EXHIBIT 99.2
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made, as of the 8th
day of November, 2002, by and among WorldWater Corp., a Delaware corporation
(the "Company"), and the Investors set forth on the signature pages affixed
hereto (each an "Investor" and collectively the "Investors").
W I T N E S S E T H:
WHEREAS, the Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the 1933 Act (as defined
below); and
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Investors, and the Investors desire
to acquire from the Company, an aggregate of $2,500,000 principal amount of the
Company's 10% Convertible Notes due 2005 (collectively, the "Notes", each of
which is a "Note"), in the form of Exhibit A annexed hereto, convertible into
shares of the Company's common stock, par value $0.001 per share (the "Common
Stock"), along with certain warrants to purchase Common Stock, half of which
shall bear an exercise price of $0.20 per share (the "$0.20 Warrants"), in the
form of Exhibit B attached to this Agreement, and the other half of which shall
have an exercise price of $0.50 per share (the "$0.50 Warrants" and
collectively, with the $0.20 Warrants, the "Warrants")), in the form of Exhibit
C attached to this Agreement; and
WHEREAS, contemporaneously with the sale of the Securities (as defined
below), the parties hereto will execute and deliver a Registration Rights
Agreement, in the form attached to this Agreement as Exhibit D (the
"Registration Rights Agreement"), pursuant to which the Company will agree,
among other things, to provide certain registration rights under the 1933 Act,
and applicable state securities laws; and
WHEREAS, contemporaneously with the sale of the Securities, the parties
hereto will execute and deliver an Investor Rights Agreement, in the form
attached to this Agreement as Exhibit E (the "Investor Rights Agreement"),
pursuant to which the Investor will receive certain approval, preemptive, tag
along and other rights;
NOW, THEREFORE, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Defined Terms
Section 1.1 Definitions. For the purposes of this Agreement, the following
terms shall have the meanings herein set forth:
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly Controls, is controlled by, or is under common control
with, such Person.
"Agreement" has the meaning ascribed thereto in the preamble hereof.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks located in New York, New York are not open for the
general transaction of business.
"By-Laws" has the meaning ascribed thereto in Section 3.1 hereof.
"Certificate of Incorporation" has the meaning ascribed thereto in Section
3.1 hereof.
"Change in Control" means any of:
(a) any Person or group (within the meaning of Rule 13d-5 promulgated under
the 0000 Xxx) becoming, directly or indirectly, the beneficial owner of shares
of voting stock of the Company representing more than 50% of the total voting
power of all outstanding classes of voting stock of the Company, or having the
power, directly or indirectly, to elect a majority of the board of directors of
the Company;
(b) the sale, lease, assignment, transfer or other conveyance of all or
substantially all of the assets of the Company where the stockholders of the
Company before such sale, lease, assignment, transfer or other conveyance do not
control, directly or indirectly, at least a majority of the voting interests of
the surviving entity after giving effect to such transaction;
(c) the liquidation or dissolution of the Company;
(d) any reclassification or other change of any stock or recapitalization
of the Company which materially adversely changes the terms or conditions of any
of the Securities;
(e) the consummation of a merger or consolidation by the Company with or
into any other entity where the stockholders of the Company before such merger
or consolidation do not control, directly or indirectly, at least a majority of
the voting interests of the surviving entity after giving effect to such merger
or consolidation; or
(f) the sale, transfer or other disposition by Xxxxxxx X. Xxxxx of 60% or
more of his holdings of the capital stock of the Company (measuring as of the
October 31, 2002), other than upon his death, whether in one transaction or a
series of transactions.
"Closing" has the meaning ascribed thereto in Section 2.2 hereof.
"Closing Date" has the meaning ascribed thereto in Section 2.2 hereof.
"Common Stock" has the meaning ascribed thereto in the recitals hereof.
"Company" has the meaning ascribed thereto in the preamble hereof.
"Company's Knowledge" means the actual knowledge of the officers of the
Company after due inquiry made in good faith.
"Contract" means any agreement, indenture, undertaking, debt instrument,
contract, lease, understanding, arrangement, or commitment to which the Company
or any of its Subsidiaries is a party or by which any of them may be bound or to
which any of their properties may be subject, whether or not in writing.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Environmental Laws" has the meaning ascribed thereto in Section 3.17
hereof.
"First Funding" has the meaning ascribed thereto in Section 2.2 hereof.
"Funding Date" has the meaning set forth in Section 2.2 hereof.
"Fundings" has the meaning ascribed thereto in Section 2.2 hereof.
"Indemnified Person" has the meaning ascribed thereto in Section 7.3
hereof.
"Infringe" has the meaning ascribed thereto in Section 3.15(e) hereof.
"Intellectual Property" means all of the following: (a) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (b) trademarks, service marks, trade dress,
trade names, corporate names, logos, slogans and Internet domain names, together
with all goodwill associated with each of the foregoing; (c) copyrights and
copyrightable works; (d) registrations, applications and renewals for any of the
foregoing; (e) trade secrets and know-how (including, but not limited to, ideas,
formulae, compositions, manufacturing and production processes and techniques,
research and development information, drawings, specifications and designs); and
(f) proprietary computer software (including, but not limited to, data, data
bases and documentation).
"Investor(s)" has the meaning ascribed thereto in the preamble hereof.
"Investor Rights Agreement" has the meaning ascribed thereto in the
recitals hereof.
"Legal Opinion" has the meaning ascribed thereto in Section5.1(a)(viii)
hereof.
"License Agreement" has the meaning ascribed thereto in Section 3.15(b)
hereof.
"Losses" has the meaning ascribed thereto in Section 7.2 hereof.
"Material Adverse Effect" means a material adverse effect on the assets,
liabilities, results of operations, condition (financial or otherwise), business
prospects or business of the Company and its Subsidiaries, individually and in
the aggregate.
"M3" means Millennium 3 Opportunity Fund, LLC.
"Notes" has the meaning ascribed thereto in the recitals hereof.
"Note Shares" means the shares of Common Stock issuable upon conversion of
the Notes.
"Person" means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
"Proposed Transaction" has the meaning ascribed thereto in Section 6.10
hereof.
"Purchase Price" means up to an aggregate of Two Million Five Hundred
Thousand Dollars ($2,500,000).
"Registration Rights Agreement" has the meaning ascribed thereto in the
recitals hereof.
"Regulation D" has the meaning ascribed thereto in the recitals hereof.
"Required Investors" means Investors who hold a majority in principal
amount of the Notes and/or a majority of the Shares.
"SEC" has the meaning ascribed thereto in the recitals hereof.
"SEC Filings" has the meaning ascribed thereto in Section 3.6 hereof.
"Second Funding" has the meaning ascribed thereto in Section 2.2 hereof.
"Securities" means the Notes, the Warrants and the Shares.
"Shares" means the Note Shares and the Warrant Shares.
"Subsidiary" has the meaning ascribed thereto in Section 3.1 hereof.
"Transaction Documents" means this Agreement, the Registration Rights
Agreement, the Investor Rights Agreement, the Warrants and the Notes.
"Transfer" means to directly or indirectly, transfer, sell, assign, pledge,
encumber, mortgage, hypothecate, give, or otherwise dispose of, whether or not
by operation of law and whether voluntarily or involuntarily.
"Unit" means (i) a Note with a principal amount of $10,000, (ii) $0.20
Warrants covering 23,810 shares of Common Stock and (iii) $0.50 Warrants
covering 23,810 shares of Common Stock. The Note shall initially have a
conversion price of $0.14 per share such that the $10,000 Note shall initially
be convertible into 71,429 shares of Common Stock. The number of shares of
Common Stock issuable upon conversion of the Notes shall be as adjusted pursuant
to the terms of the Notes and the number of shares of Common Stock issuable upon
exercise of the Warrants shall be as adjusted pursuant to the terms of the
Warrants.
"Warrants" has the meaning ascribed thereto in the recitals hereof.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of
the Warrants.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"2001 10-K" has the meaning ascribed thereto in Section 3.6 hereof.
ARTICLE II
Purchase and Sale
Section 2.1 Purchase and Sale of the Securities. Subject to the terms and
conditions of this Agreement, each of the Investors shall (severally and not
jointly) purchase and the Company shall sell to the Investors the number of
Units set forth next to such Investor's name in the chart contained in Section
2.2 hereof in exchange for the Purchase Price to be paid by such Investor as set
forth in the chart contained in Section 2.2.
Section 2.2 Closing and Fundings Generally. The consummation of the
purchase and sale of the Units shall occur in three stages, the first of which
shall be the sale of 25 Units for $250,000 (the "First Funding"), the second of
which shall be the sale of an additional 25 Units for an additional $250,000
(the "Second Funding") and the third of which shall be the sale of up to an
additional 200 Units for up to an additional $2,000,000 million (the "Closing"
and collectively with the First Funding and the Second Funding, the "Fundings")
as set forth below:
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
Principal Number of Number of
Amount of $.20 Warrants $.50 Warrants Purchase Price
-------- -------- --------------
Stage Units Notes Investor
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
First Funding 25 $250,000 595,250 595,250 M3 $250,000
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
Second Funding 25 $250,000 595,250 595,250 M3 $250,000
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
Closing Up to 200 Up to Up to Up to M3 and/or such Up to
$2,000,000 4,762,000 4,762,000 other investors $2,000,000
approved by the
Company and M3.
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
Total Up to 250 Up to Up to Up to Up to
$2,500,000 5,952,500 5,952,500 $2,500,000
-------------------- ------------- --------------- --------------- --------------- ------------------- ---------------
Each of the three (3) Fundings shall take place at the offices of
Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, or by
transmission by facsimile and overnight courier, on the applicable date set
forth in Section 2.3 or on such later date or at such different location as the
parties shall mutually agree, but not prior to the date that the applicable
conditions set forth in Article V hereof have been satisfied or waived by the
appropriate party (each, a "Funding Date"); provided, that the Funding Date on
which the Closing occurs shall also be referred to as the "Closing Date."
Subject to the conditions set forth in Section 5.1(a), the Closing shall be
consummated on or prior to December 31, 2002 (the "Last Closing Date");
provided, that in the event that the Company has not obtained in writing all
requisite third party consents or approvals (including the making of any
necessary filings), then the Last Closing Date shall be extended to a date
selected by the Investors, but not later than January 30, 2003; and provided
further, that in the event the Company has not obtained in writing all requisite
third party consents or approvals (including the making of any necessary
filings) by January 30, 2003, then the Closing shall be extended to a date
selected by the Investors in their sole discretion. Notwithstanding the
foregoing, in the event the obligation to obtain such third party consent or
approval arises solely by request of the Investors and is not related to any
pre-existing contractual or legal obligation of the Company, then such extension
shall be to a date mutually acceptable to the Company and the Investors.
Prior to the Closing, the Company and the Investors shall determine if any
other investors shall purchase any Units at the Closing.
Section 2.3 Fundings.
(a) At the First Funding (which shall occur on the date hereof):
(i) Each Investor shall deliver the portion of the Purchase Price set
forth next to its name in the chart contained in Section 2.2 hereof (on the row
labeled "First Funding") by wire transfer of immediately available funds to
accounts designated in writing by the Company; provided that the First Funding
shall not exceed $250,000.
(ii) The Company shall deliver to each Investor a Note representing
the principal amount purchased by such Investor as set forth in the chart
contained in Section 2.2 hereof (on the row labeled "First Funding") and the
number of $0.20 Warrants and $0.50 Warrants as set forth in the chart contained
in Section 2.2 (on the row labeled "First Funding").
(iii) The parties shall execute and deliver each of the documents and
take such other actions referred to in Article V hereof to be delivered by such
party at the First Funding.
(b) At the Second Funding (which shall occur on or before November 15,
2002, which date may be extended by the Investors in their sole discretion):
(i) Each Investor shall deliver the portion of the Purchase Price set
forth next to its name in the chart contained in Section 2.2 hereof (on the row
labeled "Second Funding") by wire transfer of immediately available funds to
accounts designated in writing by the Company; provided that the Second Funding
shall not exceed $250,000.
(ii) The Company shall deliver to each Investor a Note representing
the principal amount purchased by such Investor as set forth in the chart
contained in Section 2.2 hereof (on the row labeled "Second Funding") and $0.20
Warrants and $0.50 Warrants as set forth in the chart contained in Section 2.2
(on the row labeled "Second Funding") .
(iii) The parties shall execute and deliver each of the documents and
take such other actions referred to in Article V hereof to be delivered by such
party at the Second Funding.
(iv) The Registration Rights Agreement shall be effective as of the
Second Funding.
(c) At the Closing (which shall occur after the conditions to closing set
forth in Article V have been satisfied):
(i) Each Investor who shall be investing at the Closing shall deliver
its respective portion of the Purchase Price in the chart contained in Section
2.2 hereof (on the row labeled "Closing") by wire transfer of immediately
available funds to accounts designated in writing by the Company; provided that
the Closing shall be for up to $2,000,000, as determined by the Investors in
their sole discretion.
(ii) The Company shall deliver to each Investor a Note representing
the principal amount purchased by such Investor at the Closing and the number of
$0.20 Warrants and $0.50 Warrants to be issued to the Investor at the Closing
(in each case based upon the amount of Purchase Price paid by such Investor
pursuant to paragraph (i) of this subsection (c)).
(iii) The Parties shall execute and deliver each of the documents and
take such other actions referred to in Article V hereof to be delivered by such
party at the Closing.
ARTICLE III
Company Representations and Warranties
Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors as follows:
Section 3.1 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own its properties. Each of the Company and
its Subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or leasing
necessary unless the failure to so qualify has not and could not reasonably be
expected to have a Material Adverse Effect. The Company's subsidiaries are
reflected on Schedule 3.1 hereto (each a "Subsidiary" and collectively the
"Subsidiaries"). The Company has furnished to each of the Investors, true and
correct copies of the Company's Certificate of Incorporation, as amended and as
in effect on the date hereof (the "Certificate of Incorporation"), and the
Company's By-Laws, as in effect on the date hereof (the "By-Laws"). Neither the
Company nor any Subsidiary is in any material violation of any of the provisions
of its respective certificate of incorporation, by-laws or other charter
documents.
Section 3.2 Authorization. The Company has the requisite corporate
power and authority and has taken all requisite corporate action necessary for
the: (a) authorization, execution and delivery of the Transaction Documents; (b)
authorization of the performance of all obligations of the Company hereunder or
thereunder, and (c) authorization, issuance (or reservation for issuance) and
delivery of the Notes, the Warrants and the Shares. Each of the Transaction
Documents executed and delivered by the Company on the date hereof constitutes,
and each of the Transaction Documents to be executed and delivered by the
Company on the Second Funding and the Closing will constitute, the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally, and to the
exercise of judicial discretion as to the availability of equitable remedies
such as specific performance and subject, as to enforcement of indemnification
provisions, to limitations under applicable securities laws.
Section 3.3 Capitalization. (a) Schedule 3.3 sets forth (i) the
authorized capital stock of the Company on the date hereof; (ii) the number of
shares of capital stock issued and outstanding; (iii) the number of shares of
capital stock issuable pursuant to the Company's stock plans; and (iv) the
number of shares of capital stock issuable and reserved for issuance pursuant to
securities (other than the Securities) exercisable for, or convertible into or
exchangeable for any shares of capital stock of the Company. All of the issued
and outstanding shares of the Company's capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive
rights and were issued in full compliance with applicable law and any rights of
third parties. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights, were issued in full compliance
with applicable law and any rights of third parties and are owned by the
Company, beneficially and of record, subject to no lien, encumbrance or other
adverse claim. No Person is entitled to pre-emptive or similar statutory or
contractual rights with respect to any securities of the Company. Except as set
forth on Schedule 3.3, there are no outstanding warrants, options, convertible
securities or other rights, agreements or arrangements of any character under
which the Company or any of its Subsidiaries is or may be obligated to issue any
equity securities of any kind and except as contemplated by this Agreement,
neither the Company nor any of its Subsidiaries is currently in negotiations for
the issuance of any equity securities of any kind. Except for the Investor
Rights Agreement and except as set forth on Schedule 3.3, there are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the securityholders of
the Company relating to the securities of the Company held by them. Schedule 3.3
sets forth a true and complete list of the Persons who have been granted the
right to require the Company to register any securities of the Company under the
1933 Act, whether on a demand basis or in connection with the registration of
securities of the Company for its own account or for the account of any other
Person and the Company has not granted any other Person the right to require the
Company to register any securities of the Company under the 1933 Act, whether on
a demand basis or in connection with the registration of securities of the
Company for its own account or for the account of any other Person. All of the
Persons set forth on Schedule 3.3 have waived their rights to have their
securities registered by the Company in the registration statements to be filed
by the Company in connection with the registration of the Investors' Securities
pursuant to the terms of the Registration Rights Agreement.
(b) Schedule 3.3 sets forth a true and complete table setting forth
the pro forma capitalization of the Company on a fully diluted basis giving
effect to (i) the issuance of the Securities, (ii) any adjustments in other
securities resulting from the issuance of the Securities and (iii) the exercise
or conversion of all outstanding securities. The issuance and sale of the
Securities hereunder will not obligate the Company to issue shares of Common
Stock or other securities to any other Person (other than the Investors) and
will not result in the adjustment of the exercise, conversion, exchange or reset
price of any outstanding security.
(c) The Company does not have outstanding stockholder purchase rights
or any similar arrangement in effect giving any Person the right to purchase any
equity interest in the Company upon the occurrence of certain events.
Section 3.4 Valid Issuance. The Notes and the Warrants have been duly
and validly authorized. Upon the due conversion of the Notes or the due exercise
of the Warrants, as applicable, the Note Shares or the Warrant Shares, as
applicable, issuable upon such conversion or exercise will be validly issued,
fully paid and non-assessable free and clear of all liens, encumbrances,
restrictions and rights of first refusal, except for restrictions on transfer
set forth in the Transaction Documents or imposed by applicable securities laws.
The Company has reserved a sufficient number of shares of Common Stock for
issuance upon the conversion of the Notes and upon exercise of the Warrants,
free and clear of all liens, encumbrances, restrictions and rights of first
refusal, except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws. Assuming the accuracy of the
Invetors' representations and warranties contained herein, the issuance by the
Company of the Securities is exempt from registration under the 1933 Act.
Section 3.5 Consents. The execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Securities do not require consent of, action by or in respect of, or filing
with, any Person or governmental official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods (including, without limitation, the
filing of the registration statements with the SEC as contemplated by the
Registration Rights Agreement). The Company has taken all action necessary to
exempt the sale of the Notes and the Warrants and the issuance of the Note
Shares pursuant to the terms of the Notes and the Warrant Shares pursuant to the
terms of the Warrants from (i) the provisions of any anti-takeover or business
combination law or statute binding on the Company or to which the Company or any
of its assets and properties may be subject, (ii) the Company's Certificate of
Incorporation and By-Laws and (iii) any stockholder rights agreement, plan or
other arrangement which, in any case, would restrict or limit the ability of the
Investors to acquire, vote or dispose of the Securities or to exercise the
rights granted to the Investors under the Transaction Documents becoming
applicable to the Investors or the Securities.
Section 3.6 Delivery of SEC Filings; Business. The Company has
provided the Investors with copies of the Company's most recent Annual Report on
Form 10-K for the fiscal year ended December 31, 2001 (the "2001 10-K"), and all
other reports filed by the Company pursuant to the 1934 Act since the filing of
the 2001 10-K and prior to the date hereof (collectively, the "SEC Filings").
The SEC Filings are the only filings required of the Company pursuant to the
1934 Act for such period. The Company and its Subsidiaries are engaged only in
the business described in the SEC Filings and the SEC Filings contain a complete
and accurate description in all material respects of the business of the Company
and its Subsidiaries taken as a whole.
Section 3.7 Use of Proceeds. The proceeds of the sale of the
Securities hereunder shall be used by the Company primarily to fund pending
revenue projects and for current working capital.
Section 3.8 No Material Adverse Change. Since December 31, 2001,
except as identified and described in the SEC Filings, there has not been:
(a) any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the 2001 10-K or the Company's Quarterly
Reports on Form 10-Q filed since the 2001 10-K, except for changes in the
ordinary course of business which have not or are not reasonably expected to
have a Material Adverse Effect, individually or in the aggregate;
(b) any declaration or payment of any dividend, or any authorization
or payment of any distribution, on any of the capital stock of the Company, or
any redemption or repurchase of any securities of the Company;
(c) any material damage, destruction or loss, whether or not covered
by insurance to any material assets or properties of the Company or its
Subsidiaries;
(d) any waiver, not in the ordinary course of business, by the Company
or any Subsidiary of a material right or of a material debt owed to it;
(e) any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or a Subsidiary, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company and its
Subsidiaries taken as a whole (as such business is presently conducted);
(f) any change or amendment to the Company's or any Subsidiary's
Certificate of Incorporation or By-Laws, or material change to any material
contract or arrangement by which the Company or any Subsidiary is bound or to
which any of their respective assets or properties is subject;
(g) any material labor difficulties or labor union organizing
activities with respect to employees of the Company or any Subsidiary;
(h) the loss of the services of any key employee, or material change
in the composition or duties of the senior management of the Company or any
Subsidiary;
(i) the loss or, to the Company's Knowledge, threatened loss of any
customer which has had or is reasonably expected to have a Material Adverse
Effect; or
(j) any other event, transaction or condition of any character that
has had or could reasonably be expected to have a Material Adverse Effect.
Section 3.9 SEC Filings.
(a) At the time of filing thereof, the SEC Filings complied as to form
in all material respects with the requirements of the 1934 Act and did 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 the light of the
circumstances under which they were made, not misleading.
(b) During the preceding two (2) years, each registration statement
and any amendment thereto filed by the Company pursuant to the 1933 Act and the
rules and regulations thereunder, as of the date such statement or amendment
became effective, complied as to form in all material respects with the 1933 Act
and did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; and each prospectus filed pursuant to Rule 424(b) under
the 1933 Act, as of its issue date and as of the closing of any sale of
securities pursuant thereto, did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.10 No Conflict, Breach, Violation or Default.
(a) The execution, delivery and performance of the Transaction
Documents by the Company and the issuance and sale of the Securities will not
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under: (i) the Company's Certificate of
Incorporation or the Company's By-Laws, both as in effect on the date hereof;
(ii) any statute, rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the Company, any
Subsidiary or any of their respective assets or properties; or (iii) any
agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or a Subsidiary is bound or to which any of their respective
assets or properties is subject.
(b) Neither the Company nor any Subsidiary: (i) is in default under or
in violation of any Contract set forth on Schedule 3.16; (ii) is in violation of
any order of any court, arbitration or governmental body applicable to it; or
(iii) is in violation of any statute, rule or regulation of any governmental
authority to which it is subject. The business of the Company and its
Subsidiaries is not being conducted in violation of any law, ordinance, rule or
regulation of any governmental authority, except where such violations have not
resulted or would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is in breach of any Contract set forth on Schedule 3.16 where such
breach, individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect.
Section 3.11 Tax Matters. Each of the Company and each Subsidiary has
timely prepared and filed all tax returns required to have been filed by the
Company or such Subsidiary with all appropriate governmental agencies and timely
paid all taxes shown thereon or otherwise owed by it. The charges, accruals and
reserves on the books of the Company in respect of taxes for all fiscal periods
are adequate in all material respects, and, there are no material unpaid
assessments against the Company or any Subsidiary nor, to the Company's
Knowledge, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except for any assessment which is not material to the Company and its
Subsidiaries, taken as a whole. All taxes and other assessments and levies that
the Company or any Subsidiary is required to withhold or to collect for payment
have been duly withheld and collected and paid to the proper governmental
authority or third party when due. There are no tax liens or claims pending or,
to the Company's Knowledge, threatened against the Company or any Subsidiary or
any of their respective assets or property. There are no outstanding tax sharing
agreements or other such arrangements between the Company and any Subsidiary or
other corporation or entity.
Section 3.12 Title to Properties. The Company and each Subsidiary has
good and marketable title to all real properties and all other properties and
assets owned by it, in each case free from liens, encumbrances and defects of
any kind. Except as disclosed in the SEC Filings, the Company and each
Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use currently made thereof by them.
Section 3.13 Certificates, Authorities and Permits. The Company and
each Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
Section 3.14 No Labor Disputes. No material labor dispute with the
employees of the Company or any Subsidiary exists or, to the Company's
Knowledge, is threatened.
Section 3.15 Intellectual Property.
(a) Each patent, trademark, service xxxx, copyright, registered trade
name and Internet domain name, and all applications therefor, included within
the Intellectual Property of the Company and its Subsidiaries is currently valid
and enforceable and in compliance with all legal requirements (including timely
filings, proofs and payments of fees), except where the failure to be in such
compliance is not reasonably expected to have a Material Adverse Effect. No
material patent of the Company or its Subsidiaries has been or is now involved
in any interference, reissue, re-examination or opposition proceeding.
(b) All of the licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property which are necessary for the conduct
of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, "License Agreements") are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the
Company's Knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
to the exercise of judicial discretion as to the enforceability of remedies such
as specific performance.
(c) The Company and its Subsidiaries own or have the valid right to
use all of the Intellectual Property necessary for the conduct of the Company's
and each of its Subsidiaries' businesses substantially as currently conducted or
as currently proposed to be conducted and for the ownership, maintenance and
operation of the Company's and its Subsidiaries' properties and assets.
(d) The Intellectual Property owned by the Company or its Subsidiaries
and that is necessary for the conduct of the Company's and each of its
Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted, is owned free and clear of all liens, encumbrances,
adverse claims or obligations to license all such owned Intellectual Property,
other than licenses entered into in the ordinary course of the Company's and its
Subsidiaries' businesses, except for liens, encumbrances, adverse claims and
obligations that are not reasonably expected to have a Material Adverse Effect.
(e) The Company and each of its Subsidiaries have taken reasonable
steps, including the execution of confidentiality agreements and intellectual
property and work product assignments and releases, to maintain, police and
protect (i) the Intellectual Property which it owns and which is necessary for
the conduct of the Company's and each of its Subsidiaries' respective businesses
as currently conducted or as currently proposed to be conducted and the business
and marketing plans and customer and supplier lists and related information of
the Company. To the Company's Knowledge, the conduct of the Company's and its
Subsidiaries' businesses as currently conducted does not infringe or otherwise
impair or conflict with (collectively, "Infringe") any Intellectual Property
rights of any third party, and, to the Company's Knowledge, the Intellectual
Property rights of the Company and its Subsidiaries which are necessary for the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted are not being Infringed by any third party. There is no
litigation or order pending or outstanding or, to the Company's Knowledge,
threatened against the Company, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property of the Company and its Subsidiaries and the Company's and its
Subsidiaries' use of any Intellectual Property owned by a third party.
(f) The consummation of the transactions contemplated hereby do not
result in the alteration, loss, impairment of or restriction on the Company's or
any of its Subsidiaries' ownership or right to use any of the Intellectual
Property which is necessary for the conduct of the Company's and each of its
Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted.
(g) All software that has been developed by the Company or any of its
Subsidiaries, and, to the Company's Knowledge, all software that has been
developed by third-parties, that the Company or any of its Subsidiaries sells or
licenses to third parties is free from any material defect, bug, virus, or
programming, design or documentation error (other than media defects) and
conforms in all material respects to the specifications and purposes thereof.
(h) The Company and its Subsidiaries have taken reasonable steps to
protect the Company's and its Subsidiaries' rights in their confidential
information and trade secrets. Each employee, consultant and contractor who has
had access to proprietary Intellectual Property which is necessary for the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted, or the business and marketing plans and customer and
supplier lists and related information of the Company, has executed an agreement
to maintain the confidentiality of such Intellectual Property and such other
materials and has executed appropriate agreements that are substantially
consistent with the Company's standard forms thereof. Except under
confidentiality obligations, there has been no material disclosure of any of the
Company's or its Subsidiaries' confidential information or trade secrets to any
third party.
Section 3.16 Contracts. (a) Schedule 3.16 sets forth each of the
following Contracts to which the Company or any of its Subsidiaries is a party,
by which the Company or any of its Subsidiaries is bound, or to which the
properties of the Company or any of its Subsidiaries is subject:
(i) any Contract providing for the borrowing or lending of money or
the deferred purchase price of property in excess of $75,000 (in either case,
whether incurred, assumed, guaranteed or secured by any asset);
(ii) any Contract relating to Intellectual Property;
(iii) any Contract providing for exclusive dealing or that limits the
freedom of the Company or any of its Subsidiaries to compete in any line of
business or with any person or in any area or to offer employment to or hire any
person;
(iv) any compensation, employment, consulting, severance, supplemental
retirement, change in control or other similar Contract with any current
director, officer, consultant, partner, stockholder, member or employee of the
Company or any of its Subsidiaries;
(v) any stockholder agreement, voting agreement, voting trust
agreement or similar Contract involving the capital stock of the Company or any
equity interests of any of its Subsidiaries;
(vi) any Contract or other document filed as an exhibit to any of the
Company's SEC Filings; or
(vii) any other Contract that is material to the Company or any of its
Subsidiaries.
(b) Each Contract is a valid and binding agreement of the Company or its
Subsidiaries, if any, party thereto and, to the Company's Knowledge, the
counterparty or counterparties thereto, and is in full force and effect, and
neither the Company nor, to the Company's Knowledge, any other party thereto is
in default under any such Contract and there has not occurred any event that,
with the lapse of time or the giving of notice or both, would constitute such a
default.
(c) Except for the Company's engagement letter with Xxxxxx, Xxxxxx &
Xxxxxxxxx Capital Corp., none of the Company or any of its Subsidiaries is a
party to any pending engagement letters, sales agency agreements or other
similar agreements.
(d) To the Company's Knowledge, no current or former employee or contractor
of the Company or any of its Subsidiaries is or was a party to any agreement
(directed to non-disclosure, non-compete, non-solicitation, exclusive services
obligations or otherwise) that restricts, restricted, forbids or forbade at any
time during such employment or engagement the activities or performance of
duties of the employee or contractor for or on behalf of the Company, or
otherwise in connection with such employment or engagement.
Section 3.17 Environmental Matters. Neither the Company nor any Subsidiary
is in violation of any statute, rule, regulation, decision or order of any
governmental authority or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "Environmental Laws"), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could be
reasonably expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to the Company's Knowledge, threatened
investigation of any claim relating to any Environmental Laws.
Section 3.18 Litigation. There are no pending actions, suits or proceedings
against the Company, its Subsidiaries or any of its or their properties that
could be reasonably expected to have a Material Adverse Effect; and to the
Company's Knowledge, no such actions, suits or proceedings are or have been
threatened. There are no pending actions, charges, indictments, information or,
to the Company's Knowledge, investigations or threatened investigations of the
Company, any Subsidiary or any of their respective directors, officers,
employees or agents as such, which are civil in nature or involve allegations of
criminal violations of any Federal, state or local law by the Company, any
Subsidiary or any of their respective directors, officers, employees or agents
acting on behalf of the Company or any Subsidiary.
Section 3.19 Financial Statements. The financial statements included in
each SEC Filing present fairly (as required by United States generally accepted
accounting principles), in all material respects, the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis (except as may be disclosed
therein or in the notes thereto, and, in the case of quarterly financial
statements, as permitted by Form 10-Q under the 1934 Act and subject to year-end
adjustments). Except as set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof, neither the Company
nor any of its Subsidiaries has incurred any liabilities, contingent or
otherwise, except those incurred in the ordinary course of business, consistent
(as to amount and nature) with past practices since the date of such financial
statements, none of which, individually or in the aggregate, have had or is
reasonably expected to have a Material Adverse Effect.
Section 3.20 Insurance Coverage. The Company and each Subsidiary maintain
in full force and effect insurance coverage, including directors and officers
insurance, that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each
Subsidiary, and the Company reasonably believes such insurance coverage to be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure. Schedule 3.20 hereto sets forth a
complete list of all insurance policies and fidelity bonds relating to the
assets, business, operations, employees, officers or directors of the Company
and its Subsidiaries, as of the date hereof and immediately prior to the Closing
and setting forth the type of coverage, insurance limits, deductibles and
insurance carriers.
Section 3.21 Brokers and Finders. Except for Xxxxxx, Holden & Xxxxxxxxx
Capital Corp., the fees and expenses of which are solely the Company's
responsibility, no Person has, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon the Company,
any Subsidiary or an Investor for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company.
Section 3.22 No Directed Selling Efforts or General Solicitation. Neither
the Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Notes.
Section 3.23 No Integrated Offering. 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 Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the by the Company on Section 4(2) for the exemption from
registration for the transactions contemplated hereby or would require
registration of the Securities under the 1933 Act.
Section 3.24 Investment Company. The Company is not, and is not controlled
by or under common control with an Affiliate of an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
Section 3.25 Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any intentionally false or
fictitious entries on the books and records of the Company or any Subsidiary; or
(e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature.
Section 3.26 Internal Accounting Controls. The Company and each of the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (a) transactions are executed in accordance
with management's general or specific authorizations; and (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to
maintain asset accountability.
Section 3.27 Transactions With Affiliates. The Company has reported, in
accordance with law, any transactions with officers, directors or employees of
the Company who are parties to any transaction with the Company or any of its
Subsidiaries (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 Company's Knowledge, any corporation,
partnership, trust or entity in which any officer, director or any such employee
has a substantial interest or is an officer, director, trustee or partner.
Section 3.28 Application to Takeover Protection. 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 or other
similar anti-takeover provision under the Certificate of Incorporation, By-Laws
or the laws of the Company's state of incorporation which is or could become
applicable to the Investors or the Agreements as a result of the transactions
contemplated by the Agreement. None of the transactions contemplated by the
Agreements, including the conversion of the Notes into Shares, will trigger any
poison pill provisions of any of the Company's stockholders' rights or similar
agreements.
Section 3.29 Acknowledgment of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Note Shares upon conversion of the Notes or Warrant Shares upon
exercise of the Warrants. The Company further acknowledges that its obligation
to issue Shares upon conversion of the Notes or exercise of the Warrants in
accordance with this Agreement, the Notes and the Warrants is absolute and
unconditional (but subject to the terms and conditions of the Transaction
Documents) regardless of the dilutive effect that such issuance may have on the
ownership interests of other stockholders of the Company.
Section 3.30 Disclosures. No representation or warranty contained in the
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to the Company that the Company has not disclosed to the Investors
which has had or which could be expected to have a Material Adverse Effect on
the Company other than with regard to general economic conditions or world
events outside the control of the Company.
ARTICLE IV
INVESTOR'S REPRESENTATIONS AND WARRANTIES
Representations and Warranties of the Investors. Each of the Investors
hereby severally, and not jointly, makes the following representations and
warranties to the Company that:
Section 4.1 Organization and Existence. The Investor is a validly existing
corporation, limited partnership or limited liability company and has the
requisite corporate, partnership or limited liability company authority, as
applicable, to execute and deliver the Transaction Documents to which it is a
party to and to invest in the Securities pursuant to this Agreement.
Section 4.2 Authorization. The execution, delivery and performance by the
Investor of the Transaction Documents have been duly authorized and the
Transaction Documents each constitute the valid and legally binding obligation
of the Investor, enforceable against the Investor in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally, and to the exercise of judicial
discretion as to the availability of equitable remedies such as specific
performance and subject, as to enforcement of indemnification provisions, to
limitations under applicable securities laws.
Section 4.3 Purchase Entirely for Own Account. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or other
transfer or distribution of any portion thereof or interest therein in violation
of the 1933 Act, and the Investor has no present intention of selling, granting
any participation in, or otherwise transfering or distributing the Securities or
any portion thereof or interest therein in violation of the 1933 Act. The
Investor is not a registered broker dealer or an entity engaged in the business
of being a broker dealer.
Section 4.4 Investment Experience. The Investor acknowledges that it can
bear the economic risk and complete loss of its investment in the Securities,
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
Section 4.5 Disclosure of Information. The Investor has had an opportunity
to receive all additional information related to the Company requested by it and
to ask questions of and receive answers from the Company regarding the Company,
its business and the terms and conditions of the offering of the Securities. The
Investor acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by the Investor
shall modify, amend or affect the Investor's right to rely on the Company's
representations and warranties contained in this Agreement.
Section 4.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
Section 4.7 Legends.
(a) It is understood that, until the earlier of: (a) registration for
resale pursuant to the Registration Rights Agreement or (b) the time when any of
the Securities may be, may be sold pursuant to Rule 144(k), certificates or
agreements evidencing such Securities, as the case may be, may bear the
following or any substantially similar legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
FOREGOING LAWS".
(b) Upon the earlier of: (i) registration for resale pursuant to the
Registration Rights Agreement and receipt by the Company of the Investor's
written confirmation that such securities will not be disposed of except in
compliance with the prospectus delivery requirements of the 1933 Act; and (ii)
Rule 144(k) becoming available, the Company shall, upon an Investor's written
request, promptly cause certificates evidencing the Securities to be replaced
with certificates which do not bear such restrictive legends.
Section 4.8 Accredited Investor. The Investor is an accredited investor as
defined in Rule 501(a) of Regulation D.
Section 4.9 No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.
Section 4.10 Brokers and Finders. No Person has, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Investor.
ARTICLE V
CONDITIONS TO THE FUNDINGS
Section 5.1 Conditions to the Investors' Obligations. The obligation of the
Investors to purchase the requisite Notes and the Warrants at each of the
Fundings as set forth in Section 2.2 is subject to the fulfillment to the
Investors' satisfaction, on or prior to the respective Funding Date, of the
following conditions, any of which may be waived by the Investors agreeing
hereunder to purchase a majority in principal amount of the Notes on such
Funding Date:
(a) At or prior to the First Funding:
(i) The representations and warranties made by the Company in Article
III hereof shall be true and correct in all material respects as of the date of
the First Funding. The Company shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to the First Funding.
(ii) The Company shall have obtained, in a timely fashion and in
writing in a form reasonably satisfactory to the Investors, any and all
consents, permits, approvals, registrations and waivers (including waivers of
the registration rights set forth on Schedule 3.3 hereto) necessary for
consummation of the purchase and sale of the Notes and the Warrants to be
purchased by the Investors at the First Funding.
(iii) The Company shall have executed and delivered to the Investors
the Registration Rights Agreement.
(iv) The Company shall have executed and delivered to the Investors
the Investor Rights Agreement.
(v) No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated hereby
at the First Funding or in the other Transaction Documents.
(vi) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the date of the First Funding, certifying to the
fulfillment of the conditions specified in subsections (i), (ii) and (v) of this
Section 5.1(a).
(vii) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Secretary, dated as of the date of the First
Funding, certifying the resolutions adopted by the Board of Directors of the
Company approving the transactions contemplated by this Agreement, including the
transactions to occur at each of the Funding, and the other Transaction
Documents and the sale of the Notes and the Warrants and the reservation of the
Shares, certifying the current versions of the Certificate of Incorporation and
By-Laws of the Company and its Subsidiaries and certifying as to the signatures
and authority of persons signing this Agreement and the other Transaction
Documents and related documents to be delivered on behalf of the Company at the
First Funding.
(viii) The Investors shall have received an opinion from Xxxxx,
Xxxxxxx, Xxxxxxx & Xxxxxx, the Company's counsel, dated as of the date of the
First Funding, in form and substance acceptable to the Investors and addressing
such legal matters as the Investors may reasonably request.
(ix) The Company shall have executed and delivered such other
documents as the Investors may reasonably request.
(b) At or prior to the Second Funding:
(i) The representations and warranties made by the Company in Article
III hereof shall be true and correct in all material respects as of the date of
the First Funding and as of the date of the Second Funding as though made on and
as of the date of the Second Funding (except that representations and warranties
that by their terms speak only as of the date of this Agreement or some other
date need be true and correct only as of such date). The Company shall have
performed in all material respects all obligations and conditions herein
required to be performed or observed by it on or prior to the Second Funding.
(ii) The Company shall have obtained, in a timely fashion and in
writing in a form reasonably satisfactory to the Investors, any and all
consents, permits, approvals, registrations and waivers (including waivers of
the registration rights set forth on Schedule 3.3 hereto) necessary for
consummation of the purchase and sale of the Notes and the Warrants to be
purchased by the Investors at the Second Funding.
(iii) No judgment, writ, order, injunction, award or decree of or by
any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby at the Second Funding or the Closing or in the other
Transaction Documents.
(iv) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the date of the Second Funding, certifying to the
fulfillment of the conditions specified in subsections (i), (ii) and (iii) of
this Section 5.1(b).
(v) The Company shall have delivered a Certificate, executed on behalf
of the Company by its Secretary, dated as of the date of the Second Funding,
certifying the current versions of the Certificate of Incorporation and By-Laws
of the Company and its Subsidiaries and certifying as to the signatures and
authority of persons signing the Notes and the Warrants and related documents to
be delivered on behalf of the Company at the Second Funding.
(vi) The Investors shall have received an opinion from Xxxxx, Xxxxxxx,
Xxxxxxx & Xxxxxx, the Company's counsel, dated as of the date of the Second
Funding, in the form of Exhibit F annexed hereto..
(vii) The Company shall have paid the fees and expenses of the
Investors and their counsel pursuant to Section 8.5.
(viii) The Company shall have executed and delivered such other
documents as the Investors may reasonably request, including, without
limitation, the delivery of the schedules to the Purchase Agreement not
delivered at the First Funding.
(c) At or prior to the Closing:
(i) The representations and warranties made by the Company in Article
III hereof shall be true and correct in all material respects as of the date of
the First Funding, the Second Funding and as of the date of the Closing as
though made on and as of the date of the Closing (except that representations
and warranties that by their terms speak only as of the date of this Agreement
or some other date need be true and correct only as of such date). The Company
shall have performed in all material respects all obligations and conditions
herein required to be performed or observed by it on or prior to the Closing.
(ii) The Company shall have obtained, in a timely fashion and in
writing in a form reasonably satisfactory to the Investors, any and all
consents, permits, approvals, registrations and waivers (including waivers of
the registration rights set forth on Schedule 3.3 hereto) necessary for
consummation of the purchase and sale of the Notes and the Warrants to be
purchased by the Investors at the Closing.
(iii) No judgment, writ, order, injunction, award or decree of or by
any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby at the Closing or in the other Transaction Documents.
(iv) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing, certifying to the fulfillment of the
conditions specified in subsections (i), (ii) and (iii) of this Section 5.1(b).
(v) The Company shall have delivered a Certificate, executed on behalf
of the Company by its Secretary, dated as of the date of the Closing, certifying
the current versions of the Certificate of Incorporation and By-Laws of the
Company and its Subsidiaries and certifying as to the signatures and authority
of persons signing the Notes and the Warrants and related documents to be
delivered on behalf of the Company at the Closing.
(vi) The Investors shall have received an opinion from Xxxxx, Xxxxxxx,
Xxxxxxx & Xxxxxx, the Company's counsel, dated as of the date of the Closing, in
the form of Exhibit F annexed hereto.
(vii) The Investors shall have completed their investigation of the
Company and its Subsidiaries and the Investors shall be satisfied in their sole
discretion with the condition of the Company and its Subsidiaries and their
future prospects.
(viii) The Company shall have executed and delivered such other
documents as the Investors may reasonably request.
Section 5.2 Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Notes and the Warrants at each of the Fundings
as set forth in Section 2.2 is subject to the fulfillment to the satisfaction of
the Company on or prior to the respective Funding Date of the following
conditions, any of which may be waived by the Company:
(a) At or prior to the First Funding:
(i) The representations and warranties made by the Investors in
Article IV hereof, shall be true and correct in all material respects as of the
date of the First Funding. All of the Investors shall have performed in all
material respects all obligations and conditions herein required to be performed
or observed by them on or prior to the date of the First Funding.
(ii) The Investors shall have executed and delivered to the Company
the Registration Rights Agreement.
(iii) The Investors shall have executed and delivered to the Company
the Investor Rights Agreement.
(iv) The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Notes and the Warrants to be sold to the Investors at the First
Funding.
(v) No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated hereby
at the First Funding or in the other Transaction Documents.
(vi) The Investors shall have executed and delivered such other
documents as the Company may reasonably request.
(b) At or prior to the Second Funding:
(i) The representations and warranties made by the Investors in
Article IV hereof, shall be true and correct in all material respects as of the
date of the First Funding and as of the date of the Second Funding as though
made on and as of the date of the Second Funding (except that representations
and warranties that by their terms speak only as of the date of this Agreement
or some other date need be true and correct only as of such date). All of the
Investors shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by them on or prior to
the date of the Second Funding.
(ii) No judgment, writ, order, injunction, award or decree of or by
any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby at the Second Funding or in the other Transaction Documents.
(iii) The Investors shall have executed and delivered such other
documents as the Company may reasonably request.
(c) At or prior to the Closing:
(i) The representations and warranties made by the Investors in
Article IV hereof, shall be true and correct in all material respects as of the
date of the First Funding, the Second Funding and as of the date of the Closing
as though made on and as of the date of the Closing (except that representations
and warranties that by their terms speak only as of the date of this Agreement
or some other date need be true and correct only as of such date) All of the
Investors shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by them on or prior to
the date of the Closing.
(ii) No judgment, writ, order, injunction, award or decree of or by
any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby at the Closing or in the other Transaction Documents.
(iii) The Investors shall have executed and delivered such other
documents as the Company may reasonably request.
ARTICLE VI
COVENANTS AND AGREEMENTS OF THE COMPANY
Section 6.1 Conduct of Business Pending Closing. Between the date of this
Agreement and the earlier of (i) the Closing or (ii) the Company's receipt of
written notice from the Investors that the Investors will not consummate the
third Funding pursuant to the terms of this Agreement, the Company shall
maintain its existence and shall conduct its business in the customary and
ordinary course of business consistent with past practice.
Section 6.2 Negative Covenants of the Company Between the date of this
Agreement and the earlier of (i) the Closing or (ii) the Company's receipt of
written notice from the Investors that the Investors will not consummate the
third Funding pursuant to the terms of this Agreement, without the prior written
approval of the Investors, the Company shall not and shall cause its
Subsidiaries not to:
(a) cause or permit to occur any of the events or occurrences described in
Section 3.8 (No Material Adverse Change) of this Agreement;
(b) dissolve, merge with or into any other entity, or otherwise alter their
formation;
(c) enter into any contract or agreement with any union or other collective
bargaining representative representing any employees;
(d) issue any equity securities or any other securities convertible into or
exercisable for equity securities of the Company or any of its Subsidiaries,
except for the grant of options and the issuance of securities upon exercise of
options granted pursuant to any equity incentive plan of the Company in effect
on October 29, 2002;
(e) sell any of the assets of the Company and its Subsidiaries other than
in the ordinary course of business and consistent with past practices; or
(f) make any changes to its or any of Subsidiary's Certificate of
Incorporation or By-Laws.
Section 6.3 Affirmative Covenants. Between the date of this Agreement and
the earlier of (i) the Closing or (ii) the Company's receipt of written notice
from the Investors that the Investors will not consummate the third Funding
pursuant to the terms of this Agreement, the Company shall and shall cause its
Subsidiaries to:
(a) maintain their assets in substantially the same state of repair, order
and condition as on the date hereof, reasonable wear and tear excepted;
(b) maintain in full force and effect the insurance policies and binders
currently in effect;
(c) utilize their reasonable efforts to preserve intact the business
organization of the Company and its Subsidiaries;
(d) maintain all of their books and records in accordance with their past
practices;
(e) comply in all material respects with all provisions of the Contracts
listed in Schedule 3.16 and comply in all material respects with the provisions
of all material laws, rules and regulations applicable to the Company and its
Subsidiaries;
(f) cause to be paid when due, all taxes, assessments and charges or levies
imposed upon it or on any of its properties or which it is required to withhold
and pay over; and
(g) promptly advise the Investors in writing of the threat or commencement
against the Company or any of its Subsidiaries of any claim, action, suit or
proceeding, arbitration or investigation or any other event that could
reasonably be expected to have a Material Adverse Effect.
Section 6.4 Additional Negative Covenant. Between the date of this
Agreement and the date on which a Registration Statement (as defined in the
Registration Rights Agreement) registering all of the Registrable Securities (as
defined in the Registration Rights Agreement) is declared effective by the SEC,
the Company shall not, without the prior written consent of the Investors in
their sole discretion: (i) grant any Person the right to require the Company to
register any securities of the Company under the 1933 Act, whether on a demand
basis or in connection with the registration of securities of the Company, for
its own account or for the account of any other Person and (ii) shall not file
any registration statement (other than a Registration Statement pursuant to the
terms of the Registration Rights Agreement) registering any of the Company's
securities with the SEC.
Section 6.5 Stop Transfer Instruction. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company which enlarge the restrictions on transfer set forth in Section 4.7.
Section 6.6 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 0000 Xxx) that would be integrated with the offer or
sale of the Notes or the Shares in a manner that would require the registration
under the 1933 Act of the sale of the Notes or the Shares to any Investor or
cause the offering of such securities to be integrated with any other offering
of securities by the Company.
Section 6.7 Listing and Reservation of Shares.
(a) The Company shall: (i) promptly following each Funding, but not later
than five (5) Business Days thereafter, prepare and file with the OTC Bulletin
Board (as well as on any other national securities exchange or market on which
the Common Stock is then listed) additional shares listing applications or
letters acceptable to the OTC Bulletin Board (as well as on any other national
securities exchange or market on which the Common Stock is then listed) covering
and listing a number of shares of Common Stock which is at least equal to the
maximum number of Shares then issuable; (ii) take all steps necessary to cause
the Shares to be approved for listing on the OTC Bulletin Board (as well as on
any other national securities exchange or market on which the Common Stock is
then listed) as soon as possible thereafter; (iii) maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all such
Shares; and (iv) provide to the Investors evidence of such listing. Neither the
Company nor any of its Subsidiaries shall take any action that would result in
the delisting or suspension of the Common Stock on the OTC Bulletin Board (as
well as on any other national securities exchange or market on which the Common
Stock is then listed) except in connection with a merger or consolidation of the
Company where the Company is not the survivor thereof. The Company shall
promptly provide to each Investor copies of any notices it receives from the OTC
Bulletin Board (as well as on any other national securities exchange or market
on which the Common Stock is then listed) regarding the continued eligibility of
the Common Stock for listing on such system, so long as such notice does not
include material, nonpublic information.
(b) The Company at all times shall reserve a sufficient number of shares of
its authorized but unissued Common Stock to provide for the full conversion of
the outstanding Notes and exercise of the outstanding Warrants. The Shares of
Common Stock reserved for issuance upon conversion of the Notes and exercise of
the Warrants shall be allocated pro rata to each of the Investors in accordance
with the principal amount of Notes and the number of Warrants issued and
delivered to such Investors collectively at the Fundings. If at any time the
number of shares of Common Stock authorized and reserved for issuance is
insufficient to cover the number of Shares issued and issuable upon conversion
of the Notes (based on the Conversion Price (as defined in the Notes)) and upon
exercise of the Warrants (based on the Exercise Price (as defined in the
Warrants)) in effect from time to time without regard to any limitation on
conversions or exercises, the Company will promptly take all corporate action
necessary to authorize and reserve such number of shares of Common Stock,
including, without limitation, calling a special meeting of stockholders to
authorize additional shares to meet the Company's obligations under this Section
6.6, in the case of an insufficient number of authorized shares, and use its
best efforts to obtain stockholder approval of an increase in such authorized
number of shares. In addition, if on the actual date of an adjustment of the
Conversion Price pursuant to the Notes, the registration statements are
insufficient to register such number of shares of Common Stock, the Company
shall file a registration statement sufficient to register such additional
shares of Common Stock in accordance with the terms of the Registration Rights
Agreement. All calculations of the above amounts shall be made without regard to
any limitation on conversions of Notes or the Warrants.
Section 6.8 Use of Proceeds. The Company shall use the proceeds from the
sale of the Securities to the Investors hereunder primarily to fund pending
revenue projects and for current working capital.
Section 6.9 Transfer Agent Instructions. At the Closing the Company shall
issue irrevocable instructions to its transfer agent (and shall issue to any
subsequent transfer agent as required), to issue certificates, registered in the
name of each such Investor or its respective nominee(s), for the Shares in such
amounts, in accordance with the terms of the Notes, the Warrants and this
Agreement, as specified from time to time by each Investor to the Company in a
form acceptable to such Investor (the "Irrevocable Transfer Agent
Instructions"). The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 6.9, and
stop transfer instructions to give effect to Section 4.7 hereof (in the case of
the Shares, prior to registration of the Shares under the 0000 Xxx) will be
given by the Company to its transfer agent and that the Warrants and the Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in the Agreements. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Investors by violating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 6.9 will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Section 6.9, that the Investors, shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach
and requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.
Section 6.10 Press Release; Filing of Form 8-K. Subject to the provisions
of Section 8.7 hereof, on or before the fifth (5th) Business Day following each
of the Fundings, the Company shall: (a) issue a press release in form and
substance reasonably acceptable to the Investors (except as otherwise required
by law); and (b) file a Current Report on Form 8-K with the SEC describing the
terms of the transaction contemplated by the Agreements in the form required by
the 1934 Act.
Section 6.11 Exclusivity. From and after the date hereof to the first to
occur of (a) December 31, 2002 and (b) the Closing (unless such period is
extended pursuant to Section 2.2 hereof, absent the Investors' express prior
written consent, the Company shall not, directly or indirectly (and shall cause
its officers, directors, employees, equityholders, and agents to not) initiate
contact with, solicit, entertain, encourage, negotiate or enter into any
agreement or understanding (written or oral) with any person or entity (other
than the Investors) in connection with any actual or proposed investment in or
acquisition of the Company or its equity securities (collectively, "Proposed
Transactions"). The Company shall notify in writing the Investors within 48
hours of the commencement of any discussions (orally or in writing) regarding or
constituting a Proposed Transaction.
ARTICLE VII
Survival and Indemnification
Section 7.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this Agreement for the longer of (a) the period that
any of the Notes or the Warrants are outstanding, and (b) three (3) years from
the date of this Agreement.
Section 7.2 Indemnification. The Company agrees to indemnify and hold
harmless each Investor and its Affiliates and their respective directors,
officers, employees and agents from and against any and all losses, claims,
damages, liabilities and reasonable expenses (including without limitation
reasonable attorney fees and disbursements and other expenses incurred in
connection with investigating, preparing or defending any action, claim or
proceeding, pending or threatened and the costs of enforcement hereof)
(collectively, "Losses") to which such Person may become subject as a result of
any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Agreements, and will reimburse
any such Person for all such amounts as they are incurred by such Person.
Section 7.3 Conduct of Indemnification Proceedings. Promptly after receipt
by any Person (the "Indemnified Person") of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of
any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 7.2 hereof, such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses to the extent such
fees and expenses constitute Losses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (a)
the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; or (b) in the reasonable judgment of counsel to such
Indemnified Person representation of both parties by the same counsel would be
inappropriate due to actual or potential material differing interests between
them. The Company shall not be liable for any settlement of any action,
proceeding or investigation effected without its written consent, but if settled
with such consent, or if there be a final judgment for the plaintiff, the
Company shall indemnify and hold harmless such Indemnified Person from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, the Company shall not
effect any settlement of any pending or threatened action, proceeding or
investigation in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability arising out of such action, proceeding or
investigation.
ARTICLE VIII
Miscellaneous
Section 8.1 Successors and Assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Required
Investors, as applicable, provided, however: an Investor may assign its rights
and delegate its duties hereunder or any of the Securities acquired hereunder in
whole or in part to an Affiliate, or to any of its or its Affiliates officers
directors, members or managers without the prior written consent of the Company
or the other Investors, after notice duly given by such Investor to the Company
and the other Investors, provided, that no such assignment or obligation shall
affect the obligations of such Investor hereunder. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
Section 8.2 Counterparts; Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
Section 8.3 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 8.4 Notices. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing signed by
the sender, and shall be deemed duly given (i) on the date delivered if
personally delivered, (ii) on the date sent by telecopier with automatic
confirmation by the transmitting machine showing the proper number of pages were
transmitted without error, (iii) on the Business Day after being sent by Federal
Express or another recognized overnight mail service which utilizes a written
form of receipt for next day or next business day delivery, or (iv) two (2)
Business Days after mailing, if mailed by United States postage-prepaid
certified or registered mail, return receipt requested, in each case addressed
to the applicable party at the address set forth below; provided that a party
hereto may change its address for receiving notice by the proper giving of
notice hereunder:
If to the Company to: WorldWater Corp.
00 Xxxxx 00 Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
With a copy (which shall not constitute notice) to:
Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxx
000 Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxx, Esq.
If to the Investors, to the address set forth on the signature page hereto.
A copy (which shall not constitute notice) must also be sent to: Xxxxxxxxxx
Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx
X. Xxxxxxxxx, Esq., Telecopier No.: (000) 000-0000; Telephone No.: (973)
000-0000.
Section 8.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that at the Second Funding and
thereafter as incurred by the respective party, the Company shall pay the
reasonable fees and expenses of Xxxxxxxxxx Xxxxxxx PC, the attorneys for the
Investors incurred in connection with the transactions contemplated hereby up to
a maximum of $35,000 (in addition to the fees and expenses to be paid to such
firm pursuant to the terms of the Registration Rights Agreement), and the costs
and expenses of the Investors incurred in connection with the transactions
contemplated hereby and in conducting due diligence on the Company.
Section 8.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Investors. Any amendment or waiver effected in accordance with this section
shall be binding upon each holder of any Notes and/or Shares issued under this
Agreement at the time outstanding, each future holder of all such securities,
and the Company.
Section 8.7 Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the other party (which consents shall not be
unreasonably withheld or delayed).
Section 8.8 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
Section 8.9 Entire Agreement. This Agreement, including the Exhibits and
the Schedules, and the other Transaction Documents, and amendments thereto,
constitute the entire agreement among the parties hereof with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
Section 8.10 Further Assurances. The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
Section 8.11 Governing Law; Consent to Jurisdiction. This Agreement and any
and all matters arising directly or indirectly herefrom ("Agreement Matters")
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New Jersey applicable to agreements made and to be
performed entirely in such state, without giving effect to the conflict of law
principles thereof. Each of the parties hereto hereby (i) irrevocably consents
and submits to the sole exclusive jurisdiction of the United States District
Court for the District of New Jersey and any state court in the State of New
Jersey (and of the appropriate appellate courts from any of the foregoing) in
connection with any suit, arbitration, mediation, action or other proceeding
(each a "Proceeding") directly or indirectly arising out of or relating to any
Agreement Matter; provided that a party to this Agreement shall be entitled to
enforce an order or judgment of a such court in any United States or foreign
court having jurisdiction over the other party hereto, (ii) irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such Proceeding in any such
court or that any such Proceeding which is brought in any such court has been
brought in an inconvenient forum, (iii) waives, to the fullest extent permitted
by law, any immunity from jurisdiction of any such court or from any legal
process therein, and (iv) agrees that service of any summons, complaint, notice
or other process relating to such Proceeding may be effected in the manner
provided for the giving of notice hereunder.
[SIGNATURES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement or caused their duly authorized officers to execute this
Securities Purchase Agreement as of the date first above written.
The Company: WORLDWATER CORP.
By:/s/Xxxxxxx Xxxxx
______________________________
Name:Xxxxxxx Xxxxx
Title:Chief Executive Officer
The Investors:
Millennium 3 Opportunity Fund, LLC
By:/s/Xxx Xxxxxxxx
_______________________________
Name:Xxx Xxxxxxxx
Title:Member Manager
Address for Notice:
Millennium 3 Opportunity Fund, LLC
0 Xxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
