EXHIBIT 10.1
-------------------------------------------------------------------------------
COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
ATC HEALTHCARE, INC.
MARCH 5, 2007
-------------------------------------------------------------------------------
COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this "AGREEMENT"),
dated as of February __, 2007, is by and among ATC Healthcare, Inc., a Delaware
corporation (the "COMPANY"), and the purchasers signatory hereto (each, a
"PURCHASER" and, collectively, the "PURCHASERS").
RECITALS
A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act and Rule 506 of Regulation D as
promulgated by the SEC under the Securities Act.
B. The Purchasers, severally and not jointly, wish to purchase, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
an aggregate of (i) up to 5,000,000 shares of Common Stock (the "SHARES") and
(ii) warrants, in substantially the form attached hereto as Exhibit A (the
"WARRANTS"), to acquire up to 2,500,000 shares of Common Stock (the "WARRANT
SHARES").
C. The Shares, the Warrants and the Warrant Shares are collectively
referred to herein as the "SECURITIES".
The parties hereto, in consideration of the premises and their mutual
covenants and agreements herein set forth and intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms have the meanings set
forth below (and such meanings shall be equally applicable to both the singular
and plural form of the terms defined, as the context may require):
"AFFILIATE" shall mean with respect to any Person, any other Person
that is directly or indirectly controlling, controlled by or under common
control with such Person or entity or any of its Subsidiaries, and the term
"control" (including the terms "controlled by" and "under common control with")
shall mean having, directly or indirectly, the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or by contract or otherwise. Without limiting the
foregoing, (i) the ownership of ten percent (10%) or more of the voting
securities of a Person shall be deemed to constitute control and notwithstanding
anything to the contrary herein, and (ii) neither the Purchasers nor any of
their respective Affiliates shall be deemed to be Affiliates of the Company by
virtue of the transactions contemplated in this Agreement.
"BATHGATE CAPITAL" shall mean Bathgate Capital Partners LLC.
-1-
"BOARD" shall mean the Board of Directors of ATC Healthcare, Inc.
"BUSINESS" shall mean the principal business of the Company as set
forth in SECTION 4.1(B) hereof and as such shall continue to be conducted
following the purchase and sale of the Common Stock and the Warrants hereby.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which banking institutions in Denver, Colorado are authorized or
required by law to close.
"BYLAWS" shall mean the Bylaws or analogous instrument governing
operations, including all amendments and supplements thereto.
"CHARTER DOCUMENTS" shall mean the certificate of incorporation filed
with the appropriate Governmental Authorities, including all amendments and
supplements thereto.
"CLOSING" shall mean the closing of the purchase and sale of the Shares
and the Warrants pursuant to this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the Class A Common Stock of the Company.
"COMPANY" shall have the meaning assigned to such term in the
introductory paragraph hereto, except as provided otherwise in this Agreement.
"COMPANY COUNSEL" shall mean Keevican Xxxxx Xxxxxxx & Xxxxxx LLC with
offices located at 11th Floor, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000.
"CURRENT RATIO" shall mean the ratio of total consolidated current
assets of the Company to total consolidated current liabilities of the Company
(both as determined in accordance with GAAP).
"ENABLE CAPITAL" shall mean Enable Capital Management, LLC.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended, and the rules and
regulations of any governmental agency or authority, as from time to time in
effect, promulgated thereunder.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FISCAL YEAR" or "FISCAL YEAR" shall mean each 12-month period ending
on December 31 of each year.
"FWS" means Xxxxxxx Xxxxxxxxx & Xxxxx LLP with offices located at 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000.
"GAAP" shall have the meaning given to such term in Section 1.2.
"GOVERNMENTAL AUTHORITIES" shall mean any federal, state or municipal
court or other governmental department, commission, board, bureau, agency or
instrumentality, governmental or quasi-governmental, domestic or foreign.
-2-
"IRS" shall mean the Internal Revenue Service and any governmental body
or agency succeeding to the functions thereof.
"LAWS" shall mean all U.S. and foreign federal, state or local
statutes, laws, rules, regulations, ordinances, codes, policies, rules of common
law, and the like, now or hereafter in effect, including any judicial or
administrative interpretations thereof, and any judicial or administrative
orders, consents, decrees or judgments.
"LIEN" shall mean any security interest, pledge, bailment, mortgage,
hypothecation, deed of trust, conditional sales and title retention agreement
(including any lease in the nature thereof), charge, encumbrance or other
similar arrangement or interest in real or personal property, whether such
interest is based on common law, statute or contract.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, properties, assets, liabilities or condition (financial or otherwise)
of the Company, individually and/or taken as a whole.
"PER SHARE PURCHASE PRICE" equals $0.30, subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this
Agreement.
"PERSON" shall mean any individual, partnership, limited partnership,
corporation, limited liability Company, association, joint stock company, trust,
joint venture, unincorporated organization or governmental entity or department,
agency or political subdivision thereof.
"PLAN" shall mean any employee benefit plan (within the meaning of
Section 3(3) of ERISA), established or maintained by the Company or any member
of the Controlled Group.
"PREFERRED STOCK" shall mean the 7% Convertible Series A Preferred
Stock of the Company issued pursuant to a certificate of designation that was
filed on June 18, 2003 with the Secretary of State of the State of Delaware.
"PRINCIPAL MARKET" shall mean the American Stock Exchange.
"PROPERTIES AND FACILITIES" shall have the meaning assigned to such
term in SECTION 4.1(R) hereof.
"PROPERTY" shall mean, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"PROPRIETARY RIGHTS" shall mean all patents, trademarks, trade names,
service marks, copyrights, inventions, production methods, licenses, formulas,
know-how, trade secrets and good will related to any of the foregoing,
regardless of whether such are registered with any Governmental Authorities,
including applications therefor.
"PURCHASE DOCUMENTS" shall mean this Agreement (including all schedules
attached to the Agreement), the Registration Rights Agreement, the Common Stock
and the Warrants as any or all of the foregoing may be supplemented or amended
from time to time.
-3-
"PURCHASER" shall have the meaning assigned to such term in the
introductory paragraph hereto.
"REGISTRABLE SECURITIES" shall mean the Shares, the Warrant Shares and
any shares issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event, or any exercise or other price
adjustment with respect to the Common Stock.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement of even date herewith between the Purchaser and the Company.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES" means the Shares, Warrants and the Warrant Shares.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER APPROVAL" means such approval as may be required by the
applicable rules and regulations of the American Stock Exchange (or any
successor entity) from the shareholders of the Company with respect to the
transactions contemplated by the Transaction Documents, including the issuance
of all of the Shares and Warrant Shares in excess of 19.99% of the issued and
outstanding Common Stock on the Closing Date.
"SHORT SALES" means all "short sales" as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common Stock).
"SUBSCRIPTION AMOUNT" means, as to each Purchaser, the aggregate amount
to be paid for Shares and Warrants purchased hereunder as specified below such
Purchaser's name on the signature page of this Agreement and next to the heading
"Subscription Amount," in United States dollars and in immediately available
funds.
"SUBSIDIARY" of any corporation shall mean any other corporation or
limited liability company of which the outstanding capital stock possessing a
majority of voting power in the election of directors (otherwise than as the
result of a default) is owned or controlled by such corporation directly or
indirectly through Subsidiaries.
"TOTAL ASSETS" shall mean the total consolidated assets of the Company
determined in accordance with GAAP.
"TOTAL LIABILITIES" shall mean the total consolidated liabilities of
the Company determined in accordance with GAAP.
"TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock
is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day.
-4-
"TRADING MARKET" means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.
"TRANSACTION DOCUMENTS" shall have the meaning assigned to such term in
SECTION 4.1(F) hereof.
"TRANSACTIONS" shall mean the purchase of the Shares and the Warrants
as contemplated by this Agreement, and all other agreements contemplated hereby
and thereby.
1.2 ACCOUNTING PRINCIPLES. The character or amount of any asset,
liability, capital account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement shall be determined or made in accordance with generally accepted
accounting principles in the United States of America consistently applied
("GAAP").
1.3 OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION. Whenever the context
so requires, neuter gender includes the masculine and feminine, the singular
number includes the plural and vice versa. The words "hereof" "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not in any particular provision of this
agreement, and references to section, article, annex, schedule, exhibit and like
references are references to this Agreement unless otherwise specified.
References in this Agreement to any Persons shall include such Persons'
successors and permitted assigns.
ARTICLE 2
ISSUE AND SALE OF COMMON STOCK AND WARRANTS
2.1 AUTHORIZATION AND ISSUANCE OF THE SHARES AND WARRANTS. The Company
has duly authorized the offering of the Shares and Warrants to the Purchasers.
2.2 PURCHASE PRICE. Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein,
the Company shall sell to the Purchasers, and the Purchasers shall purchase from
the Company, an aggregate of up to $2,500,000 of the Shares and the Warrants.
The Purchasers and the Company agree that the Shares and the Warrants constitute
an "INVESTMENT UNIT" for purposes of Section 1273(c)(2) of the Code. On or
before the Closing Date, each Purchaser shall notify the Company of such
Purchaser's determination of the allocation of such Purchaser's Subscription
Amount of such investment unit between the Shares and the Warrants in accordance
with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h),
and neither the Purchasers nor the Company shall take any position inconsistent
with such allocation in any tax return or in any judicial or administrative
proceeding in respect of taxes.
-5-
2.3 THE CLOSING. Delivery of and payment for the Shares and the
Warrants to be sold to the Purchasers shall be made at such place and date as
may be mutually agreeable to the Company and the Purchasers, provided that the
Company and the Purchaser agree that such date shall be as soon as reasonably
practicable following the execution of this Agreement (such date, the "CLOSING
DATE"). Delivery of the Shares and Warrants shall be made to the Purchasers
against payment of their respective Subscription Amounts by wire transfer of
immediately available funds in the manner agreed to by the Company and the
Purchasers. Each Purchaser's allocation of he Shares and the Warrants shall be
issued in the name of such Purchaser.
ARTICLE 3
CONDITIONS
3.1 CONDITIONS TO PURCHASE OF SECURITIES. The obligation of each
Purchaser to purchase and pay for the Shares and Warrants is subject to the
satisfaction, prior to or at the Closing, of the following conditions at the
time of its purchase:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of the Company contained in ARTICLE 4 hereof shall be true and
correct in all material respects at and as of the Closing Date as though then
made, except to the extent of changes caused by the transactions expressly
contemplated herein.
(b) MATERIAL ADVERSE EFFECT. There shall have been no
Material Adverse Effect from the date of execution of this Agreement through and
including the Closing Date.
(c) CLOSING DOCUMENTS. The Company shall have delivered or
ordered to be delivered to such Purchaser all of the following documents in form
and substance satisfactory to such Purchaser:
(i) this Agreement, duly completed and executed by
the Company;
(ii) a legal opinion of Company Counsel, in the
form of EXHIBIT C attached hereto;
(iii) a letter to American Stock Transfer, Inc.
("American Stock"), transfer agent for the Common Stock,
executed by the Company and in form reasonably satisfactory
to the Purchaser instructing American Stock to issue the
number of Shares equal to such Purchaser's Subscription
Amount divided by the Per Share Purchase Price, registered
in the name of such Purchaser;
(iv) a Warrant registered in the name of such
Purchaser to purchase up to a number of shares of Common
Stock equal to 50% of such Purchaser's Shares, with an
exercise price equal to $0.45, subject to adjustment
therein;
(v) the Registration Rights Agreement, duly
completed and executed by the Company;
(vi) a copy of the Charter Documents and Bylaws of
the Company certified by the Secretary or Assistant
Secretary of the Company as of the Closing Date;
-6-
(vii) copies of the resolutions duly adopted by
the Board authorizing the execution, delivery and
performance by the Company of this Agreement and each of the
other agreements, instruments and documents contemplated
hereby to which the Company is a party, and the consummation
of all of the other Transactions, certified as of each
Closing Date by the President or Secretary of the Company;
(viii) a certificate dated as of the Closing Date
from the President and Secretary, as officers of the
Company, stating that the conditions specified in this
SECTION 3.1 have been fully satisfied or waived by such
Purchhaser with respect to its purchase;
(ix) a lock-up agreement, in the form of EXHIBIT B
attached hereto, executed by (a) Xxxxx Xxxxxxxx, (b) Xxxxxxx
Xxxxxxxx and (c) any principals or affiliates of Bathgate
Capital who participate in the offering, whereby each of
them agrees to lock-up its shares of Common Stock for a
period ending 60 days after the Mandatory Registration
Statement (as defined in the Registration Rights Agreement)
is declared effective; and
(x) such other documents relating to the
Transactions contemplated by this Agreement that such
Purchaser may reasonably request.
(d) PROCEEDINGS. All proceedings taken or required to be
taken in connection with the transactions contemplated hereby to be consummated
at or prior to the Closing and all documents incident thereto will be
satisfactory in form and substance to the Purchasers.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Unless the context
requires otherwise, all references to the "Company" shall include each of the
Company's Subsidiaries. As a material inducement to each Purchaser to enter into
this Agreement and purchase the Shares and the Warrants, the Company hereby
represents and warrants to each Purchaser as follows:
(a) ORGANIZATION AND POWER. The Company is duly organized,
validly existing and in good standing under the laws of its state of
organization. The Company has all requisite corporate or other organizational
power and authority and all material licenses, permits, approvals and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the Transactions, and is qualified to do business in every jurisdiction
where the failure to so qualify might reasonably be expected to have a Material
Adverse Effect. The Company has its principal place of business in Lake Success,
New York. The copies of the Charter Documents and Bylaws of the Company that
have been furnished to the Purchasers reflect all amendments made thereto at any
time prior to the date of this Agreement and are correct and complete.
(b) PRINCIPAL BUSINESS. The Company is primarily engaged in
providing medical supplemental staffing services, as described in the Company's
Form 10-K for the fiscal year ended February 28, 2006 (the "BUSINESS").
-7-
(c) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
all reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof reports filed on Form
10-K, Form 10-Q, and Form 8-K, for the two years preceding the date hereof (or
such shorter period as the Company was required by law to file such reports)
(the foregoing materials being collectively referred to herein as the "SEC
REPORTS" and, together with the Disclosure Schedules to this Agreement (if any),
the "DISCLOSURE MATERIALS") on a timely basis or has timely filed a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments. The
Company's Common Stock is registered pursuant to Section 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that
the SEC is contemplating terminating such registration. No other information
provided by or on behalf of the Company to the Purchasers which is not included
in the SEC Reports, including in any disclosure schedules, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstance under
which they are or were made not misleading.
(d) CAPITALIZATION AND RELATED MATTERS. The capitalization
of the Company is as set forth on SCHEDULE 4.1(D), which SCHEDULE 4.1(D) shall
also include the number of shares of Common Stock owned beneficially, and of
record, by Affiliates of the Company as of the date hereof. As of the Closing
Date and immediately thereafter, the authorized capital stock of the Company and
the shares of stock that are issued, outstanding and reserved for issuance upon
conversion of notes, exercise of warrants and Options and exercise of the
Warrants hereunder (after giving effect to anti-dilution adjustments) are as set
forth on SCHEDULE 4.1(D) hereto. As of the Closing Date, the Company will not
have outstanding any capital stock or securities convertible or exchangeable for
any shares of its capital stock except as set forth in SCHEDULE 4.1(D), and will
not have outstanding any rights or options to subscribe for or to purchase its
capital stock or any stock or securities convertible into or exchangeable for
its capital stock, except as set forth in SCHEDULE 4.1(D). As of the Closing
Date, the Company will not be subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock, except as set forth herein and the Charter Documents,
respectively, as in effect on the date hereof. As of the Closing, all of the
outstanding shares of the Company's capital stock will be validly issued, fully
paid and nonassessable. Except as set forth on the SCHEDULE 4.1(D), there are no
statutory or contractual stockholders' preemptive rights or notices with respect
to the issuance of the Shares and Warrants hereunder. Subject to and based on
the accuracy of all representations made by the Purchasers in this Offering, the
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and the
offer, sale and issuance of the Shares and Warrants hereunder do not require
registration under the Securities Act or any applicable state securities laws.
No further approval or authorization of any stockholder, the Board of Directors
of the Company or others is required for the issuance and sale of the
Securities. There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company's capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company's stockholders.
-8-
(e) SUBSIDIARIES. Except as set forth on SCHEDULE 4.1(E),
the Company does not own, or hold any rights to acquire, any shares of stock or
any other security or interest in any other Person. The Company has no
Subsidiaries except as set forth on SCHEDULE 4.1(E).
(f) AUTHORIZATION; NO BREACH. The execution, delivery and
performance of the Purchase Documents (collectively, the "TRANSACTION
DOCUMENTS"), and the consummation of the Transactions have been duly authorized
by the Company. The Company has the requisite corporate power and authority to
enter into and perform its obligations under the Transaction Documents and to
issue the Shares, Warrants and Warrant Shares in accordance with the terms
hereof and thereof. No further filing, consent, or authorization is required by
the Company, its Board of Directors, or its stockholders. The execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Shares and Warrants and
reservation for issuance and issuance of the Warrant Shares) will not (i) result
in a violation of any certificates or articles of incorporation, articles of
formation, certificates or articles of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which
would with notice or lapse of time or both would become a default) in any
respect under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree, including
foreign, federal and state securities laws and regulations and the rules and
regulations of the Principal Market, applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or effective.
(g) ENFORCEABILITY. This Agreement constitutes, and each of
the other Transaction Documents when duly executed and delivered by the Company
will constitute, legal, valid and binding obligations of the Company enforceable
in accordance with their respective terms.
(h) NO MATERIAL ADVERSE CHANGE. Since the date of the latest
audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company's financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
its method of accounting or the identity of its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate. The Company does not
have pending before the SEC any request for confidential treatment of
information. Except for the issuance of the Securities contemplated by this
Agreement or as set forth on SCHEDULE 4.1(H), no event, liability or development
has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws at
the time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is
made.
-9-
(i) LITIGATION. Except as described in the SEC Reports, the
Company has not received notice of the filing of any material actions, suits or
proceedings at law or in equity or by or before any arbitrator or any
Governmental Authority (collectively, "LAWSUITS") now pending nor, to the best
knowledge of the Company's management after due inquiry, have any material
Lawsuits been threatened against or filed by or materially affecting the Company
or against any of its directors or officers or Affiliates relating to the assets
or rights of the Company or the Business.
(j) COMPLIANCE WITH LAWS. The Company is not in violation of
any applicable Law in any material respect. The Company is not in default with
respect to any judgment, order, writ, injunction, decree, rule or regulation of
any Governmental Authority. There is no investigation, enforcement action or
regulatory action pending or threatened against or affecting the Company by any
Governmental Authority. There is no remedial or other corrective action that the
Company is required to take to remain in compliance with any judgment, order,
writ, injunction or decree of any Governmental Authority or to maintain any
material permits, approvals or licenses granted by any Governmental Authority in
full force and effect. During the past five (5) years, none of the officers,
directors or management of the Company have been arrested or convicted of any
material crime nor have any of them been bankrupt or an officer or director of a
bankrupt company.
(k) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. None of the
officers or directors of the Company or the Principal Shareholders and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
(l) XXXXXXXX-XXXXX ACT. The Company is in material
compliance with any and all applicable material requirements of the
Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof, and any and
all applicable material rules and regulations promulgated by the SEC thereunder
that are effective as of the date hereof.
(m) CERTAIN FEES. Neither the Company, nor any of its
Subsidiaries or Affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Shares and
Warrants. Except for any payments that may be due to Bathgate Capital and are
set forth on SCHEDULE 4.1(M), no brokerage or finder's fees or commissions are
or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.
-10-
(n) APPLICATION OF TAKEOVER PROTECTIONS. The Company has
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company's Charter Documents, or the laws of its state of incorporation that is
or could become applicable to the Purchaser as a result of the Purchaser and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation the Company's issuance of
the Shares, the Warrants and the Warrant Shares and the ownership of the Shares,
the Warrants, and the Warrant Shares by the Purchasers
(o) TAXES. The Company has filed or caused to be filed all
Federal, state and ocal tax returns that are required to be filed by it, and has
paid or caused to be paid all taxes shown to be due and payable on such returns
or on any assessments received by it, including payroll taxes.
(p) LABOR AND EMPLOYMENT. The Company is and each of its
Plans are in compliance in all material respects with those provisions of ERISA,
the Code, the Age Discrimination in Employment Act, and the regulations and
published interpretations thereunder which are applicable to the Company or any
such Plan. The Company is in compliance in all material respects with all labor
and employment laws, rules, regulations and requirements of all applicable
domestic and foreign jurisdictions. There are no pending or threatened labor
disputes, work stoppages or strikes.
(q) PROPERTIES; SECURITY INTERESTS. The Company has good and
marketable title to, or valid leasehold interests in, all of the material assets
and properties used or useful by the Company in the Business (collectively, the
"PROPERTIES AND FACILITIES"). All of the Properties and Facilities are in good
repair, working order and condition and all such assets and properties are,
except as set forth in the SEC Reports. The Properties and Facilities constitute
all of the material assets, properties and rights of any type used in or
necessary for the conduct of the Business.
(r) INTELLECTUAL PROPERTY. The Company has good title and
ownership of, or has sufficient rights to, all trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information, proprietary rights and
processes and patents, including without limitation the Proprietary Rights
(collectively, the "INTELLECTUAL PROPERTY") used in or necessary for its
business as now conducted or as proposed to be conducted. None of the
Intellectual Property used in or necessary for the Company's business as now
conducted conflicts with or infringes, nor has the Company received any written
or oral communications alleging that the Company has violated or, by conducting
its business, would violate, any Intellectual Property of any other Person. The
transactions contemplated under this Agreement will not alter, impair or
otherwise affect any rights of the Company in the Intellectual Property. The
Company has taken commercially reasonable measures to protect the proprietary
nature of the Intellectual Property and to maintain in confidence all trade
secrets and confidential information owned or used by the Company.
There are no legal or governmental proceedings, including interference,
re-examination, reissue, opposition, nullity, or cancellation proceedings
pending that relate to any of the Intellectual Property, other than review of
pending patent applications, and the Company is not aware of any information
indicating that such proceedings are threatened or contemplated by any
governmental entity or any other Person.
-11-
(s) EMPLOYMENT AGREEMENTS; INTELLECTUAL PROPERTY AGREEMENTS.
The Company is not aware that any of its employees or independent contractors is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's or independent contractor's best efforts to promote the interest of
the Company or that would conflict with the Company's business as now conducted
or as proposed to be conducted. Neither the execution or delivery of this
Agreement, nor the carrying on of the Company's business by the employees and
independent contractors of the Company, nor the conduct of the Company's
business as now conducted, or as currently proposed to be conducted, will, to
the Company's knowledge, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee or independent contractor
is now obligated. It is not and will not be necessary to use any inventions of
any of the Company's employees (or persons the Company currently intends to
hire) made prior to their employment by the Company. The SEC Reports list all
material employment agreements, including non-competition agreements,
confidentiality and intellectual property agreements, between the Company and
its directors, officers, key employees and agents. To the knowledge of the
Company, no key employee of the Company is in violation of any term of any
employment contract, patent disclosure agreement, proprietary information
agreement, noncompetition agreement, or any other contract or agreement or any
restrictive covenant relating to the right of any such key employee to be
employed by the Company because of the nature of the business conducted or to be
conducted by the Company or relating to the use of trade secrets or proprietary
information of others, and the continued employment of the key employees does
not subject the Company or the Purchasers to any material liability to third
parties.
To the knowledge of the Company, no key employee of the Company whose
termination, either individually or in the aggregate, would have a Material
Adverse Effect, has expressed any present intention of terminating his
employment with the Company
(t) COMPLETE DISCLOSURE. Except with respect to the material
terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Purchasers or their agents or counsel with
any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in
securities of the Company. All factual information furnished by or on behalf of
the Company to the Purchasers for purposes of or in connection with this
Agreement or the Transactions is, and all other such factual information
hereafter furnished by or on behalf of the Company will be true and accurate in
all material respects on the date as of which such information is furnished and
not incomplete by omitting to state any fact necessary to make such information
not misleading at such time in light of the circumstances under which such
information was provided. The press releases disseminated by the Company during
the twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading. The Company acknowledges and agrees that no Purchaser makes or
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Article 5 herein.
(u) SIDE AGREEMENTS. Neither the Company nor any Affiliate
of the Company nor any director, officer or employee of the Company or any of
its Affiliates has entered into, as of the date hereof, any side agreement,
either oral or written, with any individual or business, pursuant to which the
director, officer, employee, Company or Affiliate agreed to do anything beyond
the requirements of the formal, written contracts executed by the Company and
disclosed in the SEC reports.
-12-
(v) PRODUCT LIABILITIES. There are no product recalls, trade
disputes, product liabilities or product tampering claims now pending,
threatened against or made by or affecting the Company or any of its directors,
officers or employees or the businesses, assets or rights of the Company.
(w) ENVIRONMENTAL LAWS. The Company and its Subsidiaries, to
their knowledge, (i) are in material compliance with any and all Environmental
Laws (as hereinafter defined), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. The term
"ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
(x) SUBSIDIARY RIGHTS. The Company or one of its
Subsidiaries has the unrestricted right to vote, and (subject to limitations
imposed by applicable law) to receive dividends and distributions on, all
capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
(y) INTERNAL ACCOUNTING AND DISCLOSURE CONTROLS. The Company
and each of its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the Exchange Act) that are effective in
ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and
forms of the SEC, including, without limitation, controls and procedures
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal executive
officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure. During the
twelve months prior to the date hereof neither the Company nor any of its
Subsidiaries have received any notice or correspondence from any accountant
relating to any potential material weakness in any part of the system of
internal accounting controls of the Company or any of its Subsidiaries.
-13-
(z) INDEBTEDNESS AND OTHER CONTRACTS. Except as disclosed in
the SEC Reports, neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract,
agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) is in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company's officers, has or is
expected to have a Material Adverse Effect. SCHEDULE 4.1(Z) provides a
description of such outstanding Indebtedness. For purposes of this Agreement:
(x) "INDEBTEDNESS" of any Person means, without duplication (A) all indebtedness
for borrowed money in excess of $100,000 individually (the "Debt Threshold"),
(B) all obligations in excess of the Debt Threshold issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar instruments in excess of the Debt Threshold, (D) all obligations in
excess of the Debt Threshold evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness in excess of
the Debt Threshold created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations in excess of the Debt Threshold under any leasing or
similar arrangement which, in connection with generally accepted accounting
principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in excess
of the Debt Threshold in respect of indebtedness or obligations of others of the
kinds referred to in clauses (A) through (G) above; (y) "CONTINGENT OBLIGATION"
means, as to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to any Indebtedness of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z)
"PERSON" means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
(aa) OFF BALANCE SHEET ARRANGEMENTS. There is no
transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed or
that otherwise would be reasonably likely to have a Material Adverse Effect.
-14-
(bb) INVESTMENT COMPANY STATUS. The Company is not, and upon
consummation of the sale of the Securities will not be, an "investment company,"
a company controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(cc) TRANSFER TAXES. On the Closing Date, all stock transfer
or other taxes (other than income or similar taxes) which are required to be
paid in connection with the sale and transfer of the Securities to be sold to
the Purchasers hereunder will be, or will have been, fully paid or provided for
by the Company, and all laws imposing such taxes will be or will have been
complied with.
(dd) FOREIGN CORRUPT PRACTICES. Neither the Company nor any
of its Subsidiaries nor any director, officer, agent, employee or other Person
acting on behalf of the Company or any of its Subsidiaries has, in the course of
its actions for, or on behalf of, the Company or any of its Subsidiaries (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
(ee) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES. No event, liability, development or circumstance has occurred or
exists, or is contemplated to occur with respect to the Company, its
Subsidiaries or their respective business, properties, prospects, operations or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.
(ff) NO INTEGRATED OFFERING. None of the Company, its
Subsidiaries, any of their affiliates, and any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the Securities Act or cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any of
the Securities under the Securities Act or cause the offering of the Securities
to be integrated with other offerings.
(gg) SOLVENCY. Based on the consolidated financial condition
of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair
saleable value of the Total Assets exceeds the amount that will be required to
be paid on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Total Assets
do not constitute unreasonably small capital to carry on its business as now
conducted and as proposed to be conducted including its capital needs taking
into account the particular capital requirements of the business conducted by
the Company, and projected capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of the Total
Assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its liabilities when such
amounts are required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.
-15-
(hh) NO GENERAL SOLICITATION. Neither the Company nor any
person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has
offered the Securities for sale only to the Purchasers and certain other
"accredited investors" within the meaning of Rule 501 under the Securities Act.
(ii) ACCOUNTANTS. The Company's accounting firm is set forth
on SCHEDULE 4.1(II). To the knowledge and belief of the Company, such accounting
firm (i) is a registered public accounting firm as required by the Exchange Act
and (ii) shall express its opinion with respect to the financial statements to
be included in the Company's Annual Report on Form 10-K for the year ending
February 28, 2007.
(jj) NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There
are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company which could affect the Company's
ability to perform any of its obligations under any of the Transaction
Documents, and except as set forth in SCHEDULE 4.1(JJ) the Company is current
with respect to any fees owed to its accountants and lawyers.
(kk) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF
SECURITIES. The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm's length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchasers' purchase of the Securities. The
Company further represents to each Purchaser that the Company's decision to
enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by
the Company and its representatives.
(ll) ACKNOWLEDGEMENT REGARDING PURCHASER'S TRADING ACTIVITY.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except as set forth in Sections 5.7 and 6.1(m)), it is understood and
acknowledged by the Company (i) that none of the Purchasers have been asked by
the Company to agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or "derivative"
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) that past or future open market or other
transactions by any Purchaser, including Short Sales, and specifically
including, without limitation, Short Sales or "derivative" transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company's publicly-traded securities;
(iii) that any Purchaser, and counter-parties in "derivative" transactions to
which any such Purchaser is a party, directly or indirectly, presently may have
a "short" position in the Common Stock, and (iv) that each Purchaser shall not
be deemed to have any affiliation with or control over any arm's length
counter-party in any "derivative" transaction. The Company further understands
and acknowledges that (a) one or more Purchasers may engage in hedging
activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Warrant Shares deliverable with respect to Securities are being determined
and (b) such hedging activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.
-16-
(mm) REGULATION M COMPLIANCE. The Company has not, and to
its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Securities, or (iii) paid
or agreed to pay to any Person any compensation for soliciting another to
purchase any other securities of the Company, other than, in the case of clauses
(ii) and (iii), compensation paid to Bathgate Capital in connection with the
placement of the Securities.
4.2 SURVIVAL OF COMPANY REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement and any financial
statements, instruments, certificates, schedules or other documents delivered in
connection herewith, shall survive the execution and delivery of this Agreement
only for a period of twenty-four (24) months from the date of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Each Purchaser hereby represents and warrants to the Company as
follows:
5.1 PURCHASE ENTIRELY FOR ITS OWN ACCOUNT. This Agreement is made with
such Purchaser in reliance upon its representation to the Company that the
Shares and the Warrants will be acquired for investment for such Purchaser's own
account, not as a nominee or agent, and not with any agreement for the resale or
distribution of any part thereof. Subject to the immediate preceding sentence,
nothing contained herein shall be deemed a representation or warranty by such
Purchaser to hold any of the Securities for any period of time.
5.2 DISCLOSURE OF INFORMATION. The Purchaser has had the opportunity
to ask questions of, and receive answers from officers and directors of the
Company, to review the SEC Reports, and to obtain additional information
regarding the Company and this Offering. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser's right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company's
representations and warranties contained in the Purchase Documents.
-17-
5.3 ACCREDITED AND SOPHISTICATED INVESTOR; INVESTMENT EXPERIENCE. The
Purchaser represents that it is a sophisticated investor and an "accredited
investor" as defined in Rule 501 under the Securities Act. Such Purchaser also
represents that it is an investor in restricted securities and acknowledges that
it is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares and
Warrants and can bear the economic risk of loss of the investment in the
Securities being purchased.
5.4 RESTRICTED SECURITIES. The Purchaser acknowledges that the Shares,
the Warrants and the Warrant Shares have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available.
5.5 ASSIGNMENT. Upon the assignment or transfer by such Purchaser or
any of its successors or assignees of all or any part of the Warrants, the term
"Purchaser" as used herein shall thereafter mean, to the extent thereof, the
then holder or holders of such Warrants, or portion thereof.
5.6 SHORT SALES AND CONFIDENTIALITY PRIOR TO THE DATE HEREOF. Other
than consummating the transactions contemplated hereunder, such Purchaser has
not, nor has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing from the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder
until the date hereof ("DISCUSSION TIME"). Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser's assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).
ARTICLE 6
COVENANTS
6.1 COVENANTS. The Company covenants that, so long as the Purcchasers
own any Shares, Warrants or Warrant Shares, the Company shall:
(a) EXISTENCE. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence.
(b) FURNISHING OF INFORMATION. Timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company pursuant to the Exchange Act, and if
the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Purchaser and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchaser to sell the
Shares and Warrant Shares under Rule 144. The Company further covenants that it
will take such further action as any holder of Shares, Warrants and/or the
Warrant Shares may reasonably request, all to the extent required from time to
time to enable such Person to sell the Shares or Warrant Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.
-18-
(c) LEGENDS. Unless (i) the Shares and Warrant Shares have
been registered under the Securities Act, (ii) such Shares and Warrant Shares
have been sold pursuant to Rule 144, (iii) such Shares and Warrant Shares are
eligible for sale under Rule 144(k) or (iv) such legend on the Shares and
Warrant Shares is not required under the applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the SEC), the Company shall instruct its transfer agent to enter
stop transfer orders with respect to such Shares and Warrants Shares, and all
certificates or instruments representing the Shares, Warrants and Warrant Shares
shall bear on the face thereof substantially the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED, IN THE ABSENCE OF
SUCH REGISTRATION, UNLESS THE COMPANY IS REASONABLY SATISFIED THAT THE PROPOSED
SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS.
If the legend is not required pursuant to clauses (i)-(iv) herein, the Company
shall cause its counsel to issue a legal opinion to the Company's transfer agent
if required by such transfer agent to effect the removal of such legend. If all
or a portion of a Warrant is exercised at such time as no legend is required
pursuant to clauses (i)-(iv) herein, such Warrant Shares shall be issued free of
all legends. The Company agrees that on such date that a legend is no longer
required pursuant to clauses (i)-(iv) herein, the Company shall deliver or cause
to be delivered to a Purchaser, no later than 3 Business Days (such third
Business Day, the "LEGEND REMOVAL DATE") following the delivery by such
Purchaser to the Company or its transfer agent of a certificate representing
Shares or Warrant Shares, as the case may be, a certificate representing such
shares that is free from all restrictive and other legends (such shares without
restrictions or legends, the "UNLEGENDED SHARES"). The Company may not make any
notation on its records or give instructions to its transfer agent that enlarge
the restrictions on transfer set forth in this Section 5.5. Certificates for
Shares or Warrant Shares subject to legend removal hereunder shall be
transmitted by the Company's transfer agent to such Purchaser by crediting the
account of such Purchaser's prime broker with the Depository Trust Company
System.
In addition to any other rights available to the Purchaser, if the Company fails
to cause its transfer agent to transmit to the Purchaser a certificate or
certificates representing the Unlegended Shares on or prior to the Legend
Removal Date, and if after such Legend Removal Date the Purchaser is required by
its broker to purchase (in an open market transaction or otherwise), or the
Purchaser's brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Purchaser of the Unlegended Shares
which the Purchaser anticipated receiving by such Legend Removal Date (a
"BUY-IN"), then the Company shall (1) pay in cash to the Holder the amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of Unlegended Shares that the Company was required
to deliver to the Purchaser on the applicable Legend Removal Date times (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) deliver to the Holder the number of Unlegended Shares that
would have been issued had the Company timely complied with its delivery
obligations hereunder. For example, if the Purchaser purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to
Unlegended Shares with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (1) of the immediately preceding sentence
the Company shall be required to pay the Purchaser $1,000. The Purchaser shall
provide the Company written notice indicating the amounts payable to the
Purchaser in respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss. Nothing herein shall limit a Purchaser's right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
Unlegended Shares as required pursuant to the terms hereof.
-19-
(d) INDEMNIFICATION OF INVESTORS. In addition to the
indemnity provided in Article 7, indemnify and hold each Purchaser and its
respective directors, officers, partners, representatives, employees and agents
(each, an "INVESTOR PARTY") harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of investigation (collectively, "LOSSES") that any such Investor
Party may suffer or incur as a result of or relating to any misrepresentation,
breach or inaccuracy of any representation, warranty, covenant or agreement made
by the Company in any Transaction Document. In addition to the indemnity
contained herein, the Company will reimburse each Investor Party for its
reasonable legal and other expenses (including the cost of any investigation,
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred.
(e) COMMON STOCK RESERVE. Maintain in reserve, at all times
that the Warrants are unexercised, authorized, but unissued and unreserved,
shares of Common Stock for issuance upon exercise of the Warrants.
(f) USE OF PROCEEDS. Use the funds received from the
Purchasers in connection with the Transactions substantially in accordance with
the "USE OF PROCEEDS SCHEDULE" attached hereto as SCHEDULE 6.1(E).
(g) FURTHER ASSURANCES. With reasonable promptness, execute
and deliver to the Purchaser, from time to time, upon the reasonable request of
the Purchaser, such supplemental agreements, statements, assignments and
transfers, or instructions on documents as the Purchaser may request in order
that the full intent of this Agreement and the other Purchase Documents may be
carried into effect.
(h) NO NEW FINANCINGS. From the date of this Agreement until
the date ninety (90) days after the effectiveness of the Mandatory Registration
Statement (as defined in the Registration Rights Agreement) (the "BLOCKAGE
PERIOD"), the Company shall not, without the prior written consent of Purchasers
holding a majority-in-interest of the then-outstanding Securities, (i) issue any
equity securities of the Company other than under this Agreement or in
connection with exercises of options or warrants of the Company outstanding as
of the date hereof or issued hereafter as permitted hereby, except for (A)
securities issued in a registered public offering, (B) securities issued to a
party in connection with forming a strategic relationship or alliance with that
party or (C) Common Stock and Warrants issued for aggregate consideration of not
more than $1,000,000 contemporaneously herewith to other investors on terms
substantially similar to the terms hereof, or (ii) enter into any debt financing
arrangements not in place on the date hereof. Notwithstanding the foregoing, the
Company may during the Blockage Period enter into new or additional senior debt
arrangements or facilities and/or mezzanine debt arrangements or facilities
involving notes with minimum terms of at least two years and which may include
the issuance of warrants to purchase Common Stock of the Company, so long as
after entering into such arrangements or facilities, on a pro forma basis based
on the financial statements of the Company for the quarter last ended before
entering into the arrangements or facilities, and assuming full advance of all
amounts available under the arrangements or facilities, neither the Current
Ratio nor the ratio of Total Assets to Total Liabilities of the Company is less
than 1:1.
-20-
(i) NO VARIABLE FINANCINGS For so long as the Warrants
issued hereunder remain outstanding, the Company shall not enter into any
agreements under which it agrees to issue equity over a period of time in
accordance with a pricing formula that varies over that period of time depending
on the market price of the equity of the Company at the time of issuance.
(j) REDEMPTIONS. For so long as the Warrants issued
hereunder remain outstanding, the Company shall not redeem any shares of its
capital stock, other than mandatory redemptions of the Preferred Stock in
accordance with its terms.
(k) SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company
shall, by 8:30 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a Current Report on Form 8-K, disclosing the
material terms of the transactions contemplated hereby, and filing the
Transaction Documents as exhibits thereto. The Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser
shall issue any such press release or otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of
any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the SEC or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except (i)
as required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents (including signature pages thereto) with the SEC
and (ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (ii).
(l) NON-PUBLIC INFORMATION. Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company covenants and agrees that neither it nor any
other Person acting on its behalf will provide any Purchaser or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.
-21-
(m) LISTING OF COMMON STOCK.(n) The Company hereby agrees to
use best efforts to maintain the listing of the Common Stock on a Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the earlier of the date of effectiveness of the Mandatory
Registration Statement and the first anniversary of the Closing Date) to list
all of the Shares and Warrant Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Trading Market, it will include in such application all of the Shares and
Warrant Shares, and will take such other action as is necessary to cause all of
the Shares and Warrant Shares to be listed on such other Trading Market as
promptly as possible. The Company will take all action reasonably necessary to
continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Trading Market.
(n) INTEGRATION. The Company shall not sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers or that
would be integrated with the offer or sale of the Securities to the Purchasers
for purposes of the rules and regulations of any Trading Market such that it
would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.
(o) SHAREHOLDER APPROVAL. Unless Shareholder Approval has
been obtained and deemed effective, neither the Company nor any Subsidiary shall
make any issuance whatsoever of Common Stock or Common Stock Equivalents which
would cause any adjustment of the exercise price of the Warrants to the extent
that the holders of the Warrants would not be permitted, pursuant to Section
1(c)(ii) of the Warrants, to exercise their respective Warrants in full. Any
Purchaser shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to
collect damages
(p) SHORT SALES AND CONFIDENTIALITY AFTER THE DATE HEREOF.
Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any Short Sales during the period commencing
at the Discussion Time and ending at the time that the transactions contemplated
by this Agreement are first publicly announced as described in Section 6(j).
Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company as described in Section 6(j), such Purchaser
will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Disclosure Schedules. Each Purchaser,
severally and not jointly with any other Purchaser, understands and acknowledges
and agrees to act in a manner that will not violate the positions of the SEC as
set forth in Item 65, Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of Chief Counsel,
Division of Corporation Finance. Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 6(j). Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
-22-
ARTICLE 7
MISCELLANEOUS
7.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that (a) the Company may not assign or transfer its rights
hereunder or any interest herein or delegate its duties hereunder.
7.2 MODIFICATIONS AND AMENDMENTS. The provisions of this Agreement may
be modified, waived or amended, but only by a written instrument signed by the
Company and each Purchaser.
7.3 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No
delay or failure in exercising any right, power or remedy hereunder shall affect
or operate as a waiver thereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies that the Purchaser or any holder of Warrants or Warrant
Shares would otherwise have. Any waiver, permit, consent or approval of any kind
or character of any breach or default under this Agreement or any such waiver of
any provision or condition of this Agreement must be in writing, and shall be
effective only to the extent in such writing specifically set forth.
7.4 FEES AND EXPENSES. At Closing, the Company agrees to pay to Enable
Capital $15,000 as reimbursement of Enable's legal fees in connection with the
preparation of the Purchase Documents and other expenses. It is understood that
counsel for Enable has only rendered legal advice to Enable, and not to the
Company or any other Person in connection with the transactions contemplated
hereby, and that each of the Company and Enable has relied for such matters on
the advice of its own respective counsel. Except as specified in the immediately
preceding sentence, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of the Purchase Documents.
7.5 REIMBURSEMENT OF EXPENSES-ENFORCEMENT AND COLLECTION. The Company
upon demand shall pay or reimburse the Purchaser for all fees and expenses
incurred or payable by the Purchaser (including, without limitation, reasonable
fees and expenses of counsel for the Purchaser), from time to time arising in
connection with the enforcement of this Agreement.
-23-
7.6 NOTICES. All notices and other communications given to or made
upon any party hereto in connection with this Agreement shall, except as
otherwise expressly herein provided, be in writing (including telecopy, but in
such case, a confirming copy will be sent by another permitted means) and mailed
via certified mail, telecopied or delivered by guaranteed overnight parcel
express service or courier to the respective parties, as follows:
TO THE COMPANY:
ATC Healthcare, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Keevican Xxxxx Xxxxxxx & Xxxxxx LLC
11th Floor, Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
and
TO EACH PURCHASER AS SET FORTH ON THE SIGNATURE PAGE HERETO;
or in accordance with any subsequent written direction from the recipient party
to the sending party. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective upon delivery if delivered by
courier or overnight parcel express service; in the case of certified mail,
three (3) Business Days after the date sent; or in the case of telecopy, when
received.
7.7 SURVIVAL. All representations, warranties, covenants and
agreements of the Company contained herein or made in writing in connection
herewith shall survive the execution and delivery of this Agreement, the Closing
and the purchase and delivery of the Common Stock and Warrants.
7.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflict of laws principles. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York, County of New York, and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY.
7.9 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchaser
will be entitled to specific performance under the Purchase Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.
-24-
7.10 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement.
7.11 HEADINGS. Article, section and subsection headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
7.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by any party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.
7.13 INTEGRATION. This Agreement and the other Purchase Documents set
forth the entire understanding of the parties hereto with respect to all matters
contemplated hereby and supersede all previous agreements and understandings
among them concerning such matters. No statements or agreements, oral or
written, made prior to or at the signing hereof, shall vary, waive or modify the
written terms hereof.
7.14 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through FWS. FWS
does not represent any of the Purchasers but only Enable, as investment advisor
to one or more Purchasers. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by the Purchasers.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
-25-
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
ATC Healthcare, Inc., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
[PURCHASER SIGNATURE PAGES TO AHN SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Purchaser: ______________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF PURCHASER: _________________________
Name of Authorized Signatory: ___________________________________________
Title of Authorized Signatory: __________________________________________
Email Address of Purchaser:______________________________________________
Fax Number of Purchaser: ________________________________________________
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same as address for
notice):
Subscription Amount: $__________
Shares: ________________________
Warrant Shares: ________________
