SECURITIES PURCHASE AGREEMENT
Exhibit
10.01
This
Securities Purchase Agreement (this “AGREEMENT”) is dated as of February 26,
2007, among Triangle Petroleum Corporation, a Nevada corporation (the
“COMPANY”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “PURCHASER” and collectively the
“PURCHASERS”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act and Rule 506 promulgated thereunder, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, on the Closing
Date, that number of Shares as is set forth on the Purchaser Signature Page
of
that Purchaser.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchasers, acting severally,
agree
as follows:
ARTICLE
I.
DEFINITIONS
1.1 DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this
Section 1.1:
“ACTION”
shall have the meaning ascribed to such term in Section 3.1(j).
“AFFILIATE”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
a
Person as such terms are used in and construed under Rule 144. With respect
to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.
“CLOSING”
means the closing of the purchase and sale of the Common Stock pursuant to
Section 2.1.
“CLOSING
DATE” means the Trading Day when all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities have been satisfied or
waived. The Closing Date shall be February 26, 2007, but the Company may extend
it one or more times, by notice to the Purchasers given at any time prior to
or
on the Closing Date (as previously extended, if applicable), to a date not
later
than the date set forth in Section 5.1.
“COMMISSION”
means the Securities and Exchange Commission.
“COMMON
STOCK” means the common stock of the Company, par value $.00001 per share, and
any securities into which such common stock may hereafter be reclassified.
“COMMON
STOCK EQUIVALENTS” means any securities of the Company or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for,
or
otherwise entitles the holder thereof to receive, Common Stock.
“COMPANY
COUNSEL” means Sichenzia
Xxxx
Xxxxxxxx
Xxxxxxx
LLP.
“EFFECTIVE
DATE” means the date that the initial registration statement filed by the
Company for the Registrable Securities is first declared effective by the
Commission.
“EVALUATION
DATE” shall have the meaning ascribed to such term in Section 3.1(r).
“EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“INTELLECTUAL
PROPERTY RIGHTS” shall have the meaning ascribed to such term in Section 3.1(o).
“LEGEND
REMOVAL DATE” shall have the meaning ascribed to such term in Section 4.1(c).
“LIENS”
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.
“MATERIAL
ADVERSE EFFECT” shall have the meaning ascribed to such term in Section 3.1(b).
“MATERIAL
PERMITS” shall have the meaning ascribed to such term in Section 3.1(m).
“PER
SHARE PURCHASE PRICE” equals $2.00, 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
and
have a record date prior to the Closing Date.
“PERSON”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
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“PROCEEDING”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“PURCHASER
PARTY” shall have the meaning ascribed to such term in Section 4.9.
“REGISTRABLE
SECURITIES” means all of the Shares
purchased hereunder and held
by
the Purchasers, together with any shares of Common Stock issued or issuable
with
respect to the Shares as a result of any stock split, dividend or other
distribution, recapitalization or similar event.
“REGISTRATION
AGREEMENT” means that certain Registration Agreement, dated as of the date
hereof, by and among the Company and the Purchasers.
“REGISTRATION
STATEMENT” means a registration statement covering the resale of the Registrable
Securities.
“REQUIRED
APPROVALS” shall have the meaning ascribed to such term in Section 3.1(e).
“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
REPORTS” shall have the meaning ascribed to such term in Section 3.1(h).
“SECURITIES”
means the Shares.
“SECURITIES
ACT” means the Securities Act of 1933, as amended.
“SHARES”
means the shares of Common Stock issued or issuable to each Purchaser pursuant
to this Agreement.
“SHORT
SALES” shall include, without limitation, all “short sales” as defined in
Regulation SHO of the Commission.
“SUBSCRIPTION
AMOUNT” means, as to each Purchaser, the amounts set forth below such
Purchaser’s signature block on the signature page hereto, in United States
dollars and in immediately available funds.
“SUBSIDIARY”
shall mean the subsidiaries of the Company, if any, as described in Section
3.1(a).
“TRADING
DAY” means a day on which the Common Stock is traded on a Trading Market.
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“TRADING
MARKET” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the American Stock
Exchange, the New York Stock Exchange, the Nasdaq National Market, the Nasdaq
SmallCap Market, or the Over the Counter Bulletin Board Market.
“TRANSACTION
DOCUMENTS” means this Agreement, the Registration Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.
ARTICLE
II.
PURCHASE
AND SALE
2.1 CLOSING.
On the Closing Date, each Purchaser shall purchase from the Company, severally
and not jointly with the other Purchasers, and the Company shall issue and
sell
to each Purchaser, a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Per Share Purchase Price. The aggregate number of Shares
sold hereunder shall not exceed 11,600,000. Upon satisfaction of the conditions
set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of
Company Counsel or such other location as the parties shall mutually agree.
2.2 DELIVERIES.
(a) On
the
Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
copy of
the irrevocable instructions to the Company’s transfer agent instructing the
transfer agent to deliver, on an expedited basis, a certificate evidencing
a
number of Shares equal to such Purchaser’s Subscription Amount divided by the
Per Share Purchase Price, registered in the name of such Purchaser;
(iii) the
Registration Agreement, duly executed by the Company;
(iv) a
legal
opinion of Company Counsel, substantially in the form of EXHIBIT A attached
hereto; and
(v) a
certificate, executed by the Chief Executive Officer of the Company, dated
as of
the Closing Date, certifying that the representations and warranties of the
Company were true and correct as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties
that
speak as of a specific date) and that the Company has performed, satisfied
and
complied in all respects with all covenants, obligations, agreements and
conditions required by the Transaction Documents to be performed, satisfied
or
complied with by the Company at or prior to the Closing Date.
(b) On
the
Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the following:
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(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company.
2.3 CLOSING
CONDITIONS.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all respects as of the date when made and as of the Closing Date
of
the representations and warranties of the Purchasers contained herein (except
for representations and warranties that speak as of a specific
date);
(ii) all
obligations, covenants and agreements of the Purchasers required to be performed
at or prior to the Closing Date shall have been performed; and
(iii)
the
delivery by the Purchasers of the items set forth in Section 2.2(b) of this
Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the
accuracy in all respects as of the date when made and as of the Closing Date
of
the representations and warranties of the Company contained herein (except
for
representations and warranties that speak as of a specific date);
(ii) all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof;
(v) the
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Shares; and
(vi) From
the
date hereof to the Closing Date, trading in the Common Stock shall not have
been
suspended by the Commission (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior
to
the Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States
or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of
such
magnitude in its effect on, or any material adverse change in, any financial
market that, in each such case, in the reasonable judgment of a majority in
interest of the Purchasers, makes it impracticable or inadvisable to purchase
the Shares at the Closing.
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ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company hereby makes the representations
and
warranties set forth below to each Purchaser:
(a) SUBSIDIARIES.
Elmsworth Energy
Corporation, incorporated under the laws of Alberta, Canada, and Triangle USA
Petroleum Corporation, a Colorado corporation, are the only Subsidiaries of
the
Company. The Company has no direct or indirect equity interest in any other
entity. The Company owns, directly or indirectly, all of the capital stock
or
other equity interests of each Subsidiary free and clear of any Liens, and
all
the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.
(b) ORGANIZATION
AND QUALIFICATION. The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing
under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation or default of any of
the
provisions of its respective certificate or articles of incorporation, bylaws
or
other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing
as a
foreign corporation or other entity in each jurisdiction in which the nature
of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing,
as
the case may be, would not reasonably be expected to result in (i) a material
adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the operations (including results
thereof), assets, business, liabilities, prospects or condition (financial
or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii)
a
material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document (any
of
(i), (ii) or (iii), a “MATERIAL ADVERSE EFFECT”) and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.
(c) AUTHORIZATION;
ENFORCEMENT. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations thereunder.
The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith other than in
connection with the Required Approvals. Each of the Transaction Documents has
been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
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(d) NO
CONFLICTS. The execution, delivery and performance of the Transaction Documents
by the Company, the issuance and sale of the Shares and the consummation by
the
Company of the other transactions contemplated thereby do not and will not
(i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company
or
any Subsidiary is a party or by which any property or asset of the Company
or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal
and
state securities laws and regulations), or by which any property or asset of
the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as would not reasonably be expected to result
in a
Material Adverse Effect.
(e) FILINGS,
CONSENTS AND APPROVALS. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than
(i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing
with the Commission of a Registration Statement, (iii) application(s) to each
applicable Trading Market for the listing of the Shares for trading thereon
in
the time and manner required thereby, and (iv) the filing of Form D with the
Commission and such filings as are required to be made under applicable state
securities laws (collectively, the “REQUIRED APPROVALS”).
(f) ISSUANCE
OF THE SECURITIES. The Shares are duly authorized and, when issued and paid
for
in accordance with the Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents.
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(g) CAPITALIZATION.
The authorized capital stock of the Company consists of 100,000,000 shares
of
common stock. As of January
31,
2007,
there were 22,475,866
shares
of Common Stock issued and outstanding. As of January
31,
2007, an
aggregate of 2,000,000 shares of Common Stock are reserved for issuance pursuant
to the Company’s 2005 Incentive Stock Plan, of which 1,630,000
are
reserved for issuance upon exercise of outstanding options and options remaining
available for issuance upon exercise under the Company’s 2005 Incentive Stock
Plan; (i)
6,000,000
shares
of Common Stock were reserved for issuance upon exercise of outstanding
warrants; and (ii)
10,306,664
shares
of Common Stock were reserved for issuance upon conversion of convertible
debentures. Other than as specified above, no other shares or options, warrants
or other rights to acquire shares of capital stock of the Company or securities
convertible into capital stock of the Company are outstanding. The Company
has
not issued any capital stock since its most recently filed periodic report
under
the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plan and pursuant
to the conversion or exercise of outstanding Common Stock Equivalents. No Person
has any right of first refusal, preemptive right, right of participation, or
any
similar right to participate in the transactions contemplated by the Transaction
Documents. Except as set forth in the Company’s SEC Reports, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights
or
obligations convertible into or exchangeable for, or giving any Person any
right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock
or
Common Stock Equivalents. The issue and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of
securities of the Company to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding shares of capital stock
of
the Company are validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Shares. 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.
(h) SEC
REPORTS; FINANCIAL STATEMENTS. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a)
or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC REPORTS”)
on a timely basis or has received 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 Commission 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 Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the
notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, 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. No event, liability, development
or
circumstance has occurred or exists, or is contemplated to occur, with respect
to the Company or any of its Subsidiaries or their respective business, assets,
properties, prospects, operations (including results thereof), liabilities
or
condition (financial or otherwise), 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 Commission relating to an issuance and sale by the Company
of
its Common Stock and which has not been publicly announced, other than the
transactions contemplated by this Agreement.
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(i) MATERIAL
CHANGES. 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 and accrued expenses incurred in the ordinary course of business
consistent with past practice, (B) liabilities not required to be reflected
in
the Company’s financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend
or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.
The Company does not have pending before the Commission any request for
confidential treatment of information.
(j) LITIGATION.
There is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “ACTION”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected
to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor, to the knowledge of the Company, any director or officer thereof, is or
has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending
or
threatened, any investigation by the Commission involving the Company or any
current director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or
the
Securities Act.
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(k) LABOR
RELATIONS. No material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the Company which could
reasonably be expected to result in a Material Adverse Effect.
(l) COMPLIANCE.
Except in each case as would not reasonably be expected to have a Material
Adverse Effect, neither the Company nor any Subsidiary (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether
or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been
in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business.
(m) REGULATORY
PERMITS. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local
or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits would not reasonably be expected to result in a Material Adverse Effect
(“MATERIAL PERMITS”), and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
Material Permit.
(n) TITLE
TO
ASSETS. The Company and the Subsidiaries have good and defensible title in
fee
simple to all real property owned by them that is material to the business
of
the Company and the Subsidiaries and good and defensible title to all personal
property owned by them that is material to the business of the Company and
the
Subsidiaries, in each case free and clear of all Liens, except for Liens
securing borrowings as disclosed in the SEC Reports, Liens as do not materially
affect the value of the Company’s properties taken as a whole and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company
and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the Subsidiaries are in compliance in all material
respects.
(o) PATENTS
AND TRADEMARKS. The Company and the Subsidiaries have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights necessary
or
material for use in connection with their respective businesses as described
in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “INTELLECTUAL PROPERTY RIGHTS”). Neither the Company
nor any Subsidiary has received a written notice that the Intellectual Property
Rights used by the Company or any Subsidiary violates or infringes upon the
rights of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights of others.
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(p) INSURANCE.
The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, excluding directors
and officers insurance. Neither the Company nor any Subsidiary has any reason
to
believe that it will not be able to renew its existing insurance coverage as
and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase
in
cost.
(q) TRANSACTIONS
WITH AFFILIATES AND EMPLOYEES. Except as set forth in the SEC Reports, none
of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real
or personal property to or from, or otherwise requiring payments to or from
any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $60,000 other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company
and
(iii) for other employee benefits, including stock option agreements under
any
stock option plan of the Company.
(r) XXXXXXXX-XXXXX;
INTERNAL ACCOUNTING CONTROLS. The Company is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 that are applicable to it as of
the
Closing Date. The Company’s certifying officers have evaluated the effectiveness
of the Company’s disclosure controls and procedures and internal controls and
procedures as of the date prior to the filing date of the most recently filed
periodic report under the Exchange Act (such date, the “EVALUATION DATE”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures and internal controls and procedures based
on
their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company’s internal controls (as such
term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or,
to
the Company’s knowledge, in other factors that could significantly affect the
Company’s internal controls.
(s) CERTAIN
FEES. Other than the fees payable to Capital One Southcoast, Inc, and Xxxxxxxxx
Energy Partners, Inc. (the “PLACEMENT AGENTS”) pursuant to the terms of their
engagement letter with the Company of 6.5% of the aggregate Share Purchase
Prices, divided among them 70% and 30%, respectively, 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.
(t) PRIVATE
PLACEMENT. Assuming the accuracy of the representations and warranties of the
Purchasers set forth in Section 3.2, no registration under the Securities Act
is
required for the offer and sale of the Securities by the Company to the
Purchasers as contemplated hereby. The issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the Trading Market.
11
(u) INVESTMENT
COMPANY. The Company is not, and is not an Affiliate of, and immediately after
receipt of payment for the Shares, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company shall conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(v) LISTING
AND MAINTENANCE REQUIREMENTS. 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 Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not
in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements.
(w) APPLICATION
OF TAKEOVER PROTECTIONS. The Company and its Board of Directors have taken
all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution
under
a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of
its
state of incorporation or otherwise existing that could become applicable to
the
Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation the Company’s issuance of the Securities to each
Purchaser pursuant to this Agreement. The Company has not adopted a shareholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of shares of Common Stock or a change in control of the
Company.
(x) DISCLOSURE.
The Company confirms that all disclosure provided to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including
the Company’s Private Placement Memorandum (the “PPM”) and the representations
and warranties set forth in this Agreement do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make
the statements made therein, in light of the circumstances under which they
were
made, not misleading. 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
Section 3.2 hereof. The Company represents that the PPM does not contain any
material nonpublic information concerning the Company or its securities, other
than information that will be contained in the Current Report that is referred
to in Section 4.4.
(y) NO
INTEGRATED OFFERING. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, neither the Company, nor to the
Company’s knowledge, any of its Affiliates, nor any Person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Securities Act or any applicable
shareholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market on which any of the securities of the
Company are listed or designated.
12
(z) SOLVENCY.
Based on the financial condition of the Company as of the Closing Date after
giving effect to the receipt by the Company of the proceeds from the sale of
the
Securities hereunder, (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal
year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts
are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). 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. The SEC Reports
set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or
any
Subsidiary has commitments. For the purposes of this Agreement, “INDEBTEDNESS”
shall mean (a) any liabilities for borrowed money or amounts owed in excess
of
$50,000 (other than trade accounts payable incurred in the ordinary course
of
business), (b) all guaranties, endorsements and other contingent obligations
in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection
or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $50,000 due under leases required
to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
is
in default with respect to any Indebtedness.
(aa) TAXES.
Except for matters that would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, the Company and each
Subsidiary have filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a material tax deficiency which has been
asserted or threatened against the Company or any Subsidiary.
(bb) NO
GENERAL SOLICITATION. Neither the Company nor any person acting on behalf of
the
Company has offered or sold any of the Shares by any form of general
solicitation or general advertising. The Company has offered the Shares for
sale
only to the Purchasers and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act and “qualified institutional
buyers” as defined in Rule 144A(a) under the Securities Act.
13
(cc) FOREIGN
CORRUPT PRACTICES. Neither the Company, nor to the knowledge of the Company,
any
agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment
or
other unlawful expenses related to foreign or domestic political activity,
(ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(dd) ACCOUNTANTS.
The Company’s accountants are named in the Company’s Form 10-KSB for the fiscal
year ended January 31, 2006. To the Company’s knowledge, such accountants, who
the Company expects to express their opinion with respect to the financial
statements to be included in the Company’s Annual Report on Form 10-KSB
for
the fiscal year ended January 31, 2007, and with respect to the adequacy of
the
Company’s internal controls, are a registered public accounting firm as required
by the Securities Act.
(ee) ACKNOWLEDGMENT
REGARDING PURCHASERS’ PURCHASE OF SHARES. 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 hereby. 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 this Agreement and the transactions contemplated
hereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to such Purchaser’s purchase of the
Shares. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company and its
representatives.
(ff) ACKNOWLEDGEMENT
REGARDING PURCHASERS’ TRADING ACTIVITY. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f), 3.2(h)
and
4.8 hereof), it is understood and agreed by the Company (i) that none of the
Purchasers have been asked 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.
(gg) NO
MANIPULATION OF STOCK. The Company has not and to its knowledge no one acting
on
its behalf has, in violation of applicable law, (i) taken (directly or
indirectly), any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security
of
the Company to facilitate the sale or resale of the Securities, (ii) sold,
bid
for, purchased, or paid any compensation for soliciting purchases of any of
the
Securities, other than the Placement Agents’ placement 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. The Company will not
(and shall cause all Persons acting on its behalf to not) directly or indirectly
do any of the foregoing.
14
(hh) SB-2
STATUS. The Company meets the requirements for the use of Form SB-2 for the
registration of the resale of the Shares by the Purchasers and will use its
reasonable best efforts to maintain SB-2 status with the Commission during
the
period it is required by the Registration Agreement to maintain such
registration of the resale of the Registrable Securities. To the knowledge
of
the Company, there exist no facts or circumstances that could reasonably be
expected to prohibit or delay the preparation or initial filing of the
Registration Statement that is required by the Registration Agreement to effect
such registration.
(ii) MATERIAL
CONTRACTS. All material agreements to which the Company or any Subsidiary is
a
party and which are required to have been filed by the Company pursuant to
the
Securities Act or the Exchange Act have been filed by the Company with the
Commission pursuant to the requirements of the Securities Act or the Exchange
Act, as applicable. Each such agreement is in full force and effect and is
binding on the Company or a Subsidiary, as applicable, and, to the Company’s
knowledge, is binding upon such other parties, in each case in accordance with
its terms, and neither the Company or a Subsidiary, as applicable, nor, to
the
Company’s knowledge, any other party thereto is in breach of or default under
any such agreement, which breach or default would reasonably be expected to
have
a Material Adverse Effect. The Company has not received any written notice
regarding the termination of any such agreements.
3.2 REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS. Each Purchaser hereby, for itself and for
no
other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:
(a) ORGANIZATION;
AUTHORITY. Such Purchaser is an entity duly organized, validly existing and
in
good standing under the laws of the jurisdiction of its organization with full
right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery
and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or similar action on the
part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser
in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
15
(b) OWN
ACCOUNT. Such Purchaser understands that the Securities being purchased by
such
Purchaser are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring such
Securities as principal for its own account and not with a view to or for
distributing or reselling such Securities or any part thereof, has no present
intention of distributing any of such Securities and has no arrangement or
understanding with any other persons regarding the distribution of such
Securities (this representation and warranty not limiting such Purchaser’s right
to sell such Securities pursuant to a Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such Purchaser
is
acquiring such Securities hereunder in the ordinary course of its business.
Such
Purchaser does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of such Securities.
(c) PURCHASER
STATUS. At the time such Purchaser was offered such Securities, it was, and
at
the date hereof it is, either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii)
a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not registered as, or required to be registered as,
a
broker-dealer under Section 15 of the Exchange Act. Such Purchaser was not
organized for the purpose of purchasing such Securities.
(d) EXPERIENCE
OF SUCH PURCHASER. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks
of
the prospective investment in such Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in such Securities and, at the present time, is able to afford
a complete loss of such investment.
(e) GENERAL
SOLICITATION. Such Purchaser is not purchasing such Securities as a result
of
any advertisement, article, notice or other communication regarding such
Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
(f) SHORT
SALES. Such Purchaser has not directly or indirectly, nor has any Person acting
on behalf of or pursuant to any understanding with such Purchaser, executed
any
Short Sales in the securities of the Company (including, without limitations,
any Short Sales involving the Company’s securities) since __________, 2007,
which was according to information provided by the Company, the earliest time
that any Purchaser was first contacted regarding an investment in the Shares
(“DISCUSSION TIME”).
(g) NO
TAX,
LEGAL, ETC. ADVICE. In evaluating the merits of an investment in the Shares,
such Purchaser is not relying on the Company, the Placement Agents or their
respective counsel for an evaluation of the business, tax, legal or other
consequences of such an investment.
16
(h) ECONOMIC
RISK. Such Purchaser understands that such Purchaser must bear the economic
risk
of investment for an indefinite period of time because the sale of the Shares
has not been registered under the Securities Act pursuant to the exemption
provided by Section 4(2) and Rule 506 thereunder, nor under any applicable
state
securities laws, and the Shares or any participation therein may not be sold
or
transferred in the absence of evidence satisfactory to the Company of compliance
with applicable laws, including an opinion of counsel satisfactory to the
Company that, among other things, the Shares have been registered under the
Act
and all applicable state securities laws or that such registrations are not
required. The Company has made no agreement whatsoever to repurchase the Shares
or, except as expressly provided in the Registration Agreement, to register
the
transfer of any portion of them under the Securities Act or under any state
securities law.
(i) ACCESS
TO
INFORMATION. Such Purchaser and its advisors were afforded full and complete
access to all information with respect to the Company, its operations and the
Shares that such Purchaser and such advisors deemed necessary to evaluate the
merits and risks of an investment in the Shares, including the PPM and the
SEC
Reports, and Purchaser has had the opportunity to ask questions of and receive
answers from the Company concerning this investment. Neither the Company nor
the
Placement Agents have made any representations about the value or performance
of
the Company or the Shares.
(j) RULE
144.
Such Purchaser is aware of the provisions of Rule 144 under the Securities
Act
which permit limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, which may include, among other
things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale occurring
not
less than one year after a party has purchased and paid for the security to
be
sold, the sale being effected through a “broker’s transaction” or in
transactions directly with a “market maker” and the number of shares being sold
during any three-month period not exceeding specified limitations.
(k) FORWARD
LOOKING STATEMENTS. Such Purchaser acknowledges that information such Purchaser
has received concerning the Company, including SEC Reports and oral statements,
include forward-looking statements about the Company’s current and future
business operations, financial projections and other matters. These statements
speak only as of the date made, are not guarantees of future performance, and
involve known and unknown risks and other factors that could cause actual
results to be materially different from any future results expressed or implied
by them.
(l) PLACEMENT
AGENT FEES. Such Purchaser acknowledges that the Placement Agents will receive
a
placement fee of 6.5% of the aggregate Share Purchase Prices, and reimbursement
of certain expenses up to $50,000, all payable by the Company and that the
Company has agreed to indemnify the Placement Agents against certain
liabilities, including liabilities in connection with the offering of the
Shares.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 TRANSFER
RESTRICTIONS.
(a) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144 or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected
by
the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement.
17
(b) The
Purchasers agree to the imprinting, so long as is required by this Section
4.1(b), of a legend on any of the Securities in the following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Securities to the pledgees or secured parties.
Such
a pledge or transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or pledgor shall
be
required in connection therewith. Further, no notice shall be required of such
pledge. At the appropriate Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of
the
Securities.
18
(c) Certificates
evidencing the Shares shall not contain any legend (including the legend set
forth in Section 4.1(b)), (i) while a registration statement covering the resale
of such security is effective under the Securities Act, or (ii) following any
sale of such Shares pursuant to Rule 144, or (iii) if such Shares are eligible
for sale under Rule 144(k), or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission) and
such lack of requirement is confirmed by a legal opinion satisfactory to the
Company; PROVIDED, HOWEVER, in connection with the sale of the Shares under
the
Registration Statement, each Purchaser, severally and not jointly with the
other
Purchasers, hereby agrees to adhere to and abide by all applicable prospectus
delivery requirements under the Securities Act and rules and regulations of
the
Commission. The Company shall cause its counsel to issue a legal opinion to
the
Company’s transfer agent promptly after the Effective Date if required by the
Company’s transfer agent to effect the removal of the legend hereunder. The
Company agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 4.1(c), it will, no later than three
Trading Days following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing Shares issued with a
restrictive legend (such date, the “LEGEND REMOVAL DATE”), deliver or cause to
be delivered to such Purchaser a certificate representing such Securities that
is free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in this Section.
Certificates for Securities subject to legend removal hereunder shall be
transmitted by the transfer agent of the Company to each Purchaser by crediting
the account of such Purchaser’s prime broker with the Depository Trust Company
System.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as partial damages and not as a penalty, for each $1,000
of Shares (based on the closing price of the Common Stock on the date such
Securities are submitted to the Company’s transfer agent) subject to Section
4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five Trading
Days
after such damages have begun to accrue) for each Trading Day after the
10th
Trading
Day after the Legend Removal Date until such certificate is delivered. Nothing
herein shall limit such Purchaser’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any Securities as
required by the Transaction Documents, and such Purchaser shall have the right
to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that
the
removal of the restrictive legend from certificates representing Securities
as
set forth in this Section 4.1 is predicated upon the Company’s reliance that the
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
4.2 FURNISHING
OF INFORMATION. As long as any Purchaser owns Securities, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act. As long as any Purchaser owns
Securities, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for
the
Purchasers to sell the Securities under Rule 144. The Company further covenants
that it will take such further action as any holder of Securities may reasonably
request, all to the extent required from time to time to enable such Person
to
sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.
19
4.3 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 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.
4.4 SECURITIES
LAWS DISCLOSURE; PUBLICITY. The Company shall, by 8:30 a.m. Eastern time on
the
Trading Day following the date hereof, issue a Current Report on Form 8-K,
reasonably acceptable to the Placement Agents disclosing the material terms
of
the transactions contemplated hereby, and shall attach the Transaction Documents
thereto. The Company and each Purchaser shall consult with each other in issuing
any other press release with respect to the transactions contemplated hereby,
if
such release names or otherwise identifies the other of them. The Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission 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 Registration Statement
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 subclause (ii).
4.5 SHAREHOLDER
RIGHTS PLAN. No claim will be made or enforced by the Company or, to the
knowledge of the Company, any other Person that any Purchaser is an “Acquiring
Person” under any shareholder rights plan or similar plan or arrangement in
effect or hereafter adopted by the Company, or that any Purchaser could be
deemed to trigger the provisions of any such plan or arrangement, solely by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and the Purchasers. The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
4.6 NON-PUBLIC
INFORMATION. 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 representations in effecting transactions in securities of the
Company. The foregoing shall not apply to Purchasers who are directors,
employees or current shareholders of the Company holding 5% or more of its
capital stock. In the event of a breach by the Company of the covenant contained
in the first sentence of this Section 4.6, in addition to any other remedy
provided herein or in the other Transaction Documents, each Purchaser shall
have
the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, non-public information without
the
prior approval by the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. No Purchaser shall have
any
liability to the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, shareholders or agents for any such
disclosure.
20
4.7 USE
OF
PROCEEDS. The Company shall use the net proceeds from the sale of the Securities
hereunder for capital expenditures related to drilling and development of oil
and gas properties, and for other general corporate purposes.
4.8 SHORT
SALES. Each Purchaser covenants that neither it nor any affiliates acting on
its
behalf or pursuant to any understanding with it will execute any Short Sales
during the period commencing from the Discussion Time until the Effective Date
unless such Short Sale complies with applicable law and does not cause any
exemption from registration relied upon by the Company in issuing the Shares
to
be jeopardized or lost. Each Purchaser is aware that the Commission’s staff is
of the view that covering a short position established prior to the effective
date of a resale registration statement with shares included in such
registration statement would violate Section 5 of the Securities Act, which
view
is expressed in Item 65, pertaining to Section 5, under Section A of the Manual
of Publicly Available Telephone Interpretations, compiled by the Office of
Chief
Counsel, Division of Corporation Finance. Such Purchaser will not engage in
any
Short Sales that result in any disposition of such Purchaser’s Shares or any
interest therein, except in compliance with the Securities Act, the rules and
regulations thereunder, and applicable state securities laws.
4.9 INDEMNIFICATION
OF PURCHASERS. Subject to the provisions of this Section 4.9, the Company will
indemnify and hold the Purchasers and all of their directors, officers,
employees, shareholders, partners, members, and direct or indirect investors
and
any of the foregoing Person’s agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (each, a “PURCHASER PARTY”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs
and expenses, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation (collectively,
“LOSSES”) that any such Purchaser Party may suffer or incur as a result of or
relating to any (a) breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction
Documents or (b) cause of action, suit or claim brought or made against such
Purchaser Party by a third party (including for these purposes a derivative
action brought on behalf of the Company) and arising out of or resulting from
the execution, delivery, performance or enforcement of the Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby.
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right
to
assume the defense thereof with counsel of its own choosing, who shall be
reasonably satisfactory to such Purchaser Party. Any Purchaser Party shall
have
the right to employ separate counsel in any such action and participate in
the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense
and
to employ counsel reasonably satisfactory to such Purchaser Party or (iii)
in
such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company
and
the position of such Purchaser Party. The Company will not be liable to a
Purchaser Party under this Section or otherwise under this Agreement to the
extent that Losses for which the Company would otherwise be liable are
attributable to a breach of any of the representations, warranties, covenants
or
agreements made in this Agreement or in the other Transaction Documents by
such
Purchaser Party or the Purchaser with which it is affiliated or associated.
To
the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Losses which is permissible under applicable
law. Except as otherwise set forth herein, the mechanics and procedures with
respect to the rights and obligations under this Section 4.9 shall be the same
as those set forth in Sections 11 and 12 of the Registration
Agreement.
21
4.10 RESERVATION
OF COMMON STOCK. The Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the Company to
issue Shares pursuant to this Agreement.
4.11 LISTING
OF COMMON STOCK. 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
Effective Date and the first anniversary of the Closing Date) to list all of
the
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 will take such other action
as is necessary to cause all of the 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.
4.12 EQUAL
TREATMENT OF PURCHASERS. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of any of
the
Transaction Documents unless the same consideration is also offered to all
of
the parties to the Transaction Documents. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company
to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.
4.13 DELIVERY
OF SECURITIES AFTER CLOSING. The Company shall deliver, or cause to be
delivered, the respective Shares purchased by each Purchaser to such Purchaser
within three Trading Days after the Closing Date.
4.14 LIMITATION
OF LIABILITY. Notwithstanding anything herein to the contrary, the Company
acknowledges and agrees that the liability of each Purchaser arising directly
or
indirectly, under this Agreement or the Registration Agreement of any and every
nature whatsoever shall be satisfied solely out of the assets of such Purchaser,
and that no trustee, officer, other investment vehicle or any other affiliate
of
such Purchaser or any subscriber, shareholder or holder of shares of beneficial
interest of such Purchaser shall be personally liable for any liabilities of
such Purchaser; provided, however, that such limitation of liability shall
not
apply to acts of fraud by such trustee, officer, affiliate, subscriber,
shareholder or holder of beneficial interests of such Purchaser.
22
4.15 FORM
D
AND BLUE SKY. The Company agrees to file a Form D with respect to the Securities
as required under Regulation D promulgated under the Securities Act and to
promptly provide a copy thereof to each Purchaser who requests a copy after
such
filing. The Company, on or before the Closing Date, shall take such action
as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Purchasers at the
Closing pursuant to this Agreement under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and, if requested by a Purchaser, shall provide evidence of
any
such action so taken. The Company shall make all filings and reports relating
to
the offer and sale of the Securities required under applicable securities or
“blue sky” laws of the states of the United States following the Closing
Date.
4.16 REPORTING
STATUS. Until the date on which the Investors (as defined in the Registration
Agreement) shall have sold all the Registrable Securities, the Company shall
timely file all reports required to be filed with the Commission pursuant to
the
Exchange Act, and the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or
the
rules and regulations thereunder would otherwise permit such
termination.
4.17 ADDITIONAL
REGISTRATION STATEMENTS. Until the Effective Date, the Company will not file
a
registration statement under the Securities Act relating to securities that
are
not the Registrable Securities.
ARTICLE
V.
MISCELLANEOUS
5.1 TERMINATION.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before __________, 2007;
PROVIDED, HOWEVER, that no such termination will affect the right of any party
to xxx for any breach by the other party (or parties).
5.2 FEES
AND
EXPENSES. Except as otherwise set forth in this Agreement, each party shall
pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection
with the delivery of the Securities.
5.3 ENTIRE
AGREEMENT. The Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.
23
5.4 NOTICES.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto prior to 5:30 p.m. (New York City time)
on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
set
forth on the signature pages attached hereto on a day that is not a Trading
Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom
such
notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
5.5 AMENDMENTS;
WAIVERS. No provision of this Agreement may be waived or amended except in
a
written instrument signed, in the case of an amendment, by the Company and
each
Purchaser or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
5.6 HEADINGS.
The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
5.7 SUCCESSORS
AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit
of
the parties and their successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Purchaser, not to be unreasonably withheld or delayed.
Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided
such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Purchasers”, including
the representations and warranties of Section 3.2, to the extent reasonably
required by the Company.
5.8 NO
THIRD-PARTY BENEFICIARIES. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is
not
for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.9.
5.9 GOVERNING
LAW. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof. The parties hereby
waive all rights to a trial by jury. If any party shall commence an action
or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
24
5.10 SURVIVAL.
The representations and warranties herein shall survive the Closing and delivery
of the Shares.
5.11 EXECUTION.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
5.12 SEVERABILITY.
If any provision of this Agreement is held to be invalid or unenforceable in
any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.13 RESCISSION
AND WITHDRAWAL RIGHT. Notwithstanding anything to the contrary contained in
(and
without limiting any similar provisions of) the Transaction Documents, whenever
any Purchaser exercises a right, election, demand or option under the
Transaction Documents and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to
the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
5.14 REPLACEMENT
OF SECURITIES. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if requested.
The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Securities.
5.15 REMEDIES.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance
of
any such obligation the defense that a remedy at law would be adequate.
25
5.16 PAYMENT
SET ASIDE. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or
exercises its rights thereunder, and such payment or payments or the proceeds
of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation
or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
5.17 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 of the obligations of any other Purchaser under any Transaction
Document. The decision of each Purchaser to purchase Securities pursuant to
the
Transaction Documents has been made by such Purchaser independently of any
other
Purchasers. Nothing contained herein or in any 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 group or 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, and the Company
acknowledges that the Purchasers are not 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. 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 any of the Purchasers.
5.18 PARTIAL
DAMAGES. The Company’s obligations to pay any partial damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company
and shall not terminate until all unpaid partial damages and other amounts
have
been paid notwithstanding the fact that the instrument or security pursuant
to
which such partial damages or other amounts are due and payable shall have
been
canceled.
5.19 CONSTRUCTION.
The parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise the Transaction Documents and, therefore,
the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.
26
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
TRIANGLE
PETROLEUM CORPORATION
By:
__________________________
Name:
__________________________
Title:
__________________________
Address
for Notice:
Triangle
Petroleum Corporation
000-0
XX,
Xxxxx 0000
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Attention:
Xx. Xxxx X. Xxxxxxxxx
President,
CEO, & Chairman
Fax:
(000) 000-0000
With
a
copy to (which shall not constitute notice):
Sichenzia
Xxxx
Xxxxxxxx
Xxxxxxx
LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Mr. Xxxxxx Xxxx
Fax:
(000) 000-0000
[SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
27
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement
to be duly executed by its authorized signatory as of the date first indicated
above.
Name
of
Purchaser: _________________________
By:
______________________________________
Name:
______________________________
Title:
_______________________________
Address
for Notice to Purchaser:
______________________________
______________________________
______________________________
Fax:
__________________________
Address
for Delivery of Securities for Purchaser (if not same as above):
______________________________
______________________________
______________________________
Subscription
Amount: $_________________
Shares:
___________
Purchaser
is one or more of the following (check all that apply):
|
(i)
|
a
bank or savings and loan association.
□
|
|
(ii)
|
an
insurance company. □
|
|
(iii)
|
an
investment company registered under the Investment Company Act of
1940 or
a business development company as defined in section 2(a)(48) of
that Act.
□
|
|
(iv)
|
a
Small Business Investment Company licensed by the U.S. Small Business
Administration. □
|
28
|
(v)
|
a
plan established and maintained by a state or, its political subdivisions
for the benefit of its employees, with total assets over $5,000,000.
□
|
|
(vi)
|
an
employee benefit plan within the meaning of the Employee Retirement
Income
Security Act of 1974 (A) the investment decisions for which are made
by a
plan fiduciary, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or (B) which
has
total assets over $5,000,000, or (C) if a self-directed plan, the
investment decisions for which are made solely by persons that are
described in subsections (g)(i) through (vi) and (g)(viii) through
(g)(xv). □
|
|
(vii)
|
a
private business development company as defined in the Investment
Advisers
Act of 1940. □
|
|
(viii)
|
an
organization described in section 501(c)(3) of the Internal Revenue
Code,
a corporation, Massachusetts or similar business trust, or a partnership,
not formed for the specific purpose of acquiring the Shares, with
total
assets over $5,000,000. □
|
|
(ix)
|
a
trust, with total assets over $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed
by
a sophisticated person. □
|
|
(x)
|
a
director or executive officer of the Company.
□
|
|
(xi)
|
a
natural person whose individual net worth, or joint net worth with
such
person’s spouse, exceeds $1,000,000.
□
|
|
(xii)
|
a
natural person who had an individual income over $200,000 in each
of 2004
and 2005 or joint income with such person’s spouse in excess of $300,000
in each of those years and who has a reasonable expectation of reaching
the same income level in 2005. □
|
|
(xiii)
|
an
entity in which all of the equity owners are persons or entities
in the
above categories and which has not been organized for the specific
purpose
of making an investment in the Shares.
□
|
|
(xiv)
|
none
of the above. □
|
Purchaser’s
EIN Number is: _________________
29
