Exhibit 4.1
STOCK AND WARRANT PURCHASE AGREEMENT
This Stock and Warrant Purchase Agreement (the "Agreement") is made as
of March 27, 2002 between AMERICAN MEDICAL ALERT CORP., a New York corporation
(the "Company"), and the purchasers who are signatories hereto (the
"Purchasers").
WHEREAS, the Company wishes to sell and the Purchasers desire to
purchase shares (the "Shares") of the Company's Common Stock, $.01 par value per
share ("Common Stock") and Warrants (as defined in Section 1.3), as such are
being offered (the "Offering") by the Company pursuant to this Agreement and the
documents as set forth herein ;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Purchase and Sale of Shares and Warrants.
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1.1 Sale to the Purchasers. Subject to the terms and
conditions hereof, the Company will issue and sell to each Purchaser the number
of Shares set forth opposite such Purchaser's name on the signature page and the
number of Warrants to purchase the number of shares of Common Stock as set forth
opposite such Purchaser's name on the signature page hereto for the Purchase
Price (as defined below). The obligations of each Purchaser hereunder are
several and not joint and no Purchaser shall be obligated to purchase any number
of Shares in excess of the number set forth opposite such Purchaser's name on
the signature page hereto. The Company will not be bound to any Purchaser by the
provisions of this Agreement unless and until a copy of this Agreement, duly
executed by the Company, is delivered to such Purchaser.
1.2 Minimum-Maximum Sale. Pursuant to this Agreement, the
Company shall sell a maximum of 944,000 Shares of Common Stock and a maximum of
236,000 Warrants to purchase Common Stock of the Company. The minimum amount of
Shares and Warrants to be sold pursuant to this Agreement is Shares and Warrants
aggregating a Purchase Price of $2,000,000 (the "Minimum Amount"). The maximum
amount of proceeds to be raised by the Offering will be determined by
multiplying 944,000 shares of Common Stock by the purchase price per share of
$3.00, for a total of $2,832,000. The "Purchase Price" applicable to each
Purchaser will be equal to the number of Shares purchased by such Purchaser
multiplied by $3.00 (the purchase price per share). Each 4 shares of Common
Stock purchased entitles Purchaser to receive a Warrant to purchase 1 share of
Common Stock. Each Warrant issued shall be in the form of Exhibit A attached
hereto, and shall entitle the holder to purchase one share of Common Stock of
the Company at an exercise price equal to $3.80. The Warrants shall be
exercisable for a term of five years from the date of issuance. The shares of
Common Stock issuable upon the exercise of the Warrants are hereinafter referred
to as the "Warrant Shares."
1.3 Payment of Purchase Price. On or prior to the Closing
Date, the Company will deliver to Purchaser against delivery of the Purchase
Price, stock certificates representing the Shares and warrants representing the
Warrants purchased by Purchaser. Subject to the delivery of the stock
certificates and warrants, on or prior to the Closing Date (as defined below)
Purchaser will wire immediately available funds in the amount of the aggregate
Purchase Price for the Shares and Warrants purchased by such Purchaser
hereunder, to the Bank of New York, account number 002582, as escrow agent, or
such other escrow agent as may be specified by the Company and the Placement
Agent (the "Escrow Agent").
2. Closing Date and Delivery.
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2.1 Closing Date. A closing of the purchase and sale of the
Shares and Warrants hereunder in which no less than the Minimum Amount of Shares
and Warrants are sold (the "Minimum Amount Closing") may be held at any time
after the receipt of the Minimum Amount by the Escrow Agent, and at such date
and time (the "Minimum Amount Closing Date") as shall be agreed upon by the
Company and Jesup & Xxxxxx Securities Corp. (the "Placement Agent"), at the
offices of the Placement Agent, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, but in no
event shall the Minimum Amount Closing Date be later than April 30, 2002. If the
Minimum Amount Closing has not occurred on or prior to April 30, 2002, all
subscriptions received will be promptly returned to the Purchasers without
interest thereon. Subsequent closings for any amounts received and not included
in the Minimum Amount Closing shall be at a date, time (together with the
Minimum Amount Closing Date, each a "Closing Date") and place
to be determined by the Company and the Placement Agent, but no later than June
30, 2002 (the "Termination Date"). Any subscription proceeds remaining in escrow
at 5:00 p.m. New York time on the Termination Date, will be promptly returned to
the Purchasers without interest thereon.
2.2 Deliveries at Closing.
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(a) At or prior to each applicable Closing, the Company
shall deliver the following to each Purchaser: (a) a stock certificate
registered in such Purchaser's name, or in such nominee name(s) as designated by
the Purchaser in writing, representing the Shares purchased by such Purchaser;
(b) Warrants in such Purchaser's name, or in such nominee name(s) as designated
by the Purchaser in writing; (c) an opinion of Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx
LLP, dated the Closing Date and substantially in the form attached hereto as
Schedule I ("Opinion of Counsel"), with such customary exclusions and
qualifications reasonably acceptable to SAFECO, the first Purchaser in the
transaction; and (d) a certificate, signed by the President of the Company, to
the effect that (i) the representations and warranties of the Company contained
in this Agreement are true and correct in all material respects on and as of the
applicable Closing Date as though newly made on and as of that date (except for
representations and warranties which speak as of the date of the Agreement or as
of another specific date or period, which shall continue to be true and correct
in all material respects as of the respective dates and for the respective
periods covered thereby) and (iii) the Company has performed and complied with,
in all material respects, all of its covenants contained in this Agreement and
required to be performed or complied with on or before the Closing.
(b) The Company's obligation to sell and issue the Shares
and Warrants at each applicable Closing is subject to the fulfillment, to the
satisfaction of the Company, on or prior to each such Closing Date, of the
following conditions, any of which may be waived by the Company: (i) the
representations and warranties made by the investors in Section 4 hereof, other
than the representations and warranties contained in Sections 4.2, 4.3, 4.4 and
4.5 (the "Investment Representations") shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the applicable Closing Date with the same force and effect as if they had been
made on and as of said date; (ii) the Purchasers shall have performed in all
material respects all obligations and conditions herein required to be performed
or observed by them on or prior to the Closing Date; (iii) the Investment
Representations shall be true and correct in all respects when made, and shall
be true and correct in all respects on such Closing Date with the same force and
effect as if they had been made on and as of said date; (iv) all Purchasers
participating in the applicable Closing shall have delivered the Purchase Price
to the Escrow Agent; and (v) the Company shall have received (a) written notice
from Nasdaq to the effect that the issuance and sale of the Shares and Warrants
as contemplated hereby will not require shareholder approval pursuant to the
requirements of Nasdaq Market Place Rule 4350(i), and (b) oral confirmation from
Nasdaq that the 15 day notice requirement under Rule 4310(c)(17), either has
passed or has been waived by Nasdaq.
(c) Each Purchaser's obligation to purchase the Shares
shall be subject to fulfillment of the conditions specified in subparagraph
2.2(a) on or prior to the applicable Closing Date.
(d) Upon satisfaction of all of the conditions to each
applicable Closing set forth in this Agreement, the Company and the Placement
Agent shall jointly direct the Escrow Agent to deliver to the Company the
applicable Purchase Price for the Shares and Warrants purchased at such Closing,
less the Placement Agent fee due to the Placement Agent, and any expense that
the Company has agreed to reimburse to the Placement Agent and its counsel,
which the Escrow Agent shall pay directly to the Placement Agent in accordance
with such joint instructions.
3. Representations and Warranties by the Company. The Company
represents and warrants to each Purchaser as of the date hereof and, as of the
Closing Date applicable to such Purchaser that:
3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York, and has the requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. The Company is qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which the failure to so qualify
would have a Material Adverse Effect. As used herein, Material Adverse Effect
means a material adverse effect on the condition (financial or otherwise),
business, operations, assets, liabilities (contingent or otherwise), property,
or results from operations of the Company, taken as a whole.
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3.2 Changes. Except as set forth in Schedule 3.2, and in the
SEC Reports (as defined below), since September 30, 2001, the Company has not,
to the extent material to the Company, (i) incurred any debts, obligations or
liabilities, absolute, accrued or contingent, whether due or to become due,
other than in the ordinary course of business, (ii) mortgaged, pledged or
subjected to lien, charge, security interest or other encumbrance any of its
assets, tangible or intangible, (iii) waived any debt owed to the Company or its
subsidiaries, (iv) satisfied or discharged any lien, claim or encumbrance or
paid any obligation other than in the ordinary course of business, (v) declared
or paid any dividends, or (vi) entered into any transaction other than in the
usual and ordinary course of business.
3.3 Litigation. Except as set forth in Schedule 3.3, and the
SEC Reports, there are no legal actions, suits, arbitrations or other legal,
administrative or governmental proceedings pending or, to the best of the
Company's knowledge, threatened against the Company or its properties, assets or
business.
3.4 Compliance with Other Instruments. Except as set forth in
Schedule 3.4, and except for such matters which, either individually or in the
aggregate, would not have a Material Adverse Effect, the execution and delivery
of, and the performance and compliance with, this Agreement and the Warrants and
the transactions contemplated hereby or thereby, with or without the giving of
notice, will not (i) result in any breach of, or constitute a default under, or
result in the imposition of any lien or encumbrance upon any asset or property
of the Company pursuant to any agreement or other instrument to which the
Company is a party or by which it or any of its properties, assets or rights is
bound or affected, (ii) violate the Certificate of Incorporation or Bylaws of
the Company, or, subject to the accuracy of the representations and warranties
of the Purchasers contained in Article 4 of this Agreement, any law, rule,
regulation, judgment, order or decree, or (iii) except for the registration of
the Shares and the Warrant Shares under the Securities Act of 1933, as amended
(the "Securities Act"), the listing of the Shares and the Warrant Shares on the
NASDAQ Stock Market and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase of the Shares and the Warrants
by the Purchasers, require any consent, approval, authorization or order of or
filing with any court or governmental agency or body. The Company is not in
violation of its Certificate or Bylaws nor in violation of, or in default under,
any lien, mortgage, lease, agreement or instrument, except for such defaults
which would not, individually or in the aggregate, have a Material Adverse
Effect. The Company is not subject to any restriction which would prohibit the
Company from entering into or performing its obligations under this Agreement or
the Warrants, except for such restrictions which would not, individually or in
the aggregate, have a material adverse effect on the ability of the Company to
perform their obligations under this Agreement and the Warrants.
3.5 Reports and Financial Statements. Each Purchaser has
obtained copies of the Company's 2001 Annual Report, including Form 10-KSB, for
the year ended December 31, 2000, the Company's Proxy Statement in connection
with the 2001 Annual Meeting of Stockholders, the Company's press releases from
January 1, 2001 forward, the Company's quarterly report on Form 10-Q for the
period ended September 30, 2001, and current reports on Form 8-K dated June 8,
2001 and December 6, 2001, respectively filed by the Company with the Securities
and Exchange Commission (the "SEC"), (collectively with all filings of the
Company with the SEC, the "SEC Reports"). As of their respective filing dates,
the SEC Reports were prepared in all material respects in accordance with the
requirements of the Securities Act or the 1934 Securities Exchange Act, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such SEC Reports. The SEC Reports, when read
as a whole, as updated herein , do not contain any untrue statements of a
material fact and do not omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
interim financial statements of the Company included in the SEC Reports have
been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and fairly present, in all material respects, the
financial position of the Company as at the dates thereof and the results of its
operations and cash flows for the periods then ended subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments and any
other adjustments described in such financial statements. Each Purchaser has
also reviewed a copy of the Company's private placement memorandum dated
February 20, 2002.
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3.6 Shares. The Shares, the Warrants and the Warrant Shares,
when issued and paid for pursuant to the terms of this Agreement as the case may
be, will be duly and validly authorized, issued and outstanding, fully paid,
non-assessable and free and clear of all pledges, liens, encumbrances and
restrictions (other than arising under federal or state securities laws). The
authorized capital stock of the Company, including the Shares, conforms, and
when issued, the Warrant Shares will conform, to all statements relating thereto
included in the documents set forth herein. The issuance of the Shares, the
Warrants and the Warrant Shares is not subject to any preemptive or other
similar rights. The Company has duly reserved a sufficient number of its
authorized but unissued Common Stock for issuance upon exercise of the Warrants
by the Purchasers and the Placement Agent, and such shares shall remain so
reserved (subject to reduction from time to time for Common Stock issued upon
the exercise of the Warrants), as long as the Warrants are exercisable.
3.7 Securities Laws. Subject to the accuracy of the
representations and warranties of the Purchasers contained in Article 4 of this
Agreement, the offer, sale and issuance of the Shares, the Warrants and the
Warrant Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act, and from the registration or
qualifications requirements of the laws of any applicable state or other U.S.
jurisdiction.
3.8 Capital Stock. As of February 20, 2002, (i) 6,514,600
shares of the Company's Common Stock were issued and outstanding, (ii) no shares
of the Company's Preferred Stock were issued and outstanding, and (iii) options
and warrants to purchase 1,407,493 Shares of the Company's Common Stock were
issued and outstanding. All of the outstanding Shares of the Company's capital
stock are validly issued, fully paid and non-assessable. Except as set forth in
this Section 3.8, as of February 20, 2002, there are no outstanding
subscriptions, options, warrants, calls, contracts, demands, commitments,
conversion rights or other agreements or arrangements of any character or nature
whatever under which the Company is or may be obligated to issue its Common
Stock, Preferred Stock or warrants or options to purchase Common Stock or
Preferred Stock. No holder of any security of the Company is entitled to any
preemptive or similar rights to purchase any securities of the Company.
3.9 Corporate Acts and Proceedings. This Agreement has been
duly authorized by the requisite corporate action and has been duly executed and
delivered by an authorized officer of the Company, and is a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies. The requisite corporate
action necessary to the authorization, reservation, issuance and delivery of the
Shares, the Warrants and the Warrant Shares has been taken by the Company. Upon
execution and delivery thereof by a duly authorized officer of the Company, the
Warrants will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and as to limitations
on the enforcement of the remedy of specific performance and other equitable
remedies.
3.10 No Implied Representations. All of the Company's
representations and warranties are contained in this Agreement, and no other
representations or warranties by the Company shall be implied.
3.11 Filing of Reports. Since the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2000, the Company has filed
with the SEC all reports and other material required to be filed by it therewith
pursuant to Section 13, 14 or 15(d) of the Exchange Act and the Company is
eligible to register the offer and resale of the Shares and the Warrant Shares
on a registration statement on Form S-3, or any successor form (the
"Registration Statement").
3.12 Compliance with Laws. To the Company's knowledge, the
business and operations of the Company have been conducted in accordance with
all applicable laws, rules and regulations of all governmental authorities,
except for such violations which would not, individually or in the aggregate,
have a Material Adverse Effect.
3.13 Closing Date. Except as to representations and warranties
that speak of a specific date or period, all the representations and warranties
made by the Company in this Section 3 shall be true and complete from the date
of this Agreement through the Closing Date and the Company shall provide each
Purchaser, before the
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Closing, with any documents or information necessary for such representations
and warranties to remain true and complete as of the Closing Date.
3.14 Proprietary Rights. The Company owns or is licensed to
use all patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service xxxx
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other intangible property
and assets (herein called the "Proprietary Rights") which are material to the
business of the Company, as now conducted or as proposed to be conducted. The
Company does not have any knowledge of, and the Company has not given or
received any notice of, any pending conflicts with or infringement of the rights
of others with respect to any Proprietary Rights or with respect to any license
of Proprietary Rights. No action, suit, arbitration, or legal, administrative or
other proceeding, or investigation is pending or, to the knowledge of the
Company, threatened, which involves any Proprietary Rights. The Company is not
subject to any judgment, order, writ, injunction or decree of any court or any
Federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, has not entered into or is a party to any contract which restricts
or impairs the use of any such Proprietary Rights in a manner which would have a
material adverse effect on the use of any of the Proprietary Rights. To the
knowledge of the Company, no Proprietary Rights used by the Company, and no
services or products sold by the Company, conflict with or infringe upon any
proprietary rights owned or licensed by any third party. The Company has not
received written notice of any pending conflict with or infringement upon such
third-party proprietary rights. No claims have been asserted by any person with
respect to the validity of the Company's ownership or right to use the
Proprietary Rights. To the knowledge of the Company, the Proprietary Rights are
valid and enforceable.
3.15 Compliance with Environmental Laws. Except as would not,
singly or in the aggregate, have a Material Adverse Effect, the Company is not
in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the Company's knowledge,
no expenditures material to the Company are or will be required to comply with
any such existing statute, law or regulation. To the Company's knowledge, the
Company does not have any liability to any governmental authority or other third
party arising under or as a result of any such past or existing statute, law or
regulation, which liability would be material to the Company.
3.16 Permits, Licenses, Etc. The Company owns, possesses or
has obtained, and is operating in compliance with, all governmental,
administrative and third party licenses, permits, certificates, registrations,
approvals, consents and other authorizations (collectively, "Permits") necessary
to own or lease (as the case may be) and operate its properties, whether
tangible or intangible, and to conduct its businesses or operations as currently
conducted, except such licenses, permits, certificates, registrations,
approvals, consents and authorizations the failure of which to obtain would not
have a material adverse effect on the business, properties, operations,
financial condition or results of operations of the Company, and the Company has
not received any notice of proceedings relating to the revocation, modification
or suspension of any Permits or any circumstance which would lead it to believe
that such proceedings are reasonably likely.
3.17 Insurance. The Company maintains insurance of the type
and in the amount reasonably adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
3.18 Registration Rights. Except as set forth in Schedule 3.18
hereto, there are no persons with registration or other similar rights to have
any securities registered pursuant to the Registration Statement or otherwise.
4. Representations and Warranties by the Purchasers; Restrictions on
Transfer.
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Each Purchaser severally represents and warrants to, and covenants and
agrees with, the Company, as of the Closing Date applicable to such Purchaser,
as follows:
4.1 Authorization. Purchaser is duly organized and in good
standing in the jurisdiction of its organization and has all requisite legal and
corporate or other power and capacity and has taken all requisite
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corporate or other action to execute and deliver the Agreement, to purchase the
Shares and the Warrants to be purchased by it and to carry out and perform all
of its obligations under the Agreement. This Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid and binding obligation
of Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies.
4.2 Investor Status. Purchaser is an "Accredited Investor" as
defined in Rule 501 of Regulation D under the Securities Act. Purchaser
acknowledges receiving and reviewing the SEC Reports. Purchaser is aware of the
Company's business affairs and financial condition and has had access to and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares and the Warrants. Purchaser has
such business and financial experience as is required to give it the capacity to
utilize the information received, to evaluate the risks involved in purchasing
the Shares, Warrants and Warrant Shares, and making an informed decision about
purchasing the Shares, Warrants and Warrant Shares, and to protect its own
interests in connection with the purchase of the Shares, Warrants and Warrant
Shares, and is able to bear the risks of an investment in the Shares, Warrants
and Warrant shares. The foregoing, however, does not limit in any way the
representations and warranties made by the Company herein. Purchaser is not
itself a "broker" or a "dealer" as defined in the Exchange Act and is not an
"affiliate" of the Company as defined in Rule 405 of the Securities Act.
Purchaser, or any subsequent holder of the Warrants, as a condition of exercise
of the Warrant, shall be required to reaffirm such representations and
warranties as set forth in this Section 4, and any others that may be necessary
so that the issuance of the Common Stock pursuant to the exercise of the Warrant
shall be exempt from registration under the Securities Act.
4.3 Investment Intent. Purchaser is purchasing the Shares and
the Warrants for its own account as principal, for investment purposes only, and
not with a present view to or for resale, distribution or fractionalization
thereof, in whole or in part, within the meaning of the Securities Act.
Purchaser understands that its acquisition of the Shares and the Warrants has
not been registered under the Securities Act or registered or qualified under
any state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein. Purchaser has, in connection
with its decision to purchase the number of Shares and the Warrants set forth in
this Agreement, relied solely upon the documents set forth herein and the
representations and warranties of the Company contained herein. Purchaser will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares or Warrants, except in compliance with the Securities Act
and the rules and regulations promulgated thereunder.
4.4 Registration or Exemption Requirements. Purchaser further
acknowledges and understands that neither the Shares nor the Warrants may be
resold or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is available, and
is able to bear the economic risk of holding the Shares for an indefinite period
of time and can afford a complete lost of its investment. Purchaser understands
that until the Shares and Warrant Shares have been registered for resale by the
Purchasers in compliance with applicable securities laws, the certificates
evidencing the Shares, the Warrants and Warrant Shares will be imprinted with a
legend that prohibits the transfer of the Shares, Warrants and Warrant Shares
unless (a) such transaction is registered or such registration is not required,
and (b) if the transfer is pursuant to an exemption from registration an opinion
of counsel reasonably satisfactory to the Company is obtained to the effect that
the transaction is not required to be registered or is so exempt.
4.5 Restriction on Sales, Short Sales and Hedging
Transactions. Purchaser represents and agrees that during the period from the
date Purchaser was first contacted with respect to the potential purchase of
Shares and Warrants through the date of the execution of the Agreement by
Purchaser, Purchaser did not, and from such date until the Registration
Statement (as defined below) is declared effective, Purchaser will not, directly
or indirectly, execute or effect or cause to be executed or effected any short
sale, option or equity swap transactions in or with respect to the Company's
Common Stock or any other derivative security transaction the purpose or effect
of which is to hedge or transfer to a third party all or any part of the risk of
loss associated with the ownership of the Shares and Warrants by the Purchaser.
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4.6 No Legal, Tax Or Investment Advice. Purchaser understands
that nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Shares and the Warrants constitutes
legal, tax or investment advice. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares and the Warrants.
4.7 Closing Date. All the representations and warranties made
by each Purchaser in this Section 4 shall be true and complete from the date of
this Agreement through the Closing Date and each Purchaser shall provide the
Company, before the Closing, with any documents or information necessary to
affirm that such representations and warranties to remain true and complete as
of the Closing Date.
4.8 Compliance with Other Instruments. The execution and
delivery of this Agreement, the purchase of the Shares and the Warrants, and the
performance of all other obligations contemplated hereby will not (i) violate
any law, rule, regulation, judgment, order or decree applicable to Purchaser, or
(ii) require any consent, approval, authorization or order of or filing with any
court or governmental agency or body. Purchaser is not subject to any
restriction which would prohibit it from entering into or performing its
obligations under this Agreement, except for such restrictions which would not,
individually or in the aggregate, have a material adverse effect on the ability
of Purchaser to perform its obligations under this Agreement. There is no
action, suit, order, judgment or proceeding pending or, to the knowledge of
Purchaser, threatened against or affecting Purchaser that, individually or when
aggregated with one or more other actions, suits, orders, judgments or
proceedings, has or might reasonably be expected to have a material adverse
effect on Purchaser's ability to perform any of its obligations hereunder or
under any of the other agreements and instruments to be executed and delivered
by Purchaser in connection herewith.
4.9 No Knowledge of Misrepresentations or Omissions. Purchaser
has no current knowledge that the representations and warranties of the Company
in this Agreement, including the Disclosure Schedules hereto, are not true and
correct in all material respects, and has no actual knowledge of any material
errors in, or omissions from the documents set forth herein or the Disclosure
Schedules to this Agreement.
4.10 Compliance with Xxxxxxx Xxxxxxx Rules. Purchaser agrees
to comply with the laws and rules pertaining to inside information at all times
after the effective date of the Registration Statement.
4.11 No General Solicitation. The Purchaser did not learn of
the investment in the Shares, Warrants and Warrant Shares as a result of any
public advertising or general solicitation.
4.12 Reliance on Representations. Purchaser acknowledges that
the Company and its counsel are entitled to rely on the representations made
above.
5. Covenants
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5.1 Registration Requirements.
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(a) Promptly after, but not later than 30 days after,
each Closing Date, the Company shall prepare and file a registration statement
(the "Registration Statement") with the SEC under the Securities Act to register
the re-offer and resale of the Shares and the Warrant Shares by the Purchasers
(together, the "Registrable Securities"), and shall use its best efforts to
cause such Registration Statement to become effective within ninety (90) days
from the applicable Closing date, or not more than five days from the date upon
which the Securities and Exchange Commission shall allow the Company to
accelerate effectiveness. In the event that the Company shall fail to obtain
effectiveness of the Registration Statement within the 90 -day period following
the applicable Closing Date, the Company hereby agrees that it shall pay to each
Purchaser in cash, an amount equal to 2% of the total dollar amount purchased by
such Purchaser for each and every thirty (30) day period after the 90 day
period, with respect to which such Registration Statement shall not be effective
(the "Penalty Payment"), with the first payment to be made on the 91st day
following the applicable Closing Date and each additional 2% payment, if any, to
be made each 30 day period thereafter. Until such time as the Registration
Statement is effective, the Company shall not grant any registration rights or
other rights to register securities under the Securities Act unless such rights
are subordinate to the rights of the Purchasers under this Section 5.1 or will
not have the effect of delaying a sale or limiting the number of securities
which may be sold by the Purchasers pursuant to the Registration Statement.
7
(b) The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and each Purchaser shall pay all Selling Expenses (as defined below)
and other expenses that are not Registration Expenses relating to the
Registrable Securities resold by such Purchaser. "Registration Expenses" shall
mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Purchaser.
(c) If the Registration Statement becomes effective, the
Company will use its best efforts to: (i) keep such registration effective until
the second anniversary of the date such Registration Statement is declared
effective (or, in the case of Warrant Shares, the first anniversary of the date
of issuance of such Warrant Shares, but in any event not later than the fourth
anniversary of the date such Registration Statement is declared effective);
provided, however, if Rule 144 is amended so that the longest period that Rule
144 restricts the manner in which privately placed securities may be sold is a
period shorter than two years, then the period required by this clause shall be
reduced to the earliest of (A) such shorter period, (B) such date as all of the
Registrable Securities have been resold, or (C) such date as all Registrable
Securities may be sold pursuant to Rule 144(k) (or any successor rule); (ii)
except as provided in Section 5.1(f), prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as Purchaser from time to time may reasonably
request; (iv) cause the Shares and the Warrant Shares to be quoted on each
quotation service on which the Common Stock of the Company is then quoted; (v)
provide a transfer agent and registrar for all securities registered pursuant to
the Registration Statement and a CUSIP number for all such securities; and (vi)
file the documents required of the Company and otherwise use its best efforts to
maintain requisite blue sky clearance in all U.S. jurisdictions in which any of
the Shares are originally sold and all other states specified in writing by
Purchaser, provided, however, that the Company shall not be required to qualify
to do business in any state in which it is not now so qualified or has not so
consented.
(d) The Company shall furnish to each Purchaser upon
request a reasonable number of copies of a supplement to or an amendment of the
prospectus used in connection with the Registration Statement as may be
necessary to facilitate the public sale or other disposition of all or any of
the Registrable Securities held by Purchaser.
(e) With a view to making available to Purchasers the
benefits of Rule 144 and any other rule or regulation of the Commission that may
at any time permit Purchaser to sell Registrable Securities to the public
without registration or pursuant to the Registration Statement, the Company
covenants and agrees to use its best efforts to: (i) make and keep public
information available as those terms are understood and defined in Rule 144
until the earlier of (A) the date on which the Shares may be sold pursuant to
Rule 144(k) (or any successor rule) or (B) such date as all of the Registrable
Securities shall have been resold; (ii) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and Exchange Act; and (iii) furnish to any Purchaser upon
request, as long as the Purchaser owns any Registrable Securities, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the Commission that permits the selling of any such Registrable Securities
without registration or pursuant to such Registration Statement.
(f) For not more than 30 consecutive days, and for a
total of not more than 60 days in any 12 month period, the Company may delay the
disclosure of non-public information concerning the Company, by (i) postponing
the filing of the Registration Statement, or (ii) suspending the use of any
prospectus included in such Registration Statement which has been declared
effective, the disclosure of which at the time is not, in the good faith opinion
of the Company, in the best interests of the Company (an "Allowed Delay");
provided, that the Company
8
shall promptly (a) notify the Purchasers in writing of the existence of (but in
no event, without the prior written consent of a Purchaser, shall the Company
disclose to such Purchaser any of the facts or circumstances regarding)
non-public information giving rise to an Allowed Delay, and (b) advise the
Purchasers in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay. The Purchaser hereby covenants that it will not
sell any securities pursuant to said Registration Statement during the Allowed
Delay. Notwithstanding anything herein to the contrary, it shall only be in the
best interests of the Company to postpone such filing of the Registration
Statement or suspend the use of any prospectus if such is (i) required by any
federal or state governmental authority or (ii) in the opinion of the Company's
counsel, necessary to make changes in the Registration Statement or prospectus,
or any document incorporated or deemed to be incorporated therein by reference,
so that in the case of the Registration Statement it will not contain any untrue
statement of material fact or any omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and that in the case of the prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein, in the light of the circumstances under which they were made,
not misleading. The applicable time periods under Section 5.1(a) above, shall be
tolled during any Allowed Delay.
5.2. Indemnification and Contribution
--------------------------------
(a) The Company agrees to indemnify and hold harmless
each Purchaser from and against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) to which such Purchaser may become
subject (under the Securities Act or otherwise) (including in settlement of
litigation) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact or omission to state a material fact in the
Registration Statement , including all documents filed as a part thereof and
information deemed to be a part thereof, on the effective date thereof, or any
amendment or supplements thereto, or arise out of any failure by the Company to
fulfill any undertaking or covenant included in the Registration Statement or to
perform its obligations hereunder or under law; provided, however, that the
Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon (i) an untrue
statement or omission in such Registration Statement in reliance upon and in
conformity with information furnished to the Company by or on behalf of such
Purchaser specifically for use in preparation of the Registration Statement and
not corrected by the Purchaser in writing or (ii) an untrue statement or
omission in any prospectus that is corrected in any subsequent prospectus, or
supplement or amendment thereto, that was delivered to a Purchaser prior to the
pertinent sale or sales by such Purchaser and not delivered by such Purchaser to
the entity to which it made such sale(s) prior to such sale(s).
(b) Each Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
the Company may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) an untrue statement or
alleged untrue statement of a material fact or omission to state a material fact
in the Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser in this
Agreement or specifically for use in preparation of the Registration Statement
(provided, however, that no Purchaser shall be liable in any such case for any
untrue statement or omission in any prospectus or Registration Statement which
statement has been corrected, in writing, by such Purchaser and delivered to the
Company at least 14 days before the sale from which such loss occurred), or (ii)
an untrue statement or omission in any prospectus that is corrected in any
subsequent prospectus or supplement or amendment thereto, that was delivered to
a Purchaser at least 1 day prior to the pertinent sale or sales by such
Purchaser and not delivered by such Purchaser to the entity to which it made
such sale(s) prior to such sale(s), and each Purchaser, severally and not
jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. Notwithstanding the foregoing, no
Purchaser shall be liable, or required to indemnify the Company, in the
aggregate, for any amount in excess of the net proceeds received by the
Purchaser from the sale of the Shares or the Warrant Shares, as the case may be,
to which such loss, claim, damage or liability relates.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 5.2,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
9
indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall wish, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified person. After notice
from the indemnifying person to such indemnified person of the indemnifying
person's election to assume the defense thereof, the indemnifying person shall
not be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof;
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate in the reasonable judgment of the indemnified
person for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, further, that the indemnifying person shall not
be obligated to assume the expenses of more than one counsel to represent all
indemnified persons.
(d) If the indemnification provided for in this Section
5.2 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and each Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or a Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute in the aggregate any amount in
excess of the net proceeds received by the Purchaser from the sale of the Shares
or Warrant Shares, as the case may be, to which such loss, claim, damage or
liability relates. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchaser's obligations in this subsection (d) to
contribute are several in proportion to their sales of Shares or Warrant Shares,
as the case may be, to which such loss relates and not joint.
6. Restrictions on Transferability of Shares and Warrants; Compliance
with Securities Act.
--------------------------------------------------------------------
6.1 Restrictions on Transferability. Neither the Shares nor
the Warrants shall be transferable in the absence of registration under the
Securities Act or an exemption therefrom or in the absence of compliance with
any term of the Agreement.
4 6.2 Restrictive Legend. Until and unless the Shares and
Warrant Shares are registered under the Securities Act, each certificate
representing the Shares and the Warrant Shares and each Warrant shall bear
substantially the following legend (in addition to any legends required under
applicable state securities laws):
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR IN ACCORDANCE WITH AN EXEMPTION THEREUNDER.
6.3 Transfer of Shares and Warrants. Each Purchaser hereby
covenants with the Company not to make any sale of the Shares or Warrants except
either (a) a sale of Shares or Warrant Shares in accordance with the
Registration Statement, in which case the Purchaser covenants to comply with the
requirement of delivering a current prospectus, (b) a sale of Shares or Warrant
Shares in accordance with Rule 144, in which case the Purchaser
10
covenants to comply with Rule 144 and to deliver such additional certificates
and documents as the Company may reasonably request, or (c) in accordance with
another exemption from the registration requirements of the Securities Act. The
legend set forth in Section 6.2 will be removed from a certificate representing
Shares or the Warrant Shares, as the case may be, following and in connection
with any sale of Shares or Warrant Shares pursuant to subsection (a) or (b)
hereof but not in connection with any sale of Shares or Warrant Shares pursuant
to subsection (c) hereof. The Company will substitute one or more replacement
certificates without the legend at the request of the Purchaser promptly after
such time as the Registration Statement becomes effective.
7. Termination.
-----------
(a) The obligations of the Company, on the one hand, and
each Purchaser on the other hand, to effect the applicable Closing shall
terminate as follows:
(i) Upon the mutual written consent of the Company
and the Purchaser;
(ii) By each Purchaser, if at any time prior to
the applicable Closing, the Company shall cease conducting business in the
normal course; become insolvent or become unable to meet its obligations as they
become due; make a general assignment for the benefit of creditors; petition,
apply for, suffer or permit with or without its consent the appointment of
custodian, receiver, trustee in bankruptcy or similar officer for all or any
substantial part of its business or assets; avail itself or become subject to
any proceeding under the Federal Bankruptcy Code or any similar state, federal
or foreign statute relating to bankruptcy, insolvency, reorganization,
receivership, arrangement, adjustment of debts, dissolutions or liquidation.
(iii) By each Purchaser if any of the conditions
set forth in Section 2.2(a) shall have not been fulfilled on or prior to the
applicable Closing Date, and shall not have been waived by such Purchasers;
(iv) By the Company if any of the conditions set
forth in Section 2.2(b) shall have not been fulfilled on or prior to the
applicable Closing Date, and shall not have been waived by the Company; or
(v) By either the Company or each Purchaser if the
applicable Closing has not occurred on or prior to the Termination Date;
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the applicable Closing shall not
then be in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement or the other Agreements if such breach
has resulted in the circumstances giving rise to such party's seeking to
terminate its obligation to effect such Closing.
(b) Nothing in this Section 7 shall be deemed to release
any party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Agreements or to impair the right of
any party to compel specific performance by any other party of its obligations
under this Agreement or the other Agreements.
(c) In the event that the Minimum Amount Closing does not
occur on or prior to April 30, 2002, all subscriptions received will be promptly
returned to the Purchasers, without any interest thereon. In the event that any
subsequent closings do not occur on or prior to June 30, 2002, all subscriptions
received and not closed on will be promptly returned to the applicable
Purchasers.
8. Miscellaneous.
-------------
8.1 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made by or on behalf
of the Purchaser, and the sale and purchase of the Shares and the Warrants and
payment therefor.
8.2 Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and do not constitute a
part of this Agreement.
11
8.3 Choice of Law. It is the intention of the parties that the
internal laws of the State of New York, other than those which would defer to
the substantive laws of another jurisdiction, shall govern the validity of this
Agreement, the construction of its terms and the interpretation of the rights
and duties of the parties set forth herein.
8.4 Counterparts. This Agreement may be executed concurrently
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.5 Assignment; Parties in Interest. This Agreement may not be
pledged, assigned or otherwise transferred by the Purchasers except by operation
of law but all the terms and provision of this Agreement shall be binding upon
and inure to the benefit of and be enforced by the successors in interest of the
parties hereto. Each successive transferee of the Purchasers shall be deemed to
be a Purchaser for the purpose of Section 5 of this Agreement.
8.6 Amendments. No amendment, modification, waiver, discharge
or termination of any provision of this Agreement nor consent to any departure
by the Purchasers or the Company therefrom shall in any event be effective
unless the same shall be in writing and signed by the party to be charged with
enforcement, and then shall be effective only in the specific instance and for
the purpose for which given. No course of dealing between the parties hereto
shall operate as an amendment of, or a waiver of any right under, this
Agreement.
8.7 Severability. Except for Section 5, the holding of any
provision of this Agreement to be invalid or unenforceable by a court of
competent jurisdiction shall not affect any other provision of this Agreement,
which shall remain in full force and effect. If any provision of this Agreement
shall be declared by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part, such provision shall be
interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
8.8 Notice. Any notice or other communication given hereunder
shall be deemed sufficient if in writing and sent by (a) telecopy or facsimile
at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received); or (b) registered or
certified mail, return receipt requested, or delivered by hand against written
receipt therefor. Notices to Purchaser shall be addressed to _________________,
________________, _______, _________, with a copy to Jesup & Xxxxxx Securities
Corporation, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Facsimile: (000) 000-0000,
Attn: Xxxxx Xxxxx. Notices to the Company shall be addressed to American Medical
Alert Corp., 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, facsimile: (516)
536-5276, Attn: Xxxx Rhian, with a copy to Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx,
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile: (000) 000-0000,
Attn: Xxxxx Xxxxxxxx, Esq. Notices shall be deemed to have been given or
delivered on the date of mailing, except notices of change of address, which
shall be deemed to have been given or delivered when received.
8.9 Waiver. It is agreed that a waiver by either party of a
breach of any provision of this Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
8.10 Other Documents. The parties agree to execute and deliver
all such further documents, agreements and instruments and take such other and
further action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
8.11 Public Statements. The Purchaser agrees not to issue any
public statement with respect to the Purchaser's investment or proposed
investment in the Company or the terms of any agreement or covenant between them
and the Company without the Company's prior written consent, except such
disclosures as may be required under applicable law or under any applicable
order, rule or regulation.
8.12 No Third Party Beneficiaries. Nothing in this Agreement
shall create or be deemed to create any rights in any person or entity not a
party to this Agreement, except for the holders of Registrable Securities and
certain indemnitees.
12
8.13 Inconsistencies. In the event of any inconsistency
between this Agreement and the agreement entered into between the Company and
the Placement Agent, this Agreement shall be the final Authority.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized representatives as of
the day and year first above written.
AMERICAN MEDICAL ALERT CORP.
By:________________________
Title:_______________________
13
[PURCHASER SIGNATURE PAGE CONTINUES ON THE FOLLOWING PAGE]
PURCHASER SIGNATURE PAGE
The undersigned Purchaser hereby executes the Stock and Warrant
Purchase Agreement with American Medical Alert Corp. (the "Company") and hereby
authorizes this signature page to be attached to a counterpart of such document
executed by a duly authorized officer of the Company.
No. of Shares to be _________________________________________
Purchased: ____________ Name of Purchaser (PLEASE PRINT OR TYPE)
No. of Shares Underlying
Warrants: _____________
Aggregate Purchase [SIGN HERE]
Price: $____________
By:_____________________________
Title: _________________________
CERTIFICATE OF SIGNATORY
------------------------
I, __________________, do hereby certify that I am the duly appointed
_______________ of the above specified Purchaser, and that I have full power and
authority to execute and deliver this Agreement on behalf of such Purchaser.
By:__________________
Name:
Date:
14
Schedule I
791551_3
FORM OF OPINION OF COUNSEL TO BE DELIVERED TO THE PURCHASERS ON CLOSING DATE.
Subject to the usual and customary assumptions, exclusions, limitations
and the like of counsel to the Company, including but not limited to bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights, or equitable remedies, generally and
limitations on the enforcement of the specific provisions of this Agreement,
such as indemnification, due to public policy or applicable law:
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New York.
The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as now being conducted and to enter
into and perform its obligations under this Agreement.
The Shares, the Warrants and the Warrant Shares have been duly
authorized for issuance and sale to the Purchasers pursuant to this Agreement
and the Warrants and, when issued and delivered by the Company pursuant to this
Agreement or the Warrants against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable; and the issuance of
the Shares, the Warrants and the Warrant Shares is not subject to pre-emptive or
other rights to subscribe for or purchase securities.
This Agreement and each Warrant have been duly authorized, executed and
delivered by the Company and are enforceable in accordance with their terms.
15
