PURCHASE AGREEMENT
Exhibit
10.1
THIS
PURCHASE AGREEMENT (“Agreement”)
is made as of the 19th day of
July, 2007
by and among Terabeam, Inc., a Delaware corporation (the “Company”), and the
Investors set forth on the signature pages affixed hereto (each an “Investor”
and collectively the “Investors”).
Recitals
A. The
Company and the Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended; and
B. The
Investors wish to purchase from the Company, and the Company wishes to sell
and
issue to the Investors, upon the terms and conditions stated in this Agreement,
(i) an aggregate of 4,300,000 shares of the Company’s Common Stock, par value
$0.01 per share (together with any securities into which such shares may be
reclassified the “Common Stock”), at purchase price of $1.75 per share, and (ii)
warrants to purchase an aggregate of 2,150,000 shares of Common Stock (subject
to adjustment) at an exercise price of $2.45 per share (subject to adjustment)
in the form attached hereto as Exhibit A (the “Warrants”);
and
C. Contemporaneous
with the sale of the Common Stock and Warrants, the parties hereto will execute
and deliver a Registration Rights Agreement, in the form attached hereto as
Exhibit B (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder,
and applicable state securities laws.
In
consideration of the mutual promises
made herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
Definitions. In addition to those terms defined above
and elsewhere in this Agreement, for the purposes of this Agreement, the
following terms shall have the meanings set forth below:
“Affiliate”
means,
with respect
to any Person, any other Person which directly or indirectly through one or
more
intermediaries Controls, is controlled by, or is under common control with,
such
Person.
“Business
Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.
“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’s
Knowledge” means the
actual knowledge of the executive officers (as defined in Rule 405 under the
0000 Xxx) of the Company, after due inquiry. Notwithstanding the
foregoing, each of the Investors acknowledges and agrees that the Company has
conducted no freedom to operate searches or similar inquiries as to the
existence of any patents that would be infringed by the operation of the
Company's and each of its Subsidiaries respective businesses, as currently
conducted or currently proposed to be conducted, and that no knowledge of any
matters that would be revealed by any such searches or inquiries will be imputed
to Company under this Agreement.
“Confidential
Information” means
trade secrets, confidential information and know-how (including but not limited
to ideas, formulae, compositions, processes, procedures and techniques, research
and development information, product price and cost information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).
“Control”
(including
the terms
“controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction
of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
“Intellectual
Property” means
all of the following: (i) patents, patent applications, patent disclosures
and
inventions (whether or not patentable and whether or not reduced to practice);
(ii) trademarks, service marks, trade dress, trade names, corporate names,
logos, slogans and Internet domain names, together with all goodwill associated
with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
registrations, applications and renewals for any of the foregoing; and (v)
proprietary computer software (including but not limited to data, data bases
and
documentation).
“Material
Adverse Effect” means
a material adverse effect on (i) the assets, liabilities, results of operations,
condition (financial or otherwise), business, or prospects of the Company and
its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
its obligations under the Transaction Documents; provided that in determining
whether there has been or would be a Material Adverse Effect circumstances
attributable to general industry, economic, national or international conditions
shall not be taken into account unless they have a disproportionate impact
on
the Company and its Subsidiaries.
“Nasdaq”
means
The Nasdaq Stock
Market, Inc.
“Person”
means
an individual,
corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole
proprietorship,
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unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.
“Purchase
Price” means Seven
Million Five Hundred Twenty-Five Thousand Dollars ($7,525,000).
“Registration
Statement” has the
meaning set forth in the Registration Rights Agreement.
“SEC
Filings” has the meaning
set forth in Section 4.6.
“Securities”
means
the Shares,
the Warrants and the Warrant Shares.
“Shares”
means
the shares of
Common Stock being purchased by the Investors hereunder.
“Subsidiary”
of
any Person means
another Person, an amount of the voting securities, other voting ownership
or
voting partnership interests of which is sufficient to elect at least a majority
of its Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first Person.
“Transaction
Documents” means
this Agreement, the Warrants and the Registration Rights Agreement.
“Warrant
Shares” means the
shares of Common Stock issuable upon the exercise of the Warrants.
“1933
Act” means the Securities
Act of 1933, as amended, or any successor statute, and the rules and regulations
promulgated thereunder.
“1934
Act” means the Securities
Exchange Act of 1934, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
2. Purchase
and Sale of the Shares and Warrants. Subject to the terms and
conditions of this Agreement, on the Closing Date, each of the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue
to
the Investors, the Shares and Warrants in the respective amounts set forth
opposite the Investors’ names on the signature pages attached hereto in exchange
for the Purchase Price as specified in Section 3 below.
3. Closing. Upon
confirmation that the other conditions to closing specified herein have been
satisfied or duly waived by the Investors, the Company shall deliver to
Xxxxxxxxxx Xxxxxxx PC, in trust, a certificate or certificates, registered
in
such name or names as the Investors may designate, representing the Shares
and
Warrants, with instructions that such certificates are to be held for release
to
the Investors only upon payment in full of the Purchase Price to the Company
by
all the Investors. Upon such receipt by Xxxxxxxxxx Xxxxxxx PC of
the
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certificates,
each Investor shall promptly, but no more than one Business Day thereafter,
cause a wire transfer in same day funds to be sent to the account of the Company
as instructed in writing by the Company, in an amount representing such
Investor’s pro rata portion of the Purchase Price as set forth on the signature
pages to this Agreement. On the date (the “Closing Date”) the Company
receives the Purchase Price, the certificates evidencing the Shares and Warrants
shall be released to the Investors (the “Closing”). The Closing of
the purchase and sale of the Shares and Warrants shall take place at the offices
of Xxxxxxxxxx Xxxxxxx PC, 1251 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx
Xxxx 00000, or at such other location and on such other date as the Company
and
the Investors shall mutually agree.
4. Representations
and Warranties of the Company. The Company hereby represents and
warrants to the Investors that, except as set forth in the disclosure letter
delivered contemporaneous herewith (the “Disclosure Letter”) (with references to
Schedules below referring to portions of the Disclosure Letter):
4.
1 Organization,
Good Standing and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and to own its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and
is in
good standing in each jurisdiction in which the conduct of its business or
its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify has not had and could not reasonably be
expected to have a Material Adverse Effect. The Company’s
Subsidiaries are listed on Schedule 4.1 hereto.
4.2 Authorization. The
Company has full power and authority and has taken all
requisite action on the part of the Company, its officers, directors and
stockholders necessary for (i) the authorization, execution and delivery of
the
Transaction Documents, (ii) the authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the
Securities. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally.
4.3 Capitalization. Schedule
4.3 sets forth (a) the authorized capital stock of the Company on the date
hereof; (b) the number of shares of capital stock issued and outstanding; (c)
the number of shares of capital stock issuable pursuant to the Company’s stock
plans; and (d) the number of shares of capital stock issuable and reserved
for
issuance pursuant to securities (other than the Shares and the Warrants)
exercisable for, or convertible into or exchangeable for any shares of capital
stock of the Company. All of the issued and outstanding shares of the
Company’s capital stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of pre-emptive rights and were issued in
full
compliance with applicable state and federal securities law and any rights
of
third parties. Except as described on Schedule 4.3, all of the
issued and outstanding shares of capital stock of each Subsidiary have been
duly
authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive
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rights,
were issued in full compliance with applicable state and federal securities
law
and any rights of third parties and are owned by the Company, beneficially
and
of record, subject to no lien, encumbrance or other adverse
claim. Except as described on Schedule 4.3, no Person is
entitled to pre-emptive or similar statutory or contractual rights with respect
to any securities of the Company. Except as described on Schedule
4.3, there are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements of any character under which the
Company or any of its Subsidiaries is or may be obligated to issue any equity
securities of any kind and except as contemplated by this Agreement, neither
the
Company nor any of its Subsidiaries is currently in negotiations for the
issuance of any equity securities of any kind. Except as described on
Schedule 4.3 and except for the Registration Rights Agreement, there are
no voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among the Company and any of the
securityholders of the Company relating to the securities of the Company held
by
them. Except as described on Schedule 4.3 and except as
provided in the Registration Rights Agreement, no Person has the right to
require the Company to register any securities of the Company under the 1933
Act, whether on a demand basis or in connection with the registration of
securities of the Company for its own account or for the account of any other
Person.
Except
as described on Schedule
4.3, the issuance and sale of the Securities hereunder will not obligate the
Company to issue shares of Common Stock or other securities to any other Person
(other than the Investors) and will not result in the adjustment of the
exercise, conversion, exchange or reset price of any outstanding
security.
Except
as described on Schedule
4.3, the Company does not have outstanding stockholder purchase rights or
“poison pill” or any similar arrangement in effect giving any Person the right
to purchase any equity interest in the Company upon the occurrence of certain
events.
4.4 Valid
Issuance. The Shares have been duly and validly authorized and,
when issued and paid for pursuant to this Agreement, will be validly issued,
fully paid and nonassessable, and shall be free and clear of all encumbrances
and restrictions (other than those created by the Investors), except for
restrictions on transfer set forth in the Transaction Documents or imposed
by
applicable securities laws. The Warrants have been duly and validly
authorized. Upon the due exercise of the Warrants, the Warrant Shares
will be validly issued, fully paid and non-assessable free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth
in
the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investors. The Company has reserved a
sufficient number of shares of Common Stock for issuance upon the exercise
of
the Warrants, free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed
by
applicable securities laws and except for those created by the
Investors.
4.5 Consents. The
execution, delivery and performance by the Company of the Transaction Documents
and the offer, issuance and sale of the Securities require no consent of, action
by or in respect of, or filing with, any Person, governmental body, agency,
or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale
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filings
pursuant to applicable state and federal securities laws which the Company
undertakes to file within the applicable time periods. Subject to the
accuracy of the representations and warranties of each Investor set forth in
Section 5 hereof, the Company has taken all action necessary to exempt (i)
the
issuance and sale of the Securities, (ii) the issuance of the Warrant Shares
upon due exercise of the Warrants, and (iii) the other transactions contemplated
by the Transaction Documents from the provisions of any stockholder rights
plan
or other “poison pill” arrangement, any anti-takeover, business combination or
control share law or statute binding on the Company or to which the Company
or
any of its assets and properties may be subject and any provision of the
Company’s Certificate of Incorporation or Bylaws that is or could reasonably be
expected to become applicable to the Investors as a result of the transactions
contemplated hereby, including without limitation, the issuance of the
Securities and the ownership, disposition or voting of the Securities by the
Investors or the exercise of any right granted to the Investors pursuant to
this
Agreement or the other Transaction Documents.
4.6 Delivery
of SEC Filings; Business. The Company has made available to the
Investors through the XXXXX system, true and complete copies of the Company’s
most recent Annual Report on Form 10-K for the fiscal year ended December 31,
2006 (the “10-K”), and all other reports filed by the Company pursuant to the
1934 Act since the filing of the 10-K and prior to the date hereof
(collectively, the “SEC Filings”). The SEC Filings are the only
filings required of the Company pursuant to the 1934 Act for such
period. The Company and its Subsidiaries are engaged in all material
respects only in the business described in the SEC Filings and the SEC Filings
contain a complete and accurate description in all material respects of the
business of the Company and its Subsidiaries, taken as a whole.
4.7 Use
of Proceeds. The net proceeds of the sale of the Shares and the
Warrants hereunder shall be used by the Company for working capital and general
corporate purposes.
4.8 No
Material Adverse Change. Since December 31, 2006, except as
identified and described in the SEC Filings or as described on Schedule
4.8, there has not been:
(i) any
change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included
in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2007, except for changes in the ordinary course of business which have not
had
and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;
(ii) any
declaration or payment of any dividend, or any authorization or payment of
any
distribution, on any of the capital stock of the Company, or any redemption
or
repurchase of any securities of the Company;
(iii) any
material damage, destruction or loss, whether or not covered by insurance to
any
assets or properties of the Company or its Subsidiaries;
(iv) any
waiver, not in the ordinary course of business, by the Company or any Subsidiary
of a material right or of a material debt owed to it;
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(v) any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company and its Subsidiaries
taken as a whole (as such business is presently conducted and as it is proposed
to be conducted);
(vi) any
change or amendment to the Company's Certificate of Incorporation or Bylaws,
or
material change to any material contract or arrangement by which the Company
or
any Subsidiary is bound or to which any of their respective assets or properties
is subject;
(vii) any
material labor difficulties or labor union organizing activities with respect
to
employees of the Company or any Subsidiary;
(viii) any
material transaction entered into by the Company or a Subsidiary other than
in
the ordinary course of business;
(ix)
the loss of the services of any key employee, or material change in the
composition or duties of the senior management of the Company or any
Subsidiary;
(x)
the loss or threatened loss of any customer which has had or could
reasonably be expected to have a Material Adverse Effect; or
(xi) any
other event or condition of any character that has had or could reasonably
be
expected to have a Material Adverse Effect.
4.9 SEC
Filings; S-3 Eligibility.
(a) At
the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(b) Each
registration statement and any amendment thereto filed by the Company since
January 1, 2004 pursuant to the 1933 Act and the rules and regulations
thereunder, as of the date such statement or amendment became effective,
complied as to form in all material respects with the 1933 Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein not misleading; and each prospectus filed by the Company since
January 1, 2004 pursuant to Rule 424(b) under the 1933 Act, as of its issue
date
and as of the closing of any sale of securities pursuant thereto did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
made
therein, in the light of the circumstances under which they were made, not
misleading.
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(c) The
Company is eligible to use Form S-3 to register the Registrable Securities
(as
such term is defined in the Registration Rights Agreement) for sale by the
Investors as contemplated by the Registration Rights Agreement.
4.10 No
Conflict, Breach, Violation or Default. The execution, delivery
and performance of the Transaction Documents by the Company and the issuance
and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company’s Certificate of Incorporation or the Company’s Bylaws, both as in
effect on the date hereof (true and complete copies of which have been made
available to the Investors through the XXXXX system), or (ii)(a) any statute,
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, any Subsidiary or
any
of their respective assets or properties, or (b) any agreement or instrument
to
which the Company or any Subsidiary is a party or by which the Company or a
Subsidiary is bound or to which any of their respective assets or properties
is
subject.
4.11 Tax
Matters. The Company and each Subsidiary has timely prepared and
filed all tax returns required to have been filed by the Company or such
Subsidiary with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it, except for such instances of
noncompliance as have not had and could not reasonably be expected to have
a
Material Adverse Effect, individually or in the aggregate. The
charges, accruals and reserves on the books of the Company in respect of taxes
for all fiscal periods are adequate in all material respects, and there are
no
material unpaid assessments against the Company or any Subsidiary nor, to the
Company’s Knowledge, any basis for the assessment of any additional taxes,
penalties or interest for any fiscal period or audits by any federal, state
or
local taxing authority except for any assessment which is not material to the
Company and its Subsidiaries, taken as a whole. All taxes and other
assessments and levies that the Company or any Subsidiary is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper governmental entity or third party when due. There
are no tax liens or claims pending or, to the Company’s Knowledge, threatened
against the Company or any Subsidiary or any of their respective assets or
property. Except as described on Schedule 4.11, there are no
outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.
4.12 Title
to Properties. Except as disclosed in the SEC Filings, the
Company and each Subsidiary has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in the SEC Filings, the Company and each
Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with
the
use made or currently planned to be made thereof by them.
4.13 Certificates,
Authorities and Permits. The Company and each Subsidiary possess
adequate certificates, authorities or permits issued by appropriate governmental
agencies
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or
bodies
necessary to conduct the business now operated by it, and neither the Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that,
if
determined adversely to the Company or such Subsidiary, could reasonably be
expected to have a Material Adverse Effect, individually or in the
aggregate.
4.14 Labor
Matters.
(a) Except
as set forth on Schedule 4.14, the Company is not a party to or bound by
any collective bargaining agreements or other agreements with labor
organizations. The Company has not violated in any material respect
any laws, regulations, orders or contract terms, affecting the collective
bargaining rights of employees, labor organizations or any laws, regulations
or
orders affecting employment discrimination, equal opportunity employment, or
employees’ health, safety, welfare, wages and hours.
(b) (i)
There are no labor disputes existing, or to the Company's Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
or any other disruptions of or by the Company's employees, (ii) there are no
unfair labor practices or petitions for election pending or, to the Company's
Knowledge, threatened before the National Labor Relations Board or any other
federal, state or local labor commission relating to the Company's employees,
(iii) no demand for recognition or certification heretofore made by any labor
organization or group of employees is pending with respect to the Company and
(iv) to the Company's Knowledge, the Company enjoys good labor and employee
relations with its employees and labor organizations.
(c) The
Company is, and at all times has been, in compliance in all material respects
with all applicable laws respecting employment (including laws relating to
classification of employees and independent contractors) and employment
practices, terms and conditions of employment, wages and hours, and immigration
and naturalization. There are no claims pending against the Company
before the Equal Employment Opportunity Commission or any other administrative
body or in any court asserting any violation of Title VII of the Civil Rights
Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or
any other federal, state or local Law, statute or ordinance barring
discrimination in employment.
(d) Except
as disclosed in the SEC Filings or as described on Schedule 4.14, the
Company is not a party to, or bound by, any employment or other contract or
agreement that contains any severance, termination pay or change of control
liability or obligation, including, without limitation, any “excess parachute
payment,” as defined in Section 280G(b) of the Internal Revenue
Code.
(e) Except
as specified in Schedule 4.14, each of the Company's employees is a
Person who is either a United States citizen or a permanent resident entitled
to
work in the United States. To the Company's Knowledge, the Company
has no liability for the improper classification by the Company of such
employees as independent contractors or leased employees prior to the
Closing.
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4.15 Intellectual
Property.
(a) All
Intellectual Property of the Company and its Subsidiaries is currently in
compliance with all legal requirements (including timely filings, proofs and
payments of fees) and, to the Company’s Knowledge, is valid and
enforceable. No Intellectual Property of the Company or its
Subsidiaries which is necessary for the conduct of Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently
proposed to be conducted has been or is now involved in any cancellation,
dispute or litigation, and, to the Company’s Knowledge, no such action is
threatened. No patent of the Company or its Subsidiaries has been or
is now involved in any interference, reissue, re-examination or opposition
proceeding.
(b) All
of the licenses and sublicenses and consent, royalty or other agreements
concerning Intellectual Property which are necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted to which the Company or
any
Subsidiary is a party or by which any of their assets are bound (other than
generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000
per
license) (collectively, “License Agreements”) are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the
Company’s Knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally,
and, to the Company’s Knowledge, there exists no event or condition which will
result in a material violation or breach of or constitute (with or without
due
notice or lapse of time or both) a default by the Company or any of its
Subsidiaries under any such License Agreement.
(c) The
Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and
each of its Subsidiaries’ respective businesses as currently conducted and for
the ownership, maintenance and operation of the Company’s and its Subsidiaries’
properties and assets, free and clear of all liens, encumbrances, adverse claims
or obligations to license all such owned Intellectual Property and Confidential
Information, other than licenses entered into in the ordinary course of the
Company’s and its Subsidiaries’ businesses. The Company and its
Subsidiaries have a valid and enforceable right to use all third party
Intellectual Property and Confidential Information used or held for use in
the
respective businesses of the Company and its Subsidiaries.
(d) To
the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’
businesses as currently conducted does not infringe or otherwise impair or
conflict with (collectively, “Infringe”) any Intellectual Property rights of any
third party or any confidentiality obligation owed to a third party, and, to
the
Company’s Knowledge, the Intellectual Property and Confidential Information of
the Company and its Subsidiaries which are necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted are not being Infringed
by
any third party. There is no litigation or order pending or
outstanding or, to the Company’s
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Knowledge,
threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any Intellectual Property or
Confidential Information of the Company and its Subsidiaries and the Company’s
and its Subsidiaries’ use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.
(e) The
consummation of the transactions contemplated hereby and by the other
Transaction Documents will not result in the alteration, loss, impairment of
or
restriction on the Company’s or any of its Subsidiaries’ ownership or right to
use any of the Intellectual Property or Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be
conducted.
(f) The
Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property and
Confidential Information. Each employee, consultant and contractor
who has had access to Confidential Information which is necessary for the
conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has executed an
agreement to maintain the confidentiality of such Confidential Information
and
has executed appropriate agreements that are substantially consistent with
the
Company’s standard forms thereof. Except under confidentiality
obligations or otherwise in accordance with applicable laws, to the Company’s
Knowledge there has been no material disclosure of any of the Company’s or its
Subsidiaries’ Confidential Information to any third party.
4.16 Environmental
Matters. Neither the Company nor any Subsidiary is in violation
of any statute, rule, regulation, decision or order of any governmental agency
or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, “Environmental Laws”), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in
the
aggregate; and there is no pending or, to the Company’s Knowledge, threatened
investigation that might lead to such a claim.
4.17 Litigation. Except
as described on Schedule 4.17, there are no pending actions, suits or
proceedings against or affecting the Company, its Subsidiaries or any of its
or
their properties; and to the Company’s Knowledge, no such actions, suits or
proceedings are threatened or contemplated. Neither the Company nor
any Subsidiary, nor any director or officer thereof, is or since January 1,
2002
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 Company’s Knowledge,
there is not pending or contemplated, any investigation by the SEC involving
the
Company or any current or former director or officer of the
Company. The SEC has not issued any stop order or other
order
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suspending
the effectiveness of any registration statement filed by the Company or any
Subsidiary under the 1933 Act or the 1934 Act.
4.18 Financial
Statements. The financial statements included in each SEC Filing
present fairly, in all material respects, the consolidated financial position
of
the Company as of the dates shown and its consolidated results of operations
and
cash flows for the periods shown, and such financial statements have been
prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis (“GAAP”) (except as may be disclosed
therein or in the notes thereto, and, in the case of quarterly financial
statements, as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof or as described on Schedule 4.18, neither
the Company nor any of its Subsidiaries has incurred any liabilities, contingent
or otherwise, except those incurred in the ordinary course of business,
consistent (as to amount and nature) with past practices since the date of
such
financial statements, none of which, individually or in the aggregate, have
had
or could reasonably be expected to have a Material Adverse Effect.
4.19 Insurance
Coverage. The Company and each Subsidiary maintains in full force
and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by
the
Company and each Subsidiary, and the Company reasonably believes such insurance
coverage to be adequate against all liabilities, claims and risks against which
it is customary for comparably situated companies to insure.
4.20 Compliance
with Nasdaq Continued Listing Requirements. The Company is in
compliance with applicable Nasdaq continued listing
requirements. There are no proceedings pending or, to the Company’s
Knowledge, threatened against the Company relating to the continued listing
of
the Common Stock on Nasdaq and the Company has not received any notice of,
nor
to the Company’s Knowledge is there any basis for, the delisting of the Common
Stock from Nasdaq.
4.21 Brokers
and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than as
described in Schedule 4.21.
4.22 No
Directed Selling Efforts or General Solicitation. Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation
D) in
connection with the offer or sale of any of the Securities.
4.23 No
Integrated Offering. Neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration
for
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the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.
4.24 Private
Placement. The offer and sale of the Securities to the Investors
as contemplated hereby is exempt from the registration requirements of the
1933
Act.
4.25 Questionable
Payments. Neither the Company nor any
of its Subsidiaries nor, to the Company’s Knowledge, any of their respective
current or former stockholders, directors, officers, employees, agents or other
Persons acting on behalf of the Company or any Subsidiary, has on behalf of
the
Company or any Subsidiary or in connection with their respective businesses:
(a)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) made any direct
or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries
on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment
of
any nature.
4.26 Transactions
with Affiliates. Except as disclosed in the SEC Filings or as
disclosed on Schedule 4.26, none of the officers or directors of the
Company and, to the Company’s Knowledge, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than as holders of stock options and/or warrants, and for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real
or personal property to or from, or otherwise requiring payments to or from
any
officer, director or such employee or, to the Company’s Knowledge, any entity in
which any officer, director, or any such employee has a substantial interest
or
is an officer, director, trustee or partner.
4.27 Internal
Controls. The Company is in material compliance with the
provisions of the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to the
Company. The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
The
Company has established disclosure controls and procedures (as defined in 1934
Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the
Company, including the Subsidiaries, is made known to the certifying officers
by
others within those entities, particularly during the period in which the
Company’s most recently filed periodic report under the 1934 Act, as the case
may be, is being prepared. The Company's certifying officers have
evaluated the effectiveness of the Company's controls and procedures as of
the
end of the period covered by the most recently filed periodic report under
the
1934 Act (such date, the "Evaluation Date").
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The
Company presented in its most recently filed periodic report under the 1934
Act
the conclusions of the certifying officers about the effectiveness of the
disclosure 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 308 of Regulation S-K) or, to the Company's Knowledge, in other factors
that could significantly affect the Company's internal controls. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP and the applicable
requirements of the 1934 Act.
4.28 Application
of Takeover Protections. There is no control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s or any
Subsidiary's charter documents or the laws of its state of incorporation that
is
or could become applicable to any of the Investors as a result of the Investors
and the Company fulfilling their obligations or exercising their rights under
the Transaction Documents, including, without limitation, as a result of the
Company’s issuance of the Securities and the Investors’ ownership of the
Securities.
Section
4.29 Disclosures. Neither the Company
nor any Person acting on its behalf has provided the Investors or their agents
or counsel with any information that constitutes or might constitute material,
non-public information, other than the terms of the transactions contemplated
hereby. The written materials delivered to the Investors in
connection with the transactions contemplated by the Transaction Documents
do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein, in light
of
the circumstances under which they were made, not misleading.
5. Representations
and Warranties of the Investors. Each of the Investors hereby
severally, and not jointly, represents and warrants to the Company
that:
5.1 Organization
and Existence. Such Investor, if applicable, is a validly
existing corporation, limited partnership or limited liability company and
has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The
execution, delivery and performance by such Investor of the Transaction
Documents to which such Investor is a party have been duly authorized and each
constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally.
5.3 Purchase
Entirely for Own Account. The Securities to be received by such
Investor hereunder will be acquired for such Investor’s own account, not as
nominee or agent, and not with a view to the resale or distribution of any
part
thereof in violation of the 1933 Act or any applicable state securities laws,
and such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the 1933
Act or any applicable state securities laws without prejudice, however, to
such Investor’s right at all
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times
to
sell or otherwise dispose of all or any part of such Securities in compliance
with applicable federal and state securities
laws. Nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Securities for any
period of time. Such Investor is not a broker-dealer registered with
the SEC under the 1934 Act or an entity engaged in a business that would require
it to be so registered.
5.4 Investment
Experience. Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Securities and has
such
knowledge and experience in financial or business matters that it is capable
of
evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure
of Information. Such Investor has had an opportunity to receive
all information related to the Company requested by it and to ask questions
of
and receive answers from the Company regarding the Company, its business and
the
terms and conditions of the offering of the Securities. Such Investor
acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, limit or otherwise affect such Investor’s right to rely on the
Company’s representations and warranties contained in this
Agreement.
5.6 Restricted
Securities. Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only
in
certain limited circumstances.
5.7 Legends. It
is understood that, except as provided below, certificates evidencing the
Securities may bear the following or any similar legend:
(a) “The
securities represented hereby may not be transferred unless (i) such securities
have been registered for sale pursuant to the Securities Act of 1933, as
amended, (ii) such securities may be sold pursuant to Rule 144(k), or (iii)
the
Company has received an opinion of counsel reasonably satisfactory to it that
such transfer may lawfully be made without registration under the Securities
Act
of 1933 or qualification under applicable state securities laws.”
(b) If
required by the authorities of any state in connection with the issuance of
sale
of the Securities, the legend required by such state authority.
5.8 Accredited
Investor. Such Investor is an accredited investor as defined in
Rule 501(a) of Regulation D, as amended, under the 0000 Xxx.
5.9 No
General Solicitation. Such Investor did not learn of the
investment in the Securities as a result of any general solicitation or general
advertising.
5.10 Brokers
and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon
-15-
the
Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Investor.
5.11 Prohibited
Transactions. During the last thirty (30) days prior to the date
hereof, neither such Investor nor any Affiliate of such Investor which (x)
had
knowledge of the transactions contemplated hereby, (y) has or shares discretion
relating to such Investor’s investments or trading or information concerning
such Investor’s investments, including in respect of the Securities, or (z) is
subject to such Investor’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading Affiliates”) has, directly or
indirectly, effected or agreed to effect any short sale, whether or not against
the box, established any “put equivalent position” (as defined in Rule 16a-1(h)
under the 0000 Xxx) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Securities (each, a “Prohibited
Transaction”). Until the end of the Effectiveness Period (as defined
in the Registration Rights Agreement), so long as any Investor continues to
hold
any Securities, such Investor shall not, and shall cause its Trading Affiliates
not to, engage, directly or indirectly, in a Prohibited Transaction; provided,
however, that the provisions of this sentence shall not apply during any period
when either (i) the bid price per share of the Common Stock is more than $3.00
per share (appropriately adjusted for any stock split, reverse stock split,
stock dividend or other reclassification or combination of the Common Stock
occurring after the date hereof) or (ii) a Registration Statement covering
the
Registrable Securities (as defined in the Registration Rights Agreement) is
required to be effective under the terms of the Registration Rights Agreement
but is not effective and available for resales of the Registrable Securities
(other than as a result of an Allowed Delay). Such Investor
acknowledges that the representations, warranties and covenants contained in
this Section 5.11 are being made for the benefit of the Investors as well as
the
Company and that each of the other Investors shall have an independent right
to
assert any claims against such Investor arising out of any breach or violation
of the provisions of this Section 5.11.
6. Conditions
to
Closing.
6.1 Conditions
to the Investors’ Obligations. The obligation of each Investor to purchase
the Shares and the Warrants at the Closing is subject to the fulfillment to
such
Investor’s satisfaction, on or prior to the Closing Date, of the following
conditions, any of which may be waived by such Investor (as to itself
only):
(a) The
representations and warranties made by the Company in Section 4 hereof qualified
as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty
shall be true and correct as of such earlier date, and, the representations
and
warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times
prior to and on the Closing Date, except to the extent any such representation
or warranty expressly
-16-
speaks
as
of an earlier date, in which case such representation or warranty shall be
true
and correct in all material respects as of such earlier date. The
Company shall have performed in all material respects all obligations and
covenants herein required to be performed by it on or prior to the Closing
Date.
(b) The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers necessary or appropriate for consummation of the
purchase and sale of the Securities and the consummation of the other
transactions contemplated by the Transaction Documents, all of which shall
be in
full force and effect.
(c) The
Company shall have executed and delivered the Registration Rights
Agreement.
(d) The
Company shall have filed with Nasdaq a Notification Form for the inclusion
of
the Shares and the Warrant Shares in the Nasdaq Capital Market.
(e) No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order
of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated hereby or in
the
other Transaction Documents.
(f) The
Company shall have delivered a Certificate, executed on behalf of the Company
by
its Chief Executive Officer or its Chief Financial Officer, dated as of the
Closing Date, certifying to the fulfillment of the conditions specified in
subsections (a), (b), (d), (e) and (i) of this Section 6.1.
(g) The
Company shall have delivered a Certificate, executed on behalf of the Company
by
its Secretary, dated as of the Closing Date, certifying the resolutions adopted
by the Board of Directors of the Company approving the transactions contemplated
by this Agreement and the other Transaction Documents and the issuance of the
Securities, certifying the current versions of the Certificate of Incorporation
and Bylaws of the Company and certifying as to the signatures and authority
of
persons signing the Transaction Documents and related documents on behalf of
the
Company.
(h) The
Investors shall have received an opinion from Xxxxx Xxxx LLP, the Company's
counsel, dated as of the Closing Date, in form and substance reasonably
acceptable to the Investors and addressing such legal matters as the Investors
may reasonably request.
(i) No
stop order or suspension of trading shall have been imposed by Nasdaq, the
SEC
or any other governmental or regulatory body with respect to public trading
in
the Common Stock.
6.2 Conditions
to Obligations of the Company. The Company's obligation to sell and issue
the Shares and the Warrants at the Closing is subject to the fulfillment to
the
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satisfaction
of the Company on or prior to the Closing Date of the following conditions,
any
of which may be waived by the Company:
(a) The
representations and warranties made by the Investors in Section 5 hereof, other
than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
5.6, 5.7, 5.8 and 5.9 (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 Closing Date with the same force and effect as if
they
had been made on and as of said date. The Investment Representations
shall be true and correct in all respects when made, and shall be true and
correct in all respects on the Closing Date with the same force and effect
as if
they had been made on and as of said date. The Investors shall have
performed in all material respects all obligations and covenants herein required
to be performed by them on or prior to the Closing Date.
(b) The
Investors shall have executed and delivered the Registration Rights
Agreement.
(c) The
Investors shall have delivered the Purchase Price to the Company.
6.3 Termination
of Obligations to Effect Closing; Effects.
(a) The
obligations of the Company, on the one hand, and the Investors, on the other
hand, to effect the Closing shall terminate as follows:
(i) Upon
the mutual written consent of the Company and the Investors;
(ii) By
the Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the
Company;
(iii) By
an Investor (with respect to itself only) if any of the conditions set forth
in
Section 6.1 shall have become incapable of fulfillment, and shall not have
been
waived by the Investor; or
(iv) By
either the Company or any Investor (with respect to itself only) if the Closing
has not occurred on or prior to July 31, 2007;
provided,
however, that, except in the case of clause (i) above, the party seeking to
terminate its obligation to effect the Closing shall not then be in breach
of
any of its representations, warranties, covenants or agreements contained in
this Agreement or the other Transaction Documents if such breach has resulted
in
the circumstances giving rise to such party’s seeking to terminate its
obligation to effect the Closing.
-18-
(b) In
the event of termination by any Investor of its obligations to effect the
Closing pursuant to this Section 6.3 (such Investor, a “Terminating Investor”),
written notice thereof shall forthwith be given by the Company to the other
Investors, and each other Investor shall have the right (but not the obligation)
to purchase at a price per Share equal to the Per Share Purchase Price a pro
rata portion of the Terminating Investor’s allocated portion of the total number
of Shares to be acquired by all Investors under this Agreement (or such greater
portion of the Terminated Investor’s allocated portion of the Shares as
otherwise agreed to among each of the other Investors electing to purchase
a
portion of the Terminated Investor’s allocated portion of the
Shares). Nothing in this Section 6.3 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 Transaction Documents 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 Transaction
Documents.]
7. Covenants
and Agreements of the Company.
7.1 Reservation
of Common Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely
for
the purpose of providing for the exercise of the Warrants, such number of shares
of Common Stock as shall from time to time equal the number of shares sufficient
to permit the exercise of the Warrants issued pursuant to this Agreement in
accordance with their respective terms.
7.2 Reports. The
Company will furnish to the Investors and/or their assignees such information
relating to the Company and its Subsidiaries as from time to time may reasonably
be requested by the Investors and/or their assignees; provided, however, that
the Company shall not disclose material nonpublic information to the Investors,
or to advisors to or representatives of the Investors, unless prior to
disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.
7.3 No
Conflicting Agreements. The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the Company’s obligations to the Investors under
the Transaction Documents.
7.4 Compliance
with Laws. The Company will comply in all material respects with
all applicable laws, rules, regulations, orders and decrees of all governmental
authorities.
7.5 Listing
of Underlying Shares and Related Matters. Promptly following the
date hereof, the Company shall take all necessary action to cause the Shares
and
the Warrant Shares to be listed on the Nasdaq Capital Market no later than
the
Closing Date. Further, if the Company applies to have its Common
Stock or other securities traded on any other principal stock exchange or
market, it shall include in such application the Shares and the Warrant Shares
and will take such other action as is necessary to cause such Common Stock
to be
so listed. The Company will use commercially reasonable efforts to
continue the listing and trading of its
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Common
Stock on the Nasdaq Capital Market and, in accordance, therewith, will use
commercially reasonable efforts to comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of such market
or exchange, as applicable.
7.6 Termination
of Covenants. The provisions of Sections 7.2 through 7.4 shall
terminate and be of no further force and effect on the date on which the
Company’s obligations under the Registration Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall
terminate.
7.7 Removal
of Legends. Upon the earlier of (i) registration for resale
pursuant to the Registration Rights Agreement or (ii) Rule 144(k) becoming
available the Company shall (A) deliver to the transfer agent for the Common
Stock (the “Transfer Agent”) irrevocable instructions that the Transfer Agent
shall reissue a certificate representing shares of Common Stock (or make
available such shares in electronic format via DWAC) without legends upon
receipt by such Transfer Agent of the legended certificates for such shares,
together with either (1) a customary representation by the Investor that Rule
144(k) applies to the shares of Common Stock represented thereby or (2) a
statement by the Investor that such Investor has sold the shares of Common
Stock
represented thereby in accordance with the Plan of Distribution contained in
the
Registration Statement, and (B) cause its counsel to deliver to the Transfer
Agent one or more blanket opinions to the effect that the removal of such
legends in such circumstances may be effected under the 1933
Act. From and after the earlier of such dates, upon an Investor’s
written request, the Company shall promptly cause certificates evidencing the
Investor’s Securities to be replaced with certificates which do not bear such
restrictive legends or to be replaced with unlegended shares made available
electronically via DWAC, and Warrant Shares subsequently issued upon due
exercise of the Warrants shall not bear such restrictive legends provided the
provisions of either clause (i) or clause (ii) above, as applicable, are
satisfied with respect to such Warrant Shares. When the Company is
required to cause an unlegended certificate (or electronic unlegended shares)
to
replace a previously issued legended certificate, if: (1) the unlegended
certificate is not delivered (or unlegended electronic shares are not made
available) to an Investor within three (3) Business Days of submission by that
Investor of a legended certificate and supporting documentation to the Transfer
Agent as provided above (a copy of which shall be given to the Company) and
(2)
prior to the time such unlegended certificate is received by the Investor (or
unlegended electronic shares are made available to the Investor via DWAC),
the
Investor, or any third party on behalf of such Investor or for the Investor’s
account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Investor of shares represented
by such certificate (a “Buy-In”), then the Company shall pay in cash to the
Investor (for costs incurred either directly by such Purchaser or on behalf
of a
third party) the amount by which the total purchase price paid for Common Stock
as a result of the Buy-In (including brokerage commissions, if any) exceeds
the
proceeds received by such Investor as a result of the sale to which such Buy-In
relates. The Investor shall provide the Company written notice
indicating the amounts payable to the Investor in respect of the
Buy-In.
7.8 Subsequent
Equity Sales. From the date hereof until such time as no Investor
holds any of the Securities (but in no event beyond July 1, 2009), the Company
shall be
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prohibited
from effecting or entering into an agreement to effect any Subsequent Financing
involving a “Variable Rate Transaction”. The term “Variable Rate
Transaction” shall mean a transaction in which the Company issues or sells (i)
any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price
that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt
or
equity securities, or (B) with a conversion, exercise or exchange price that
is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market
for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price.
7.9 Equal
Treatment of Investors. 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 Investor by the Company and negotiated separately by each Investor, and
is
intended for the Company to treat the Investors as a class and shall not in
any
way be construed as the Investors acting in concert or as a group with respect
to the purchase, disposition or voting of Securities or otherwise.
7.10 Right
of First Refusal on Future Financings. From the date hereof until the first
anniversary of the Closing Date, upon any financing by the Company of its Common
Stock or Common Stock Equivalents at an effective price per share of $2.70
or
less (appropriately adjusted for any stock split, reverse stock split, stock
dividend or other reclassification or combination of the Common Stock occurring
after the date hereof), the primary purpose of which is the raising of capital
(a “Subsequent Financing”), each Investor shall have the right to participate in
such Subsequent Financing as provided herein. At least five (5)
Business Days prior to the closing of the Subsequent Financing, the Company
shall deliver to each Investor a written notice of its intention to effect
a
Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Investor if
it wants to review the details of such financing (such additional notice, a
“Subsequent Financing Notice”). Upon the request of an Investor, and
only upon a request by such Investor, for a Subsequent Financing Notice, the
Company shall promptly, but no later than one Business Day after such request,
deliver a Subsequent Financing Notice to such Investor. Any Investor
who elects to receive a Subsequent Financing Notice shall keep the contents
thereof confidential until the consummation or the abandonment of the Subsequent
Financing. The Subsequent Financing Notice shall describe in
reasonable detail the proposed terms of such Subsequent Financing, the amount
of
proceeds intended to be raised thereunder, the Person with whom such Subsequent
Financing is proposed to be effected, and attached to which shall be a term
sheet or similar document relating thereto. Each Investor shall
notify the Company by 6:30 p.m. (New York City time) on the fifth (5th) Business
Day
after their receipt of the Subsequent Financing Notice of its willingness to
provide the Subsequent Financing on the terms described in the Subsequent
Financing Notice, subject to completion of mutually acceptable
documentation. If one or more Investors shall fail to so notify the
Company of their willingness to participate in the Subsequent Financing, the
Investors agreeing to participate in the
-21-
Subsequent
Financing (the “Participating Investors”) shall have the right to provide all of
the Subsequent Financing. If one or more Investors fail to notify the
Company of their willingness to provide all of the Subsequent Financing and
the
Participating Investors do not agree to provide all of the Subsequent Financing,
the Company may effect the remaining portion of such Subsequent Financing on
substantially the same terms and to the Persons set forth in the Subsequent
Financing Notice; provided that the Company must provide the Investors with
a
second Subsequent Financing Notice, and the Investors will again have the right
of first refusal set forth above in this Section 7.10, if the Subsequent
Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within
60 Business Days after the date of the initial Subsequent Financing Notice
with
the Person identified in the Subsequent Financing Notice. In the
event the Company receives responses to Subsequent Financing Notices from
Investors seeking to purchase more than the financing sought by the Company
in
the Subsequent Financing such Investors shall have the right to purchase their
Pro Rata Portion (as defined below) of the Common Stock or Common Stock
Equivalents to be issued in such Subsequent Financing. “Pro Rata
Portion” is the ratio of (x) the amount invested by such Investor pursuant to
this Agreement (the “Subscription Amount”) and (y) the aggregate sum of all of
the Subscription Amounts. Notwithstanding the foregoing, this Section
7.10 shall not apply in respect of the issuance of (a) shares of Common Stock
or
options to employees, consultants, officers or directors of the Company pursuant
to any stock or option plan duly adopted by the Board of Directors of the
Company or a majority of the members of a committee of non-employee directors
established for such purpose and (b) securities upon the exercise of or
conversion of any convertible securities, options or warrants issued and
outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of
shares of Common Stock issuable thereunder or to lower the exercise or
conversion price thereof.
8.
Survival and Indemnification.
8.1 Survival. The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing of the transactions contemplated by this
Agreement.
8.2 Indemnification. The
Company agrees to indemnify and hold harmless each Investor and its Affiliates
and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”) to which such Person may become subject as a result of
any breach of representation, warranty, covenant or agreement made by or to
be
performed on the part of the Company under the Transaction Documents, and will
reimburse any such Person for all such amounts as they are incurred by such
Person.
8.3 Conduct
of
Indemnification Proceedings. Promptly
after receipt by any Person (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise
to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 8.2, such
-22-
Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of
its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed
to
the retention of such counsel; or (ii) in the reasonable judgment of counsel
to
such Indemnified Person representation of both parties by the same counsel
would
be inappropriate due to actual or potential conflicts of interest between
them. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior
written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person
is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such
proceeding.
9. Miscellaneous.
9.1 Successors
and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investors, as
applicable, provided, however, that (a) an Investor may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate or to a third
party acquiring some or all of its Securities in a transaction complying with
applicable securities laws without the prior written consent of the Company
or
the other Investors and (b) the Company may assign its rights and delegate
its
duties hereunder to any surviving or successor corporation in connection with
a
merger or consolidation of the Company with another corporation, or a sale,
transfer or other disposition of all or substantially all of the Company’s
assets to another corporation without the prior written consent of the
Investors, after notice duly given by the Company to each
Investor. The provisions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this
Agreement.
9.2 Counterparts;
Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile (including electronic transmission of scanned
documents), which shall be deemed an original.
-23-
9.3 Titles
and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
9.4 Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given
by
an internationally recognized overnight air courier, then such notice shall
be
deemed given one Business Day after delivery to such carrier. All
notices shall be addressed to the party to be notified at the address as
follows, or at such other address as such party may designate by ten days’
advance written notice to the other party:
If
to the Company:
0000
X’Xxx Xxxxx
Xxx
Xxxx,
Xxxxxxxxxx 00000
Attention:
Fax:
With
a copy to:
000
Xxxxx
Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention: Xxxxx
X. Xxxxxxx
Fax: (000)
000-0000
If
to the Investors:
to
the
addresses set forth on the signature pages hereto.
9.5 Expenses. The
parties hereto shall pay their own costs and expenses in connection herewith,
except that the Company shall pay the reasonable fees and expenses of Xxxxxxx
Xxxxx LLP not to exceed $10,000 and of Xxxxxxxxxx Xxxxxxx PC not to exceed
$35,000; it being understood that Xxxxxxxxxx Xxxxxxx PC has only rendered legal
advice to funds affiliated with SRB Greenway Capital participating in this
transaction and not to the Company or any other Investor in connection with
the
transactions contemplated hereby, and that each of the Company and each Investor
has relied for such matters on the advice of its own respective
counsel. Such expenses shall be paid not later than the
Closing. The Company shall reimburse the Investors upon demand for
all reasonable out-of-pocket expenses incurred by the Investors, including
without limitation reimbursement of attorneys’ fees and disbursements, in
connection
-24-
with
any
amendment, modification or waiver of this Agreement or the other Transaction
Documents. In the event that legal proceedings are commenced by any
party to this Agreement against another party to this Agreement in connection
with this Agreement or the other Transaction Documents, the party or parties
which do not prevail in such proceedings shall severally, but not jointly,
pay
their pro rata share of the reasonable attorneys’ fees and other reasonable
out-of-pocket costs and expenses incurred by the prevailing party in such
proceedings.
9.6 Amendments
and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or
in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investors. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities, and the Company.
9.7 Publicity. Except
as set forth below, no public release or announcement concerning the
transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the Company (in the case of a release or
announcement by the Investors) or the Investors (in the case of a release or
announcement by the Company) (which consents shall not be unreasonably
withheld), except as such release or announcement may be required by law or
the
applicable rules or regulations of any securities exchange or securities market,
in which case the Company or the Investors, as the case may be, shall allow
the
Investors or the Company, as applicable, to the extent reasonably practicable
in
the circumstances, reasonable time to comment on such release or announcement
in
advance of such issuance. By 8:30 a.m. (New York City time) on the
trading day immediately following the Closing Date, the Company shall issue
a
press release disclosing the consummation of the transactions contemplated
by
this Agreement. No later than the fourth trading day following the
Closing Date, the Company will file a Current Report on Form 8-K attaching
the
press release described in the foregoing sentence as well as copies of the
Transaction Documents. In addition, the Company will make such other
filings and notices in the manner and time required by the SEC or
Nasdaq.
9.8 Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision
of
law which renders any provision hereof prohibited or unenforceable in any
respect.
9.9 Entire
Agreement. This Agreement, including the Exhibits and the
Disclosure Letter, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof
and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.
-25-
9.10 Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and
to
evidence the fulfillment of the agreements herein contained.
9.11 Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District
of
New York for the purpose of any suit, action, proceeding or judgment relating
to
or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to
the
laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
9.12 Independent
Nature of Investors' Obligations and Rights. The obligations of
each Investor under any Transaction Document are several and not joint with
the
obligations of any other Investor, and no Investor shall be responsible in
any
way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase
Securities pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor. Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction
Documents. Each Investor acknowledges that no other Investor has
acted as agent for such Investor in connection with making its investment
hereunder and that no Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Investor 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 Investor
to
be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that each of the Investors has been
provided with the same Transaction Documents for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.
[signature
page follows]
-26-
IN
WITNESS WHEREOF, the parties have
executed this Agreement or caused their duly authorized officers to execute
this
Agreement as of the date first above written.
|
The
Company:
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
|
|
Name:
|
Xxxxxx
X. Xxxxxxxxxx
|
|
|
Title:
|
Chief
Executive Officer
|
|
-27-
|
The
Investors:
|
SRB
GREENWAY CAPITAL, L.P.
|
|
By: SRB
Management, L.P., General Partner
|
|
|
By: BC
Advisors, L.L.C., General Partner
|
|
|
By:
/s/ Xxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxx
X. Xxxxxx
|
|
|
Title: Member
|
|
Aggregate
Purchase Price:
|
$ |
322,875
|
||
|
Number
of Shares:
|
184,500
|
|||
|
Number
of Warrants:
|
92,250
|
|
Address
for Notice:
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
|
|
Xxxxxx,
Xxxxx 00000
|
|
|
000-000-0000
(telephone)
|
|
|
000-000-0000
(fax)
|
|
|
Attn: Xxxxxx
Xxx
|
|
|
with
a copy to:
|
|
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
|
00
Xxxxxxxxxx Xxxxxx
|
|
|
Xxxxxxxx,
XX 00000
|
|
|
Attn: Xxxx
X. Xxxxxxxx, Esq.
|
|
|
Telephone: 000.000.0000
|
|
|
Facsimile:
973.597.2400
|
|
SRB
GREENWAY CAPITAL (Q.P.), L.P.
|
|
|
By: SRB
Management, L.P., General Partner
|
|
|
By: BC
Advisors, L.L.C., General Partner
|
|
|
By:
/s/ Xxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxx
X. Xxxxxx
|
|
|
Title: Member
|
|
Aggregate
Purchase Price:
|
$ |
2,797,725
|
||
|
Number
of Shares:
|
1,598,700
|
|||
|
Number
of Warrants:
|
799,350
|
-28-
|
Address
for Notice:
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
|
|
Xxxxxx,
Xxxxx 00000
|
|
|
000-000-0000
(telephone)
|
|
|
000-000-0000
(fax)
|
|
|
Attn: Xxxxxx
Xxx
|
|
|
with
a copy to:
|
|
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
|
00
Xxxxxxxxxx Xxxxxx
|
|
|
Xxxxxxxx,
XX 00000
|
|
|
Attn: Xxxx
X. Xxxxxxxx, Esq.
|
|
|
Telephone:
000.000.0000
|
|
|
Facsimile:
973.597.2400
|
|
SRB
GREENWAY OFFSHORE
|
|
|
OPERATING
FUND, L.P.
|
|
|
By: SRB
Management, L.P., General Partner
|
|
|
By: BC
Advisors, L.L.C., General Partner
|
|
|
By:
/s/ Xxxxxx X. Xxxxxx
|
|
|
Name: Xxxxxx
X. Xxxxxx
|
|
|
Title: Member
|
|
Aggregate
Purchase Price:
|
$ |
116,900
|
||
|
Number
of Shares:
|
66,800
|
|||
|
Number
of Warrants:
|
33,400
|
|
Address
for Notice:
|
000
Xxxxxxxx Xxxxx, Xxxxx 0000
|
|
Xxxxxx,
Xxxxx 00000
|
|
|
000-000-0000
(telephone)
|
|
|
000-000-0000
(fax)
|
|
|
Attn: Xxxxxx
Xxx
|
|
|
with
a copy to:
|
|
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
|
00
Xxxxxxxxxx Xxxxxx
|
|
|
Xxxxxxxx,
XX 00000
|
|
|
Attn: Xxxx
X. Xxxxxxxx, Esq.
|
|
|
Telephone:
000.000.0000
|
|
|
Facsimile:
973.597.2400
|
-29-
|
Xxxxx
X. Xxxxxx, III
|
|
|
/s/
Xxxxx X. Xxxxxx, III
|
|
|
Xxxxx
X. Xxxxxx, III
|
|
Aggregate
Purchase Price:
|
$ |
1,618,750
|
||
|
Number
of Shares:
|
925,000
|
|||
|
Number
of Warrants:
|
462,500
|
|
Address
for Notice:
|
0000
Xxxxxx Xxxxx
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
|
Tel: (000)
000-0000
|
|
|
Fax: (000)
000-0000
|
|
|
with
a copy to:
|
|
|
Xxxxx
Xxxxxx
|
|
|
0000
Xxxxxx Xxxxx
|
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
|
Tel: (000)
000-0000
|
|
|
Fax: (000)
000-0000
|
|
MILFAM
II, LP
|
|
|
By:
Milfam LLC, its General Partner
|
|
|
By:
/s/ Xxxxx X. Xxxxxx, III
|
|
|
Name: Xxxxx
X. Xxxxxx, III
|
|
|
Title: Manager
|
|
Aggregate
Purchase Price:
|
$ |
1,618,750
|
||
|
Number
of Shares:
|
925,000
|
|||
|
Number
of Warrants:
|
462,500
|
|
Address
for Notice:
|
0000
Xxxxxx Xxxxx
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
|
Tel: (000)
000-0000
|
|
|
Fax: (000)
000-0000
|
|
|
with
a copy to:
|
|
|
Xxxxx
Xxxxxx
|
|
|
0000
Xxxxxx Xxxxx
|
|
|
Xxxxxx,
Xxxxxxx 00000
|
|
|
Tel: (000)
000-0000
|
|
|
Fax: (000)
000-0000
|
-00-
|
XXXXXXX
XXXXXXX XXXX.
|
|
|
By:
/s/ Xxxxxx X. Xxxxx
|
|
|
Name: Xxxxxx
X. Xxxxx
|
|
|
Title: Chairman
|
Aggregate
Purchase Price: $525,000
Number
of
Shares: 300,000
Number
of
Warrants: 150,000
|
Address
for Notice:
|
|
|
0000
Xxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
Xxxx 00000
|
|
CLARION
WORLD OFFSHORE FUND, LTD.
|
|
|
By:
/s/ Xxxxxx X. Xxxxx
|
|
|
Name: Xxxxxx
X. Xxxxx
|
|
|
Title: Investment
Manager
|
Aggregate
Purchase Price: $175,000
Number
of
Shares: 100,000
Number
of
Warrants: 50,000
|
Address
for Notice:
|
|
|
0000
Xxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
Xxxx 00000
|
|
THE
AMENDED & RESTATED DECLARATION OF
|
|
|
TRUST
OF XXXXXX X. XXXXX, DATED MAY 9, 2005
|
|
|
By:
/s/ Xxxxxx X. Xxxxx
|
|
|
Name: Xxxxxx
X. Xxxxx
|
|
|
Title: Trustee
|
Aggregate
Purchase Price: $175,000
Number
of
Shares: 100,000
Number
of
Warrants: 50,000
-31-
|
Address
for Notice:
|
|
|
0000
Xxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
Xxxx 00000
|
|
SHAKER
INVESTMENTS TOWER, L.P.
|
|
|
By:
/s/ Xxxxxx Xxxxxxxxxx
|
|
|
Name: Xxxxxx
Xxxxxxxxxx
|
|
|
Title: Managing
Member
|
|
Aggregate
Purchase Price: $175,000
Number
of
Shares: 100,000
Number
of
Warrants: 50,000
|
Address
for Notice:
|
|
|
0000
Xxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
Xxxx 00000
|
|
-32-
