AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (this "Agreement"),
dated as of February 7, 2006, by and among GREENSHIFT CORPORATION, a Delaware
corporation (the "Company"), and the Buyers listed on Schedule I attached hereto
(individually, a "Buyer" or collectively "Buyers").
WITNESSETH
WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2), Rule 506 of Regulation D ("Regulation D") and/or Regulation E, as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase Five Million Dollars
($5,000,000) of secured convertible debentures (the "Convertible Debentures"),
which shall be convertible into shares of the Company's common stock, par value
$0.001 (the "Common Stock") (as converted, the "Conversion Shares"), of which
$3,050,369 shall be funded on the date hereof (the "First Closing") and the
balance of $1,949,631 shall be funded on May 1, 2006 (the "Second Closing"), for
a total purchase price of Five Million Dollars ($5,000,000) (the "Purchase
Price") in the respective amounts set forth opposite each Buyer(s) name on
Schedule I (the "Subscription Amount");
WHEREAS, a portion of the Purchase Price shall consist of a convertible
debenture issued to Highgate House Funds, Ltd. ("Highgate") in the amount of
$1,150,369 (representing the outstanding the principal of the convertible
debenture dated June 1, 2005 issued by Inseq Corporation, a Nevada corporation
("Inseq") to Highgate in the principal amount of $795,716.58, plus accrued and
unpaid interest in the amount of $53,411.12 through February 1, 2006 and the
outstanding the principal of the convertible debenture dated July 7, 2005 issued
by Inseq to Highgate in the principal amount of $285,000, plus accrued and
unpaid interest in the amount of $16,241.11 through February 1, 2006 (both Inseq
convertible debentures shall collectively be referred to as the "Prior Debt") in
exchange for the Prior Debt held by Highgate in Inseq and the remaining balance
of the Purchase Price in the amount of $3,849,631 shall be funded in cash (of
which $1,900,000 shall be funded at the First Closing and the balance of
$1,949,631 shall be funded at the Second Closing);
WHEREAS, this Securities Purchase Agreement and the Transaction Documents
and the parties' respective obligations hereunder and thereunder shall not
become effective until the majority of the Company's shareholders approve the
issuance by the Company of the Convertible Debentures and the Company provides
its shareholders with notice of said shareholder approval in compliance with all
applicable rules and regulations; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering certain other
agreements and instruments, all of which constitute part of this transaction
(collectively, the "Transaction Documents").
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s) hereby agree
as follows:
1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
(a) Purchase of Convertible Debentures. Subject to the satisfaction (or
waiver) of the terms and conditions of this Agreement, each Buyer
agrees, severally and not jointly, to purchase at Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer,
severally and not jointly, at Closing, Convertible Debentures in
amounts corresponding with the Subscription Amount set forth opposite
each Buyer's name on Schedule I hereto.
(b) Closing Date. The First Closing of the purchase and sale of the
Convertible Debentures shall take place at 10:00 a.m. Eastern Standard
Time on the second (2nd) business day following the date hereof,
subject to notification of satisfaction of the conditions to the
Closing set forth herein and in Sections 6 and 7 below (or such later
date as is mutually agreed to by the Company and the Buyer(s)) (the
"First Closing Date"). The Second Closing shall take place on May 1,
2006, subject to notification of satisfaction of the conditions to the
Closing set forth herein and in Sections 6 and 7 below (or such later
date as is mutually agreed to by the Company and the Buyer(s)) (the
"Second Closing Date"). Each Closing shall occur on the respective
Closing Dates at the offices of Yorkville Advisors, LLC, 000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxx Xxxxxx 00000 (or such other place
as is mutually agreed to by the Company and the Buyer(s)).
(c) Form of Payment. Subject to the satisfaction of the terms and
conditions of this Agreement, on the Closing Dates, (i) the Buyers
shall deliver to the Company such aggregate proceeds for the
Convertible Debentures to be issued and sold to such Buyer(s), minus
the fees to be paid directly from the proceeds the Closings as set
forth herein, and (ii) the Company shall deliver to each Buyer,
Convertible Debentures which such Buyer(s) is purchasing in amounts
indicated opposite such Buyer's name on Schedule I, duly executed on
behalf of the Company.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants, severally and not jointly, that:
(a) Investment Purpose. Each Buyer is acquiring the Convertible Debentures
and, upon conversion of Convertible Debentures, the Buyer will acquire
the Conversion Shares then issuable, for its own account for
investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, such
Buyer reserves the right to dispose of the Conversion Shares at any
time in accordance with or pursuant to an effective registration
statement covering such Conversion Shares or an available exemption
under the Securities Act.
(b) Accredited Investor Status. Each Buyer is an "Accredited Investor" as
that term is defined in Rule 501(a)(3) of Regulation D.
(c) Reliance on Exemptions. Each Buyer understands that the Convertible
Debentures are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and
understandings of such Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of such Buyer
to acquire such securities.
(d) Information. Each Buyer and its advisors (and his or, its counsel), if
any, have been furnished with all materials relating to the business,
finances and operations of the Company and information he deemed
material to making an informed investment decision regarding his
purchase of the Convertible Debentures and the Conversion Shares,
which have been requested by such Buyer. Each Buyer and its advisors,
if any, have been afforded the opportunity to ask questions of the
Company and its management. Neither such inquiries nor any other due
diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer's
right to rely on the Company's representations and warranties
contained in Section 3 below. Each Buyer understands that its
investment in the Convertible Debentures and the Conversion Shares
involves a high degree of risk. Each Buyer is in a position regarding
the Company, which, based upon employment, family relationship or
economic bargaining power, enabled and enables such Buyer to obtain
information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and
tax advice, as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Convertible
Debentures and the Conversion Shares.
(e) No Governmental Review. Each Buyer understands that no United States
federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the
Convertible Debentures or the Conversion Shares, or the fairness or
suitability of the investment in the Convertible Debentures or the
Conversion Shares, nor have such authorities passed upon or endorsed
the merits of the offering of the Convertible Debentures or the
Conversion Shares.
(f) Transfer or Resale. Each Buyer understands that except as provided in
the Investor Registration Rights Agreement of even date herewith or
pursuant to Regulation E promulgated under the Securities Act of 1933:
(i) the Convertible Debentures have not been and are not being
registered under the Securities Act or any state securities laws, and
may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, or (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration requirements; (ii) any sale of
such securities made in reliance on Rule 144 under the Securities Act
(or a successor rule thereto) ("Rule 144") may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act)
may require compliance with some other exemption under the Securities
Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to
register such securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any
exemption thereunder. The Company reserves the right to place stop
transfer instructions against the shares and certificates for the
Conversion Shares.
(g) Legends. Each Buyer understands that the certificates or other
instruments representing the Convertible Debentures and or the
Conversion Shares shall bear a restrictive legend in substantially the
following form (and a stop transfer order may be placed against
transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed and the Company within two
(2) business days shall issue a certificate without such legend to the
holder of the Conversion Shares upon which it is stamped, if, unless
otherwise required by state securities laws, (i) in connection with a
sale transaction, provided the Conversion Shares are registered under
the Securities Act or (ii) in connection with a sale transaction,
after such holder provides the Company with an opinion of counsel,
which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a
public sale, assignment or transfer of the Conversion Shares may be
made without registration under the Securities Act.
(h) Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and is a
valid and binding agreement of such Buyer enforceable in accordance
with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(i) Receipt of Documents. Each Buyer and his or its counsel has received
and read in their entirety: (i) this Agreement and each
representation, warranty and covenant set forth herein and in the
Transaction Documents; (ii) all due diligence and other information
necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) the Company's Form
10-KSB for the fiscal year ended December 31, 2004; (iv) the Company's
Form 10-QSB for the fiscal quarter ended March 31, 2005 and (v)
answers to all questions each Buyer submitted to the Company regarding
an investment in the Company; and each Buyer has relied on the
information contained therein and has not been furnished any other
documents, literature, memorandum or prospectus.
(j) Due Formation of Corporate and Other Buyers. If the Buyer(s) is a
corporation, trust, partnership or other entity that is not an
individual person, it has been formed and validly exists and has not
been organized for the specific purpose of purchasing the Convertible
Debentures and is not prohibited from doing so.
(k) No Legal Advice From the Company. Each Buyer acknowledges, that it had
the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and
investment and tax advisors. Each Buyer is relying solely on such
counsel and advisors and not on any statements or representations of
the Company or any of its representatives or agents for legal, tax or
investment advice with respect to this investment, the transactions
contemplated by this Agreement or the securities laws of any
jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that, except as
set forth in the SEC Documents (as defined herein):
(a) Organization and Qualification. The Company and its subsidiaries are
corporations duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power to own their properties and to
carry on their business as now being conducted. Each of the Company
and its subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the
nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(b) Authorization, Enforcement, Compliance with Other Instruments. (i) The
Company has the requisite corporate power and authority to enter into
and perform this Agreement and the other Transaction Documents and to
issue the Convertible Debentures and the Conversion Shares in
accordance with the terms hereof and thereof, (ii) the execution and
delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the
Convertible Debentures the Conversion Shares and the reservation for
issuance and the issuance of the Conversion Shares issuable upon
conversion or exercise thereof, have been duly authorized by the
Company's Board of Directors and no further consent or authorization
is required by the Company, its Board of Directors or its
stockholders, (iii) the Transaction Documents have been duly executed
and delivered by the Company, (iv) the Transaction Documents
constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies. The authorized officer
of the Company executing the Transaction Documents knows of no reason
why the Company cannot file the registration statement as required
under the Investor Registration Rights Agreement or perform any of the
Company's other obligations under such documents.
(c) Capitalization. As of the date hereof the authorized capital stock of
the Company consists of 250,000,000 shares of Common Stock, par value
$0.001 per share and 5,000,000 shares of Preferred Stock of which
approximately 80,000,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock are issued and outstanding. All of such outstanding
shares have been validly issued and are fully paid and nonassessable.
Except as disclosed in the SEC Documents (as defined in Section 3(f)),
no shares of Common Stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or
permitted by the Company. Except as disclosed in the SEC Documents, as
of the date of this Agreement, (i) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may
become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries or options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of
capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities and (iii) there are no agreements
or arrangements under which the Company or any of its subsidiaries is
obligated to register the sale of any of their securities under the
Securities Act (except pursuant to the Registration Rights Agreement)
and (iv) there are no outstanding registration statements and there
are no outstanding comment letters from the SEC or any other
regulatory agency. There are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the
issuance of the Convertible Debentures as described in this Agreement.
The Company has furnished to the Buyer true and correct copies of the
Company's Articles of Incorporation, as amended and as in effect on
the date hereof (the "Articles of Incorporation"), and the Company's
By-laws, as in effect on the date hereof (the "By-laws"), and the
terms of all securities convertible into or exercisable for Common
Stock and the material rights of the holders thereof in respect
thereto other than stock options issued to employees and consultants.
(d) Issuance of Securities. The Convertible Debentures are duly authorized
and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens
and charges with respect to the issue thereof. The Conversion Shares
issuable upon conversion of the Convertible Debentures have been duly
authorized and reserved for issuance. Upon conversion or exercise in
accordance with the Convertible Debentures the Conversion Shares will
be duly issued, fully paid and nonassessable.
(e) No Conflicts. Except as disclosed in the SEC Documents, the execution,
delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated
hereby will not (i) result in a violation of the Certificate of
Incorporation, any certificate of designations of any outstanding
series of preferred stock of the Company or the By-laws or (ii)
conflict with or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the
rules and regulations of The National Association of Securities
Dealers Inc.'s OTC Bulletin Board on which the Common Stock is quoted)
applicable to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries is bound
or affected. Except as disclosed in the SEC Documents, neither the
Company nor its subsidiaries is in violation of any term of or in
default under its Articles of Incorporation or By-laws or their
organizational charter or by-laws, respectively, or any material
contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation
applicable to the Company or its subsidiaries. The business of the
Company and its subsidiaries is not being conducted, and shall not be
conducted in violation of any material law, ordinance, or regulation
of any governmental entity. Except as specifically contemplated by
this Agreement and as required under the Securities Act and any
applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or
contemplated by this Agreement or the Registration Rights Agreement in
accordance with the terms hereof or thereof. Except as disclosed in
the SEC Documents, all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the
date hereof. The Company and its subsidiaries are unaware of any facts
or circumstance, which might give rise to any of the foregoing.
(f) SEC Documents: Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to
be filed by it with the SEC under of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (all of the foregoing filed
prior to the date hereof or amended after the date hereof and all
exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being
hereinafter referred to as the "SEC Documents"). The Company has
delivered to the Buyers or their representatives, or made available
through the SEC's website at xxxx://xxx.xxx.xxx., true and complete
copies of the SEC Documents. As of their respective dates, the
financial statements of the Company disclosed in the SEC Documents
(the "Financial Statements") complied as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such Financial
Statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and, fairly present in all material
respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). No other information provided by or on
behalf of the Company to the Buyer which is not included in the SEC
Documents, including, without limitation, information referred to in
this Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(g) 10(b)-5. The SEC Documents do not include any untrue statements of
material fact, nor do they omit to state any material fact required to
be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.
(h) Absence of Litigation. Except as disclosed in the SEC Documents, there
is no action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory
organization or body pending against or affecting the Company, the
Common Stock or any of the Company's subsidiaries, wherein an
unfavorable decision, ruling or finding would (i) have a material
adverse effect on the transactions contemplated hereby (ii) adversely
affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any
of the documents contemplated herein, or (iii) except as expressly
disclosed in the SEC Documents, have a material adverse effect on the
business, operations, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
(i) Acknowledgment Regarding Buyer's Purchase of the Convertible
Debentures. The Company acknowledges and agrees that the Buyer(s) is
acting solely in the capacity of an arm's length purchaser with
respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges that the Buyer(s) is not acting as a
financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Buyer(s) or any of
their respective representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely
incidental to such Buyer's purchase of the Convertible Debentures or
the Conversion Shares. The Company further represents to the Buyer
that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation by the Company and its
representatives.
(j) No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Convertible Debentures or the Conversion
Shares.
(k) 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 security or solicited
any offers to buy any security, under circumstances that would require
registration of the Convertible Debentures or the Conversion Shares
under the Securities Act or cause this offering of the Convertible
Debentures or the Conversion Shares to be integrated with prior
offerings by the Company for purposes of the Securities Act.
(l) Employee Relations. Neither the Company nor any of its subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company or
any of its subsidiaries, is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union and
the Company and its subsidiaries believe that their relations with
their employees are good.
(m) Intellectual Property Rights. The Company and its subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade
names, service marks, service xxxx registrations, service names,
patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to
conduct their respective businesses as now conducted. The Company and
its subsidiaries do not have any knowledge of any infringement by the
Company or its subsidiaries of trademark, trade name rights, patents,
patent rights, copyrights, inventions, licenses, service names,
service marks, service xxxx registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company there
is no claim, action or proceeding being made or brought against, or to
the Company's knowledge, being threatened against, the Company or its
subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service
xxxx registrations, trade secret or other infringement; and the
Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.
(n) Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval.
(o) Title. Any real property and facilities held under lease by the
Company and its subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(p) Insurance. The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to
be prudent and customary in the businesses in which the Company and
its subsidiaries are engaged. Neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a whole.
(q) Regulatory Permits. The Company and its subsidiaries possess all
material certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor
any such subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization
or permit.
(r) Internal Accounting Controls. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability, and (iii) the
recorded amounts for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(s) No Material Adverse Breaches, etc. Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is subject
to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the
Company's officers has or is expected in the future to have a material
adverse effect on the business, properties, operations, financial
condition, results of operations or prospects of the Company or its
subsidiaries. Except as set forth in the SEC Documents, neither the
Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers, has
or is expected to have a material adverse effect on the business,
properties, operations, financial condition, results of operations or
prospects of the Company or its subsidiaries.
(t) Tax Status. Except as set forth in the SEC Documents, the Company and
each of its subsidiaries has made and filed all federal and state
income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject and (unless and only to the
extent that the Company and each of its subsidiaries has set aside on
its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except
those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
(u) Certain Transactions. Except as set forth in the SEC Documents, and
except for arm's length transactions pursuant to which the Company
makes payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from third parties and other
than the grant of stock options disclosed in the SEC Documents, none
of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company (other than for services as
employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or
any such employee has a substantial interest or is an officer,
director, trustee or partner.
(v) Fees and Rights of First Refusal. The Company is not obligated to
offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to,
current or former shareholders of the Company, underwriters, brokers,
agents or other third parties.
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts timely to satisfy
each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.
(b) Form D. The Company agrees to file a Form D with respect to the
Conversion Shares as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall,
on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Conversion Shares, or
obtain an exemption for the Conversion Shares for sale to the Buyers
at the Closing pursuant to this Agreement under applicable securities
or "Blue Sky" laws of the states of the United States, and shall
provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date.
(c) Reporting Status. Until the earlier of (i) the date as of which the
Buyer(s) may sell all of the Conversion Shares without restriction
pursuant to Rule 144(k) promulgated under the Securities Act (or
successor thereto), or (ii) the date on which (A) the Buyer(s) shall
have sold all the Conversion Shares and (B) none of the Convertible
Debentures are outstanding (the "Registration Period"), the Company
shall file in a timely manner all reports required to be filed with
the SEC pursuant to the Exchange Act and the regulations of the SEC
thereunder, and the Company shall not terminate its status as an
issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would otherwise
permit such termination.
(d) Use of Proceeds. The Company will use the proceeds from the sale of
the Convertible Debentures for general corporate and working capital
purposes.
(e) Reservation of Shares. The Company shall take all action reasonably
necessary to at all times have authorized, and reserved for the
purpose of issuance, such number of shares of Common Stock as shall be
necessary to effect the issuance of the Conversion Shares. If at any
time the Company does not have available such shares of Common Stock
as shall from time to time be sufficient to effect the conversion of
all of the Conversion Shares of the Company shall call and hold a
special meeting of the shareholders within thirty (30) days of such
occurrence, for the sole purpose of increasing the number of shares
authorized. The Company's management shall recommend to the
shareholders to vote in favor of increasing the number of shares of
Common Stock authorized. Management shall also vote all of its shares
in favor of increasing the number of authorized shares of Common
Stock.
(f) Listings or Quotation. The Company shall promptly secure the listing
or quotation of the Conversion Shares upon each national securities
exchange, automated quotation system or The National Association of
Securities Dealers Inc.'s Over-The-Counter Bulletin Board ("OTCBB") or
other market, if any, upon which shares of Common Stock are then
listed or quoted (subject to official notice of issuance) and shall
use its best efforts to maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all Conversion Shares
from time to time issuable under the terms of this Agreement. The
Company shall maintain the Common Stock's authorization for quotation
on the OTCBB.
(g) Fees and Expenses. Each of the Company and the Buyer(s) shall pay all
costs and expenses incurred by such party in connection with the
negotiation, investigation, preparation, execution and delivery of the
Transaction Documents. The Company shall pay Yorkville Advisors
Management LLC a commitment fee of $384,963.10.
(i) The Company shall pay a structuring fee to Yorkville Advisors,
LLC of $15,000, which shall be paid directly from the proceeds of
the Closing.
(ii) In the event that the Company is no longer regulated as a
Business Development Company under Section 54 of the Investment
Company Act of 1940, as amended, the Company shall issue to the
Investors warrants (collectively, the "Warrants") to purchase the
aggregate of Forty Five Million (45,000,000) shares of Common
Stock as follows: (A) warrants issued to Cornell Capital
Partners, LP and Highgate House Funds, Ltd. to purchase
11,550,000 and 3,450,000 shares, respectively, of the Company's
Common Stock for a period of five (5) years at an exercise price
of $0.15 per share, and (B) warrants issued to Cornell Capital
Partners, LP and Highgate House Funds, Ltd. to purchase
11,550,000 and 3,450,000 shares, respectively, of the Company's
Common Stock for a period of five (5) years at an exercise price
of $0.20 per share, and (C) warrants issued to Cornell Capital
Partners, LP and Highgate House Funds, Ltd. to purchase
11,550,000 and 3,450,000 shares, respectively, of the Company's
Common Stock for a period of five (5) years at an exercise price
of $0.25 per share (all the shares of Common Stock underlying the
above warrants shall collectively be referred to as the "Warrant
Shares"). The Warrant Shares shall have "piggy-back" and demand
registration rights. The Warrants will be issued within 10 days
after the Company is no longer regulated as a Business
Development Company under Section 54 of the Investment Company
Act of 1940, as amended. The Warrants shall be in the form
attached hereto as Exhibit "A."
(h) Corporate Existence. So long as any of the Convertible Debentures
remain outstanding, the Company shall not directly or indirectly
consummate any merger, reorganization, restructuring, reverse stock
split consolidation, sale of all or substantially all of the Company's
assets or any similar transaction or related transactions (each such
transaction, an "Organizational Change") unless, prior to the
consummation an Organizational Change, the Company obtains the written
consent of each Buyer. In any such case, the Company will make
appropriate provision with respect to such holders' rights and
interests to insure that the provisions of this Section 4(h) will
thereafter be applicable to the Convertible Debentures.
(i) Transactions With Affiliates. So long as any Convertible Debentures
are outstanding, the Company shall not, and shall cause each of its
subsidiaries not to, enter into, amend, modify or supplement, or
permit any subsidiary to enter into, amend, modify or supplement any
agreement, transaction, commitment, or arrangement with any of its or
any subsidiary's officers, directors, person who were officers or
directors at any time during the previous two (2) years, stockholders
who beneficially own five percent (5%) or more of the Common Stock, or
Affiliates (as defined below) or with any individual related by blood,
marriage, or adoption to any such individual or with any entity in
which any such entity or individual owns a five percent (5%) or more
beneficial interest (each a "Related Party"), except for (a) customary
employment arrangements and benefit programs on reasonable terms, (b)
any investment in an Affiliate of the Company, (c) any agreement,
transaction, commitment, or arrangement on an arms-length basis on
terms no less favorable than terms which would have been obtainable
from a person other than such Related Party, (d) any agreement
transaction, commitment, or arrangement which is approved by a
majority of the disinterested directors of the Company, for purposes
hereof, any director who is also an officer of the Company or any
subsidiary of the Company shall not be a disinterested director with
respect to any such agreement, transaction, commitment, or
arrangement. "Affiliate" for purposes hereof means, with respect to
any person or entity, another person or entity that, directly or
indirectly, (i) has a ten percent (10%) or more equity interest in
that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or
entity, or (iv) shares common control with that person or entity.
"Control" or "controls" for purposes hereof means that a person or
entity has the power, direct or indirect, to conduct or govern the
policies of another person or entity.
(j) Transfer Agent. The Company covenants and agrees that, in the event
that the Company's agency relationship with the transfer agent should
be terminated for any reason prior to a date which is two (2) years
after the Closing Date, the Company shall immediately appoint a new
transfer agent and shall require that the new transfer agent execute
and agree to be bound by the terms of the Irrevocable Transfer Agent
Instructions (as defined herein).
(k) Restriction on Issuance of the Capital Stock. So long as any
Convertible Debentures are outstanding, the Company shall not, without
the prior written consent of the Buyer(s), (i) issue or sell shares of
Common Stock or Preferred Stock without consideration or for a
consideration per share less than the Bid Price of the Common Stock
determined immediately prior to its issuance, (ii) issue any warrant,
option, right, contract, call, or other security instrument granting
the holder thereof, the right to acquire Common Stock without
consideration or for a consideration less than such Common Stock's Bid
Price value determined immediately prior to it's issuance, (iii) enter
into any security instrument granting the holder a security interest
in any and all assets of the Company, or (iv) file any registration
statement on Form S-8.
5. TRANSFER AGENT INSTRUCTIONS.
(a) The Company shall issue the Irrevocable Transfer Agent Instructions to
its transfer agent irrevocably appointing Xxxxx Xxxxxxxx, Esq. as its
agent for purpose of having certificates issued, registered in the
name of the Buyer(s) or its respective nominee(s), for the Conversion
Shares representing such amounts of Convertible Debentures as
specified from time to time by the Buyer(s) to the Company upon
conversion of the Convertible Debentures, for interest owed pursuant
to the Convertible Debenture, and for any and all Liquidated Damages
(as this term is defined in the Investor Registration Rights
Agreement). Xxxxx Xxxxxxxx, Esq. shall be paid a cash fee of Fifty
Dollars ($50) for every occasion they act pursuant to the Irrevocable
Transfer Agent Instructions. The Company shall not change its transfer
agent without the express written consent of the Buyer(s), which may
be withheld by the Buyer(s) in its sole discretion. Prior to
registration of the Conversion Shares under the Securities Act, all
such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, and stop transfer instructions to give
effect to Section 2(g) hereof (in the case of the Conversion Shares
prior to registration of such shares under the Securities Act) will be
given by the Company to its transfer agent and that the Conversion
Shares shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and the
Investor Registration Rights Agreement. Nothing in this Section 5
shall affect in any way the Buyer's obligations and agreement to
comply with all applicable securities laws upon resale of Conversion
Shares. If the Buyer(s) provides the Company with an opinion of
counsel, in form, scope and substance customary for opinions of
counsel in comparable transactions to the effect that registration of
a resale by the Buyer(s) of any of the Conversion Shares is not
required under the Securities Act, the Company shall within two (2)
business days instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by
the Buyer. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Section 5, that the Buyer(s)
shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without
any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closings is subject to the satisfaction, at or
before the Closing Dates, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:
(a) Each Buyer shall have executed the Transaction Documents and delivered
them to the Company.
(b) The Buyer(s) shall have delivered to the Company the Purchase Price
for Convertible Debentures in respective amounts as set forth next to
each Buyer as outlined on Schedule I attached hereto, minus any fees
to be paid directly from the proceeds of the Closing as set forth
herein, by wire transfer of immediately available U.S. funds pursuant
to the wire instructions provided by the Company.
(c) The representations and warranties of the Buyer(s) shall be true and
correct in all material respects as of the date when made and as of
the Closing Dates as though made at that time (except for
representations and warranties that speak as of a specific date), and
the Buyer(s) shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with
by the Buyer(s) at or prior to the Closing Dates.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
(a) The obligation of the Buyer(s) hereunder to purchase the Convertible
Debentures at the First Closing is subject to the satisfaction, at or
before the First Closing Date, of each of the following conditions:
(i) The Company shall have executed the Transaction Documents and
delivered the same to the Buyer(s).
(ii) The Common Stock shall be authorized for quotation on the OTCBB,
trading in the Common Stock shall not have been suspended for any
reason.
(iii) The representations and warranties of the Company shall be true
and correct in all material respects (except to the extent that
any of such representations and warranties is already qualified
as to materiality in Section 3 above, in which case, such
representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the
First Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the First Closing
Date. If requested by the Buyer, the Buyer shall have received a
certificate, executed by the President of the Company, dated as
of the First Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by the Buyer
including, without limitation an update as of the First Closing
Date regarding the representation contained in Section 3(c)
above.
(iv) The Company shall have executed and delivered to the Buyer(s) the
Convertible Debentures in the respective amounts set forth
opposite each Buyer(s) name on Schedule I attached hereto.
(v) The Buyer(s) shall have received an opinion of counsel from the
Company's counsel in a form satisfactory to the Buyer(s).
(vi) The Company shall have provided to the Buyer(s) a certificate of
good standing from the secretary of state from the state in which
the company is incorporated.
(vii) The Company shall have reserved out of its authorized and
unissued Common Stock, solely for the purpose of effecting the
conversion of the Convertible Debentures, shares of Common Stock
to effect the conversion of all of the Conversion Shares then
outstanding.
(viii) The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to the Buyer, shall have been delivered to
and acknowledged in writing by the Company's transfer agent.
(b) The obligation of the Buyer(s) hereunder to accept the Convertible
Debentures at the Second Closing is subject to the satisfaction, at or
before the Second Closing Date, of each of the following conditions:
(i) The Common Stock shall be authorized for quotation on the OTCBB,
trading in the Common Stock shall not have been suspended for any
reason.
(ii) The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section 3 above, in which case, such representations
and warranties shall be true and correct without further
qualification) as of the date when made and as of the Second Closing
Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied in all material respects with
the covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by the Company at or prior to
the Second Closing Date. If requested by the Buyer, the Buyer shall
have received a certificate, executed by the President of the Company,
dated as of the Second Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by the Buyer
including, without limitation an update as of the Second Closing Date
regarding the representation contained in Section 3(c) above.
(iii) The Company shall have executed and delivered to the Buyer(s) the
Convertible Debentures in the respective amounts set forth opposite
each Buyer(s) name on Schedule I attached hereto.
(iv) The Company shall have certified that all conditions to the Second
Closing have been satisfied and that the Company will file the
Registration Statement with the SEC in compliance with the rules and
regulations promulgated by the SEC for filing thereof two (2) business
days after the Second Closing. If requested by the Buyer, the Buyer
shall have received a certificate, executed by the President of the
Company, dated as of the Second Closing Date, to the foregoing effect.
(v) No Events of Default shall have occurred under any of the Transaction
Documents.
8. INDEMNIFICATION.
(a) In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Convertible Debentures and the Conversion
Shares hereunder, and in addition to all of the Company's other
obligations under this Agreement, the Company shall defend, protect,
indemnify and hold harmless the Buyer(s) and each other holder of the
Convertible Debentures and the Conversion Shares, and all of their
officers, directors, employees and agents (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Buyer
Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether
any such Buyer Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by the Buyer Indemnitees or any of them as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of
any representation or warranty made by the Company in this Agreement,
the other Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this
Agreement, the other Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any
cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the
Indemnities, any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the
Convertible Debentures or the status of the Buyer or holder of the
Convertible Debentures the Conversion Shares, as a Buyer of
Convertible Debentures in the Company. To the extent that the
foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.
(b) In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Buyer's other obligations
under this Agreement, the Buyer shall defend, protect, indemnify and
hold harmless the Company and all of its officers, directors,
employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "Company Indemnitees") from and against any and all
Indemnified Liabilities incurred by the Indemnitees or any of them as
a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by
the Buyer(s) in this Agreement, instrument or document contemplated
hereby or thereby executed by the Buyer, (b) any breach of any
covenant, agreement or obligation of the Buyer(s) contained in this
Agreement, the other Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby executed by the
Buyer, or (c) any cause of action, suit or claim brought or made
against such Company Indemnitee based on material misrepresentations
or due to a material breach and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement, the
other Transaction Documents or any other instrument, document or
agreement executed pursuant hereto by any of the Company Indemnities.
To the extent that the foregoing undertaking by each Buyer may be
unenforceable for any reason, each Buyer shall make the maximum
contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New Jersey without regard to
the principles of conflict of laws. The parties further agree that any
action between them shall be heard in Xxxxxx County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court
of New Jersey, sitting in Xxxxxx County and the United States District
Court for the District of New Jersey sitting in Newark, New Jersey for
the adjudication of any civil action asserted pursuant to this
Paragraph.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event
any signature page is delivered by facsimile transmission, the party
using such means of delivery shall cause four (4) additional original
executed signature pages to be physically delivered to the other party
within five (5) days of the execution and delivery hereof.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of,
this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement, Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyer(s), the Company,
their affiliates and persons acting on their behalf with respect to
the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived
or amended other than by an instrument in writing signed by the party
to be charged with enforcement.
(f) Notices. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt,
when sent by facsimile; (iii) three (3) days after being sent by U.S.
certified mail, return receipt requested, or (iv) one (1) day after
deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the Buyer: Cornell Capital Partners, LP
Highgate House Funds, Ltd.
000 Xxxxxx Xxxxxx -Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Cornell Capital Partners, LP
Highgate House Funds, Ltd.
000 Xxxxxx Xxxxxx -Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company: GreenShift Corporation.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Chief Executive Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to: Sonageri & Fallon
000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Buyer(s), to its address and facsimile number on Schedule I, with
copies to the Buyer's counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written notice to the other party of any change in
address or facsimile number.
(g) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement
or any rights or obligations hereunder without the prior written
consent of the other party hereto.
(h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
(i) Survival. Unless this Agreement is terminated under Section 9(l), the
representations and warranties of the Company and the Buyer(s)
contained in Sections 2 and 3, the agreements and covenants set forth
in Sections 4, 5 and 9, and the indemnification provisions set forth
in Section 8, shall survive the Closing for a period of two (2) years
following the date on which the Convertible Debentures are converted
in full. The Buyer(s) shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(j) Publicity. The Company and the Buyer(s) shall have the right to
approve, before issuance any press release or any other public
statement with respect to the transactions contemplated hereby made by
any party; provided, however, that the Company shall be entitled,
without the prior approval of the Buyer(s), to issue any press release
or other public disclosure with respect to such transactions required
under applicable securities or other laws or regulations (the Company
shall use its best efforts to consult the Buyer(s) in connection with
any such press release or other public disclosure prior to its release
and Buyer(s) shall be provided with a copy thereof upon release
thereof).
(k) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(l) Termination. In the event that the Closing shall not have occurred
with respect to the Buyers on or before five (5) business days from
the date hereof due to the Company's or the Buyer's failure to satisfy
the conditions set forth in Sections 6 and 7 above (and the
non-breaching party's failure to waive such unsatisfied condition(s)),
the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other
party; provided, however, that if this Agreement is terminated by the
Company pursuant to this Section 9(l), the Company shall remain
obligated to reimburse the Buyer(s) for the fees and expenses of
Yorkville Advisors Management, LLC described in Section 4(g) above.
(m) No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.
COMPANY:
GREENSHIFT CORPORATION
By:/s/ Xxxxx Xxxxxxxx
-------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
SCHEDULE I
SCHEDULE OF BUYERS
Address/Facsimile Amount of
Name Signature Number of Buyer Subscription
---- --------- --------------- ------------
Cornell Capital Partners, LP By: Yorkville Advisors, LLC 000 Xxxxxx Xxxxxx - Xxxxx 0000 $3,849,631
Its: General Partner Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
By:
Name: Xxxx Xxxxxx
Its: Portfolio Manager
Highgate House Funds, Ltd. 000 Xxxxxx Xxxxxx - Xxxxx 0000 $1,150,369
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
By:
Name: Xxxx Xxxxxx
Its: Portfolio Manager
With a copy to: Xxxx Xxxxx, Esq. 000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: (201)
985-8266
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EXHIBIT "A"
FORM OF WARRANT
