EXHIBIT 99.1
FORM OF
SUBSCRIPTION AGREEMENT
WHITEWING ENVIRONMENTAL CORP.
OFFERING OF UP TO
$2,000,000 WORTH OF UNITS CONSISTING OF
SERIES A CONVERTIBLE PREFERRED STOCK AND CLASS A COMMON STOCK PURCHASE WARRANTS
RETURN BY MAIL OR OVERNIGHT DELIVERY TO:
MAXIM GROUP, LLC
000 XXXXXXXXX XXX., 0XX XXXXX
XXX XXXX, XXX XXXX 00000
ATTENTION: XXXXX XXXXXXXXXX
WHITEWING ENVIRONMENTAL CORP.
FORM OF SUBSCRIPTION AGREEMENT
The undersigned (hereinafter "SUBSCRIBER") hereby confirms his/her/its
subscription for the purchase units ("UNITS") of Whitewing Environmental Corp.,
a Delaware corporation (the "COMPANY"), on the terms described below, with each
Unit consisting of: (i) 1 share of Series A Convertible Preferred Stock of the
Company (the "SERIES A STOCK"), and (ii) 40 Class A Common Stock Purchase
Warrants of the Company (the "WARRANTS", and collectively with the Series A
Stock and the shares of Common Stock (as defined below) into which such
instruments are convertible or exercisable, as the case may be, and the Units,
the "SECURITIES"). Capitalized terms used and not otherwise defined herein shall
have the meanings set forth for such terms in the Company's Confidential Private
Placement Memorandum, dated as of September 2, 2003 (as amended or supplemented,
and together with all documents and filings attached thereto, the "MEMORANDUM").
In connection with this subscription, Subscriber and the Company agree
as follows:
1. PURCHASE AND SALE OF THE SECURITIES.
(a) The Company hereby agrees to issue and to sell to Subscriber, and
Subscriber hereby agrees to purchase from the Company, a number of Units at a
price equal to $8.00 per Unit and for the aggregate subscription amount set
forth on the signature page hereto, with each Unit consisting of: (i) 1 share of
Series A Stock and (ii) 40 Warrants, each of which being, respectively,
convertible and exercisable in accordance with the terms thereof into shares of
the Company's common stock, par value $.001 per share (the "COMMON STOCK"). The
form of Certificate of Designations for the Series A Stock and the form of
Warrant are as annexed to the Memorandum. Upon acceptance of this Subscription
Agreement by the Company, the Company shall issue and deliver to Subscriber a
share certificate and a warrant certificate evidencing the application number of
shares of Series A Stock and Warrants subscribed for against payment in U.S.
Dollars of the Purchase Price (as defined below).
(b) Subscriber has hereby delivered and paid concurrently herewith the
purchase price (the "PURCHASE PRICE") set forth on the signature page hereof
required to purchase the Securities subscribed for hereunder which amount has
been paid in U.S. Dollars by cash, wire transfer or check, subject to
collection, to the order of "Continental Stock Transfer & Trust
Company-Whitewing Environmental Corp. Escrow Account."
(c) Subscriber understands and acknowledges that this subscription is
part of a proposed placement by the Company of up to $2,000,000 of Units, which
offering is being made on a "best efforts - all or none" basis for a minimum of
62,500 Units (the "MINIMUM OFFERING") and a maximum of 250,000 Units (the
"MAXIMUM OFFERING"). Subscriber understands that payments hereunder as to the
Minimum Offering will be held in an escrow account established by the Company,
and released to the Company if the Minimum Offering is reached within the
Offering Period (as described in the Memorandum) or any extended period. If the
Minimum Offering is not obtained within the Offering Period or any extended
period, the funds held therein will be returned to the investors without
interest or deduction. Subscriber also understands that all funds received
hereunder after the Minimum Offering is reached will be made immediately
available to the Company.
2. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. Subscriber represents and
warrants to the Company as follows:
(a) Subscriber is an "accredited investor" as defined by Rule 501 under
the Securities Act of 1933, as amended (the "ACT"), and Subscriber is capable of
evaluating the merits and risks of Subscriber's investment in the Company and
has the capacity to protect Subscriber's own interests.
(b) Subscriber understands that the Securities are not presently
registered, but Subscriber is entitled to certain rights with respect to the
registration of the Common Stock underlying the Securities (see Section 5
below).
(c) Subscriber acknowledges and understands that the Securities are
being purchased for investment purposes and not with a view to distribution or
resale, nor with the intention of selling, transferring or otherwise disposing
of all or any part thereof for any particular price, or at any particular time,
or upon the happening of any particular event or circumstances, except selling,
transferring, or disposing the Securities made in full compliance with all
applicable provisions of the Act, the rules and regulations promulgated by the
Securities and Exchange Commission ("SEC") thereunder, and applicable state
securities laws; and that an investment in the Securities is not a liquid
investment.
(d) Subscriber acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Act or unless an exemption
from such registration is available. Subscriber is aware of the provisions of
Rule 144 promulgated under the Act which permit limited resale of common stock
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the common stock, the availability of certain current public information about
the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" and
the number of shares of common stock being sold during any three-month period
not exceeding specified limitations.
(e) Subscriber acknowledges that Subscriber has had the opportunity to
ask questions of, and receive answers from the Company or any person acting on
its behalf concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could
have been acquired by the Company without unreasonable effort or expense)
necessary to verify the accuracy of the information received by Subscriber. In
connection therewith, Subscriber acknowledges that Subscriber has had the
opportunity to discuss the Company's business, management and financial affairs
with the Company's management or any person acting on its behalf. Subscriber has
received and reviewed the Memorandum, and all the information, both written and
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oral, that it desires. Without limiting the generality of the foregoing,
Subscriber has been furnished with or has had the opportunity to acquire, and to
review, (i) copies of all of the Company's publicly available documents,
including but not limited to, those attached to the Memorandum, and (ii) all
information, both written and oral, that it desires with respect to the
Company's business, management, financial affairs and prospects. In determining
whether to make this investment, Subscriber has relied solely on Subscriber's
own knowledge and understanding of the Company and its business based upon
Subscriber's own due diligence investigations and the information furnished
pursuant to this paragraph. Subscriber understands that no person has been
authorized to give any information or to make any representations which were not
furnished pursuant to this paragraph and Subscriber has not relied on any other
representations or information.
(f) Subscriber has all requisite legal and other power and authority to
execute and deliver this Subscription Agreement and to carry out and perform
Subscriber's obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
general principals of equity, whether such enforcement is considered in a
proceeding in equity or law.
(g) Subscriber has carefully considered and has discussed with the
Subscriber's professional legal, tax, accounting and financial advisors, to the
extent the Subscriber has deemed necessary, the suitability of this investment
and the transactions contemplated by this Subscription Agreement for the
Subscriber's particular federal, state, local and foreign tax and financial
situation and has determined that this investment and the transactions
contemplated by this Subscription Agreement are a suitable investment for the
Subscriber. Subscriber relies solely on such advisors and not on any statements
or representations of the Company or any of its agents. Subscriber understands
that Subscriber (and not the Company) shall be responsible for Subscriber's own
tax liability that may arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.
(h) This Subscription Agreement does not contain any untrue statement
of a material fact concerning Subscriber.
(i) There are no actions, suits, proceedings or investigations pending
against Subscriber or Subscriber's properties before any court or governmental
agency (nor, to Subscriber's knowledge, is there any threat thereof) which would
impair in any way Subscriber's ability to enter into and fully perform
Subscriber's commitments and obligations under this Subscription Agreement or
the transactions contemplated hereby.
(j) The execution, delivery and performance of and compliance with this
Subscription Agreement, and the issuance of the Securities will not result in
any material violation of, or conflict with, or constitute a material default
under, any of Subscriber's articles of incorporation or bylaws, if applicable,
or any of Subscriber's material agreements nor result in the creation of any
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mortgage, pledge, lien, encumbrance or charge against any of the assets or
properties of Subscriber or the Securities.
(k) Subscriber acknowledges that the Securities are speculative and
involve a high degree of risk and that Subscriber can bear the economic risk of
the purchase of the Securities, including a total loss of his/her/its
investment.
(l) Subscriber acknowledges that he/she/it has carefully reviewed and
considered the risk factors discussed in the "Risk Factors" section of the
Memorandum.
(m) Subscriber recognizes that no federal, state or foreign agency has
recommended or endorsed the purchase of the Securities.
(n) Subscriber is aware that the Securities are and will be, when
issued, "restricted securities" as that term is defined in Rule 144 of the
general rules and regulations under the Act.
(o) Subscriber understands that any and all certificates representing
the Securities and any and all securities issued in replacement thereof or in
exchange therefor shall bear the following legend or one substantially similar
thereto, which Subscriber has read and understands:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS
AVAILABLE."
(p) In addition, the certificates representing the Securities, and any
and all securities issued in replacement thereof or in exchange therefor, shall
bear such legend as may be required by the securities laws of the jurisdiction
in which Subscriber resides.
(q) Because of the restrictions imposed on resale, Subscriber
understands that the Company shall have the right to note stop-transfer
instructions in its stock transfer records, and Subscriber has been informed of
the Company's intention to do so. Any sales, transfers, or any other
dispositions of the Securities by Subscriber, if any, will be in compliance with
the Act.
(r) Subscriber acknowledges that Subscriber has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in the Securities and of making an
informed investment decision.
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(s) Subscriber represents that (i) Subscriber is able to bear the
economic risks of an investment in the Securities and to afford the complete
loss of the investment; and (ii) (A) Subscriber could be reasonably assumed to
have the capacity to protect his/her/its own interests in connection with this
subscription; or (B) Subscriber has a pre-existing personal or business
relationship with either the Company or any affiliate thereof of such duration
and nature as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the Company or such affiliate and is otherwise personally qualified to evaluate
and assess the risks, nature and other aspects of this subscription.
(t) Subscriber further represents that the address set forth below is
his/her principal residence (or, if Subscriber is a company, partnership or
other entity, the address of its principal place of business); that Subscriber
is purchasing the Securities for Subscriber's own account and not, in whole or
in part, for the account of any other person; Subscriber is purchasing the
Securities for investment and not with a view to resale or distribution; and
that Subscriber has not formed any entity for the purpose of purchasing the
Securities.
(u) Subscriber understands that the Company shall have the
unconditional right to accept or reject this subscription, in whole or in part,
for any reason or without a specific reason, in the sole and absolute discretion
of the Company (even after receipt and clearance of Subscriber's funds). This
Subscription Agreement is not binding upon the Company until accepted by an
authorized officer of the Company. In the event that the subscription is
rejected, then Subscriber's subscription funds will be returned without interest
thereon or deduction therefrom.
(v) Subscriber has not been furnished with any oral representation or
oral information in connection with the offering of the Securities that is not
contained in the Memorandum and this Subscription Agreement.
(w) Subscriber represents that Subscriber is not subscribing for
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over the Internet, television or radio or presented at any seminar or
meeting.
(x) Subscriber has carefully read this Subscription Agreement and the
Memorandum, and Subscriber has accurately completed the Purchaser Questionnaire
which accompanies this Subscription Agreement.
(y) No representations or warranties have been made to Subscriber by
the Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Securities the Subscriber is not relying upon any
representations other than those contained in the Memorandum or in this
Subscription Agreement.
(z) Subscriber represents and warrants, to the best of its knowledge,
that other than the Placement Agent, no finder, broker, agent, financial advisor
or other intermediary, nor any purchaser representative or any broker-dealer
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acting as a broker, is entitled to any compensation in connection with the
transactions contemplated by this Subscription Agreement.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
represents, warrants and covenants to Subscriber as follows:
(a) The Company is duly organized and validly exists as a corporation
in good standing under the laws of the State of Delaware.
(b) The Company has all such corporate power and authority to enter
into, deliver and perform this Subscription Agreement.
(c) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Subscription Agreement by the Company, and the issuance and sale of the
Securities to be sold by the Company pursuant to this Subscription Agreement.
This Subscription Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(d) In addition to the foregoing, Subscriber shall be entitled to rely
on all of the representations and warranties made by the Company to the
Placement Agent in that certain Placement Agency Agreement, as the same may be
amended, entered into between the Placement Agent and the Company in connection
with the Offering as if such representations and warranties were made directly
to the Subscriber.
(e) In addition, the Company hereby covenants to the Subscriber that
the Company shall not pay down, restructure or otherwise modify the terms of
that certain indebtedness owed by it to Xxxxxx Xxxxxx and Xxxxx Xxxxx, in the
aggregate principal amount, as of the Closing Date, of $500,000, until the
earlier of: (i) September 30, 2006, (ii) the date on which all of the shares of
Series A Stock have been redeemed by the Company or converted into shares of
Common Stock, or (iii) the date on which the Company has maintained a
consolidated Debt Coverage Ratio (as defined below), as determined based on the
information derived from the Company's financial statements as filed with the
SEC, for any two (2) consecutive fiscal quarters following the Closing Date (as
defined in the Memorandum). For purposes of this Section 3(e), the term "DEBT
COVERAGE RATIO" means the ratio of: (a) the Company's consolidated EBITDA (as
hereinafter defined) during such fiscal quarter, to (b) all capitalized
equipment lease payments made by the Company and its consolidated subsidiaries
PLUS all cash principal and interest payments made by the Company with respect
to indebtedness for borrowed money during such fiscal quarter. For purposes of
this Section 3(e), the term "EBITDA" means, for the applicable fiscal quarter,
and with respect to each item described below, as determined in accordance with
GAAP, the consolidated net income (or net loss) of the Company PLUS (i) any
provision for (or less any benefit from) income taxes, (ii) any deduction for
interest expense and (iii) depreciation and amortization expense, as adjusted
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for the following items (to the extent that they are reflected in net income or
net loss): elimination of: (x) all extraordinary gains and losses, (y) gains and
losses from sales or dispositions of property and equipment or other fixed
assets, and (z) all non-recurring income and expense items not incurred in the
ordinary course of business to the extent included in the determination of net
income for the relevant determination period, in each case, as determined in
accordance with GAAP. For purposes of this Section 3(e), the term "GAAP" means
United States generally accepted accounting principles, consistently applied.
4. INDEMNIFICATION. Subscriber agrees to indemnify and hold harmless the
Company, its officers, directors, employees, shareholders and affiliates, and
any person acting on behalf of the Company, from and against any and all damage,
loss, liability, cost and expense (including reasonable attorneys' fees) which
any of them may incur by reason of the failure by Subscriber to fulfill any of
the terms and conditions of this Subscription Agreement, or by reason of any
breach of the representations and warranties made by Subscriber herein, or in
any other document provided by Subscriber to the Company. All representations,
warranties and covenants of each of Subscriber and the Company contained herein
shall survive the acceptance of this subscription.
5. REGISTRATION RIGHTS. In consideration of the investment in the Company
described in this Agreement and the Memorandum, the Company hereby grants to the
Subscriber the registration rights set forth on ANNEX A attached hereto.
6. MISCELLANEOUS.
(a) Subscriber agrees not to transfer or assign this Subscription
Agreement or any of Subscriber's interest herein and further agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.
(b) Subscriber agrees that Subscriber cannot cancel, terminate, or
revoke this Subscription Agreement or any agreement of Subscriber made
hereunder, and this Subscription Agreement shall survive the death or legal
disability of Subscriber and shall be binding upon Subscriber's heirs,
executors, administrators, successors, and permitted assigns.
(c) Subscriber has read and has accurately completed this entire
Subscription Agreement.
(d) This Subscription Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and may be amended
only by a written execution by all parties.
(f) Subscriber acknowledges that it has been advised to consult with
his/her/its own attorney regarding this subscription and Subscriber has done so
to the extent that Subscriber deems appropriate.
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(g) Any notice or other document required or permitted to be given or
delivered to the Subscriber shall be in writing and sent (i) by fax if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid) or (c) by a recognized
overnight delivery service (with charges prepaid).
If to the Company, at:
Whitewing Environmental Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Tel: 000.000.0000; Fax: 000.000.0000
or such other address as it shall have specified to the
Subscriber in writing, with a copy (which shall not constitute
notice) to:
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Tel: 000.000.0000, Fax: 000.000.0000
If to the Subscriber, at its address set forth on the
signature page to this Subscription Agreement, or such other address as it shall
have specified to the Company in writing, with a copy (which shall not
constitute notice) to each of the following:
Maxim Group, LLC
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Tel: 212. 895.3695, Fax: 000.000.0000
and
Ellenoff Xxxxxxxx & Schole LLP
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Tel: 000.000.0000; Fax: 000.000.0000
(h) Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or delay by the Company in exercising such right or
remedy, will not operate as a waiver thereof.
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No waiver by the Company will be effective unless and until it is in writing and
signed by the Company.
(i) This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
as such laws are applied by the New York courts to agreements entered into and
to be performed in New York by and between residents of New York, and shall be
binding upon the Subscriber, the Subscriber's heirs, estate, legal
representatives, successors and assigns and shall inure to the benefit of the
Company, its successors and assigns.
(j) If any provision of this Subscription Agreement is held to be
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.
(k) The parties understand and agree that money damages would not be a
sufficient remedy for any breach of the Subscription Agreement by the Company or
the Subscriber and that the party against which such breach is committed shall
be entitled to equitable relief, including injunction and specific performance,
as a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by either party of the Subscription Agreement
but shall be in addition to all other remedies available at law or equity to the
party against which such breach is committed.
(l) All pronouns and any variations thereof used herein shall be deemed
to refer to the masculine, feminine, singular or plural, as identity of the
person or persons may require.
(m) This Subscription Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
[Signature Pages Follow]
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SIGNATURE PAGE FOR INDIVIDUALS:
IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement
to be executed as of the date indicated below.
$
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Purchase Price Number of Units
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Print or Type Name
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Signature
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Date
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Social Security Number (if applicable)
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Address
Please check if applicable and include co-owner's information below (name,
address, social security number):
_______ Joint Tenancy ______ Tenants in Common
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S-1
PARTNERSHIPS, CORPORATIONS OR OTHER ENTITIES:
IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement
to be executed as of the date indicated below.
$
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Purchase Price Number of Units
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Print or Type Name of Entity
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Address
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Taxpayer I.D. No. (if applicable) Date
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Signature Print or Type Name and Indicate
Title or Position with Entity
S-1
Disposition of Subscription Agreement
IN WITNESS WHEREOF, the Company has caused this Subscription Agreement
to be executed, and the foregoing subscription accepted, as of the date
indicated below.
WHITEWING ENVIRONMENTAL CORP.
By:
----------------------------------
Name:
Title:
Date: __________________________, 2003
ANNEX A TO SUBSCRIPTION AGREEMENT
REGISTRATION RIGHTS
1. DEFINITIONS.
Capitalized terms used herein without definition shall have the
respective meanings given such terms as set forth in the Subscription Agreement
dated as of __, 2003 between Whitewing Environmental Corp. and the investor
signatory thereto (the "Subscription Agreement"). As used herein, the following
terms shall have the following meanings:
BUSINESS DAY: Any day other than a day on which banks are
authorized or required to be closed in the State of New York.
COMMISSION: The Securities and Exchange Commission.
COMMON STOCK: The common stock, par value $.001 per share, of
the Company.
EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended, and the rules and regulationsof the Commission
promulgated thereunder.
HOLDER or HOLDERS: Any holder of the Registrable Securities.
PERSON: Any individual, corporation, partnership, joint
venture, association, joint stock company, trust,
unincorporated organization or government or other agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus
filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and
supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
REGISTRABLE SECURITIES: (i) The Shares of Common Stock (a)
issuable upon conversion of the Series A Convertible
Preferred Stock and (b) issuable upon exercise of the
Warrants, until such time as (i) a Registration Statement
covering such Registrable Securities has been declared
effective by the Commission and such Registrable Securities
have been disposed of pursuant to such effective Registration
Statement or (ii) such Registrable Securities are saleable
pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act, whichever is earlier.
REGISTRATION STATEMENT: Any registration statement of the
Company that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration
statements, including post effective amendments, all
exhibits, and all material incorporated by reference or
deemed to be incorporated by reference in such registration
statement.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated
thereunder.
SERIES A CONVERTIBLE PREFERRED STOCK: The preferred stock
included in the Units with an initial conversion price of
$.08 per share.
UNITS: The units of the Company sold pursuant to the
Subscription Agreement consisting of (i) one (1) Share of
Series A Preferred Stock and (ii) forty (40) Warrants.
WARRANTS: The Class A Common Stock Warrants included in the
Units exercisable for shares of Common Stock at an exercise
price of $.15 per share.
2. (a) REQUIRED REGISTRATION. The Company shall as soon as
reasonably practicable after the termination of the private
offering of the Units prepare and file with the Commission a
Registration Statement covering the resale of all Registrable
Securities for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on
Form SB-2 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form SB-2,
in which case such registration shall be on another
appropriate form, except if otherwise directed by the
Holders). The Company shall use its reasonable efforts
subject to Section 2(e) below, to cause the Registration
Statement to be declared effective under the Securities Act
by March 31, 2004 (the "TARGET EFFECTIVE DATE")after the
filing thereof, and shall use its best efforts to keep such
Registration Statement continuously effective under the
Securities Act until the date which is three years after the
termination of the Offering (the "EFFECTIVENESS PERIOD").
(b) PIGGYBACK REGISTRATION. If, at any time prior to the third
anniversary of the termination of the private offering of the
Units, the Company proposes to register any of its securities
under the Securities Act for sale to the public for its own
account or for the account of other security holders (except
with respect to registration statements on Forms S-4 or S-8 or
another form not available for registering the Registrable
Securities for sale to the public), each such time it will
give written notice thereof to Holders of its intention so to
do (such notice to be given at least fifteen (15) days prior
to the filing thereof). Upon the written request of any such
Holder (which request shall specify the number of Registrable
Securities intended to be disposed of by such Holder and the
intended method of disposition thereof, received by the
Company within ten (10) days after giving of any such notice
by the Company, to register any of such Holder's Registrable
Securities, the Company will use its reasonable efforts,
subject to Section 2(e) below, to cause the Registrable
Securities as to which registration shall have been so
requested to be included in the securities to be covered by
the Registration Statement proposed to be filed by the
Company, all to the extent requisite to permit the sale or
other disposition by the Holder (in accordance with its
written request) of such Registrable Securities so registered
("Piggyback Registration Rights"); PROVIDED, that (i) if such
registration involves an underwritten offering, all Holders
requesting to be included in the Company's registration must
sell their Registrable Securities to the underwriters selected
by the Company on the same terms and conditions as apply to
the Company; and (ii) if, at any time after giving written
notice of its intention to register any securities pursuant to
this Section 2(b) and prior to the effective date of the
Registration Statement filed in connection with such
registration, the Company shall determine for any reason not
to register such securities, the Company shall give written
notice to all Holders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in
connection with such registration. If a registration pursuant
to this Section 2(b) involves an underwritten public offering,
any Holder requesting to be included in such registration may
elect, in writing prior to the effective date of the
registration statement filed in connection with such
registration, not to register such securities in connection
with such registration. The foregoing provisions
notwithstanding, (i) the Company may withdraw any registration
statement referred to in this Section 2(b) without thereby
incurring any liability to the Holders, and (ii) the inclusion
of Units of Registrable Securities under such Piggyback
Registration Rights is subject to the cut-back provisions of
Section 2(c) below.
(c) PRIORITY IN REGISTRATION. If a registration pursuant to
Section 2(a) or 2(b) hereof involves an underwritten offering
and the managing underwriter advises the Company in writing
that, in its opinion, the number of equity securities
(including all Registrable Securities) which the Company, the
Holders and any other persons intended to be included in such
registration exceeds the largest number of securities which
can be sold without having an adverse effect on such offering,
including the price at which such securities can be sold, the
Company will include in such registration (i) first, all the
securities the Company proposes to sell for its own account,
and (ii) second, to the extent that the number of securities
which the Company proposes to sell for its own account
pursuant to Section 2(a) or 2(b) hereof is less than the
number of securities which the Company has been advised can be
sold in such offering without having the adverse effect
referred to above, the number of securities requested to be
included in such registration by security holders as a result
of their exercise of "demand" registration rights by such
other holders. Any such reductions shall be pro rata in
relation to the number of Units of Common Stock to be
registered by each person participating in the offering.
(d) HOLDBACK AGREEMENTS. If any registration of Registrable
Securities shall be in connection with an underwritten public
offering, each Holder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any Registrable Securities, and not to
effect any such public sale or distribution of any other
equity security of the Company or of any security convertible
into or exchangeable or exercisable for any equity security of
the Company (in each case, other than as part of such
underwritten public offering) during the thirty (30) days
prior to, and during the ninety (90) day period beginning on,
the effective date of such Registration Statement (except as
part of such registration).
(e) EXCEPTIONS. Notwithstanding the foregoing, the Company may
delay the registration of Registrable Securities pursuant to
Section 2(a) or 2(b) hereof for the time periods described in
Section 2(f) hereof upon the occurrence of any of the
following:
(i) The Company shall have previously entered into an
agreement or letter of intent contemplating an
underwritten public offering on a firm commitment
basis of Common Stock or securities convertible into
or exchangeable for Common Stock and the managing
underwriter of such proposed public offering advises
the Company in writing that in its opinion such
proposed underwritten offering would be materially
and adversely affected by a concurrent registered
offering of Registrable Securities (such opinion to
state the reasons therefor);
(ii) During the two (2) month period immediately
preceding such request, the Company shall have
entered into an agreement or letter of intent, which
has not expired or otherwise terminated,
contemplating a material business acquisition by the
Company or its subsidiaries whether by way of merger,
consolidation, acquisition of assets, acquisition of
securities or otherwise;
(iii) The Company is in possession of material
nonpublic information that the Company would be
required to disclose in the Registration Statement
and that is not, but for the registration, otherwise
required to be disclosed at the time of such
registration, the disclosure of which, in its good
faith judgment, would have a material adverse effect
on the business, operations, prospects or competitive
position of the Company;
(iv) The Company shall receive the written opinion of
the managing underwriter of the underwritten public
offering pursuant to which Common Stock has been
registered within the three (3) month period prior to
the receipt of a registration request that the
registration of additional Common Stock will
materially and adversely affect the market for the
Common Stock (such opinion to state the reasons
therefor); or
(v) At the time of receipt of a registration request,
the Company is engaged, or its board of directors has
adopted by resolution a plan to engage, in any
program for the purchase of Units of Common Stock or
securities convertible into or exchangeable for Units
of Common Stock and, in the opinion of counsel,
reasonably satisfactory to the requesting Holders,
the distribution of the Common Stock to be registered
would cause such purchase of Units to be in violation
of Regulation M promulgated under the Exchange Act.
(f) PERIOD OF DELAY. If an event described in clauses (i)
through (iv) of Section 2(e) shall occur, the Company may, by
written notice to the Holders, delay the filing of a
Registration Statement with respect to the Registrable
Securities to be covered thereby for a period of time not
exceeding one hundred twenty (120) days.
If an event described in clause (v) of Section 2(e)
shall occur, the filing of a Registration Statement with
respect to the Registrable Securities to be covered thereby
shall be delayed until the first date that the Registrable
Securities to be covered thereby can be sold without violation
of Regulation M of the Exchange Act.
3. REGISTRATION PROCEDURES.
In connection with the registration obligations of the Company
pursuant to the terms and conditions of this Agreement, the Company shall:
(a) prior to filing a Registration Statement or Prospectus or
any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the
Registration Statement, the Company will furnish to the
Holders covered by such Registration Statement (the "Selling
Holders"), Holders' Counsel and the underwriters, if any,
draft copies of all such documents proposed to be filed at
least three (3) Business Days prior thereto, which documents
will be subject to the review of such Holders' Counsel and the
underwriters, if any, and the Company will not, unless
required by law, file any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including
such documents incorporated by reference) to which Selling
Holders of at least a majority of the Registrable Securities
(the "Objecting Party") shall object, pursuant to notice given
to the Company prior to the filing of such amendment or
supplement (the "Objection Notice"). The Objection Notice
shall set forth the objections and the specific areas in the
draft documents where such objections arise. The Company shall
have five (5) Business Days after receipt of the Objection
Notice to correct such deficiencies to the satisfaction of the
Objecting Party, and will notify each Selling Holder of any
stop order issued or threatened by the Commission in
connection therewith and take all reasonable actions required
to prevent the entry of such stop order or to remove it if
entered;
(b) as promptly as practicable prepare and file with the
Commission such amendments and post-effective amendments to
the Registration Statement as may be necessary to keep such
Registration Statement effective for the period required
pursuant to Section 2; cause the Prospectus to be supplemented
by any required Prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the
Securities Act applicable to it with respect to the
disposition of all Registrable Securities covered by such
Registration Statement during the applicable period in
accordance with the intended methods of disposition by the
Selling Holders set forth in such Registration Statement or
supplement to the Prospectus;
(c) as promptly as practicable furnish to any Selling Holder
and the underwriters, if any, without charge, such number or
conformed copies of such Registration Statement and any
post-effective amendment thereto and such number of copies of
the Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, and any documents
incorporated by reference therein, as such Selling Holder or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by such
Selling Holder (it being understood that the Company consents
to the use of the Prospectus and any amendment or supplement
thereto by each Selling Holder and the underwriters, if any,
in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or
supplement thereto); PROVIDED, that before filing a
Registration Statement or Prospectus relating to the
Registrable Securities or any amendments or supplements
thereto, the Company will furnish to Holders' Counsel copies
of all documents proposed to be filed at least three (3)
Business Days prior to the filing thereof, which documents
will be subject to the review of such counsel;
(d) on or prior to the date on which the Registration
Statement is declared effective, register or qualify such
Registrable Securities under such other securities or "blue
sky" laws of such jurisdictions as any Selling Holder,
Holders' Counsel or underwriter reasonably requests and do any
and all other acts and things which may be necessary or
advisable to enable such Selling Holder to consummate the
disposition in such jurisdictions of such Registrable
Securities owned by such Selling Holder; keep each such
registration or qualification (or exemption therefrom)
effective during the period which the Registration Statement
is required to be kept effective; and do any and all other
acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement;
PROVIDED that the Company shall not be required to (i) qualify
to do business as a foreign corporation or as a broker-dealer
in any jurisdiction where it is not then so qualified or (ii)
take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not
then so subject;
(e) cause the Registrable Securities covered by such
Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the
Company to enable the Selling Holders to consummate the
disposition of such Registrable Securities;
(f) as promptly as practicable notify each Selling Holder,
Holders' Counsel and any underwriter and (if requested by any
such Person) confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective
amendment has been filed and, with respect to a Registration
Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission or any
other federal or state governmental authority for amendments
or supplements to a Registration Statement or related
Prospectus or for additional information to be included in any
Registration Statement or Prospectus or otherwise, (iii) of
the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose,
(iv) of the issuance by any state securities commission or
other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the
Registrable Securities under state securities or "blue sky"
laws or the initiation of any proceedings for that purpose and
(v) of the happening of any event which makes any statement
made in a Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated by
reference therein untrue or which requires the making of any
changes in such Registration Statement, Prospectus or
documents so that they will not contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a
supplement or amendment to such Prospectus so that, as
thereafter deliverable to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(g) make generally available to the Holders an earnings
statement satisfying the provisions of Section 11 (a) of the
Securities Act no later than thirty (30) days after the end of
the 12-month period beginning with the first day of the
Company's first fiscal quarter commencing after the effective
date of a Registration Statement;
(h) use its reasonable efforts to prevent the issuance of any
order suspending the effectiveness of a Registration
Statement, and, if one is issued, to obtain the withdrawal of
any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(i) as promptly as practicable after filing with the
Commission of any document which is incorporated by reference
into a Registration Statement, deliver a copy of such document
to Holders' Counsel;
(j) cooperate with the Selling Holders and the managing
underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (which shall not bear
any restrictive legends and shall be in a form eligible for
deposit with the Depository Trust Company) representing
securities sold under such Registration Statement, and enable
such securities to be in such denominations and registered in
such names as the managing underwriter or underwriters, if
any, or such Selling Holders may request and make available
prior to the effectiveness of such Registration Statement a
supply of such certificates;
Each Selling Holder, upon receipt of any notice from the
Company of the happening of any event of the kind described in
subsection (f) of this Section 3, shall forthwith discontinue
disposition of the Registrable Securities until such Selling Holder's
receipt of the copies of the supplemented or amended Prospectus
contemplated by subsection (f) of this Section 2 or until it is advised
in writing (the "Advice") by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such Selling Holder
will, or will request the managing underwriter or underwriters, if any,
to, deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Selling Holder's possession, of
the Prospectus covering such Registrable Securities current at the time
of receipt of such notice. In the event that the Company shall give any
such notice, the time periods for which a Registration Statement is
required to be kept effective pursuant to Section 2 hereof shall be
extended by the number of days during the period from and including the
date of the giving of such notice to and including the date when each
Selling Holder shall have received (i) the copies of the supplemented
or amended Prospectus contemplated by Section 2(f) or (ii) the Advice.
4. REGISTRATION EXPENSES.
All expenses incident to the Company's performance
of, or compliance with, the provisions hereof, including
without limitation, all Commission and securities exchange or
NASD registration and filing fees, fees and expenses of
compliance with securities or "blue sky" laws (including fees
and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Securities), printing
expenses, messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of
the Company's officers and employees performing legal or
accounting duties), fees and expenses incurred in connection
with the listing of the securities to be registered, if any,
on each securities exchange on which similar securities issued
by the Company are then listed, fees and disbursements of
counsel for the Company and its independent certified public
accountants (including the expense of any special audit or
"cold comfort" letters required by, or incident to, such
performance), Securities Act liability insurance (if the
Company elects to obtain such insurance), reasonable fees and
expenses of any special experts retained by the Company in
connection with such registration, fees and expenses of other
Persons retained by the Company in connection with each
registration hereunder (but not including the fees and expense
of legal counsel retained by a Holder or Holders, or any
underwriting fees, discounts or commissions attributable to
the sale of Registrable Securities) are herein called
"Registration Expenses."
The Company will pay all Registration Expenses in
connection with each Registration Statement filed pursuant to
Section 2 except as otherwise set forth therein. All expenses
to be borne by the Holders in connection with any Registration
Statement filed pursuant to Section 2 (including, without
limitation, all underwriting fees, discounts or commissions
attributable to such sale of Registrable Securities) shall be
borne by the participating Holders pro rata in relation to the
number of Units of Registrable Securities to be registered by
each Holder.
5. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnity and hold harmless, to the full extent permitted by
law, each Holder, its officers, directors and each Person who
controls such Holder (within the meaning of the Securities
Act), and any agent or investment adviser thereof, against all
losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees and costs of investigation) arising
out of or based upon any untrue or alleged untrue statement of
material fact contained in any Registration Statement, any
amendment or supplement thereto, any Prospectus or preliminary
Prospectus or any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
except insofar as the same arise out of or are based upon any
such untrue statement or omission based upon information with
respect to such Holder furnished in writing to the Company by
or on behalf of such Holder expressly for use therein;
PROVIDED that, in the event that the Prospectus shall have
been amended or supplemented and copies thereof as so amended
or supplemented, shall have been furnished to a Holder prior
to the confirmation of any sales of Registrable Securities,
such indemnity with respect to the Prospectus shall not inure
to the benefit of such Holder if the Person asserting such
loss, claim, damage or liability and who purchased the
Registrable Securities from such holder did not, at or prior
to the confirmation of the sale of the Registrable Securities
to such Person, receive a copy of the Prospectus as so amended
or supplemented and the untrue statement or omission of a
material fact contained in the Prospectus was corrected in the
Prospectus as so amended or supplemented.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE
SECURITIES. In connection with any Registration Statement in
which a Holder is participating, each such Holder will furnish
to the Company in writing such information with respect to the
name and address of such Holder and such other information as
may be reasonably required for use in connection with any such
Registration Statement or Prospectus and agrees to indemnity,
to the full extent permitted by law, the Company, its
directors and officers and each Person who controls the
Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting
from any untrue statement of a material fact or any omission
of a material fact required to be stated in the Registration
Statement or Prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such
untrue or alleged untrue statement is contained in or such
omission or alleged omission relates to any information with
respect to such Holder so furnished in writing by such Holder
specifically for inclusion in any Prospectus or Registration
Statement; PROVIDED, HOWEVER, that such Holder shall not be
liable in any such case to the extent that prior to the filing
of any such Registration Statement or Prospectus or amendment
thereof or supplement thereto, such Holder has furnished in
writing to the Company information expressly for use in such
Registration Statement or Prospectus or any amendment thereof
or supplement thereto which corrected or made not misleading
information previously furnished to the Company. In no event
shall the liability of any Selling Holder hereunder be greater
in amount than the dollar amount of the proceeds received by
such Selling Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such Person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim
indemnification or contribution pursuant to the provisions
hereof and, unless in the judgment of counsel of such
indemnified party a conflict of interest may exist between
such indemnified party and the indemnifying party with respect
to such claim, permit the indemnifying party to assume the
defense of such claim. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its
consent (but such consent will not be unreasonably withheld).
No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. If the
indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay
the fees and expenses of more than one counsel (plus such
local counsel, if any, as may be reasonably required in other
jurisdictions) with respect to such claim, unless in the
judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels. For the
purposes of this Section 5(c), the term "conflict of interest"
shall mean that there are one or more legal defenses available
to the indemnified party that are different from or additional
to those available to the indemnifying party or such other
indemnified parties, as applicable, which different or
additional defenses make joint representation inappropriate.
(d) CONTRIBUTION. If the indemnification from the indemnifying
party provided for in this Section 5 is unavailable to an
indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact, has
been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties
intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by
a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 5(c),
any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section
5(d), no underwriter shall be required to contribute any
amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and
distributed to the public were offered to the public exceeds
the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, and no
Selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the
Registrable Securities of such Selling Holder were offered to
the public exceeds the amount of any damages which such
Selling Holder has otherwise been required to pay by reason of
such untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section I
l(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(e) If indemnification is available under this Section 5, the
indemnifying parties shall indemnity each indemnified party to
the full extent provided in Sections 5(a) and (b) without
regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration
provided for in this Section 5(d).
6. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any underwritten registration
hereunder unless such Holder (a) agrees to sell its Registrable
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements
and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
7. TRANSFER OF RIGHTS.
The rights to cause the Company to register Registrable
Securities granted pursuant to the provisions hereof may be transferred
or assigned by any Holder to a transferee or assignee; PROVIDED;
HOWEVER, that the transferee or assignee of such rights assumes the
obligations of such transferor or assignor, as the case may be,
hereunder.
8. AMENDMENT
Except as otherwise provided herein, the provisions hereof may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a
majority of the aggregate number of the Registrable Securities then
outstanding.
