SECURITIES PURCHASE AGREEMENT
EXHIBIT
4.1
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”),
dated
as of January 13, 2006, is made by and among Matritech, Inc., a corporation
organized under the laws of the State of Delaware (the “Company”),
and
each of the purchasers (individually, a “Purchaser”
and
collectively the “Purchasers”)
set
forth on the execution pages hereof (each, an “Execution
Page”
and
collectively the “Execution
Pages”).
BACKGROUND
A. The
Company and each Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation
D”),
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the Securities Act of 1933, as amended (the “Securities
Act”).
B. Upon
the
terms and conditions stated in this Agreement, the Company desires to issue
and
sell to the Purchasers, and each Purchaser desires to purchase (i) a secured
convertible promissory note, in the form attached hereto as Exhibit
A
(collectively, the “Notes”),
in
the principal face amount set forth on the Execution Pages hereof (for each
Purchaser, the “Subscription
Amount”),
which
Notes shall initially be convertible into shares of the Company’s common stock,
par value $0.01 per share (the “Common
Stock”)
at the
conversion price set forth in the Note, and (ii) a warrant, in the form attached
hereto as Exhibit
B
(the
“Warrants”),
to
acquire a number of shares of Common Stock equal to 60% of the number of
shares
of Common Stock such Purchaser would own if it converted its Notes on the
Closing Date (as defined below) in accordance with the terms of such Notes
plus
an additional number of shares that may become issuable thereunder pursuant
to
Section 11(i) of such Warrants. The shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Notes, including shares of Common
Stock issued as payment of interest under the Notes and shares paid upon
amortization of the Notes, are referred to herein as the “Conversion
Shares”
and
the
shares of Common Stock issuable upon exercise of or otherwise pursuant to
the
Warrants are referred to herein as the “Warrant
Shares.”
The
Notes, the Warrants, the Conversion Shares and the Warrant Shares are
collectively referenced herein as the “Securities”
and
each of them may individually be referred to herein as a “Security.”
C. In
connection with the Closing pursuant to this Agreement, the Company will
execute
and deliver a Security Agreement, in the form attached hereto as Exhibit
C
(together with any other document securing the Notes, the “Security
Documents”),
in
favor of the Collateral Agent (as defined herein) for the benefit of all
of the
Purchasers, pursuant to which the Company has agreed to grant a security
interest in certain collateral described in the Security Documents in order
to
secure its obligations under the Notes.
D. In
connection with the Closing pursuant to this Agreement, the parties hereto
will
execute and deliver a Registration Rights Agreement, in the form attached
hereto
as Exhibit
D
(the
“Registration
Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration
rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws, and the Company and the Collateral
Agent
will execute and deliver a Contingent License Agreement, in the form attached
hereto as Exhibit
E
(the
“Contingent
License Agreement”),
pursuant to which the Company has agreed, under certain circumstances, to
provide a license to certain intellectual property rights. This Agreement,
the
Warrants, the Security Documents and the Registration Rights Agreement are
collectively referred to herein as the “Transaction
Documents.”
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Company and the Purchasers, intending
to be
legally bound, hereby agree as follows:
1. PURCHASE
AND SALE OF SECURITIES.
(a) Purchase
and Sale of Securities.
Subject
to the terms and conditions hereof, at the Closing (as defined in Section
1(b)
below), the Company shall issue and sell to the Purchasers an aggregate
principal face amount of up to $7,000,000, and each Purchaser, severally
and not
jointly, shall purchase from the Company, its respective Subscription
Amount.
(b) The
Closing.
Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6
and 7
below, the closing of the transactions contemplated hereby (the “Closing”)
shall
take place at the offices of Drinker Xxxxxx & Xxxxx LLP at One Xxxxx Square,
00xx
&
Xxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 at 10:00 a.m., Philadelphia,
Pennsylvania time, or such other time or place as the Company and the Purchasers
may mutually agree (the “Closing
Date”).
2. PURCHASER’S
REPRESENTATIONS AND WARRANTIES.
Each
Purchaser severally, but not jointly, represents and warrants to the Company
as
follows:
(a) Purchase
for Own Account, Etc.
Such
Purchaser is purchasing the Securities for such Purchaser’s own account for
investment purposes only and not with a present view towards the public sale
or
distribution thereof, except pursuant to sales that are exempt from the
registration requirements of the Securities Act and/or sales registered under
the Securities Act. Such Purchaser understands that such Purchaser must bear
the
economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities
or
blue sky laws or an exemption from such registration is available, and that
the
Company has no present intention of registering the resale of any such
Securities other than as contemplated by the Registration Rights Agreement.
Notwithstanding anything in this Section 2(a) to the contrary, by making
the
representations herein, such Purchaser does not agree to hold the Securities
for
any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements under the
Securities Act.
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(b) Accredited
Investor Status.
Such
Purchaser is an “Accredited Investor” as that term is defined in Rule 501(a) of
Regulation D.
(c) Reliance
on Exemptions.
Such
Purchaser understands that the Securities are being offered and sold to such
Purchaser in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that
the
Company is relying upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine
the
availability of such exemptions and the eligibility of such Purchaser to
acquire
the Securities.
(d) Information.
Such
Purchaser and its counsel, if identified to the Company, have been furnished
all
materials relating to the business, finances and operations of the Company
and
materials relating to the offer and sale of the Securities which have been
specifically requested by such Purchaser or its counsel. Neither such inquiries
nor any other investigation conducted by such Purchaser or its counsel or
any of
its representatives shall modify, amend or affect such Purchaser’s right to rely
on the Company’s representations and warranties contained in Section 3 below.
Such Purchaser understands that such Purchaser’s investment in the Securities
involves a high degree of risk.
(e) Governmental
Review.
Such
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed upon or made any recommendation
or
endorsement of the Securities.
(f) Authorization;
Enforcement.
This
Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of such Purchaser and are valid
and
binding agreements of such Purchaser enforceable against such Purchaser in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws
affecting creditors’ rights and remedies generally and general principles of
equity.
(g) Residency.
Such
Purchaser is a resident of the jurisdiction set forth under such Purchaser’s
name on the Execution Page hereto executed by such Purchaser.
(h) No
Trading in Securities.
Such
Purchaser has not offered to sell, solicited offers to buy, disposed of,
loaned,
pledged or granted any right with respect to the Company’s Common Stock since
the date it agreed to learn the confidential terms of the transactions
contemplated by the Transaction Documents.
(i) Beneficial
Ownership.
Prior
to the Closing, such Purchaser is not a “beneficial owner” of more than 5% of
the Common Stock (as defined for purposes of Rule 13d-3 of the Exchange
Act).
Each
Purchaser’s representations and warranties made in this Article 2 are made
solely for the purpose of permitting the Company to make a determination
that
the offer and sale of the Securities pursuant to this Agreement comply with
applicable U.S. federal and state securities
-3-
laws
and
not for any other purpose. Accordingly, the Company may not rely on such
representations and warranties for any other purpose. No Purchaser has made
or
hereby makes any other representations or warranties, express or implied,
to the
Company in connection with the transactions contemplated hereby.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
Except
as
set forth on a Disclosure Schedule executed and delivered by the Company
to each
Purchaser (the “Disclosure
Schedule”),
the
Company represents and warrants to each Purchaser as follows:
(a) Organization
and Qualification.
The
Company and each of its direct and indirect subsidiaries (collectively, the
“Subsidiaries”)
is a
corporation duly organized and existing in good standing under the laws of
the
jurisdiction in which it is incorporated or organized, and has the requisite
corporate power to own its properties and to carry on its business as now
being
conducted. The Company and each of 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 and where the failure so to qualify or be in good standing would
have
a Material Adverse Effect. For purposes of this Agreement, “Material
Adverse Effect”
means
any effect which, individually or in the aggregate with all other effects,
reasonably would be expected to be materially adverse to (i) the Securities,
(ii) the ability of the Company to perform its obligations under this Agreement
or the other Transaction Documents or (iii) the business, operations,
properties, prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole.
(b) Authorization;
Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and the other Transaction
Documents, to issue and sell the Notes and Warrants in accordance with the
terms
hereof, to issue the Conversion Shares upon conversion of the Notes in
accordance with the terms thereof and to issue the Warrant Shares upon exercise
of the Warrants in accordance with the terms thereof; (ii) the execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Notes
and
Warrants and the issuance and reservation for issuance of the Conversion
Shares
and Warrant Shares) have been duly authorized by the Company’s Board of
Directors and, except for the approval of the Company’s stockholders referenced
in Sections 4(g) and 7(h) hereof, no further consent or authorization of
the
Company, its Board of Directors, or any committee of the Board of Directors
is
required, and (iii) this Agreement constitutes, and, upon execution and delivery
by the Company of the other Transaction Documents, such Transaction Documents
will constitute, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms.
(c) Capitalization.
The
capitalization of the Company as of the date hereof, including the authorized
capital stock, the number of shares issued and outstanding, the number of
shares
issuable and reserved for issuance pursuant to the Company’s stock option plans,
the number of shares issuable and reserved for issuance pursuant to securities
(other than the Notes and the
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Warrants)
exercisable or exchangeable for, or convertible into, any shares of capital
stock and the number of shares to be reserved for issuance upon conversion
of
the Notes and exercise of the Warrants is set forth in Section
3(c)
of the
Disclosure Schedule. All of such outstanding shares of capital stock have
been,
or upon issuance in accordance with the terms of any such exercisable,
exchangeable or convertible securities will be, validly issued, fully paid
and
non-assessable. Except as set forth in Section
3(c)
of the
Disclosure Schedule, no shares of capital stock of the Company (including
the
Conversion Shares and the Warrant Shares) are subject to preemptive rights
or
any other similar rights of the stockholders of the Company or any liens
or
encumbrances. Except for the Securities and as set forth in Section
3(c)
of the
Disclosure Schedule, (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 or exercisable or
exchangeable for, 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,
nor are any such issuances, contracts, commitments, understandings or
arrangements contemplated, (ii) there are no contracts, commitments,
understandings or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their securities
under the Securities Act (except the Registration Rights Agreement); (iii)
there
are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there
are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem or otherwise
acquire
any security of the Company or any of its Subsidiaries; and (iv) the Company
does not have any shareholder rights plan, “poison pill” or other anti-takeover
plans or similar arrangements. Section
3(c)
of the
Disclosure Schedule sets forth all of the securities or instruments issued
by
the Company or any of its Subsidiaries that contain anti-dilution or similar
provisions, and, except as and to the extent set forth thereon, the sale
and
issuance of the Securities will not trigger any anti-dilution adjustments
to any
such securities or instruments. The Company has furnished to each Purchaser
true
and correct copies of the Company’s Amended and Restated Certificate of
Incorporation as amended and as in effect on the date hereof (“Certificate
of Incorporation”),
the
Company’s Amended and Restated Bylaws as in effect on the date hereof (the
“Bylaws”),
and
all other instruments and agreements governing securities convertible into
or
exercisable or exchangeable for capital stock of the Company, all of which
instruments and agreements are set forth in Section
3(c)
of the
Disclosure Schedule. For purposes of all provisions of this Agreement, any
document publicly available on the SEC’s XXXXX system shall be considered to
have been validly “furnished,”“delivered” or “provided” to a Purchaser or its
counsel, as applicable. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of
its
Subsidiaries as owned by the Company or any such Subsidiary.
(d) Issuance
of Securities.
The
Notes and Warrants are duly authorized and, upon issuance in accordance with
the
terms of this Agreement, (i) will be validly issued, fully paid and
non-assessable and free from all taxes, liens, security interests, claims
and
encumbrances (other than those imposed by the Transaction Documents), (ii)
will
not be subject to preemptive rights, rights of first refusal or other similar
rights of stockholders of the Company or any other person and (iii) will
not
impose personal liability on the holder thereof. The Conversion Shares and
-5-
Warrant
Shares are duly authorized and reserved for issuance, and, upon conversion
of
the Notes and exercise of the Warrants in accordance with the terms thereof,
(x)
will be validly issued, fully paid and non-assessable, and free from all
taxes,
liens, claims and encumbrances (other than those imposed by the Transaction
Documents), (y) will not be subject to preemptive rights, rights of first
refusal or other similar rights of stockholders of the Company or any other
person and (z) will not impose personal liability upon the holder
thereof.
(e) No
Conflicts; Consents.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance
of
the Notes and Warrants and the issuance and reservation for issuance of the
Conversion Shares and Warrant Shares) will not (i) result in a violation
of the
Certificate of Incorporation or Bylaws, (ii) conflict with, or constitute
a
default (or an event that with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment
(including, without limitation, the triggering of any anti-dilution provisions),
acceleration or cancellation of, any agreement, indenture or instrument to
which
the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
United States federal and state securities laws, rules and regulations and
rules
and regulations of any self-regulatory organizations to which either the
Company
or its securities are subject) 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, with respect to clauses (ii) and
(iii), for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations that would not, individually or in the aggregate,
have a Material Adverse Effect). Except (w) as may be required under the
Securities Act in connection with the performance of the Company’s obligations
under the Registration Rights Agreement, (x) for the filing of a Form D with
the
SEC, (y) as may be required for compliance with applicable state securities
or
“blue sky” laws, or (z) as otherwise set forth in Section
3(e)
of the
Disclosure Schedule, the Company is not required to obtain any consent,
approval, authorization or order of, or make any filing or registration with,
any court or governmental agency or any regulatory or self-regulatory agency
or
other third party (including, without limitation, pursuant to any Material
Contract (as defined in Section 3(g) below)) in order for it to execute,
deliver
or perform any of its obligations under this Agreement or any of the other
Transaction Documents.
(f) Compliance.
The
Company is not in violation of its Certificate of Incorporation, Bylaws or
other
organizational documents and no Subsidiary is in violation of any of its
organizational documents. Neither the Company nor any of its Subsidiaries
is in
default (and no event has occurred that with notice or lapse of time or both
would put the Company or any of its Subsidiaries in default) under, nor,
to the
knowledge of the Company or any of its Subsidiaries, has there occurred any
event giving others (with notice or lapse of time or both) 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 (including, without limitation, the Material Contracts), except for
actual
or possible violations, defaults or rights that would not, individually or
in
the aggregate, have a Material Adverse Effect. The businesses of the Company
and
its Subsidiaries are not being conducted, and shall not be conducted so long
as
any Purchaser owns any of the Securities, in violation of any law, ordinance
or
regulation of any
-6-
governmental
entity, except for possible violations the sanctions for which either
individually or in the aggregate have not had and would not have a Material
Adverse Effect. Neither the Company, nor any of its Subsidiaries has, nor,
to
the knowledge of the Company or any of its Subsidiaries, has any director,
officer, agent, employee or other person acting on behalf of the Company
or any
Subsidiary, in the course of his actions for, or on behalf of, the Company
or
any Subsidiary, used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity,
made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds, violated or is in violation of
any
provision of the U.S. Foreign Corrupt Practices Act of 1977, or made any
bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to
any
foreign or domestic government official or employee. The Company and its
Subsidiaries possess all certificates, authorizations and permits issued
by the
appropriate federal, state, provincial or foreign regulatory authorities
that
are material to the conduct of its business, and neither the Company nor
any of
its Subsidiaries has received any notice of proceeding relating to the
revocation or modification of any such certificate, authorization or permit.
(g) SEC
Documents, Financial Statements.
Since
December 31, 2000, the Company has timely filed (within applicable extension
periods) all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of
the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”)
(all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, the “SEC
Documents”).
The
Company has delivered to each Purchaser true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents,
at
the time they were filed with the SEC, contained any untrue statement of
a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the statements
made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended
or
updated in subsequent filings made prior to the date hereof). As of their
respective dates, the financial statements of the Company included in the
SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared
in
accordance with U.S. generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except as may be otherwise
indicated in such financial statements or the notes thereto or, in the case
of
unaudited interim statements, to the extent they may not include footnotes
or
may be condensed or summary statements) and fairly present in all material
respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal, immaterial year-end audit adjustments).
Except
as set forth in the financial statements of the Company included in the Select
SEC Documents (as defined below), the Company has no liabilities, contingent
or
otherwise, other than (i) liabilities incurred in the ordinary course of
business with non-affiliated third parties subsequent to the date of such
-7-
financial
statements and (ii) obligations under contracts and commitments incurred
in the
ordinary course of business with non-affiliated third parties and not required
under GAAP to be reflected in such financial statements, which liabilities
and
obligations referred to in clauses (i) and (ii), individually or in the
aggregate, are not material to the financial condition or operating results
of
the Company. To the extent required by the rules and regulations of the SEC
applicable thereto, the Select SEC Documents contain a complete and accurate
list of all material undischarged written or oral contracts, agreements,
leases
or other instruments to which the Company or any Subsidiary is a party or
by
which the Company or any Subsidiary is bound or to which any of the properties
or assets of the Company or any Subsidiary is subject (each, a “Material
Contract”).
Except as set forth in the Select SEC Documents, none of the Company, its
Subsidiaries or, to the best knowledge of the Company, any of the other parties
thereto is in breach or violation of any Material Contract, which breach
or
violation would have a Material Adverse Effect. For purposes of this Agreement,
“Select
SEC Documents”
means
the Company’s (A) Proxy Statement for its 2004 Annual Meeting, (B) Annual Report
on Form 10-K for the fiscal year ended December 31, 2004 (the “2004
Annual Report”),
(C)
Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2005,
and
September 30, 2005, and (D) Current Reports on Form 8-K filed since December
31,
2004.
(h) Internal
Accounting Controls.
The
Company and each of its Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action
is taken with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15)
for
the Company and designed such disclosure controls and procedures to ensure
that
material information relating to the Company, including its Subsidiaries,
is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, as the case may be, is being prepared.
The
Company’s certifying officers have evaluated the effectiveness of the Company’s
controls and procedures as of a date within 90 days prior to the filing date
of
the 2004 Annual Report and the Company’s most recently filed Quarterly Report on
Form 10-Q (each such date, an “Evaluation
Date”).
The
Company presented in the 2004 Annual Report and its most recently filed
Quarterly Report on Form 10-Q the conclusions of the certifying officers
about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the respective Evaluation Date. Since the Evaluation Date
for
the 2004 Annual Report, there have been no significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of Regulation S-K
under the Exchange Act) or, to the Company’s knowledge, in other factors that
could significantly affect the Company’s internal controls.
(i) Absence
of Certain Changes.
Except
as set forth in the Select SEC Documents, since December 31, 2004, there
has
been no material adverse change and no material adverse development in the
business, properties, operations, prospects, financial condition or results
of
operations of the Company and its Subsidiaries, taken as a whole. The Company
has not taken
-8-
any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy or receivership law, nor does the Company or any
of
its Subsidiaries have any knowledge or reason to believe that its creditors
intend to initiate involuntary bankruptcy proceedings with respect to the
Company or any of its Subsidiaries.
(j) Transactions
With Affiliates.
Except
as set forth in the Select SEC Documents, none of the officers, directors,
or
employees of the Company or any of its Subsidiaries is presently a party
to any
transaction with the Company or any of its Subsidiaries (other than for ordinary
course services solely in their capacity as officers, directors or employees),
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 such
officer, director or employee or any corporation, partnership, trust or other
entity in which any such officer, director, or employee has an ownership
interest of five percent or more or is an officer, director, trustee or
partner.
(k) Absence
of Litigation.
Except
as disclosed in the Select 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 (including, without limitation,
the
SEC) pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company, any of its Subsidiaries, or
any of
their respective directors or officers in their capacities as such. There
are no
facts which, if known by a potential claimant or governmental authority,
could
give rise to a claim or proceeding which, if asserted or conducted with results
unfavorable to the Company or any of its Subsidiaries, could reasonably be
expected to have a Material Adverse Effect.
(l) Intellectual
Property.
Except
for those matters described in the Company’s SEC Documents and except for other
matters which are not material to the Company’s business taken as a whole:
| (i) |
No
“Intellectual
Property” (consisting
of patents, trademarks, service marks, trade dress, trade names
and
corporate names, copyrights; and any registrations, applications
and
renewals for any of the foregoing) owned by the Company or its
Subsidiaries which is necessary for the conduct of the Company’s and each
of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted is now involved in any cancellation,
dispute or litigation, and, to the Company’s knowledge, no such action is
threatened.
|
| (ii) |
No
patent owned by the Company or its Subsidiaries is now involved
in any
interference, reissue, re-examination or opposition proceeding.
|
| (iii) |
To
the knowledge of the Company and its Subsidiaries, neither the
Company nor
any Subsidiary of the Company infringes or is in conflict with
any right
of any other person with respect to any third party Intellectual
Property.
|
-9-
| (iv) |
Neither
the Company nor any of its Subsidiaries has received written notice
of any
pending conflict with or infringement upon such third party Intellectual
Property.
|
| (v) |
Neither
the Company nor any of its Subsidiaries has entered into any consent
agreement, forbearance to xxx or settlement agreement with respect
to the
validity of the Company’s or its Subsidiaries’ ownership of or right to
use its Intellectual Property.
|
| (vi) |
The
Company and its Subsidiaries have complied, in all material respects,
with
their respective contractual obligations relating to the protection
of the
Intellectual Property used pursuant to licenses.
|
| (vii) |
To
the Company’s knowledge, no person is infringing on or violating the
Intellectual Property owned by the Company which is necessary for
the
conduct of Company’s and each of its Subsidiaries’ respective businesses
as currently conducted or as currently proposed to be
conducted.
|
(m) Title.
The
Company and its Subsidiaries have good and marketable title in fee simple
to all
real property and good and merchantable title to all personal property owned
by
them that is material to the business of the Company and its Subsidiaries,
in
each case free and clear of all liens, encumbrances and defects except such
as
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries. 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
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its Subsidiaries.
(n) Tax
Status.
Except
as set forth in the Select SEC Documents, the Company and each of its
Subsidiaries has made or filed all foreign, U.S. federal, state, provincial
and
local income and all other tax returns, reports and declarations required
by any
jurisdiction to which it is subject (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) and
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 provisions 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. The Company has not executed a waiver with respect
to
any statute of limitations relating to the assessment or collection of any
foreign, federal, state, provincial or local tax. None of the Company’s tax
returns is presently being audited by any taxing authority.
(o) Key
Employees.
Each of
the Company’s directors and officers and any Key Employee (as defined below) is
currently serving the Company in the capacity disclosed in the Select SEC
Documents. No Key Employee is, or is now expected to be, in violation of
any
-10-
material
term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment of each
Key
Employee does not subject the Company or any of its Subsidiaries to any material
liability with respect to any of the foregoing matters. No Key Employee has,
to
the knowledge of the Company and its Subsidiaries, any intention to terminate
or
limit his employment with, or services to, the Company or any of its
Subsidiaries, nor is any such Key Employee subject to any constraints which
would cause such employee to be unable to devote his full time and attention
to
such employment or services. For purposes of this Agreement, “Key
Employee”
means
the persons listed in Section
3(o)
of the
Disclosure Schedule and any individual who assumes or performs any of the
duties
of a Key Employee.
(p) Employee
Relations.
Neither
the Company nor any of its Subsidiaries is involved in any material union
labor
dispute nor, to the knowledge of the Company or any of its Subsidiaries,
is any
such dispute threatened. The Company and its Subsidiaries believe that their
relations with their employees are good. No executive officer (as defined
in
Rule 501(f) of the Securities Act) has notified the Company that such officer
intends to leave the Company or otherwise terminate such officer’s employment
with the Company. The Company and its Subsidiaries are in compliance with
all
federal, state, local and foreign laws and regulations respecting employment
and
employment practices, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or
in
the aggregate, result in a Material Adverse Effect.
(q) Insurance.
The
Company and each Subsidiary maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each
Subsidiary, and the Company reasonably believes such insurance coverage to
be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure. To the Company’s knowledge, no
default or event has occurred that could give rise to a default under any
such
policy.
(r) Environmental
Matters.
Neither
the Company nor any Subsidiary is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or
human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”);
owns
or, to the Company’s knowledge, operates any real property contaminated with any
substance that is subject to any Environmental Laws; is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, and is subject
to
any claim relating to any Environmental Laws, which violation, contamination,
liability or claim has had or could reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate; and there is no pending
or, to
the Company’s knowledge, threatened investigation that might lead to such a
claim.
(s) Solvency.
Based
on the financial condition of the Company as of the Closing Date, and after
giving effect to the net proceeds of the transactions contemplated by this
Agreement, (i) the Company’s fair saleable value of its assets exceeds the
amount that is currently required to be paid on or in respect of the Company’s
existing debts and other liabilities
-11-
(including
known contingent liabilities); and, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal
year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing
and
amounts of cash to be payable on or in respect of its debt).
(t) Listing.
The
Common Stock is currently listed for trading on the American Stock Exchange
(“AMEX”).
Except as set forth in Schedule
3(t)
of the
Disclosure Schedule, the Company is not in violation of the listing requirements
of AMEX, does not reasonably anticipate that the Common Stock will be delisted
by AMEX for the foreseeable future, and has not received any notice regarding
the possible delisting of the Common Stock from AMEX.
(u) Form
S-3 Eligibility.
The
Company is eligible to register the resale of its Common Stock on a registration
statement on Form S-3 under the Securities Act. There exist no facts or
circumstances that would prohibit or delay the preparation and filing of
a
registration statement on Form S-3 with respect to the Registrable Securities
(as defined in the Registration Rights Agreement). The Company has no basis
to
believe that its past or present independent public auditors will withhold
their
consent to the inclusion, or incorporation by reference, of their audit opinion
concerning the Company’s financial statements which are included in the
Registration Statement required to be filed pursuant to the Registration
Rights
Agreement.
(v) Anti-Takeover
Provisions.
The
Company and its board of directors have taken all necessary action, if any,
in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under its Certificate of Incorporation
or the laws of the state of its incorporation (including, without limitation,
Section 203 of the Delaware General Corporation Law, as amended) which is
or
could become applicable to any Purchaser as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and any and all Purchaser’s ownership of the
Securities.
(w) Acknowledgment
Regarding Each Purchaser’s Purchase of the Securities.
The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of arm’s length purchaser with respect to this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby,
and
that prior to the Closing no Purchaser is (i) an officer or director of the
Company, (ii) an “affiliate” of the Company (as defined in Rule 144 under the
Securities Act (including any successor rule, “Rule
144”))
or
(iii) a “beneficial owner” of more than 5% of the Common Stock (as defined for
purposes of Rule 13d-3 of the Exchange Act). The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement or the other
Transaction Documents and the transactions contemplated hereby and thereby,
and
any advice given by a Purchaser or any of its representatives or agents in
connection with this Agreement or the other Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Purchaser’s purchase of the Securities. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
-12-
Transaction
Documents has been based solely on the independent evaluation by the Company
and
its representatives.
(x) No
General Solicitation or Integrated Offering.
Neither
the Company nor any distributor participating on the Company’s behalf in the
transactions contemplated hereby (if any) nor any person acting for the Company,
or any such distributor, has conducted any “general solicitation” (as such term
is defined in Regulation D) with respect to any of the Securities being offered
hereby. 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 Securities being offered hereby under the
Securities Act or cause this offering of Securities to be integrated with
any
prior offering of securities of the Company for purposes of the Securities
Act,
which result of such integration would require registration under the Securities
Act, or any applicable stockholder approval provisions.
(y) No
Brokers.
The
Company has taken no action that would give rise to any claim by any person
for
brokerage commissions, finder’s fees or similar payments by any Purchaser
relating to this Agreement or the transactions contemplated hereby.
(z) Acknowledgment
Regarding Securities.
The
number of Conversion Shares issuable upon conversion of the Notes and the
number
of Warrant Shares issuable upon exercise of the Warrants may increase in
certain
circumstances. The Company’s directors and executive officers have studied and
fully understand the nature of the Securities being sold hereunder. The Company
acknowledges that its obligation to issue Conversion Shares upon conversion
of
the Notes in accordance with the terms thereof and the Warrant Shares upon
the
exercise of the Warrants in accordance with the terms thereof is absolute
and
unconditional, regardless of the dilution that such issuance may have on
the
ownership interests of other stockholders and the availability of remedies
provided for in any of the Transaction Documents relating to a failure or
refusal to issue Conversion Shares or Warrant Shares. Taking the foregoing
into
account, the Company’s Board of Directors has determined in its good faith
business judgment that the issuance of the Notes and Warrants hereunder and
the
consummation of the other transactions contemplated hereby are in the best
interests of the Company and its stockholders.
(aa) Disclosure.
All
information relating to or concerning the Company and/or any of its Subsidiaries
set forth in this Agreement or provided to the Purchasers pursuant to Section
2(d) hereof or otherwise in connection with the transactions contemplated
hereby
is true and correct in all material respects and the Company has not omitted
to
state any material fact necessary in order to make the statements made herein
or
therein, in light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or exists with respect
to the
Company or its Subsidiaries or their respective businesses, properties,
prospects, operations or financial conditions, which has not been publicly
disclosed but, under applicable law, rule or regulation, would be required
to be
disclosed by the Company in a registration statement filed on the date hereof
by
the Company under the Securities Act with respect to a primary issuance of
the
Company’s securities.
4. COVENANTS.
-13-
(a) Best
Efforts.
The
parties shall use their respective best efforts timely to satisfy each of
the
conditions described in Sections 6 and 7 of this Agreement.
(b) Form
D; Blue Sky Laws.
The
Company shall file with the SEC a Form D with respect to the Securities as
required under Regulation D. The Company shall, on or before the Closing
Date,
take such action as the Company shall reasonably determine is necessary to
qualify the Securities for sale to each Purchaser pursuant to this Agreement
under applicable securities or “blue sky” laws of the states of the United
States or obtain exemption therefrom. The Company shall issue a press release
(the “Press
Release”)
describing in reasonable detail the transactions contemplated hereby and
such
other matters as had previously been discussed by the Purchasers and the
Company, as soon as practicable on or after the date hereof, but in no event
later than 8:30 a.m., New York, New York time, on the first trading day
following the date hereof. The Press Release shall be subject to prior review
and comment from the Purchasers. In addition, no later than the second business
day after the Closing Date, the Company shall file a Form 8-K with the SEC
concerning this Agreement and the transactions contemplated hereby, which
Form
8-K shall attach this Agreement and its Exhibits as exhibits to such Form
8-K
(the “8-K
Filing”).
Except as set forth in Schedule
4(b)
to the
Disclosure Schedules, from and after the date of the Press Release, the Company
hereby acknowledges that no Purchaser shall be in possession of any material
nonpublic information received from the Company, any of its Subsidiaries
or, to
the best of the Company’s knowledge, any of its or their respective directors,
officers, employees, affiliates, stockholders, agents or representatives,
that
is not disclosed in the Press Release. The Company shall not, and shall cause
each of its Subsidiaries and its and each of their respective directors,
officers, employees, affiliates, stockholders, agents or representatives
not to,
provide any Purchaser with any material nonpublic information regarding the
Company or any of its Subsidiaries from and after the Press Release without
the
prior express written consent of such Purchaser; provided,
however,
that a
Purchaser that exercises its rights under Section 4(m) hereof shall be
deemed to have given such express written consent. In the event the covenant
in
the preceding sentence is breached for any reason, whether or not as a result
of
the fault or nonfeasance of the Company, the Company shall, as promptly as
practicable and in no event later than the first trading day after becoming
aware of such breach, disclose all such material nonpublic information to
the
public in accordance with Regulation FD promulgated under the Exchange Act.
Subject to the foregoing, neither the Company nor any Purchaser shall issue
any
press releases or any other public statements with respect to the transactions
contemplated hereby; provided,
however,
that
the Company shall be entitled, without the prior approval of any Purchaser,
to
make any press release or other public disclosure with respect to such
transactions as is required by applicable law and regulations (provided that
(a)
the Required Holders (as defined herein) shall be consulted by the Company
in
connection with any such press release or other public disclosure prior to
its
release and (b) in no event will any Purchaser be identified by name in any
press release, including without limitation, the Press Release, or other
public
disclosure (other than the registration statement on Form S-3 with respect
to
the Registrable Securities) without the express prior approval of the Purchaser
to be named).
(c) Reporting
Status.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Securities, the Company shall timely file all reports required to
be
filed with the SEC pursuant to the Exchange Act, and the Company shall not
terminate its status
-14-
as
an
issuer required to file reports under the Exchange Act even if the Exchange
Act
or the rules and regulations thereunder would permit such termination. In
addition, the Company shall take all actions necessary to meet the “registrant
eligibility” requirements set forth in the general instructions to Form S-3 or
any successor form thereto, to continue to be eligible to register the resale
of
its Common Stock on a registration statement on Form S-3 under the Securities
Act.
(d) Use
of
Proceeds.
The
Company shall use the proceeds from the sale and issuance of the Notes and
Warrants as set forth on Schedule
4(d)
of the
Disclosure Schedule. Except as set forth on Schedule
4(d)
of the
Disclosure Schedule such proceeds shall not be used to (i) pay dividends;
(ii)
pay for any increase in executive compensation or make any loan or other
material advance to any officer, employee, shareholder, director or other
affiliate of the Company, without the express approval of the Board of Directors
acting in accordance with past practice; (iii) purchase debt or equity
securities of any entity (including redeeming the Company’s own securities, but
expressly excluding any scheduled monthly redemptions of the Company’s
outstanding 7.5% Convertible Notes and the scheduled monthly redemptions
of the
Notes), except for (A) evidences of indebtedness issued or fully guaranteed
by
the United States of America and having a maturity of not more than one year
from the date of acquisition, (B) certificates of deposit, notes, acceptances
and repurchase agreements having a maturity of not more than one year from
the
date of acquisition issued by a bank organized in the United States having
capital, surplus and undivided profits of at least $500,000,000, (C) the
highest-rated commercial paper having a maturity of not more than one year
from
the date of acquisition, and (D) “Money Market” fund shares, or money market
accounts fully insured by the Federal Deposit Insurance Corporation and
sponsored by banks and other financial institutions, provided that the
investments consist principally of the types of investments described in
clauses
(A), (B), or (C) above; or (iv) make any investment not directly related
to the
current business of the Company.
(e) Financial
Information.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Securities, the Company shall deliver the following reports to each
such
Purchaser: (i) within ten days after the filing with the SEC, a copy of its
Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its proxy
statements and any Current Reports on Form 8-K; and (ii) within one day after
release, copies of all press releases issued by the Company or any of its
Subsidiaries.
(f) Reservation
of Shares.
The
Company currently has authorized and reserved for the purpose of issuance
a
sufficient number of shares of Common Stock required to provide for the full
conversion of the Notes (at the current conversion price) and issuance of
the
Conversion Shares in connection therewith, the full exercise of the Warrants
(at
the current exercise price) and the issuance of the Warrant Shares in connection
therewith. The Company shall be obligated to authorize and reserve for issuance
a sufficient number of shares of Common Stock to provide for the full conversion
of the Notes, the issuance of the Conversion Shares in connection therewith,
the
full exercise of the Warrants and the issuance of the Warrant Shares in
connection therewith (including those shares issued pursuant to Section 11(i)
of
the Warrant) (collectively, the “Issuance
Obligations”).
In
the event such number of shares becomes insufficient to satisfy the Issuance
Obligations, the Company shall take all necessary action to authorize and
reserve such additional shares of Common Stock necessary to satisfy the Issuance
Obligations.
-15-
(g) Listing;
Stockholder Meeting.
The
Company shall: (i) prepare and file an additional listing application with
AMEX
covering the Optional Conversion Shares initially issuable upon conversion
of
the Notes (without giving effect to any limitations on conversion contained
in
Article IX.B of the Notes) and the Warrant Shares initially issuable upon
exercise of the Warrants (without giving effect to any limitations on exercise
contained in Section 3(c) of the Warrants); (ii) use its best efforts to
cause
such Conversion Shares and Warrant Shares to be approved for listing on AMEX
as
soon as possible thereafter; (iii) use its best efforts to maintain the listing
of such Conversion Shares and Warrant Shares on AMEX, or the NASDAQ Small-Cap
Market (the “Small
Cap Market”),
the
New York Stock Exchange (the “NYSE’)
or the
NASDAQ National Market (the “National
Market”),
whichever is at the time the principal trading exchange or market for the
Common
Stock, based upon share volume and (iv) take any other action required by,
and
comply with any other request of, AMEX required to cause such Conversion
Shares
and Warrant Shares to be approved for listing on AMEX or to maintain the
listing
of such Conversion Shares and Warrant Shares on AMEX. In addition, the Company
shall, at its next regularly scheduled annual or special meeting of
stockholders, but in no event later than June 15, 2006, include proposals
(the
“Stockholder
Proposals”)
for
stockholder approval (as required by the applicable rules and regulations
of
AMEX) with respect to the transactions contemplated by the Transaction
Documents, including a proposal approving an amendment to the Company’s
Certificate of Incorporation, if required, to increase the number of authorized
shares of Common Stock to at least the amount required to allow for the issuance
of the maximum number of Conversion Shares and Warrants Shares by the Company
issuable under the Notes and the Warrants, and a proposal approving (i) the
issuance of shares upon conversion of the Notes, as payment of interest on
the
Notes, or upon the amortization of the Notes, at a price below the last sale
price of the Common Stock on AMEX on the last trading day before the Closing
Date (such last sale price, the “Floor
Price”),
and
(ii) the issuance of shares upon exercise of the Warrants pursuant to the
full
ratchet antidilution provisions in the Warrants at a price below the Floor
Price, with the recommendation of the Company’s Board of Directors that such
proposals be approved, and the Company shall use its best efforts to solicit
proxies from its stockholders in connection therewith in favor of such proposals
and all management-appointed proxyholders shall vote their proxies in favor
of
such proposals.
(h) Corporate
Existence.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Securities, the Company shall maintain its corporate existence, and
in
the event of a merger, consolidation or sale of all or substantially all
of the
Company’s assets, the Company shall ensure that the surviving or successor
entity in such transaction (i) assumes the Company’s obligations under this
Agreement and the other Transaction Documents and the agreements and instruments
entered into in connection herewith and therewith regardless of whether or
not
the Company would have had a sufficient number of shares of Common Stock
authorized and available for issuance in order to effect the conversion of
all
the Notes and exercise in full of all Warrants outstanding as of the date
of
such transaction or in order to effect an Amortization Issuance and (ii)
except
in the event of a merger, consolidation of the Company into any other
corporation, or the sale or conveyance of all or substantially all of the
assets
of the Company where the consideration consists solely of cash, the surviving
or
successor entity is a publicly traded corporation whose common stock is listed
for trading on the SmallCap Market, the National Market, the NYSE or the
AMEX.
-16-
(i) No
Integrated Offerings.
The
Company shall not make any offers or sales of any security (other than the
Securities) under circumstances that would require registration of the
Securities being offered or sold hereunder under the Securities Act or cause
this offering of the Securities to be integrated with any other offering
of
securities by the Company for purposes of any stockholder approval provision
applicable to the Company or its securities.
(j) Legal
Compliance.
The
Company shall conduct its business and the business of its Subsidiaries in
compliance with all laws, ordinances or regulations of governmental entities
applicable to such businesses, except where the failure to do so would not
have
a Material Adverse Effect.
(k) Redemptions,
Dividends and Repayments of Indebtedness.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Notes, the Company shall not, without first obtaining the written
approval of the holders of a majority of the aggregate principal face amount
of
the Notes then outstanding (which approval may be given or withheld by such
holders in their sole and absolute discretion), repurchase, redeem or declare
or
pay any cash dividend or distribution on any shares of capital stock of the
Company or repay or prepay any indebtedness of the Company other than as
expressly required pursuant to the terms of such indebtedness as in effect
on
the date hereof.
(l) Information.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Securities, the Company shall furnish to each such Purchaser the
information the Company must deliver to any holder or to any prospective
transferee of Securities in order to permit the sale or other transfer of
such
Securities pursuant to Rule 144A of the SEC or any similar rule then in
effect.
The
Company shall keep at its principal executive office a true copy of this
Agreement (as at the time in effect), and cause the same to be available
for
inspection at such office during normal business hours by any holder of
Securities or any prospective transferee of Securities designated by a holder
thereof.
(m) Inspection
of Properties and Books.
So long
as any Purchasers (or any of their respective affiliates) beneficially own
any
of the Securities, each such Purchaser and its representatives and agents
(collectively, the “Inspectors”)
shall
have the right, at such Purchaser’s expense, to visit and inspect any of the
properties of the Company and of its Subsidiaries, to examine the books of
account and records of the Company and of its Subsidiaries, to make or be
provided with copies and extracts therefrom, to discuss the affairs, finances
and accounts of the Company and of its Subsidiaries with, and to be advised
as
to the same by, its and their officers, employees and independent public
accountants (and by this provision the Company authorizes such accountants
to
discuss such affairs, finances and accounts, whether or not a representative
of
the Company is present) all at such reasonable times and intervals and to
such
reasonable extent as the Purchasers may desire; provided,
however,
that
each Inspector shall hold in confidence and shall not make any disclosure
(except to such Purchaser) of any such information which the Company determines
in good faith to be confidential, and of which determination the Inspectors
are
so notified, unless (i) the parties mutually determine on a reasonable basis
that the disclosure of such information is necessary to
-17-
avoid
or
correct a misstatement or omission in any Registration Statement filed pursuant
to the Registration Rights Agreement, (ii) the release of such information
is
ordered pursuant to a subpoena or other order from a court or government
body of
competent jurisdiction, or (iii) such information has been made generally
available to the public other than by disclosure in violation of this or
any
other agreement. Each Purchaser agrees that it shall, upon learning that
disclosure of such information is sought in or by a court or governmental
body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the information
deemed confidential.
(n) Stockholders
Rights Plan.
No
claim shall be made or enforced by the Company or any other person that any
Purchaser is an “Acquiring Person” under any stockholders rights plan or similar
plan or arrangement in effect or hereafter adopted by the Company, or that
any
Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under this Agreement or any
other
Transaction Documents or under any other agreement between the Company and
the
Purchasers.
(o) Pledge
of Securities.
The
Company acknowledges and agrees that the Securities may be pledged by any
Purchaser in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Purchaser effecting a pledge of Securities shall
be
required to provide the Company with any notice thereof or otherwise make
any
delivery to the Company pursuant to this Agreement or any other Transaction
Document. The Company shall execute and deliver such documentation as a pledgee
of the Securities may reasonably request in connection with a pledge of the
Securities to such pledgee by a Purchaser.
(p) Expenses.
At the
Closing, the Company shall pay to SDS Capital Partners SPC, Ltd. (“SDS”)
reimbursement for the out-of-pocket expenses reasonably incurred by SDS,
its
affiliates and its advisors in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Transaction Documents
and
the consummation of the transactions contemplated hereby and thereby, including,
without limitation, SDS’ and its respective affiliates’ and advisors’ reasonable
due diligence and attorneys’ fees and expenses (the “Expenses”);
provided,
however,
that
SDS shall be permitted, in its discretion, to deduct all of its Expenses
from
the Purchase Price payable by SDS hereunder; and provided,
further,
that
the aggregate amount of the Expenses payable to SDS shall not exceed $70,000
(including reasonable legal fees and expenses related to the preparation
of the
Transaction Documents and the transactions contemplated thereby without the
prior consent of the Company, which consent shall not be unreasonably withheld
(the “Expense
Cap”).
(q) Participation
Right.
Subject
to the terms and conditions specified in this Section 4(q), until the third
anniversary of the date hereof (or such later date to which the maturity
date of
the Notes is extended), Purchasers holding $250,000 or more of aggregate
principal face amount of the Notes (each, a “Qualifying
Purchaser”)
shall
have a right to participate in any issuance by the Company of (i) equity
or
equity-linked securities, or (ii) debt which is convertible into equity or
in
which there is an equity component (“Additional
Securities”)
on
-18-
the
same
terms and conditions as offered by the Company to the other purchasers of
such
Additional Securities. Each time the Company proposes to offer any Additional
Securities, the Company shall make an offering of such Additional Securities
to
each such Purchaser in accordance with the following provisions:
(i) At
least
ten (10) trading days prior to the closing of the sale of Additional
Securities,
the
Company shall deliver to each Qualifying Purchaser a written notice of its
intention to effect a Subsequent Financing (“Pre-Notice”),
which
Pre-Notice shall ask such Qualifying Purchaser if it wants to review the
details
of such financing (such additional notice, a “Subsequent
Financing Notice”).
Upon
the request of a Qualifying Purchaser, and only upon a request by such
Qualifying Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than five (5) trading days after such request, deliver
a
Subsequent Financing Notice to such Qualifying Purchaser.
The
Subsequent Financing Notice shall describe in reasonable detail the proposed
terms of such Subsequent Financing, the amount of proceeds intended to be
raised
thereunder, the Person with whom such Subsequent Financing is proposed to
be
effected (provided that the name of such Person(s) is available), and attached
to which shall be a term sheet or similar document relating thereto. Each
Qualifying Purchaser shall notify the Company by 6:30 p.m. (New York City
time)
on the fifth (5th)
trading
day after their receipt of the Subsequent Financing Notice of its willingness
to
provide the Subsequent Financing on the terms described in the Subsequent
Financing Notice, subject to completion of mutually acceptable documentation.
No
Purchaser shall offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to the Company’s Common Stock (other than
pursuant to this Section 4(q)) from the time the Company delivers the Subsequent
Financing Notice until such time as the Purchaser is no longer in possession
of
material non-public information regarding the Company.
(ii) Each
Qualifying Purchaser agreeing to participate in the Subsequent Financing
(the
“Participating
Purchasers”)
shall
have the right to purchase, at the price and on the terms specified in the
Notice, up to an amount of such Additional Securities equal to the aggregate
principal amount of Notes then held by such Purchaser provided,
that
such
rights are subject, until December 20, 2006, to the prior rights of the holders
of the Company’s Series A Preferred Stock, and that the Purchasers eligible to
participate in the offering of the Additional Securities may only purchase
in
the aggregate up to 50% of the aggregate maximum dollar amount and/or other
consideration being offered in such offering (with any cutback required being
allocated on a pro rata basis among the participating Purchasers based upon
percentage of aggregate principal amount of all such participating Purchasers);
and further
provided, that
any
Purchaser who has a participation right with respect to the purchase of the
Company’s Series A Preferred Stock may not exercise its participation rights
hereunder if it has exercised its rights under the transaction documents
related
to its purchase of the Company’s Series A Preferred Stock, and further
provided that
the
limitations on the number of Additional Securities that a Participating
Purchaser may acquire pursuant to this Section 4(q) shall include all Additional
Securities that such Participating Purchaser may acquire pursuant to the
exchange right set forth in Article X of the Notes.
(iii) If
all
Additional Securities which the eligible Purchasers are entitled to purchase
pursuant to this Section 4(q) are not purchased as provided herein, the Company
may,
-19-
during
the 60 trading-day period following the expiration of the 5 trading- day
period
provided in clause (i), offer the remaining unsubscribed portion of such
Additional Securities to any person at a price not less than, and upon terms
no
more favorable to the offeree than, as specified in the Notice. If the Company
does not consummate the sale of such Additional Securities within such period,
the right provided hereunder shall be deemed to be revived and such Additional
Securities shall not be offered or sold unless first reoffered to the Purchasers
in accordance herewith.
(iv) Notwithstanding
the foregoing, the participation rights granted in this Section 4(q) shall
not
be applicable to: (A) the issuance of shares of Common Stock upon the exercise
or conversion of the Company’s options, warrants or convertible securities
outstanding as of the date hereof and disclosed in Section
3(c)
of the
Disclosure Schedule in accordance with the terms of such options, warrants
or
other securities as in effect on the date hereof; (B) the issuance of stock,
stock options or other stock rights pursuant to any stock or option plan
duly
adopted by a majority of the non-employee members of the Board of Directors
of
the Company or a majority of the members of a committee of non-employee
directors established for such purpose; (C) the issuance of securities pursuant
to a bona fide underwritten public offering with gross proceeds of at least
$25,000,000; (D) the issuance of the Notes, the Warrants, the Conversion
Shares,
the Warrant Shares and the Additional Warrant Shares (as defined in the
Warrants); (E) the issuance of securities in a bona fide business acquisition
the primary purpose of which, as determined in good faith by a majority of
the
members of the Board of Directors of the Company, is not the raising of capital;
(F) the issuance of capital stock or convertible securities in a joint venture,
strategic partnership or licensing arrangement, the primary purpose of which,
as
determined in good faith by a majority of the members of the Board of Directors
of the Company, is not the raising of capital; and (G) the issuance of shares
of
common stock by reason of a dividend, stock split or other distribution on
shares of common stock (but only to the extent that such a dividend, split
or
distribution results in an adjustment in the conversion price of the Notes
and
the exercise price and number of shares issuable under the
Warrants).
(r) Restriction
on Sales.
Until
such time that the Company issues the Press Release, or otherwise publicly
announces the transactions contemplated hereby, the Purchasers will not offer
to
sell, solicit offers to buy, dispose of, loan, pledge or grant any right
with
respect to the Company’s Common Stock.
(s) Investor
Board Seat/Observer Right.
Matritech will use its best efforts to recruit to serve as a Board member
(to be
nominated for election at the 2006 Annual Meeting of the Company’s stockholder
to be held on or before June 15, 2006) a qualified person who has
experience as a qualified CEO, COO or CFO of a publicly traded company in
the
human diagnostics industry.
(t) Listing
of Additional Securities on AMEX.
Immediately following stockholder approval of the Stockholder Proposals,
the
Company shall prepare and file with AMEX a listing application covering all
additional Conversion Shares issuable and not included in the listing
application referenced in Section 7(c) hereof, and, if necessary, all
additional Warrant Shares and shares of Common Stock issuable in connection
with
the Warrants not included in the Company's AMEX listing application referred
to
in Section 7(c) hereof.
-20-
(u) Dilutive
Issuances.
Until
such time as the Company has held a meeting of its stockholder at which the
Stockholders Proposals have been voted upon, the Company shall not issue
any
shares of Common Stock, or any securities convertible into or exercisable
or
exchangeable for shares of Common Stock, at an effective price below the
Floor
Price, except for shares of Common Stock that would be excluded from the
participation right in clauses (A), (B) or (D) of Section 4(q)(iv)
above.
5. SECURITIES
TRANSFER MATTERS.
(a) Conversion
and Exercise.
Upon
conversion of the Notes or exercise of the Warrants by any person, (i) if
the
DTC Transfer Conditions (as defined below) are satisfied, the Company shall
cause its transfer agent to electronically transmit all Conversion Shares
and
Warrant Shares by crediting the account of such person or its nominee with
the
Depository Trust Company (“DTC”)
through its Deposit Withdrawal Agent Commission system; or (ii) if the DTC
Transfer Conditions are not satisfied, the Company shall issue and deliver,
or
instruct its transfer agent to issue and deliver, certificates (subject to
the
legend and other applicable provisions hereof and the Notes and Warrants),
registered in the name of such person or its nominee, physical certificates
representing the Conversion Shares and Warrant Shares, as applicable. Even
if
the DTC Transfer Conditions are satisfied, any person effecting a conversion
of
Notes or exercising Warrants may instruct the Company to deliver to such
person
or its nominee physical certificates representing the Conversion Shares and
Warrant Shares, as applicable, in lieu of delivering such shares by way of
DTC
Transfer. For purposes of this Agreement, “DTC
Transfer Conditions”
means
that (A) the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer program and (B) the certificates for the Conversion Shares
or Warrant Shares required to be delivered do not bear a legend and the person
effecting such conversion or exercise is not then required to return such
certificate for the placement of a legend thereon.
(b) Transfer
or Resale.
Each
Purchaser understands that (i) except as provided in the Registration Rights
Agreement, the sale or resale of the Securities have not been and are not
being
registered under the Securities Act or any state securities laws, and the
Securities may not be transferred unless (A) the transfer is made pursuant
to
and as set forth in an effective registration statement under the Securities
Act
covering the Securities; or (B) such Purchaser shall have delivered to the
Company 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 the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; or (C) sold under and in
compliance with Rule 144; or (D) sold or transferred to an affiliate of such
Purchaser that agrees to sell or otherwise transfer the Securities only in
accordance with the provisions of this Section 5(b); and (ii) neither the
Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws (other than pursuant
to
the terms of the Registration Rights Agreement). Notwithstanding the foregoing
or anything else contained herein to the contrary, the Securities may be
pledged
as collateral in connection with a bona fide margin account or other lending
arrangement, provided such pledge is consistent with applicable laws, rules
and
regulations.
-21-
(c) Legends.
Each
Purchaser understands that the Notes and Warrants and, until such time as
the
Conversion Shares and Warrant Shares have been registered under the Securities
Act (including registration pursuant to Rule 416 thereunder) as contemplated
by
the Registration Rights Agreement or otherwise may be sold by such Purchaser
under Rule 144, the certificates for the Conversion Shares and Warrant Shares
may bear a restrictive legend in substantially the following form:
The
securities represented by this certificate have not been registered under
the
Securities Act of 1933, as amended, or the securities laws of any state of
the
United States or in any other jurisdiction. The securities represented hereby
may not be offered, sold or transferred in the absence of an effective
registration statement for the securities under applicable securities laws
unless offered, sold or transferred pursuant to an available exemption from
the
registration requirements of those laws.
For
so
long as the Conversion Shares and Warrant Shares (i) have been registered
for
resale under the Securities Act (including registration pursuant to Rule
416
thereunder) as contemplated by the Registration Rights Agreement or (ii)
otherwise may be sold by such Purchaser under Rule 144(k), the Company shall
instruct the transfer agent that, in connection with the issuance of the
Conversion Shares and Warrant Shares, certificates representing such Conversion
Shares and Warrant Shares shall be issued without the restrictive legend
above,
provided that, in the case of in clause (i), the Company shall have received
an
undertaking from the holder that such Conversion Shares and Warrant Shares
will
be sold or transferred pursuant to the prospectus contained in such registration
statement referred to in clause (i), including the prospectus delivery
requirements if any, in accordance with the plan of distribution included
in the
registration statement.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which
it is
stamped, if, unless otherwise required by state securities laws, (i) the
sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder); (ii) such holder provides the Company with
an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act;
or
(iii) such holder provides the Company with reasonable assurances that such
Security can be sold under Rule 144(k). In the event the above legend is
removed
from any Security and thereafter the effectiveness of a registration statement
covering such Security is suspended or the Company determines that a supplement
or amendment thereto is required by applicable securities laws, then upon
reasonable advance written notice to such Purchaser the Company may require
that
the above legend be placed on any such Security that cannot then be sold
pursuant to an effective registration statement or under Rule 144 and such
Purchaser shall cooperate in the replacement of such legend. Such legend
shall
thereafter be removed when such Security may again be sold pursuant to an
effective registration statement or under Rule 144(k).
-22-
(d) Transfer
Agent Instruction.
Upon
compliance by any Purchaser with the provisions of this Section 5 with respect
to the transfer of any Securities, the Company shall permit the transfer
of such
Securities and, in the case of the transfer of Conversion Shares or Warrant
Shares, promptly instruct its transfer agent to issue one or more certificates
(or effect a DTC Transfer) in such name and in such denominations as specified
by such Purchaser. The Company shall not give any instructions to its transfer
agent with respect to the Securities, other than any permissible or required
instructions provided in this Section 5, and the Securities shall otherwise
be
freely transferable on the books and records of the Company as and to the
extent
provided in this Agreement.
6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Notes and Warrants
to
each Purchaser hereunder is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions as to such Purchaser, provided
that such conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion:
(a) Execution
of Transaction Documents.
Each
Purchaser shall have executed such Purchaser’s Execution Page to this Agreement
and each other Transaction Document to which such Purchaser is a party and
delivered the same to the Company.
(b) Payment
of Purchase Price.
Each
Purchaser shall have delivered the full amount of such Purchaser’s Purchase
Price to the Company by wire transfer in accordance with the Company’s written
wiring instructions.
(c) Representations
and Warranties True; Covenants Performed.
The
representations and warranties of each Purchaser shall be true and correct
as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such
date),
and such Purchaser shall have performed, satisfied and complied with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Purchaser at or prior to the Closing
Date.
(d) No
Legal Prohibition.
No
statute, rule, regulation, executive order, decree, ruling, injunction, action
or proceeding shall have been enacted, entered, promulgated or endorsed by
any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of any of the transactions contemplated
by this Agreement.
7. CONDITIONS
TO EACH PURCHASER’S OBLIGATION TO PURCHASE.
The
obligation of each Purchaser hereunder to purchase the Notes and Warrants
for
which it is subscribing from the Company hereunder is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that such conditions are for each Purchaser’s individual
and sole benefit and may be waived by any Purchaser as to such Purchaser
at any
time in such Purchaser’s sole discretion:
-23-
(a) Execution
of Transaction Documents.
The
Company shall have executed such Purchaser’s Execution Page to this Agreement
and each Transaction Document to which the Company is a party and delivered
executed originals of the same to such Purchaser. All other parties to the
Transaction Documents shall have executed such Transaction Documents to which
they are a party.
(b) Delivery
of Securities.
The
Company shall have delivered to such Purchaser a duly executed Note and Warrant
for the Subscription Amount being purchased by such Purchaser, registered
in
such Purchaser’s name.
(c) AMEX
Listing.
The
Company shall: (i) prepare and file with AMEX a listing application covering
the
Optional Conversion Shares initially issuable upon conversion of the Notes
(without giving effect to any limitations on conversion contained in Article
IX.A of the Notes) and the Warrant Shares initially issuable upon exercise
of
the Warrants (without giving effect to any limitations on exercise contained
in
Section 3(c) of the Warrants), (ii) use its best efforts to take all steps
necessary to cause such shares to be approved for listing on AMEX as soon
as
possible thereafter, (iii) notify the Holders upon such listing, and (iv)
use
its best efforts to maintain the listing of the Common Stock on AMEX, the
SmallCap Market, the National Market or the NYSE.
(d) Representations
and Warranties True; Covenants Performed.
The
representations and warranties of the Company shall be true and correct as
of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such
date)
and the Company shall have performed, satisfied and complied 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 Closing Date. Such Purchaser
shall have received a certificate, executed by the Chief Executive Officer
of
the Company after reasonable investigation, dated as of the Closing Date
to the
foregoing effect and as to such other matters as may reasonably be requested
by
such Purchaser.
(e) No
Legal Prohibition.
No
statute, rule, regulation, executive order, decree, ruling, injunction, action
or proceeding shall have been enacted, entered, promulgated or endorsed by
any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of, any of the transactions contemplated
by this Agreement.
(f) Legal
Opinion.
Such
Purchaser shall have received an opinion of the Company’s counsel dated as of
the Closing Date in substantially the form approved by the Required Holders
prior to the Closing.
(g) No
Material Adverse Change.
There
shall have been no material adverse changes and no material adverse developments
in the business, properties, operations, prospects, condition (financial
or
otherwise) or results of operations of the Company and its Subsidiaries,
-24-
taken
as
a whole, since the date hereof, and no information that is materially adverse
to
the Company and of which such Purchaser is not currently aware shall come
to the
attention of such Purchaser.
(h) Corporate
Approvals.
Such
Purchaser shall have received (i) a copy of resolutions, duly adopted by
the
Board of Directors of the Company, which shall be in full force and effect
at
the time of the Closing, authorizing the execution, delivery and performance
by
the Company of this Agreement and the other Transaction Documents and the
consummation by the Company of the transactions contemplated hereby and thereby
and providing a determination that none of the Purchasers is or will be an
“interested stockholder” as defined in Section 203 of the Delaware General
Corporation Law, as amended, certified as such by the Secretary or Assistant
Secretary of the Company, (ii) consents of the holders of at least 75% of
the
outstanding face amount of the Company's Series A Preferred Stock and a copy
of
any amendment filed by the Company to its Certificate of Incorporation in
connection therewith, certified as such by the Secretary or Assistant Secretary
of the Company; and (iii) such other documents they reasonably request in
connection with the Closing.
8. COLLATERAL
AGENCY PROVISIONS.
(a) Appointment
of Collateral Agent.
The
Purchasers hereby appoint SDS Capital Partners SPC, LTD. to act as collateral
agent (the “Collateral
Agent”)
and
SDS Capital Partners SPC, LTD. agrees to act as Collateral Agent for the
Purchasers, as contemplated herein and in the Security Documents.
(b) Collateral
Agent Authorized to Enter into Collateral Documents.
Each of
the Purchasers authorizes the Collateral Agent to enter into the Security
Documents on its behalf.
(c) Amendment
to Security Documents.
The
Purchasers holding a majority of the total outstanding principal balance
of the
Notes (the “Required
Holders”)
shall
have the right to direct the Collateral Agent, from time to time, to consent
to
any amendment, modification or supplement to or waiver of any provision of
any
Security Document and to release any Collateral (as defined in the Security
Documents) from any lien or security interest held by the Collateral Agent;
provided,
however,
that
(i) no such direction shall require the Collateral Agent to consent to the
modification of any provision or portion thereof which (in the sole judgment
of
the Collateral Agent) is intended to benefit the Collateral Agent, (ii) the
Collateral Agent shall have the right to decline to follow any such direction
if
the Collateral Agent shall determine in good faith that the directed action
is
not permitted by the terms of any Security Document or may not lawfully be
taken
and (iii) no such direction shall waive or modify any provision of any Security
Document the waiver or modification of which requires the consent of all
Purchasers unless all Purchasers consent thereto. The Collateral Agent may
rely
on any such direction given to it by the Required Holders and shall be fully
protected in relying thereon, and shall under no circumstances be liable,
except
in circumstances involving the Collateral Agent's gross negligence or willful
misconduct as shall have been determined in a final nonappealable judgment
of a
court of competent jurisdiction, to any holder of the Notes or any other
person
or entity for taking or refraining from taking action in accordance with
any
direction or otherwise in accordance with any of the Security
Documents.
-25-
(d) Duties
of Collateral Agent.
(i) Powers.
The
Collateral Agent shall have and may exercise such powers under the Security
Documents as are specifically delegated to the Collateral Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. The Collateral Agent shall not have any implied duties or any
obligations to take any action under the Security Documents except any action
specifically provided by the Security Documents to be taken by the Collateral
Agent.
(ii) Reliance
on Instructions of Required Holders.
The
Collateral Agent shall be required to act or to refrain from acting (and
shall
be fully protected in so acting or refraining from acting) upon the written
instructions of the Required Holders and such instructions shall be binding
upon
all the Purchasers; provided,
however,
that the
Collateral Agent shall not be required to take any action which the Collateral
Agent in good faith believes (A) could reasonably be expected to expose it
to
personal liability or (B) is contrary to this Agreement, the Security Documents
and applicable law.
(iii) Action
Without Instructions After Event of Default.
Absent
written instructions from the Required Holders at a time when an Event of
Default shall have occurred and be continuing, the Collateral Agent may take,
but shall have no obligation to take, any and all actions under the Security
Documents or any of them or otherwise as it shall deem to be in the best
interests of the Purchasers; provided,
however,
that in
the absence of written instructions from the Required Holders, the Collateral
Agent shall not exercise remedies available to it under any Security Document
with respect to the Collateral or any part thereof (other than preserving,
collecting and protecting the Collateral and the proceeds thereof).
(iv) Independent
Right of Each Purchaser to Instruct Collateral Agent.
The
right of each Purchaser to instruct the Collateral Agent is the separate
and
individual property of such Purchaser and may be exercised as such Purchaser
sees fit in its sole discretion and with no liability to any other such
Purchaser for the exercise or non-exercise thereof. Without limiting the
foregoing, the Required Holders shall not be liable under any circumstances
to
any other Purchaser for any action taken or omitted to be taken hereunder
by the
Collateral Agent upon written instructions from the Required
Holders.
(v) Relationship
Between Collateral Agent and Purchasers.
The
relationship between the Collateral Agent and the Purchasers is and shall
be
only to the extent explicitly provided for herein that of agent and principal
and nothing herein contained shall be construed to constitute the Collateral
Agent a trustee for any Purchaser or to impose on the Collateral Agent duties
and obligations other than those expressly provided for herein. Without limiting
the generality of the foregoing, neither the Collateral Agent nor any of
its
directors, officers, employees, partners or agents shall:
(A) be
responsible to the other Purchasers for any recitals, representations or
warranties contained in, or for the execution, validity, genuineness,
perfection, effectiveness or enforceability of, the Security Documents (it
being
expressly understood that any determination of the foregoing is the
responsibility of each Purchaser),
-26-
(B) be
responsible to the other Purchasers for the validity, genuineness, perfection,
effectiveness, enforceability, existence, value or enforcement of any security
interest in the Collateral (it being expressly understood that any determination
of the foregoing is the responsibility of each Purchaser),
(C) be
under
any duty to inquire into or pass upon any of the foregoing matters, or to
make
any inquiry concerning the performance by any person or entity of its or
their
obligations under any Security Document (it being expressly understood that
any
determination of the foregoing is the responsibility of each
Purchaser),
(D) be
deemed
to have knowledge of the occurrence of an Event of Default (as defined in
the
Notes), or any event, condition or circumstance the occurrence of which would,
with the giving of notice or the passage of time or both, constitute an Event
of
Default,
(E) be
responsible or liable to the Purchasers for any shortage, discrepancy, damage,
loss or destruction of any part of the Collateral wherever the same may be
located regardless of the cause thereof unless the same shall happen solely
through the gross negligence or willful misconduct of the Collateral Agent
as
shall have been determined in a final nonappealable judgment of a court of
competent jurisdiction,
(F) have
any
liability to the Purchasers for any error or omission or action or failure
to
act of any kind made in the settlement, collection or payment in connection
with
any of the Security Documents or any of the Collateral or any instrument
received in payment therefor or for any damage resulting therefrom other
than as
a sole result of its own gross negligence or willful misconduct as shall
have
been determined in a final nonappealable judgment of a court of competent
jurisdiction, or
(G) in
any
event, be liable to the Purchasers as such for any action taken or omitted
by
it, absent, in each case described in this subsection, its gross negligence
or
willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction.
(e) Standard
of Care.
Each
Purchaser agrees with all other Purchasers and the Collateral Agent that
nothing
contained in this Agreement shall be construed to give rise to, nor shall
such
Purchaser have, any claims whatsoever against the Collateral Agent on account
of
any act or omission to act in connection with the exercise of any right or
remedy of the Collateral Agent with respect to the Security Documents or
the
Collateral in the absence of gross negligence or willful misconduct of the
Collateral Agent as shall have been determined in a final nonappealable judgment
of a court of competent jurisdiction.
(f) Collateral
In Possession of Collateral Agent.
The
Collateral Agent shall be at liberty to place any of the Collateral, this
Agreement, the Security Documents and any other instruments, documents or
deeds
delivered to it pursuant to or in connection with any of such documents in
any
safe deposit box, safe or receptacle selected by it or with any bank, any
company whose business includes undertaking the safe custody of documents
or any
firm of
-27-
lawyers
of good repute and the Collateral Agent shall not be responsible for any
loss
thereby incurred unless such loss is solely the result of the Collateral
Agent’s
gross negligence or willful misconduct as shall have been determined in a
final
nonappealable judgment of a court of competent jurisdiction. The Collateral
Agent’s books and records shall at all times show that the Collateral is held by
the Collateral Agent subject to the pledge and lien of the Security
Documents.
(g) Agents,
Officers and Employees of Collateral Agent.
The
Collateral Agent may execute any of its duties under the Security Documents
by
or through its agents, officers or employees. Neither the Collateral Agent
nor
any of its agents, officers or employees shall be liable for any action taken
or
omitted to be taken by it or them in good faith, be responsible for the
consequence of any oversight or error of judgment or answerable for any loss
unless any of the foregoing shall happen through its or their gross negligence
or willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction.
(h) Appointment
of Co-Agent.
Whenever the Collateral Agent shall deem it necessary or prudent in order
either
to conform to any law of any jurisdiction in which all or any part of the
Collateral shall be situated or to make any claim or bring any suit with
respect
to the Collateral or the Security Documents, or in the event that the Collateral
Agent shall have been requested to do so by or on behalf of the Required
Holders, the Collateral Agent shall execute and deliver a supplemental agreement
and all other instruments and agreements necessary or proper to constitute
a
bank or trust company, or one or more other persons or entities approved
by the
Collateral Agent, either to act as co-agent or co-agents with respect to
all or
any part of the Collateral or with respect to the Security Documents, jointly
with the Collateral Agent or any successor or successors, or to act as separate
agent or agents of any such property, in any such case with such powers as
may
be provided in such supplemental agreement, and to vest in such bank, trust
company or other persons or entities as such co-agent or separate agent,
as the
case may be, any property, title, right or power of the Collateral Agent
deemed
necessary or advisable by the Required Holders or the Collateral
Agent.
(i) Reliance
on Certain Documents.
The
Collateral Agent shall be entitled to rely on any communication, instrument
or
document believed by it to be genuine and correct and to have been signed
or
sent by the proper person or entity, and with respect to all legal matters
shall
be entitled to rely on the advice of legal advisors selected by it concerning
all matters relating to the Security Documents and its duties hereunder and
thereunder and otherwise shall rely on such experts as it deems necessary
or
desirable, and shall not be liable to any Purchaser or any other person or
entity for the consequences of such reliance in the absence of gross negligence
or willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction.
(j) Collateral
Agent May Have Separate Relationship with Parties.
The
Collateral Agent (or any affiliate of the Collateral Agent) may, notwithstanding
the fact that it is the Collateral Agent, act as a lender to the Company
and
lend money to, and generally engage in any kind of business with such party
in
the same manner and to the same effect as though it were not the Collateral
Agent; and such business shall not constitute a breach of any obligation
of the
Collateral Agent to the other Purchasers.
-28-
(k) Indemnification
of Collateral Agent.
Each of
the Purchasers, ratably on the basis of the respective principal amounts
of the
Notes outstanding at the time of the occurrence giving rise to the below
liabilities, losses, etc., agrees to indemnify the Collateral Agent for any
and
all liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Collateral Agent in its capacity
as the
Collateral Agent, in any way relating to or arising out of the Security
Documents or the transactions contemplated hereby or thereby or the enforcement
of any of the terms hereof or thereof, provided that neither the Company
nor any
Purchaser shall be liable for any of the foregoing to the extent they arise
from
gross negligence or willful misconduct on the part of the Collateral Agent
as
shall have been determined in a final nonappealable judgment of a court of
competent jurisdiction. This Section 8(k) shall survive the termination of
this
Agreement. Prior to taking any action hereunder as Collateral Agent, the
Collateral Agent may require each Purchaser to deposit with it sufficient
sums
as it determines in good faith is necessary to protect the Collateral Agent
for
costs and expenses associated with taking such action, and the Collateral
Agent
shall have no liability hereunder for failure to take such action unless
the
Purchasers promptly deposit such sums.
(l) Resignation.
The
Collateral Agent at any time may resign, upon 30 days’ prior written notice, by
an instrument addressed and delivered to the Purchasers and the Company and
may
be removed at any time with or without cause upon 30 days’ prior written notice,
by an instrument in writing duly executed by duly authorized signatories
of the
Required Holders. The Required Holders shall also have the right to appoint
a
successor to the Collateral Agent upon any such resignation or removal, by
instrument of substitution complying with the requirements of applicable
law,
or, in the absence of any such requirement, without any formality other than
appointment and designation in writing, a copy of which instrument or writing
shall be sent to each Purchaser. Upon the making of such appointment and
delivery to such successor Collateral Agent of the Collateral then held by
the
retiring Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties
conferred hereby and by the Security Documents upon the Collateral Agent
named
herein, and one or more such appointments and designations shall not exhaust
the
right to appoint and designate further successor Collateral Agents hereunder.
The retiring Collateral Agent shall not be discharged from its duties and
obligations hereunder until, and the retiring Collateral Agent shall be so
discharged when, all the Collateral held by the retiring Collateral Agent
has
been delivered to the successor Collateral Agent and such successor Collateral
Agent shall execute, acknowledge and deliver to each holder of the Notes
and to
the Company an instrument accepting such appointment. If no successor shall
be
appointed and approved on or prior to the date of any such resignation, the
resigning Collateral Agent may apply to any court of competent jurisdiction
to
appoint a successor to act until a successor shall have been appointed by
the
Required Holders as above provided.
(m) Rights
with Respect to Collateral.
(i) Each
Purchaser agrees with all other Purchasers (A) that it shall not, and shall
not
attempt to, exercise any rights with respect to its security interest in
the
Collateral, whether pursuant to any other agreement or otherwise (other than
pursuant to this Agreement), or take or institute any action against the
Collateral Agent or any of the other Purchasers in respect
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of
the
Collateral or its rights hereunder (other than any such action arising from
the
breach of this Agreement) and (B) that such Purchaser has no other rights
with
respect to the Collateral other than as set forth in this Agreement and the
Security Documents.
(ii) Each
Purchaser agrees with all other Purchasers and the Collateral Agent that
nothing
contained in this Section 8 shall be construed to give rise to, nor shall
such
Purchaser have, any claims whatsoever against any other Purchaser or the
Collateral Agent on account of any act or omission to act in connection with
the
exercise of any right or remedy of the Collateral Agent or any other Purchaser
with respect to the Collateral in the absence of gross negligence or willful
misconduct of such other Purchaser or Collateral Agent, as applicable, as
shall
have been determined in a final nonappealable judgment of a court of competent
jurisdiction.
9. GOVERNING
LAW; MISCELLANEOUS.
(a) Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware applicable to contracts made and to be performed in the
State
of Delaware. The Company and each Purchaser irrevocably consent to the exclusive
jurisdiction of the United States federal courts and the state courts located
in
the County of New Castle, State of Delaware, in any suit or proceeding based
on
or arising under this Agreement or the transactions contemplated hereby and
irrevocably agree that all claims between the parties in respect of such
suit or
proceeding may be determined in such courts. The Company and each Purchaser
irrevocably waive the defense of an inconvenient forum to the maintenance
of
such suit or proceeding in such forum. The Company and each Purchaser further
agree that service of process upon the Company or any Purchaser mailed by
first
class mail shall be deemed in every respect effective service of process
upon
the Company or such Purchaser, as the case may be, in any such suit or
proceeding. Nothing herein shall affect the right of the Company or any
Purchaser to serve process in any other manner permitted by law. The Company
and
each Purchaser agree that a final non-appealable judgment in any such suit
or
proceeding shall be conclusive and may be enforced in other jurisdictions
by
suit on such judgment or in any other lawful manner.
(b) Counterparts.
This
Agreement may be executed in two or more 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.
This Agreement, once executed by a party, may be delivered to the other parties
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement. In the event any signature
is delivered by facsimile transmission, the party using such means of delivery
shall cause the manually executed execution page(s) hereof to be physically
delivered to the other party within five days of the execution hereof, provided
that the failure to so deliver any manually executed execution page shall
not
affect the validity or enforceability of this Agreement.
(c) Construction.
Whenever the context requires, the gender of any word used in this Agreement
includes the masculine, feminine or neuter, and the number of any word includes
the singular or plural. Unless the context otherwise requires, all references
to
articles and sections
-30-
refer
to
articles and sections of this Agreement, and all references to schedules
are to
schedules attached hereto, each of which is made a part hereof for all purposes.
The descriptive head-ings of the several articles and sections of this Agreement
are inserted for purposes of reference only, and shall not affect the meaning
or
construction of any of the provisions hereof.
(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 or the validity or
enforceability of this Agreement in any other jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement and the other Transaction Documents (including any schedules and
exhibits hereto and thereto) contain the entire understanding of the Purchasers,
the Company, their affiliates and persons acting on their behalf with respect
to
the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchasers make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument
in
writing signed by the party to be charged with enforcement, and no provision
of
this Agreement may be amended other than by an instrument in writing signed
by
the Company and each Purchaser.
(f) Notices.
Any
notices required or permitted to be given under the terms of this Agreement
shall be in writing and sent by certified or registered mail (return receipt
requested) or delivered personally, by nationally recognized overnight carrier
or by confirmed facsimile transmission, and shall be effective five days
after
being placed in the mail, if mailed, or upon receipt or refusal of receipt,
if
delivered personally or by nationally recognized overnight carrier or confirmed
facsimile transmission, in each case addressed to a party as provided herein.
The initial addresses for such communications shall be as follows, and each
party shall provide notice to the other parties of any change in such party’s
address:
(i) If
to the
Company:
Matritech,
Inc.
000
Xxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Chief Executive Officer
with
a
copy simultaneously transmitted by like means (which transmittal
shall
not
constitute notice hereunder) to:
Xxxxxxx
Procter LLP
Exchange
Place
00
Xxxxx
Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
(000) 000-0000
-31-
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxx
(ii) If
to any
Purchaser, to the address set forth under such Purchaser’s name on the Execution
Page hereto executed by such Purchaser.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Except as provided herein, the Company shall
not
assign this Agreement or any rights or obligations hereunder. Any Purchaser
may
assign or transfer the Securities pursuant to the terms of this Agreement
and of
such Securities, or assign such Purchaser’s rights hereunder to any other person
or entity.
(h) 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; provided,
however,
that
Section 4(q) may be enforced by any Purchaser’s affiliates and its or their
advisors to the extent the same is entitled to reimbursement of Expenses
pursuant thereto.
(i) Survival.
The
representations and warranties of the Company and the agreements and covenants
set forth in Sections 3, 4, 5, 8 and 9 hereof shall survive the Closing
notwithstanding any due diligence investigation conducted by or on behalf
of any
Purchaser. Moreover, none of the representations and warranties made by the
Company herein shall act as a waiver of any rights or remedies any Purchaser
may
have under applicable U.S. federal or state securities laws.
(j) Publicity.
The
Company and each Purchaser shall have the right to approve before issuance
any
press releases or SEC filings, or any other public statements with respect
to
the transactions contemplated hereby; provided,
however,
that
the Company shall be entitled, without the prior approval of the Purchasers,
to
make any press release, SEC filings or, to the extent applicable, AMEX filings
with respect to such transactions as is required by applicable law and
regulations (although the Purchasers shall be consulted by the Company in
connection with any such press release prior to its release, and the Purchasers
shall be provided with a copy thereof and must provide specific consent to
the
use of a Purchaser’s name in connection therewith).
(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) Indemnification.
In
consideration of each Purchaser’s execution and delivery of this Agreement and
the other Transaction Documents and purchase of the Securities hereunder,
and in
addition to all of the Company’s other obligations under this Agreement and the
other Transaction Documents, from and after the Closing, the Company shall
defend, protect, indemnify and hold harmless each Purchaser and each other
holder of the Securities and all of
-32-
their
stockholders, partners, members, officers, directors, employees and direct
or
indirect investors and any of the foregoing persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement, collectively, the
“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 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 any Indemnitee as a result of, or arising out of, or relating
to (i)
any misrepresentation or breach of any representation or warranty made by
the
Company in this Agreement, any other Transaction Document or any other
certificate, instrument or document contemplated hereby or thereby, (ii)
any
breach of any covenant, agreement or obligation of the Company contained
in this
Agreement, any other Transaction Document or any other certificate, instrument
or document contemplated hereby or thereby, or (iii) any cause of action,
suit,
claim, order, proceeding or process brought or made against such Indemnitee
by a
third party (including for these purposes a derivative action brought on
behalf
of the Company) and arising out of or resulting from (A) the execution,
delivery, performance or enforcement of this Agreement, any other Transaction
Document or any other certificate, instrument or document contemplated hereby
or
thereby, (B) any disclosure made by such Purchaser pursuant to Section 4(b)
or
4(m) hereof, or (C) the status of such Purchaser or holder of the Securities
as
an investor in the Company; provided,
however,
that
with respect to clause (iii) above, excluding any Indemnified Liabilities
(a)
resulting from the Indemnitee’s or the Purchaser’s own acts of fraud or willful
misconduct and (b) resulting from any cause of action, suit, claim, order,
proceeding or process brought or asserted against any Indemnified Party by
any
investor in or partner, shareholder, member, employee or agent of said
Indemnified Party. 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. Except as otherwise
set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(l) shall be the same as those set forth
in
Section 7(c) of the Registration Rights Agreement.
(m) Payment
Set Aside.
To the
extent that the Company makes a payment or payments to any Purchaser hereunder
or pursuant to any of the other Transaction Documents or any Purchaser enforces
or exercises its rights hereunder or thereunder, and such payment or payments
or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any
law
(including, without limitation, any bankruptcy law, state or federal law,
common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall
be
revived and continued in full force and effect as if such payment had not
been
made or such enforcement or setoff had not occurred.
(n) Joint
Participation in Drafting.
Each
party to this Agreement has participated in the negotiation and drafting
of this
Agreement and the other Transaction Documents. As such, the language used
herein
and therein shall be deemed to be the language chosen by the parties
-33-
hereto
to
express their mutual intent, and no rule of strict construction will be applied
against any party to this Agreement.
(o) Remedies.
No
provision of this Agreement or any other Transaction Document providing for
any
remedy to a Purchaser shall limit any other remedy which would otherwise
be
available to such Purchaser at law, in equity or otherwise. Nothing in this
Agreement or any other Transaction Document shall limit any rights any Purchaser
may have under any applicable federal or state securities laws with respect
to
the investment contemplated hereby. The Company acknowledges that a breach
by it
of its obligations hereunder will cause irreparable harm to the Purchasers
by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach
of its
obligations hereunder (including, but not limited to, its obligations pursuant
to Section 5 hereof) will be inadequate and agrees, in the event of a breach
or
threatened breach by the Company of the provisions of this Agreement (including,
but not limited to, its obligations pursuant to Section 5 hereof), that each
Purchaser shall be entitled, in addition to all other available remedies,
to an
injunction restraining any breach and requiring immediate issuance and transfer
of the Securities, without the necessity of showing economic loss and without
any bond or other security being required.
(p) Knowledge.
As used
in this Agreement, the term “knowledge” of any person or entity shall mean and
include such person’s or entity’s or, with respect to the Company, the Company’s
executive officers’ actual knowledge and that knowledge which a reasonably
prudent business person could have obtained in the management of his or her
business affairs after making due inquiry and exercising due diligence which
a
prudent business person should have made or exercised, as applicable, with
respect thereto.
(q) Exculpation
Among Purchasers; No “Group”.
Each
Purchaser acknowledges that it has independently evaluated the merits of
the
transactions contemplated by this Agreement and the other Transaction Documents,
that it has independently determined to enter into the transactions contemplated
hereby and thereby, that it is not relying on any advice from or evaluation
by
any other Purchaser, and that it is not acting in concert with any other
Purchaser in making its purchase of securities hereunder or in monitoring
its
investment in the Company. The Purchasers and, to its knowledge, the Company
agree that the Purchasers have not taken any actions that would deem such
Purchasers to be members of a “group” for purposes of Section 13(d) of the
Exchange Act, and the Purchasers have not agreed to act together for the
purpose
of acquiring, holding, voting or disposing of equity securities of the Company.
Each Purchaser further acknowledges that SDS has retained Drinker Xxxxxx
&
Xxxxx LLP (“DB&R”)
to act
as its counsel in connection with the transactions contemplated by this
Agreement and the other Transaction Documents and that DB&R has not acted as
counsel for any of the other Purchasers in connection therewith and none
of the
other Purchasers have the status of a client of DB&R for conflict of
interest or other purposes as a result thereof.
[REMAINDER
OF PAGE LEFT BLANK INTENTIONALLY]
-34-
IN
WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.
MATRITECH,
INC.
By:______________________________
Name:
Title:
PURCHASER:
(Print
or
Type Name of Purchaser)
By:______________________________
Name:
Title:
RESIDENCE:______________________
ADDRESS:_______________________
Telephone:
______________
Facsimile:
_______________
Attention:_______________
SUBSCRIPTION
AMOUNT:
Aggregate
Face Amount of Note:$________________
