EXHIBIT 2
XXXXXXXX.XXX, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of the
Closing Date (as hereinafter defined) by and between xxxxxxxx.xxx, Inc., a
Nevada corporation (the "Company"), with its principal office at 00000 Xxx Xxxxx
Xxx., Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000, and each of the purchasers who are
signatories hereto and any other purchasers who are made a party to this
Agreement pursuant to Section 1 (individually, a "Purchaser" and collectively,
the "Purchasers").
RECITALS
The Company has engaged Pennsylvania Merchant Group (the "Placement
Agent") as exclusive agent of the Company in connection with the placement and
sale (the "Offering") of up to 3,782,360 shares of the Company's Common Stock,
$.001 par value per share (the "Common Stock"). Shares of Common Stock will be
sold by the Company to Purchasers pursuant to Regulation D under the Securities
Act of 1933, as amended (the "Act"). The purchase price of the shares to be
offered in the Offering (the "Offering Price") will be determined based upon a
negotiated discount to the average closing bid for the Common Stock for the last
ten (10) trading days immediately prior to the Closing Date. The Placement Agent
has delivered to each prospective purchaser a private placement memorandum,
dated August 6, 1999, together with an Addendum thereto of even date herewith
(the "Placement Memorandum"), describing the Company's business, financial and
operating condition, the Offering and information regarding risks to be
evaluated when contemplating an investment in the Company through the Offering.
AGREEMENT
In consideration of the mutual promises, representations, warranties and
conditions set forth in the Agreement, the Company and each Purchaser (severally
and not jointly) agree as follows:
1. PURCHASE AND SALE OF SHARES.
1.1 ISSUE OF SHARES.
(a) The Company has authorized the issuance and sale of up to
3,782,360 shares (the "Shares") of its Common Stock pursuant to the provisions
of this Agreement.
(b) In reliance upon the Purchaser's representations and
warranties contained in Section 4 hereof, and subject to the terms and
conditions set forth herein, the Company hereby agrees to sell to each Purchaser
the aggregate amount of Shares set forth below such Purchaser's signature on the
subscription page bearing such Purchaser's name, such Shares to be sold at the
Offering Price.
(c) In reliance upon the representations and warranties of the
Company contained herein, and subject to the terms and conditions set forth
herein, each Purchaser hereby agrees to purchase the amount of Shares as
determined on the subscription page bearing such Purchaser's name at the
Offering Price. Each Purchaser shall severally, and not jointly, be liable for
only the purchase of the amount of Shares that appears on the subscription page
hereof that relates to such Purchaser.
(d) The Company's agreement with each of the Purchasers is a
separate agreement and the sale of the Shares to each of the Purchasers is a
separate sale.
2. CLOSING DATE; DELIVERY.
2.1 CLOSING. The closing of the sale and purchase of the Shares
under this Agreement (the "Closing") shall consist of the sale and purchase of
the Shares and shall be held at the offices of the Placement Agent at such time
and date selected by the Placement Agent and the Company occurring on or before
October 15, 1999, or such later date to which the offering period is extended by
the Company and the Placement Agent (the "Closing Date").
2.2 DELIVERY. Within five (5) days following the Closing, subject to
the terms and conditions hereof, the Company shall deliver to each Purchaser
stock certificates, registered in the same of the Purchaser, representing the
Shares to be purchased by the Purchaser from the Company, dated as of the
Closing, against payment of the purchase price therefor in immediately available
funds by wire transfer or previously cleared check, unless other means of
payment shall have been agreed upon by the Purchaser and the Company. In
addition, subject to the terms and conditions hereof, at the Closing, the
Company shall deliver to each Purchaser a Warrant Certificate, dated as of the
Closing, in the name of the Purchaser, representing the number of Warrants to
which the Purchaser is entitled, which shall equal one Warrant for every one
Share purchased by the Purchaser hereunder.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser as of the
date hereof and as of the Closing Date as follows:
3.1 ORGANIZATION. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Company has all requisite power and authority to own or lease
its properties and to conduct its business as it is now being conducted. The
Company holds all licenses and permits required for the conduct of its business
as it is now being conducted other than those which, if not obtained, would not
have a material adverse effect on the business, financial condition or results
of operations of the Company. The Company and each Subsidiary is qualified as a
foreign or domestic corporation and is in good standing in all states where the
conduct of its business or its ownership or leasing of property requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the business, financial condition or results of operations of
the Company. The Company has previously delivered a true and complete copy of
its Articles of Incorporation ("Articles") and Bylaws to the Placement Agent.
Excepting only its ownership of xxxxx.xxx, Inc., a Delaware corporation, a
wholly-owned subsidiary of the Company, the Company does not own more than five
percent (5%) of any class of equity securities of, or greater than a five
percent (5%) equity interest in, any corporation, partnership, limited liability
company or other person.
3.2 CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company on October 4, 1999 is as set forth in the Placement
Memorandum under the heading "SUMMARY -- Capitalization." All of the issued and
outstanding shares of Common Stock have been duly authorized, validly issued and
are fully paid and nonassessable. Except as described in the Placement
Memorandum, there are no existing subscriptions, options, stock option plans,
warrants, calls, commitments, agreements, conversion or other rights of any
character (contingent or otherwise) to purchase or otherwise acquire from the
Company at any time, or upon the happening of any stated event, any shares of
the capital stock of the Company.
3.3 AUTHORITY. The Company has all requisite power and authority to
enter into this Agreement, the Registration Rights Agreement, the Warrant for
the Purchase of Shares of Common Stock, and the Placement Agent Warrant (as
defined in Section 6.6), and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement, the Registration
Rights Agreement and the Placement Agent Warrant, and the consummation of the
transactions contemplated
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hereby and thereby, have been duly authorized by all
necessary corporate action on the part of the Company and, upon their execution
and delivery by the Company, such agreements will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors' rights and
subject to general equity principles.
3.4 SECURITIES FILINGS.
(a) The Company has filed with the Securities and Exchange
Commission (the "SEC") the documents set forth at Exhibit A of the Placement
Memorandum, and other filings required to be filed with the SEC under the rules
and regulations of the SEC (the "SEC Filings"). The Company's SEC Filings
include a Form 10 Registration Statement (the "Registration Statement"), filed
on June 11, 1999, which was subsequently amended on July 27, 1999. The
Registration Statement became effective on August 11, 1999, but remains subject
to further comment by the SEC. As of the Closing Date, the Company anticipates
that one or more post-effective date amendments of the Registration Statement
will be required by the SEC; accordingly, the Company makes no representations
nor warranties concerning the nature and scope of further comment on the
Registration Statement by the SEC, and the Company's required response thereto.
(b) Except as disclosed in Section 3.4(a) hereof, the SEC
Filings conformed, and any future SEC Filings will conform, in all material
respects to the requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the SEC thereunder as of
their respective filing dates and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The documents or
portions thereof that were incorporated by reference in the SEC Filings pursuant
to the requirements of the Exchange Act, when such incorporated documents or
portions were first filed with the SEC, conformed in all material respects with
any applicable requirements of the Exchange Act and the rules and regulations of
the SEC thereunder.
(c) The consolidated financial statements of the Company
included in the SEC Filings fairly presented in all material respects the
financial position and results of operations of the Company and the Subsidiaries
at their respective dates and for the respective periods to which they apply.
Such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as stated therein.
3.5 PLACEMENT MEMORANDUM. The Placement Agent has advised the
Company that it has delivered to each prospective purchaser the Placement
Memorandum and an Amended Private Placement Memorandum, which describes the
Company's business, financial and operating condition, the Offering and
information regarding risks to be evaluated when contemplating an investment in
the Company through the Offering.
(a) The Placement Memorandum, as amended, does not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(b) The consolidated financial statements of the Company
included in the Placement Memorandum fairly present in all material respects the
financial position and results of operations of the Company and the Subsidiaries
at their respective dates and for the respective periods to which they apply.
Such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as stated therein.
3.6 ISSUANCE OF THE SHARES. The Shares, when issued pursuant to the
terms of this Agreement, shall be duly and validly authorized and issued, fully
paid and nonassessable.
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3.7 NO CONFLICT WITH LAW OR DOCUMENTS. The execution, delivery and
consummation of this Agreement, the Registration Rights Agreement, the Warrant
for the Purchase of Common Stock, and the Placement Agent Warrant and the
transactions contemplated hereby and thereby will not (a) conflict with any
provisions of the Articles or Bylaws of the Company or of any Subsidiary or (b)
result in any violation of or default or loss of a benefit under, or permit the
acceleration of any obligation under (in each case, upon the giving of notice,
the passage of time, or both), any mortgage, indenture, lease, agreement or
other instrument, permit, franchise, license, judgment, order, decree, law,
ordinance, rule or regulation applicable to the Company or any of its
properties.
3.8 CONSENTS, APPROVALS AND PRIVATE OFFERING. Except for any filings
required under federal and applicable state securities laws, all of which shall
have been made as of the Closing Date to the extent required as of such time, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any federal, state, local or foreign governmental authority is
required to be made or obtained by the Company in connection with the execution
and delivery of this Agreement, the Registration Rights Agreement, the Warrant
for the Purchase of Common Stock, and the Placement Agent Warrant and the
consummation of the transactions contemplated hereby and thereby.
3.9 ABSENCE OF CERTAIN DEVELOPMENTS. Except as described in the
Admendment to the Placement Memorandum, since August 6, 1999, the Company has
not (a) incurred or become subject to any material liabilities (absolute or
contingent) except current liabilities incurred, and liabilities under contracts
entered into, in the ordinary course of business consistent with past practices;
(b) mortgaged, pledged or subjected to any lien, charge or other encumbrance any
of its assets, tangible or intangible (except for liens for current taxes,
assessments and governmental charges and levies which may be paid without
penalty, interest or other additional charge, or which are being contested in
good faith by appropriate proceedings and are not material in amount or value in
relation to the value of the associated property); (c) sold, assigned or
transferred any of its assets or canceled any debts or obligations except in the
ordinary course of business consistent with past practices; (d) suffered any
extraordinary losses, or waived any rights of substantial value; (e) entered
into any material transaction other than in the ordinary course of business,
consistent with past practices; or (f) otherwise had any change in its
condition, financial or otherwise, except as shown on or reflected in the
consolidated balance sheet as of June 30, 1999, except for changes in the
ordinary course of business consistent with past practices, none of which
individually or in the aggregate has been materially adverse to the Company.
Except as described in the SEC Filings, and Section 3.4(a) hereof, the Company
has not entered into any agreement since August 6, 1999 of the type that would
be required under the SEC's rules and regulations to be filed as an exhibit to a
Report on Form 10-K.
3.9 NO INTEGRATION. The Company has not, directly or indirectly,
solicited any offer to buy or offer to sell any Shares or any other securities
of the Company during the twelve-month period ending on the date hereof except
as may be described in the Placement Memorandum or which would not be integrated
with the sale of the Shares in a manner that would require the registration of
the Offering pursuant to the Act and has no present intention to solicit any
offer to buy or offer to sell any Shares or any other securities of the Company
other than pursuant to this Agreement or pursuant to a registered public
offering of the Company's securities which may be commenced after the completion
of the Offering.
3.10 LITIGATION. Except as described in the Placement Memorandum,
there are no actions, suits, proceedings or investigations pending against or
affecting the Company or any Subsidiary that in the aggregate could reasonably
be anticipated to result in a material adverse effect on the Company.
3.11 INTELLECTUAL PROPERTY. The Placement Memorandum sets forth a
complete and accurate summary of the intellectual property of the Company. The
Company has no knowledge that any intellectual property owned, used or licensed
by the Company infringes upon the lawful rights of any other party.
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3.12 REGISTRATION RIGHTS. Each of the Shares shall be entitled to
the registration rights provided by the Registration Rights Agreement in the
form included herein as Exhibit A.
3.13 WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK. Upon
execution of this Agreement, and payment of the Offering Price, each Purchaser
shall be entitled to warrants for the purchase of common stock of the Company,
upon terms described in the Placement Memorandum and the form of Warrant for the
Purchase of Shares of Common Stock included herein as Exhibit B.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF THE PURCHASER.
Each Purchaser hereby represents and warrants to, and covenants
with, the Company as follows:
4.1 LEGAL POWER. Purchaser has the requisite corporate, partnership,
trust or fiduciary power, as appropriate, and is authorized, if Purchaser is a
corporation, partnership or trust, to enter into this Agreement, to purchase the
Shares hereunder, and to carry out and perform its obligations under the terms
of this Agreement, the Warrant for the Purchase of Common Stock, and the
Registration Rights Agreement.
4.2 DUE EXECUTION. Each of this Agreement, the Warrant for the
Purchase of Common Stock, and the Registration Rights Agreement has been duly
authorized, if Purchaser is a corporation, partnership, trust or fiduciary,
executed and delivered by Purchaser and, upon due execution and delivery by the
Company, this Agreement, the Warrant for the Purchase of Common Stock, and the
Registration Rights Agreement will be valid and binding agreements of Purchaser,
enforceable against Purchaser in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors' rights and subject to general equity
principles.
4.3 INVESTMENT REPRESENTATIONS.
4.3.1 Purchaser is acquiring the Shares for its own account, not as
nominee or agent, for investment and not with a view to or for resale in
connection with any distribution or public offering thereof within the meaning
of the Act, except pursuant to an effective registration statement under the
Act.
4.3.2 Purchaser understands that (i) the Shares have not been
registered under the Act by reason of a specific exemption therefrom, and may
not be transferred or resold except pursuant to an effective registration
statement or exemption from registration and (ii) each certificate representing
the Shares will be endorsed with legends in substantially the following form:
A) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS;
B) Any legend required to be placed thereon by applicable federal or
state securities laws;
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and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied.
4.3.3 Purchaser has received and reviewed the Placement Memorandum.
In addition, Purchaser has been furnished with such materials and has been given
access to such information relating to the Company as it or its qualified
representative has requested and has been afforded the opportunity to ask
questions regarding the Company and the Shares, all as Purchaser has found
necessary to make an informed investment decision.
4.3.4 Purchaser is an "accredited investor" as such term is defined
in Rule 501 under the Act and was not formed for the specific purpose of
acquiring the Shares.
4.3.5 Purchaser is a resident of, and all communications regarding
Purchaser's purchase of the Shares were sent to Purchaser in, the state of
Purchaser's residence shown on the subscription page attached hereto.
4.3.6 Purchaser agrees that an unspecified portion of the Offering
Price represents consideration for the issuance of a Warrant, and the balance of
the Offering Price represents the consideration for the purchase of one share of
common stock of the Company. Purchaser shall be responsible for consulting with
his or her personal tax advisor with respect to such allocation and any
resulting consequences of federal or state taxation upon Purchaser's personal
situation.
5. COVENANTS OF THE COMPANY.
5.1 INFORMATION. So long as the Company is subject to the periodic
reporting requirements of the Exchange Act, the Company shall deliver to each
holder of Shares all annual, quarterly or other reports to the extent such
reports are furnished to the Company's public security holders. In the event
that the Company is not so subject, until the fifth anniversary of the Closing,
the Company shall promptly furnish to each holder of Shares (i) as soon as
available, and in any event within 90 days after the end of each fiscal year of
the Company, a consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all prepared in accordance with generally accepted
accounting principles and reported on by independent certified public
accountants of recognized national standing; and (ii) as soon as available, and
in any event within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, a consolidated balance sheet of the
Company and its consolidated subsidiaries, if any, as of the end of such quarter
and the related consolidated statements of income and stockholder's equity
(together with any other quarterly financial statements being prepared by the
Company at such time), setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Company's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation and consistency by the chief
financial or accounting officer of the Company.
5.2 NO INTEGRATION. The Company shall not, directly or indirectly,
engage in any act or activity which may jeopardize the status of the Offering
and sale of the Shares as exempt transactions under the Act or under the
securities or "blue sky" laws of any jurisdiction in which the Offering may be
made. Without limiting the generality of the foregoing, and notwithstanding
anything contained herein to the contrary, the Company shall not, during the six
(6) months following completion of the Offering, (a) directly or indirectly,
engage in any offering of securities which, if integrated with the Offering in
the manner prescribed by Rule 502 (a) of Regulation D and applicable releases of
the Commission, may jeopardize the status of the Offering and sale of the Shares
as exempt transactions under Regulation D; or (B) engage in any offering of
securities, without the opinion of counsel reasonably satisfactory to the
Placement Agent, to the effect that such offering would not result in
integration with this Offering, or
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if integration would so result, that such integration would not jeopardize the
status of this Offer as an exempt transaction under Regulation D.
5.3 USE OF PROCEEDS. The Company shall apply net proceeds from the
sale of the Shares for the purposes set forth under the caption "Use of
Proceeds" in the Placement Memorandum in substantially the manner indicated
thereunder.
5.4 FURTHER ISSUANCES. For a period of 24 months from the date
hereof, without written consent of the Placement Agent, which cannot be
unreasonable withheld, the Company shall not (i) issue any security, other than
Employee Stock options, which is convertible into, exercisable for, or
exchangeable for shares of Common Stock if the number of shares of Common Stock
or price per share of Common Stock is based on the market price of such Common
Stock at the time of such conversion, exercise or exchange, or (ii) engage in
any offering under Regulation S.
5.5 RECLASSIFICATION, REORGANIZATION, CONSOLIDATION OR MERGER. In
the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or in the event of any consolidation or merger of the
Company with or into another corporation (other than a merger in which merger
the Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock or in the event of any sale, lease, transfer or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall use its best efforts to cause
effective provisions to be made so that the Purchaser shall have the right
thereafter to purchase the kind and amount of shares of stock and other
securities receivable upon such reclassification, capital reorganization and
other change, consolidation, merger, sale or conveyance by exchanging the
Purchaser's shares of stock in the Company for the same percentage of shares of
Common Stock received as a result of reclassification, capital reorganization,
change, consolidation, merger, sale or conveyance. The foregoing provisions of
this Section 5.5 shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
6. REPRESENTATIONS OF PLACEMENT AGENT; COMPENSATION OF PLACEMENT AGENT.
The Company has authorized the Placement Agent to conduct the Offering under
Regulation D of the Act, and the Placement Agent represents and agrees with the
Company as follows:
6.1 SALES TO ACCREDITED INVESTORS. The Placement Agent has made and
will only make offers and sales of the Shares to Purchasers it reasonably
believes to be "accredited investors" as that term is defined in Rule 501(a)
under the Act.
6.2 REGULATION D COMPLIANCE. The Placement Agent has made and will
make offers and sales of Shares in compliance with Rule 506 and the other
applicable provisions of Regulation D, to the extent applicable to the Placement
Agent, and the Placement Agent has not and will not offer to sell the Shares by
any form of general solicitation or general advertising that is prohibited under
the Act.
6.3 COMPLIANCE GENERALLY. The Placement Agent has and will observe
all securities laws and regulations applicable to it in any jurisdiction in
which it has or may offer, sell or deliver Shares and it will not, directly or
indirectly, offer, sell or deliver Shares or distribute or publish any
prospectus, circular, advertisement or other offering material in relation to
the Shares in or from any state in the United States or country or jurisdiction
except under circumstances that will result in compliance with applicable laws
and regulations.
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6.4 SALES COMMISSIONS. In consideration of the Placement Agent's
services hereunder, the Company shall pay the Placement Agent in cash on the
Closing Date a commission of six and one-half percent (6.5%) of the Offering
Price of each Share sold at such Closing (the "Placement Fee").
6.5 PLACEMENT AGENT EXPENSES. Upon the Closing, the Company agrees
to reimburse the Placement Agent for its reasonable, documented out-of-pocket
expenses incurred in connection with the Offering, including the reasonable fees
and expenses of the Placement Agent's counsel, up to a maximum of $100,000.00.
6.6 PLACEMENT AGENT WARRANT. At the Closing, the Company shall sell
to the Placement Agent warrants to purchase 61,564 shares of the Company's
Common Stock (the "Placement Agent Warrant"), at a purchase price of $.001 per
share of Common Stock underlying the Placement Agent Warrant (the "Warrant
Shares"). The Placement Agent Warrant shall be exercisable at any time before
the fifth anniversary of the Closing at an exercise price per share equal to one
hundred twenty percent (120%) of the Offering Price. The Placement Agent Warrant
shall be in a form satisfactory to the Company and the Placement Agent.
6.7 POSSIBLE PARTICIPATION BY AFFILIATES OF PLACEMENT AGENT.
Affiliates of the Placement Agent may purchase Common Stock in the Offering.
Purchases by such affiliates may be counted toward any applicable minimum
proceeds requirement, but no such individual Placement Agent affiliate purchase
shall consist of more than 10% of such minimum. If such minimum is exceeded, no
individual Placement Agent affiliate purchase beyond that minimum shall exceed
10% of the Common Stock sold in the Offering and all Placement Agent affiliate
purchases beyond such minimum shall not in the aggregate exceed 20% of the
Common Stock sold in the Offering.
7. CONDITIONS TO CLOSING.
7.1 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. Each Purchaser's
obligation to purchase the Shares at the Closing is subject to the fulfillment,
at or prior to such Closing, of all of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects at the Closing with
the same force and effect as if they had been made on and as of said date.
Except as described in or contemplated by the Placement Memorandum, the
business, assets, financial condition and results of operations of the Company
shall not have been adversely affected in any material way prior to the Closing.
The Company shall have performed in all material respects all obligations herein
required to be performed by it on or prior to the Closing.
(b) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchaser.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing Date. At the
time of the Closing, the sale and issuance of the Shares shall be legally
permitted by all laws and regulations to which the Purchaser and the Company are
subject.
(d) REGISTRATION RIGHTS AGREEMENT. The Company shall have
entered into the Registration Rights Agreement.
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(e) WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK. The
Company shall have entered into the Warrant for the Purchase of Shares of Common
Stock.
(e) LEGAL OPINION. Counsel to the Company shall have provided
a legal opinion to the Purchasers reasonably acceptable to the Placement Agent.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
fulfillment to the Company's satisfaction, on or prior to the Closing, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by the Purchaser in Section 4 hereof shall be true and
correct at the Closing with the same force and effect as if they had been made
on and as of the Closing.
(b) PERFORMANCE OF OBLIGATIONS. The Purchaser shall have
performed and complied in all material respects with all agreements and
conditions herein required to be performed or complied with by them on or before
the Closing, and each Purchaser shall have delivered payment to the Company in
respect of its purchase of Shares.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing. At the time
of the Closing, the sale and issuance of the Shares shall be legally permitted
by all laws and regulations to which each Purchaser and the Company are subject.
8. MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware without regard to any otherwise
applicable principles of conflicts of laws.
8.2 SURVIVAL. The representations and warranties made by the parties
in this Agreement shall survive the consummation of the transactions herein
contemplated until the expiration of the statute of limitations with respect to
claims arising under Section 10(b) of the Securities Exchange Act of 1934, as
amended, with respect to the purchase of Shares hereunder.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto and
thereto, and the other documents delivered pursuant hereto and thereto,
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants or
agreements except as specifically set forth herein or therein. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto and their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided herein.
8.5 SEVERABILITY. In the event that any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent practicable,
be modified so as to make it valid, legal and enforceable and to retain as
nearly as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. To the
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extent permitted by law, the parties hereto waive the benefit of any provision
of law that renders any provision of this Agreement invalid or unenforceable in
any respect.
8.6 JOINDER. By execution of this Agreement, the Placement Agent
joins this Agreement for purposes of (i) making the representations of the
Placement Agent set forth in Section 6 hereof and (ii) receiving the benefits of
the Company's covenants in such Section 6.
8.7 AMENDMENT AND WAIVER. Except as otherwise provided herein, any
term of this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Purchaser. Any
amendment or waiver effected in accordance with this section shall be binding
upon each future holder of any security purchased under this Agreement
(including securities into which such securities have been converted) and the
Company.
8.8 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery, on the first business day following mailing by overnight
courier, or on the fifth day following mailing by registered or certified mail,
return receipt requested, postage prepaid, addressed to the Company and the
Purchaser at the respective addresses included herein.
8.9 FEES AND EXPENSES. Except as otherwise provided herein, the
Company and the Purchasers shall bear their own expenses and legal fees incurred
on its behalf with respect to this Agreement and the transactions contemplated
hereby. Purchasers acknowledge that the Placement Agent will receive a
commission equal to six and one-half percent (6.5%) of the Offering Price of
each Share sold in the Offering and will be entitled to purchase for nominal
consideration the Placement Agent Warrant.
8.10 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
8.12 NO WAIVER. No waiver by any party to this Agreement of any
one or more defaults by any other party or parties in the performance of any of
the provisions hereof shall operate or be construed as a waiver of any future
default or defaults, whether of a like or different nature. Except as expressly
provided herein, no failure or delay on the part of any party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
[SIGNATURE PAGE FOLLOWS]
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