SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”)
is
dated as of May 18, 2007, by and among Offline Consulting, Inc., a Delaware
corporation (the “Company”),
and
the purchasers identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser”
and
collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase on the Closing Date
from the Company in the aggregate, $1,500,000 of Units, each of which consists
of (i) Series A Preferred Stock (the “Preferred
Stock”),
(ii)
Class A warrants (the “A
Warrants”)
to
purchase shares of common stock, par value $0.0001 per share (the “Common
Stock”),
(iii)
Class J warrants (the “J
Warrants”)
to
purchase shares of Common Stock, and (iii) Class B warrants (the “B
Warrants”)
to
purchase shares of Common Stock.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions.
In
addition to the terms defined elsewhere in this Agreement, the following terms
have the meanings indicated in this Section 1.1:
“Action”
shall
have the meaning ascribed to such term in Section 3.1(j).
“Actual
Minimum”
means,
as of any date, the maximum aggregate number of shares of Common Stock then
issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon conversion or exercise
in full of all shares of Preferred Stock and Warrants.
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
“Closing”
means
the closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing
Date”
means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to
(i)
each Purchaser’s obligations to pay the Subscription Amount have been satisfied
or waived (ii) and the Company’s obligations to deliver the Securities have been
satisfied or waived.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, par value $0.0001 per share, and any securities
into which such common stock shall hereinafter been reclassified
into.
“Common
Stock Equivalents”
means
any securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including without limitation,
any
debt, preferred stock, rights, options, warrants or other instrument that is
at
any time convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.
“Company
Counsel”
means
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, with offices located at 00 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
“Disclosure
Schedules”
means
the Disclosure Schedules of the Company delivered concurrently
herewith.
“Effective
Date”
means
the date that the Registration Statement is first declared effective by the
Commission.
“Escrow
Agreement”
means
the Escrow Agreement, dated the date hereof, among the Company, each Purchaser
and Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, as escrow agent.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Exempt
Issuance”
the
issuance of (a) shares of Common Stock or options to employees, officers,
consultants or directors of the Company pursuant to any stock or option plan
duly adopted by a majority of the non-employee members of the Board of Directors
of the Corporation or a majority of the members of a committee of non-employee
directors established for such purpose [so long as such issuances in the
aggregate do not exceed ten percent (10)% of the issued and outstanding shares
of Common Stock as of the Original Issue Date], (b) securities upon the exercise
of or conversion of any securities issued hereunder, convertible securities,
options or warrants issued and outstanding on the date of the Purchase
Agreement, provided that such securities have not been amended since the date
of
the Purchase Agreement to increase the number of such securities or to decrease
the exercise or conversion price of any such securities, (c) securities issued
in connection with acquisitions or (d) securities issued as equity enhancements
in connection with standard non-convertible debt transactions.
“GAAP”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Liens”
means
a
lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
“Losses”
means
any and all losses, claims, damages, liabilities, settlement costs and expenses,
including without limitation costs of preparation and reasonable attorneys'
fees.
“Material
Adverse Effect”
shall
have the meaning assigned to such term in Section 3.1(b).
“Material
Permits”
shall
have the meaning ascribed to such term in Section 3.1(m).
“Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Registration
Rights Agreement”
means
the Registration Rights Agreement, dated the date hereof, among the Company
and
each Purchaser, in the form of Exhibit
A.
“Registration
Statement”
means
a
registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchasers of the Underlying
Shares.
“Required
Approvals”
shall
have the meaning ascribed to such term in Section 3.1(e).
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
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“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means
the Units, the shares of Preferred Stock, the Warrants and the Underlying
Shares.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shareholder
Approval”
means
such approval as may be required by the applicable rules and regulations of
the
Trading Market (or any successor entity) from the shareholders of the Company
with respect to the transactions contemplated by the Transaction Documents,
including the issuance of all of the Underlying Shares and shares of Common
Stock issuable upon exercise of the Warrants in excess of 19.9% of the Company’s
issued and outstanding Common Stock on the Closing Date.
“Short
Sales”
shall
include, without limitation, all “short sales” as defined in Rule 3b-3 of the
Exchange Act.
“Subscription
Amount”
shall
mean, as to each Purchaser, the amount to be paid for the shares of Preferred
Stock and the Warrants purchased hereunder as specified below such Purchaser's
name on the signature page of this Agreement, in United States
Dollars.
“Subsidiary”
means
any subsidiary of the Company that is required to be listed in Schedule
3.1(a).
“Trading
Day”
means
any day during which the Trading Market shall be open for business.
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: OTC Bulletin Board, the American Stock
Exchange, the New York Stock Exchange, the Nasdaq Global Select Market, Nasdaq
Global Market or the Nasdaq Capital Market.
“Transaction
Documents”
means
this Agreement, the shares of Preferred Stock, the Warrants, the Registration
Rights Agreement and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Underlying
Shares”
means
the shares of Common Stock issuable upon conversion of the Preferred Stock
and
upon exercise of the Warrants.
“Units”
means
the Units offered hereby, each of which consists of shares of Preferred Stock,
A
Warrants, J Warrants and B Warrants.
“VWAP”
means,
for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
the daily volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the Common Stock
is
then listed or quoted as reported by Bloomberg Financial L.P. (based on a
Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if
the Common Stock is not then listed or quoted on a Trading Market and if prices
for the Common Stock are then quoted on the OTC Bulletin Board, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
listed or quoted on the OTC Bulletin Board and if prices for the Common Stock
are then reported in the “Pink Sheets” published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected
in
good faith by the Purchasers and reasonably acceptable to the
Company.
“Warrants”
means,
collectively, the (i) A Warrant in the form of Exhibits
B
delivered to the Purchasers at the Closing in accordance with Section 2.2
hereof, which warrants shall be exercisable immediately upon issuance for a
term
of five years at $9.46 per share, (ii) J Warrant in the form of Exhibits
C
delivered to the Purchasers at the Closing in accordance with Section 2.2
hereof, which warrants shall be exercisable immediately upon issuance for a
term
of twelve months following the Effectiveness Date (as defined in the
Registration Rights Agreement) at $10.44 per share, and (iii) B Warrant in
the
form of Exhibits
D
delivered to the Purchasers at the Closing in accordance with Section 2.2
hereof, which warrants shall be exercisable immediately upon issuance for a
term
of five years at $10.44 per share.
“Warrant
Shares”
means
the shares of Common Stock issuable upon exercise of the Warrants.
-34-
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ARTICLE
II
PURCHASE
AND SALE
2.1 Closing.
On the
Closing Date, each Purchaser shall purchase from the Company, severally and
not
jointly with the other Purchasers, and the Company shall issue and sell to
each
Purchaser Units consisting of (a) shares of Preferred Stock with a stated value
equal to such Purchaser’s Subscription Amount (the aggregate principal amount of
the shares of Preferred Stock sold hereunder shall be $1,500,000), (b) A Warrant
to purchase an aggregate of 158,562 shares of Common Stock, (c) J Warrant to
purchase an aggregate of 158,562
shares of Common Stock and (d) B Warrant to purchase an aggregate of 158,562
shares of Common Stock. Upon satisfaction of the conditions set forth in Section
2.2, the Closing shall occur at the offices of Sichenzia Xxxx Xxxxxxxx Xxxxxxx
LLP, 00 Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 or such other location as the parties shall mutually
agree.
2.2 Conditions
to Closing.
The
Closing is subject to the satisfaction or waiver by the party to be benefited
thereby of the following conditions:
(a) At
or
before the Closing, the Company shall have delivered or caused to be delivered
to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) the
shares of Preferred Stock;
(iii) A
Warrants registered in the name of such Purchaser to purchase an aggregate
of
158,562 shares of Common Stock;
(iv) J
Warrants registered in the name of such Purchaser to purchase an aggregate
of
158,562 shares of Common Stock;
(v) B
Warrants registered in the name of such Purchaser to purchase an aggregate
of
158,562 shares of Common Stock;
(vi) a
legal
opinion of Company Counsel, in the form of Exhibit
E
attached
hereto, addressed to each Purchaser;
(vii) the
Registration Rights Agreement duly executed by the Company;
(viii) the
Escrow Agreement duly executed by the Company;
(ix) a
certificate, signed by the Secretary of the Company, attaching (i) the charter
and By-Laws of the Company, and (ii) resolutions passed by its Board of
Directors to authorize the transactions contemplated hereby and by the other
Transaction Documents, and certifying that such documents are true and complete
copies of the originals and that such resolutions have not been amended or
superseded, it being understood that such Purchaser may rely on such certificate
as a representation and warranty of the Company made herein;
and
(x) a
certificate, signed by the Chief Executive Officer of the Company, certifying
that the conditions specified in this Section have been fulfilled as of the
Closing, it being understood that such Purchaser may rely on such certificate
as
though it were a representation and warranty of the Company made
herein.
(b) At
or
before the Closing, the Company shall have satisfied the following conditions
(any or all of which may be waived in whole or in part by the
Purchasers):
(i) No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Agreement.
(ii) Trading
in the Company’s Common Stock shall not have been suspended by the Commission or
the OTC Bulletin Board (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the
Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets (“Bloomberg”)
shall
not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by Bloomberg, or on the
New
York Stock Exchange, nor shall a banking moratorium have been declared either
by
the United States or New York State authorities, nor shall there have occurred
any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in any financial market which, in each case, in the
judgment of such Purchaser, makes it impracticable or inadvisable to purchase
the Units.
4
(iii) No
Material Adverse Effect shall have occurred at or before the Closing
Date.
(iv) The
merger transaction with Xxxxxxxxxx Corporation shall have been
consummated.
(v) The
Company shall have reserved from its duly authorized
capital stock no less than 100% of the aggregate number of shares of Common
Stock needed to comply with Section 3(d) of the Warrants.
(c) At
or
before the Closing, each Purchaser shall have delivered or caused to be
delivered to the Company the following:
| (i) |
this
Agreement duly executed by such
Purchaser;
|
(ii) the
Escrow Agreement duly executed by such Purchaser;
(iii) such
Purchaser’s Subscription Amount by wire transfer to the escrow account;
and
(iv) the
Registration Rights Agreement duly executed by such Purchaser, including
questionnaire.
(d) All
representations and warranties of the other party contained herein shall remain
true and correct as of the Closing Date and all covenants of the other party
shall have been performed if due prior to such date.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company.
Except
as set forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
the
representations and warranties set forth below to each Purchaser:
(a) Subsidiaries.
All of
the direct and indirect subsidiaries of the Company are set forth on
Schedule
3.1(a).
The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all the issued
and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no subsidiaries, then
references in the Transaction Documents to the Subsidiaries will be
disregarded.
(b) Organization
and Qualification.
Each of
the Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and
to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified
to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on
the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business, or
financial condition of the Company and the Subsidiaries, taken as a whole,
or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”)
and no
Proceeding has been instituted in any such jurisdiction revoking, limiting
or
curtailing or seeking to revoke, limit or curtail such power and authority
or
qualification.
(c) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations hereunder or thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated hereby or thereby have
been duly authorized by all necessary action on the part of the Company and
no
further consent or action is required by the Company other than Required
Approvals. Each of the Transaction Documents has been (or upon delivery will
be)
duly executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and general principles of equity. Neither the Company nor any Subsidiary is
in
violation of any of the provisions of its respective certificate or articles
of
incorporation, by-laws or other organizational or charter documents except
where
such violation could not, individually or in the aggregate, constitute a
Material Adverse Effect.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company,
the issuance and sale of the Securities and the consummation by the Company
of
the other transactions contemplated thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that
with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or
any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company
or
Subsidiary debt or otherwise) or other understanding to which the Company or
any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal
and
state securities laws and regulations), or by which any property or asset of
the
Company or a Subsidiary is bound or affected, or (iv) conflict with or violate
the terms of any agreement by which the Company or any Subsidiary is bound
or to
which any property or asset of the Company or any Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse
Effect.
5
(e) Filings,
Consents and Approvals.
Neither
the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than
(i) the filings required under Section 4.9, (ii) the filing with the Commission
of the Registration Statement, (iii) the application(s) to each applicable
Trading Market for the listing of the Underlying Shares for trading thereon
in
the time and manner required thereby, (iv) the filing with the Commission of
a
Form D pursuant to Commission Regulation D, and (v) applicable Blue Sky filings
(collectively, the “Required
Approvals”).
(f) Issuance
of the Securities.
The
Securities are duly authorized and, when issued and paid for in accordance
with
the applicable Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens. The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for
issuance of the Underlying Shares at least equal to the Actual Minimum on the
date hereof.
(g) Capitalization.
The
capitalization of the Company consist of 700,000,000 shares of Common Stock,
of
which 1,720,201 shares are issued and outstanding. No Person has any right
of
first refusal, preemptive right, right of participation, or any similar right
to
participate in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities and as set forth
on Schedule
3.1(g),
there
are no outstanding options, warrants, script rights to subscribe to, calls
or
commitments of any character whatsoever relating to, or securities, rights
or
obligations convertible into or exchangeable for, or giving any Person any
right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock,
of
Common Stock Equivalents. Except as set forth on Schedule
3.1(g)
(in each
case an “Exempt Adjustment”), the issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to
any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding shares of capital stock
of
the Company are validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the shares of the Preferred
Stock. There are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.
(h) SEC
Reports; Financial Statements.
Since
April 11, 2006, the Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, (the foregoing materials, including the exhibits
thereto, being collectively referred to herein as the “SEC
Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As
of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, 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. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) Material
Changes.
Since
the date of the Form 8-K filed with the Securities and Exchange Commission
describing the acquisition of Xxxxxxxxxx Corporation, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent
with
past practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend
or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.
6
(j) Litigation.
There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting
the
Company, any Subsidiary or any of their respective properties before or by
any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which
(i) adversely affects or challenges the legality, validity or enforceability
of
any of the Transaction Documents or the Securities or (ii) could, if there
were
an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving a claim
of
violation of or liability under federal or state securities laws or a claim
of
breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer
of
the Company.
(k) Labor
Relations.
No
material labor dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could reasonably
be
expected to result in a Material Adverse Effect.
(l) Compliance.
Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is
in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
except in each case as could not have a Material Adverse Effect.
(m) Regulatory
Permits.
The
Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses, except where
the
failure to possess such permits could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect
(“Material
Permits”),
and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.
(n) Title
to Assets.
Except
as set forth on Schedule
3(n),
the
Company and the Subsidiaries have good and marketable title in fee simple to
all
real property owned by them that is material to the business of the Company
and
the Subsidiaries and good and marketable title in all personal property owned
by
them that is material to the business of the Company and the Subsidiaries,
in
each case free and clear of all Liens, except for Liens 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 the
Subsidiaries, Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the Subsidiaries
are
held by them under valid, subsisting and enforceable leases of which the Company
and the Subsidiaries are in compliance.
(o) Patents
and Trademarks.
The
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or material
for
use in connection with their respective businesses and which the failure to
so
have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).
Neither the Company nor any Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or any Subsidiary violates
or
infringes upon the rights of any Person. To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of
others.
(p) Insurance.
The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged. To the best of Company’s knowledge, such insurance contracts and
policies are accurate and complete. Neither the Company nor any Subsidiary
has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
(q) Transactions
With Affiliates and Employees.
None of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real
or personal property to or from, or otherwise requiring payments to or from
any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $60,000 other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company
and
(iii) for other employee benefits, including stock option agreements under
any
stock option plan of the Company.
(r) Internal
Accounting Controls.
The
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general
or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
7
(s) Certain
Fees.
No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. Except as set forth on Schedule
3.1(s),
the
Purchasers shall have no obligation with respect to any fees or with respect
to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
(t) Private
Placement.
Assuming the accuracy of the Purchaser’s representations and warranties set
forth in Section 3.2, no registration under the Securities Act is required
for
the offer and sale of the Securities by the Company to the Purchasers as
contemplated hereby.
(u) Registration
Rights.
Except
as set forth on Schedule 3.1(u), no Person has any right to cause the Company
to
effect the registration under the Securities Act of any securities of the
Company.
(v) No
Integrated Offering.
Neither
the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security
or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the Securities Act or which could violate any applicable
shareholder approval provisions, including, without limitation, under the rules
and regulations of the Trading Market. The Company does not have any
registration statement pending before the Commission or currently under the
Commission’s review and since August
1,
2006, the Company has not offered or sold any of its equity securities or debt
securities convertible into shares of Common Stock.
(w) Indebtedness.
The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.
For the purposes of this Agreement, “Indebtedness”
shall
mean (a) any liabilities for borrowed money or amounts owed in excess of
$250,000 (other than trade accounts payable incurred in the ordinary course
of
business), (b) all guaranties, endorsements and other contingent obligations
in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection
or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments
in excess of $250,000 due under leases required to be capitalized in accordance
with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any
Indebtedness.
(x) Tax
Status.
Except
as set forth on Schedule
3(x),
the
Company and each of its Subsidiaries has made or filed all federal, state and
foreign 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
the statute of limitations relating to the assessment or collection of any
foreign, federal, statue or local tax. None of the Company’s tax returns is
presently being audited by any taxing authority.
(y) No
General Solicitation or Advertising in Regard to this
Transaction.
Neither
the Company nor any of its directors or officers (i) has conducted or will
conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D) or general advertising with respect to the sale of the shares
of
Preferred Stock or the Warrants.
(z) Foreign
Corrupt Practices.
Neither
the Company, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company, has (i) directly or indirectly, used any
corrupt funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or
to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company (or made
by
any person acting on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision of
the
Foreign Corrupt Practices Act of 1977, as amended
(aa) Acknowledgment
Regarding Purchasers’ Purchase of Securities.
The
Company acknowledges and agrees that the Purchasers are acting solely in the
capacity of arm’s length purchasers with respect to this Agreement and the
transactions contemplated hereby. 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 and the transactions
contemplated hereby and any statement made by any Purchaser or any of their
respective representatives or agents in connection with this Agreement and
the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation of the Company
and
its representatives.
8
(bb) Accountants.
The
Company’s accountants are set forth on Schedule
3.1(bb)
of the
Disclosure Schedule. To the Company’s knowledge, such accountants, who the
Company expects will express their opinion with respect to the financial
statements to be included in the Company’s Annual Report on Form 10-KSB for the
year ending September 30, 2007, are a registered public accounting firm as
required by the Securities Act.
(cc) No
Disagreements with Accountants and Lawyers.
There
are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the accountants and lawyers formerly or
presently engaged by the Company and the Company is current with respect to
any
fees owed to its accountants and lawyers.
(dd) Lock
Up.
As of
the date of this Agreement, the parties identified on Schedule
3.1(dd)
will
enter into a lock up agreement in the form attached hereto as Exhibit
F.
(ee) Xxxxxxxx-Xxxxx
Act.
The
Company is in compliance with the applicable provisions of the Xxxxxxxx-Xxxxx
Act of 2002 (the “Xxxxxxxx-Xxxxx
Act”),
and
the rules and regulations promulgated thereunder, that are effective, and
intends to comply with other applicable provisions of the Xxxxxxxx-Xxxxx Act,
and the rules and regulations promulgated thereunder, upon the effectiveness
of
such provisions.
(ff) DTC
Status.
The
Company’s transfer agent is a participant in and the Common Stock is eligible
for transfer pursuant to the Depository Trust Company Automated Securities
Transfer Program. The name, address, telephone number, fax number, contact
person and email address of the Company’s transfer agent is set forth on
Schedule
3.1(ff)
hereto.
(gg) Investor
Relations Firm.
Within
60 days of this Agreement, the Company has hired an investor relations firm
and
has purchased a third party independent research report.
3.2 Representations
and Warranties of the Purchasers.
Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as
follows:
(a) Organization;
Authority.
Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate
the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations thereunder. The execution, delivery and performance by
such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(b) No
View to Distribute.
Such
Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account and not
with a view to or for distributing or reselling such Securities or any part
thereof, has no present intention of distributing any of such Securities and
has
no arrangement or understanding with any other persons regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business. Such Purchaser does not have any agreement
or
understanding, directly or indirectly, with any Person to distribute any of
the
Securities.
(c) Purchaser
Status.
At the
time such Purchaser was offered the Securities, it was, and at the date hereof
it is, and on each date on which it exercises any Warrants, it will be either:
(i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is
not required to be registered as a broker-dealer under Section 15 of the
Exchange Act.
(d) Experience
of Such Purchaser.
Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.
(e) General
Solicitation.
Such
Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in
any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
The
Company acknowledges and agrees that each Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.
9
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the Company
or
to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in
Section 4.1(b), the Company may require the transferor thereof to provide to
the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion and shall
be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing
to
be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement and the Registration Rights Agreement.
(b) Each
Purchaser agrees to the imprinting, so long as is required by this Section
4.1(b), of the following legend on any certificate evidencing Securities:
[NEITHER]
THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
[EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject
to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further,
no
notice shall be required of such pledge. At the appropriate Purchaser’s expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Securities may reasonably request in connection with a
pledge or transfer of the Securities, including, if the Securities are subject
to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under
the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder.
(c) The
Company shall cause its counsel to issue a legal opinion to the Company’s
transfer agent promptly after the Effective Date if required by the Company’s
transfer agent to effect the removal of the legend hereunder, provided that
the
removal of such legend is consistent with applicable securities laws. If all
or
any portion of the shares of Preferred Stock or Warrant is converted or
exercised (as applicable) at a time when there is an effective registration
statement to cover the resale of the Underlying Shares, or if such Underlying
Shares may be sold under Rule 144 or if such legend is not otherwise required
under applicable requirements of the Securities Act (including judicial
interpretations thereof) then such Underlying Shares shall be issued free of
all
legends upon delivery, in the case of a sale under Rule 144, of the customary
Rule 144 documentation. The Company agrees that following the Effective Date
or
at such time as such legend is no longer required under this Section 4.1(c),
it
will, no later than three Trading Days following the delivery by a Purchaser
to
the Company or the Company's transfer agent of a certificate representing
Securities issued with a restrictive legend (such date, the “Legend
Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing
such Underlying Shares that is free from all restrictive and other legends.
The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section. Certificates for Securities subject to legend removal
hereunder shall be transmitted by the transfer agent of the Company to the
Purchasers by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash or, at the option of the Company, in shares of Common
Stock, as partial liquidated damages and not as a penalty, for each $2,500
of
Underlying Shares (based on the VWAP on the date such Securities are submitted
to the Company’s transfer agent) delivered for removal of the restrictive legend
and subject to this Section 4.1(c), $10 per Trading Day (increasing to $20
per
Trading Day five (5) Trading Days after such damages have begun to accrue)
for
each Trading Day after the Legend Removal Date until such certificate is
delivered. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Company’s failure to deliver certificates representing any
Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief.
10
(e)
Each
Purchaser, severally and not jointly with the other Purchasers, agrees that
the
removal of the restrictive legend from certificates representing Securities
as
set forth in this Section 4.1 is predicated upon the Company’s reliance that the
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
4.2 Furnishing
of Information.
As long
as any Purchaser owns Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. Upon the request of any Purchaser, the Company
shall deliver to such Purchaser a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long
as
any Purchaser owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to each Purchaser and make
publicly available in accordance with Rule 144(c) such information as is
required for each Purchaser to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to
time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule
144.
4.3 Integration.
The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the
sale
of the Securities to the Purchasers or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.
4.4 Use
of
Proceeds.
The
proceeds from the sale of the Securities shall be used as set forth on
Schedule
4.4
and not
to redeem any Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or to settle any outstanding
litigation.
4.5 Indemnification
of Purchasers.
Subject
to the provisions of this Section 4.5, the Company will indemnify and hold
the
Purchasers and their directors, officers, shareholders, partners, employees
and
agents (each, a “Purchaser
Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result
of
or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser, or
any
of them or their respective Affiliates, by any stockholder of the Company who
is
not an Affiliate of such Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon
a
breach of such Purchaser’s representation, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder or any violations by the Purchaser of state
or
federal securities laws or any conduct by such Purchaser which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action
shall
be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing. Any Purchaser Party shall
have
the right to employ separate counsel in any such action and participate in
the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense
and
to employ counsel or (iii) in such action there is, in the reasonable opinion
of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party. The Company
will not be liable to any Purchaser Party under this Agreement (i) for any
settlement by an Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (ii) to the
extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by the Purchasers in this Agreement
or
in the other Transaction Documents.
4.6 Reservation
and Listing of Securities.
(a) The
Company shall maintain a reserve from its duly authorized shares of Common
Stock
for issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction Documents.
11
(b) If,
on
any date, the number of authorized but unissued (and otherwise unreserved)
shares of Common Stock is less than 130% of (i) the Actual Minimum on such
date, minus (ii) the number of shares of Common Stock previously issued pursuant
to the Transaction Documents, then the Board of Directors of the Company shall
use commercially reasonable efforts to amend the Company's certificate or
articles of incorporation to increase the number of authorized but unissued
shares of Common Stock to at least the Actual Minimum at such time (minus the
number of shares of Common Stock previously issued pursuant to the Transaction
Documents), as soon as possible and in any event not later than the 75th day
after such date; provided that the Company will not be required at any time
to
authorize a number of shares of Common Stock greater than the maximum remaining
number of shares of Common Stock that could possibly be issued after such time
pursuant to the Transaction Documents.
(c) The
Company shall: (i) in the time and manner required by the Trading Market,
prepare and file with such Trading Market an additional shares listing
application covering a number of shares of Common Stock at least equal to the
Actual Minimum on the date of such application, (ii) take all steps necessary
to
cause such shares of Common Stock to be approved for listing on the Trading
Market as soon as possible thereafter, (iii) provide to each Purchaser evidence
of such listing, and (iv) use reasonable efforts to maintain the listing of
such
Common Stock on such Trading Market or another Trading Market. In addition,
the
Company shall hold a special meeting of shareholders (which may also be at
the
annual meeting of shareholders) at the earliest practical date, for the purpose
of obtaining Shareholder Approval, with the recommendation of the Company’s
Board of Directors that such proposal be approved, and the Company shall solicit
proxies from its shareholders in connection therewith in the same manner as
all
other management proposals in such proxy statement and all management-appointed
proxyholders shall vote their proxies in favor of such proposal.
4.7 Conversion
and Exercise Procedures.
The
form of Election to Purchase included in the Warrants and the forms of
Conversion Notice included in the shares of Preferred Stock set forth the
totality of the procedures required in order to exercise the Warrants or convert
the shares of Preferred Stock. No additional legal opinion or other information
or instructions shall be necessary to enable each Purchaser to exercise their
Warrants or convert their shares of Preferred Stock. The Company shall honor
exercises of the Warrants and conversions of the shares of Preferred Stock
and
shall deliver Underlying Shares in accordance with the terms, conditions and
time periods set forth in the Transaction Documents. The Company acknowledges
that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the
Transaction Documents, including its obligation to issue the Underlying Shares
pursuant to the Transaction Documents, are unconditional and absolute and not
subject to any right of set off, counterclaim, delay or reduction, regardless
of
the effect of any such dilution or any claim the Company may have against any
Purchaser and regardless of the dilutive effect that such issuance may have
on
the ownership of the other stockholders of the Company.
4.8 Equal
Treatment of Purchasers.
No
consideration shall be offered or paid to any person to amend or consent to
a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes
a
separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended to treat for the Company the
Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or
voting of Securities or otherwise.
4.9 Participation
in Future Financing.
From
the date hereof until 12 months after the Effective Date, upon any financing
by
the Company of its Common Stock or Common Stock Equivalents (a “Subsequent
Financing”),
each
Purchaser shall have the right to participate in such Subsequent Financing.
At
least 5 Trading Days prior to the closing of the Subsequent Financing, the
Company shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”),
which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent
Financing Notice”).
Upon
the request of a Purchaser, and only upon a request by such Purchaser, for
a
Subsequent Financing Notice, the Company shall promptly, but no later than
1
Trading Day after such request, deliver a Subsequent Financing Notice to such
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, and attached to which shall be a term sheet or similar
document relating thereto. If by 6:30 p.m. (New York City time) on the
10th
Trading
Day after all of the Purchasers have received the Pre-Notice, notifications
of
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to provide) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and to the Persons
set forth in the Subsequent Financing Notice. If the Company receives no notice
from a Purchaser as of such 10th
Trading
Day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate. The Company must provide the Purchasers with a second
Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.9, if the Subsequent Financing
subject to the initial Subsequent Financing Notice is not consummated for any
reason on the terms set forth in such Subsequent Financing Notice within 30
Trading Days after the date of the initial Subsequent Financing Notice. In
the
event the Company receives responses to Subsequent Financing Notices from
Purchasers seeking to purchase more than the aggregate amount of the Subsequent
Financing, each such Purchaser shall have the right to purchase their Pro Rata
Portion (as defined below) of the Subsequent Financing. “Pro
Rata Portion”
is
the
ratio of (x) the Subscription Amount of a participating Purchaser and (y) the
sum of the aggregate Subscription Amount of all participating Purchasers.
Notwithstanding the foregoing, this Section 4.9 shall not apply in respect
of an
Exempt Issuance. The Purchasers are granted the registration rights under the
Registration Rights Agreement in relation to securities issued in a Subsequent
Financing.
12
4.10 Disclosure
of Transaction.
The
Company shall issue a press release describing the material terms of the
transactions contemplated hereby (the “Press
Release”)
as
soon as practicable after the Closing but in no event later than 9:00 A.M.
Eastern Time on the first Trading Day following the Closing. The Company shall
also file with the Commission a Current Report on Form 8-K (the “Form
8-K”)
describing the material terms of the transactions contemplated hereby (and
attaching as exhibits thereto this Agreement, the Registration Rights Agreement,
the Certificate of Designation, the Lock-Up Agreement, the Securities Escrow
Agreement, the form of each series of Warrant and the Press Release) as soon
as
practicable following the Closing Date but in no event more than one (1) Trading
Day following the Closing Date, which Press Release and Form 8-K shall be
subject to prior review and comment by the Purchasers.
4.11 Disclosure
of Material Information.
The
Company covenants and agrees that neither it nor any other person acting on
its
behalf has provided or will provide any Purchaser or its agents or counsel
with
any information that the Company believes constitutes material non-public
information (other than with respect to the transactions contemplated by this
Agreement), unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The
Company understands and confirms that each Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the
Company.
4.12 Variable
Rate Transaction.
For
a
period of two (2) years following the
Closing Date, the Company shall be
prohibited from effecting or entering into an agreement to effect any Subsequent
Financing involving a “Variable
Rate Transaction”
without
the prior written consent of the holders of 75% of the Preferred Shares then
outstanding. The term “Variable
Rate Transaction”
shall
mean a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at
a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or
(B)
with a conversion, exercise or exchange price that is subject to being reset
at
some future date after the initial issuance of such debt or equity security
or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or
(ii) enters into any agreement, including, but not limited to, an equity line
of
credit, whereby the Company may sell securities at a future determined
price.
ARTICLE
V
MISCELLANEOUS
5.1 Fees
and Expenses.
(a) Except
as
otherwise set forth in this Agreement, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
Notwithstanding the foregoing, Company
will pay for all costs incurred by the Purchasers for legal and due diligence
relating to this transaction regardless of whether it is successfully completed
which shall not exceed $30,000 and $25,000, respectively. The
Company shall pay all stamp and other taxes and duties levied in connection
with
the sale of the Securities as well as any expenses in connection with UCC
searches and filings
Company
will pay for all costs incurred by the investor for legal and due diligence
as
it relates to this offering regardless of whether this Offering is successfully
completed.
(b) All
fees
and reimbursements due hereunder will be payable on the Closing Date out of
funds held pursuant to the Escrow Agreement.
5.2 Entire
Agreement.
The
Transaction Documents, together with the exhibits and schedules thereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
5.3 Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified on the signature
page prior to 5:30 p.m. (New York City time) on a Trading Day and an electronic
confirmation of delivery is received by the sender, (b) the next Trading Day
after the date of transmission, if such notice or communication is delivered
via
facsimile at the facsimile number specified in this Section on a day that is
not
a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) three Trading Days following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to
whom such notice is required to be given. The addresses for such notices and
communications are those set forth on the signature pages hereof, or such other
address as may be designated in writing hereafter, in the same manner, by such
Person.
13
5.4 Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each
Purchaser or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
5.5 Headings.
The
headings herein are for convenience only, do not constitute a art of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
5.6 Successors
and Assigns
.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser. Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply
to
the “Purchasers”.
5.7 No
Third-Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set
forth
in Section 4.9.
5.8 Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced
in
accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively
in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect
to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions
of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
5.9 Survival.
The
representations and warranties contained herein shall survive the Closing and
the delivery, exercise and/or conversion of the Securities, as
applicable.
5.10 Execution.
This
Agreement may be executed in two or more counterparts, all of which when taken
together 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, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.
5.11 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.12 Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting
any
similar provisions of) the Transaction Documents, whenever any Purchaser
exercises a right, election, demand or option under a Transaction Document
and
the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights; provided,
however,
in the
case of a rescission of a conversion of the shares of Preferred Stock or
exercise of the Warrant, the Purchaser shall be required to return any shares
of
Common Stock subject to such conversion or exercise notice.
14
5.13 Replacement
of Securities.
If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement
Securities.
5.14 Remedies.
In
addition to being entitled to exercise all rights provided herein or granted
by
law, including recovery of damages, each of each Purchaser and the Company
will
be entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance
of
any such obligation the defense that a remedy at law would be
adequate.
5.15 Payment
Set Aside.
To the
extent that the Company makes a payment or payments to any Purchaser pursuant
to
any Transaction Document or a Purchaser enforces or exercises its rights
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.
5.16 Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser under any Transaction Document are several and
not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out
of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by the Purchasers.
5.17 Liquidated
Damages.
The
Company’s obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company
and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security
pursuant to which such partial liquidated damages or other amounts are due
and
payable shall have been canceled.
5.18 Construction.
The
parties agree that each of them and/or their respective counsel has reviewed
and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.
[SIGNATURE
PAGE FOLLOWS]
-34-
15
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
|
OFFLINE
CONSULTING, INC.
|
Address
for Notice:
|
|
By:/s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
CEO
|
0000
00xx
Xxxxxx Xxxx
Xxxxxxxxx,
Xxxxxxx 00000
T
941-371-0440
F
000-000-0000
|
|
With
a copy to (which shall not constitute notice):
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxxxx, Esq.
T
212-930-9700
F
212-930-9725
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
16
[PURCHASER
SIGNATURE PAGES TO OFFLINE CONSULTING, INC.
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
Name
of
Purchaser: VISION
OPPORTUNITY MASTER FUND LTD.
Signature
of Authorized Signatory of Purchaser:
/s/Xxxx
Xxxxxxxx
Name
of
Authorized Signatory: ______________________________________
Title
of
Authorized Signatory: Portfolio Manager
Email
Address of Authorized Signatory: ________________________________
Address
for Notice of Investing Entity:
Address
for Delivery of Securities for Investing Entity (if not same as
above):
Subscription
Amount: $____________
Shares
of
Preferred Stock: __________
Warrant
Shares: _________________
EIN
Number:
17
Exhibits
A Form
of
Registration Rights Agreement
B Form
of A
Warrant
C Form
of J
Warrant
D Form
of B
Warrant
E Form
of
Lock-Up Agreement
F Form
of
Legal Opinion
18
Schedules
Section
3.1(a) - Subsidiaries
Xxxxxxxxxx
Corporation
Xxxxxxxxxx
Restoration Corporation
Xxxxxxxxxx
Coastal Construction
King
Brothers Woodworking, Inc.
King
Brothers Door and Hardware, Inc.
1st
Aluminum
Corporation
Section
3.1(g) - Capitalization
The
Company is authorized capital stock 700,000,000 shares of common stock, par
value, $0.0001 and 20,000,000 shares of preferred stock. The Company presently
has 1,711,643 shares of common stock and no shares of Preferred Stock
outstanding.
The
Company has a commitment to issue the following securities:
| · |
The
Company issued a common stock purchase warrant to purchase 93,938
shares
of common stock at an exercise price of $9.46 per share for a term
of five
years to Cypress Advisors LLC.
|
| · |
The
Company issued a common stock purchase warrant to Xxxxx Xxxxxx to
purchase
10,265 shares of common stock at an exercise price of $7.21 per
share.
|
| · |
The
Company issued an option to an employee to purchase 2,053 shares
of common
stock at $9.74 per share.
|
| · |
The
Company is required to issue 8,558 to a law firm for legal
services.
|
Section
3.1(n) - Title to Assets
None
Section
3.1(s) - Certain Fees
In
connection with this offering, the Company will be paying Cypress Advisors
a
placement fee of 10% of the gross proceeds in cash. In addition, Cypress
Advisors is entitled to receive such number of warrants as set forth under
Schedule 3.1(g).
19
Section
3.1(u) - Registration Rights
Pursuant
to the terms of our agreement with Cypress Advisors, we are obligated to include
the shares underlying the warrants if we file a registration statement.
|
Name
|
Shares
|
|
Xxxxx
Xxxxxx
|
4,619
|
|
Xxxxxxx
Xxxxxx
|
8,212
|
|
Xxxx
Xxxxxxxx
|
4,106
|
|
Xxxxx
Xxxxx
|
7,185
|
|
Xxxxxxxx
X Xxxxxx
|
2,053
|
|
Xxxxx
X' Xxxxxxxx
|
115,763
|
|
Xxx
Xxxxxx
|
1,540
|
|
Xxxxxxx
Xxx Xxxxxxx
|
8,417
|
|
Xxxxxxx
Xxxxxxx
|
2,053
|
|
H
Xxxxx Xxxxxxxxx
|
1,026
|
|
Xxxx
Xxxxxx
|
513
|
|
Xxxx
Xxxxxx
|
2,955
|
|
Xxxx
Xxxxx
|
2,163
|
|
Xxxxxxx
Xxxxxxxxx
|
513
|
|
Xxxxx
Xxxxxxxx
|
513
|
|
Xxxxxxx
& Xxxxx Xxx
|
1,026
|
|
Xxxx
Xxxx
|
513
|
Section
3.1(x) - Taxes
NONE
Section
3.1(bb) - Accountants
Lougheed
& Company LLC
Section
3.1(dd) - Lock-Up
Xxx
Xxxxx
Xxx
Xxxxx
Xxxxx
Xxxxxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxxx
Xxx
Xxxxxxxx
Xxxx
and
Xxxxxx Xxxx
Xxxx
and
Xxxxxxxx Xxxx
3.1(ff)
Transfer Agent
Manhattan
Stock Transfer
Section
4.4 - Use of Proceeds
|
Acquisitions
and related costs
|
(775,000)
|
||||||
|
Funding
advisory fees and related costs
|
(360,000
|
)
|
|||||
|
Working
capital and accounting integration
|
(365,000
|
)
|
|||||
|
Total
Use of Proceeds
|
(1,500,000
|
)
|
|||||
20
