EXHIBIT
10.13
ARTICLE
I
“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.
“Closing” means the
Initial Closing and the Subsequent Closing.
“Closing Dates” means
the Initial Closing Date and the Subsequent Closing Date.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means
the common stock of the Company, $0.001 par value, and any securities into which
such common stock may hereafter be reclassified.
“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 Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.C. or other counsel (including in-house
counsel) reasonably acceptable to Seaside.
“Dollar Limit” shall
have the meaning ascribed to such term in Section 2.6.
“Disclosure Schedules”
means the disclosure schedules of the Company delivered concurrently herewith,
as the same may be updated by the Company from time to time.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).
“Initial Closing”
means the closing of the purchase and sale of the Common Stock pursuant to
Section 2.1.
“Initial Closing Date”
means the date when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to
Seaside’s obligations to purchase the Shares, and the Company’s obligations to
issue and deliver the Shares, have been satisfied or waived with respect to the
Initial Closing.
“Initial Per Share Purchase
Price” means $0.24.
“Intellectual
Property” shall have the meaning ascribed to such term in Section
3.1(p).
“Lien” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.
“Material Adverse
Effect” means any condition, event, change or effect that could
reasonably be expected to have a material adverse effect on (i) the legality,
validity or enforceability of any Transaction Document, (ii) the results of
operations, assets, business, prospects or financial condition of the Company
and its Subsidiaries, taken as a whole, or (iii) the Company’s ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document, but shall not mean or include any condition, event, change
or effect (1) which is or results from events or occurrences relating to the
economy in general (including arising from terrorist attacks, acts of war or
civil unrest) or the Company’s industry in general and not specifically relating
to the Company or having a disproportionate impact on the Company, or (2) which
results from the announcement of this Agreement or the transactions contemplated
hereby or by the other Transaction Documents.
“Per Share Purchase
Price” shall be an amount equal to the lower of (i) the daily volume
weighted average of actual trading prices (measured in hundredths of cents) of
the Common Stock of the Company on the Trading Market for the ten consecutive
Trading Days immediately prior to the Subsequent Closing Date multiplied by 0.65
and (ii) the daily volume weighted average of actual trading prices (measured in
hundredths of cents) of the Common Stock of the Company on the Trading Market
for the Trading Day immediately prior to the Subsequent Closing Date multiplied
by 0.65.
“Permits” shall have
the meaning ascribed to such term in Section 3.1(q).
“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.
“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.
“Seaside Party” shall
have the meaning ascribed to such term in Section 4.6.
“SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).
“Securities Act” means
the Securities Act of 1933, as amended.
“Shares” means the
shares of Common Stock issued or issuable to Seaside pursuant to this
Agreement.
“Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200 of
Regulation SHO of the Exchange Act.
“Subsequent Closing”
means the closing of the purchase and sale of the Common Stock pursuant to
Section 2.2.
“Subsequent Closing
Date” means the day three months subsequent to the Initial Closing Date
(or, if such day is not a Trading Day, then the first day thereafter that is a
Trading Day), or such later date when all conditions precedent to Seaside’s
obligations to purchase the Shares, and the Company’s obligations to issue and
deliver the Shares, have been satisfied or waived with respect to the Subsequent
Closing.
“Subsidiary” shall
have the meaning ascribed to such term in Section 3.1(a).
“Trading Day” means a
day on which the Common Stock is traded on a Trading Market.
“Trading Market” means
whichever of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the New York Stock
Exchange, the NYSE Alternext Exchange, the NYSE AMEX, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin
Board.
“Transaction
Documents” means this Agreement and any other documents or agreements
executed in connection with the transactions contemplated
hereunder.
ARTICLE
II
2.1 Initial
Closing. On the Initial Closing Date, Seaside shall purchase
from the Company, and the Company shall issue and sell to Seaside, 1,500,000
Shares at the Initial Per Share Purchase Price. Upon satisfaction or
waiver of the conditions set forth in Sections 2.3, 2.4, 2.5 and 2.6, the
Initial Closing shall occur at the offices of White White & Van Etten PC, 00
Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, XX 00000, or such other location as the parties
shall mutually agree.
2.2 Subsequent
Closing. On the Subsequent Closing Date, subject to Section
2.6, Seaside shall purchase from the Company, and the Company shall issue and
sell to Seaside, 1,500,000 Shares at the Per Share Purchase
Price. Upon satisfaction or waiver of the conditions set forth in
Sections 2.3, 2.4, 2.5 and 2.6, the Subsequent Closing shall occur at the
offices of White White & Van Etten PC, 00 Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, XX
00000, or such other location as the parties shall mutually agree.
(a) subject
to Section 2.6, a certificate representing 1,500,000 Shares in the name of
Seaside as specified on the signature pages hereto and/or a copy of the
Company’s irrevocable instructions to its transfer agent to prepare and issue
such certificate, with delivery of such certificate to occur no later than three
business days thereafter;
(b) an
officer’s certificate of the Company’s Chief Executive Officer or Chief
Financial Officer in the form of Exhibit A attached
hereto; and
(c) solely
on the Initial Closing Date, a legal opinion of Company Counsel, in the form of
Exhibit B
attached hereto.
(a) The
obligations of the Company hereunder in connection with each Closing are subject
to the satisfaction by Seaside, or waiver by the Company, of the following
conditions:
(i) the
accuracy on the Closing Date of the representations and warranties of Seaside
contained herein;
(ii) all
obligations, covenants and agreements of Seaside required to be performed at or
prior to the Closing Date shall have been performed; and
(iii) the
delivery by Seaside of the items set forth in Section 2.4 of this
Agreement.
(b) The
obligations of Seaside hereunder in connection with each Closing are subject to
the satisfaction by the Company, or waiver by Seaside, of the following
conditions:
(i) the
accuracy on the Closing Date of the representations and warranties of the
Company contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed, and all Required
Approvals shall have been obtained;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this
Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof that has not been cured by the Company;
(v) the
purchase of Shares at the Subsequent Closing from the Company shall not cause
Seaside’s beneficial ownership of the Company’s Common Stock, calculated in
accordance with Rule 13d-3 promulgated by the Commission, to exceed 10%;
and
(vi) from
the date hereof to each Closing Date, trading in the Common Stock shall not have
been suspended by the Commission and trading in securities generally as reported
by Bloomberg Financial Markets shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, 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 of such magnitude in its
effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of Seaside, makes it impracticable or
inadvisable to purchase the Shares at the Closing.
ARTICLE
III
(b) Organization and
Qualification. The Company and each of 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. Except as
set forth in Section 3(b) of the Disclosure Schedules, 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 reasonably be expected to result in a
Material Adverse Effect and, to the knowledge of the Company, 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
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby, including the issuance, reservation for issuance and
delivery of the Shares, have been duly authorized by all necessary action on the
part of the Company and its stockholders, and no further action is required by
the Company or its stockholders in connection therewith other than in connection
with the Required Approvals. Each Transaction Document has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and legally
binding obligation of the Company enforceable against the Company 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.
(d) No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Shares at
each Closing 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, violate or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or result in the creation
of any Lien upon any of the properties or assets of the Company or any
Subsidiary pursuant to, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement (written or oral), credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) 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, except in the case of each of
clauses (ii) and (iii), such as could not reasonably be expected to result in a
Material Adverse Effect.
(e) Filings, Consents and
Approvals. The Company is not 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, the Trading Market or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than any notice filings or SEC Reports as are required to be
made following each Closing Date under applicable federal and state securities
laws and applicable rules and regulations of the Trading Market (collectively,
the “Required
Approvals”). All such Required Approvals will be made within
the time periods prescribed by law.
(g) Capitalization. The
capitalization of the Company is as set forth in Section 3.1(g) of the
Disclosure Schedules. The Company has not issued any capital stock
since its most recently filed periodic report under
the Exchange Act, other than pursuant to (i) the exercise of employee
stock options under the Company’s stock option plans, (ii) the issuance of
shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plan (if applicable), (iii) the conversion or exercise of outstanding
Common Stock Equivalents, and (iv) as otherwise set forth in the Disclosure
Schedules. 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
disclosed in the SEC Reports or Section 3.1(g) of the Disclosure Schedules,
there are no outstanding options, warrants, 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 or
Common Stock Equivalents. Except as disclosed in the SEC Reports or
Section 3.1(g) of the Disclosure Schedules, the issue and sale of the Shares
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than Seaside) 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 have been duly authorized, are validly issued,
fully paid and non-assessable and have been issued in compliance with all
federal and state securities laws and requirements of the Trading Market, 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 or the Board of Directors of the
Company is required for the issuance and sale of the Shares, other than the
Required Approvals. 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. Except as set forth in Section 3(h) of the Disclosure
Schedules, the Company has filed or furnished all reports, schedules, forms,
statements and other documents required to be filed or furnished by it under the
Securities Act and the Exchange Act (including all required exhibits thereto),
including pursuant to Section 13(a) or 15(d) thereof, for the 12 months
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials, as the same may be amended,
and including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”), and
any notices, reports or other filings pursuant to applicable requirements of the
Trading Market, on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports and notices, reports or other
filings pursuant to applicable requirements of the Trading Market prior to the
expiration of any such extension. Except as set forth in Section
3.1(h) of the Disclosure Schedules, as of their respective dates, the SEC
Reports complied in all material respects with the applicable 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 (including its
consolidated Subsidiaries) 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 (i) 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 (ii) 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, year-end audit
adjustments. Except as set forth in the SEC Reports or Section 3(h)
of the Disclosure Schedules, neither the Company nor any Subsidiary has any
material liability of any nature (whether accrued, absolute, contingent or
otherwise) that is required by GAAP to be included in such financial statements
other than liabilities arising after the date of the most recent balance sheet
included in such financial statements which were incurred in the ordinary course
of business consistent with past practice.
(i) Material
Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports or in Section 3.1(i) of the Disclosure Schedules, (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, except as has been
reasonably cured by the Company, (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 or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting except as otherwise required pursuant to GAAP, (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 and incentive plans.
(j) Litigation. Except
as disclosed in the SEC Reports, there is no Proceeding 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) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares 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, to the knowledge
of the Company, any director or officer thereof (in his or her capacity as
such), is or has been the subject of any Proceeding involving a claim or
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 currently pending or contemplated, any investigation by
the Commission involving the Company or any current or former director or
officer of the Company (in his or her capacity as such). The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act and, to the Company’s
knowledge, no proceeding for such purpose is pending before or threatened by the
Commission.
(k) Compliance. Except as
set forth in Section 3.1(k) of the Disclosure Schedules, 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,
could reasonably be expected to 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 in violation of any statute,
rule or regulation of any governmental authority or the Trading Market,
including without limitation all foreign, federal, state and local laws
applicable to its business, except in each case as would not have a Material
Adverse Effect.
(p) Intellectual
Property. The Company or its Subsidiaries owns or possesses
such right, title and interest in and to, or possesses legal right to use, all
patents, patent rights, trade secrets, inventions, know-how, trademarks, trade
names, copyrights, service marks and other proprietary rights (“Intellectual
Property”) material to the conduct of the Company’s business except
Intellectual Property the failure of which to own, possess or have a legal right
to use would not have a Material Adverse Effect. Except as disclosed
in the SEC Reports, neither the Company nor any Subsidiary has received any
notice of infringement, misappropriation or conflict from any third party as to
Intellectual Property owned by or exclusively licensed to the Company or any
such Subsidiary that has not been resolved or disposed of, which infringement,
misappropriation or conflict would if adversely decided have a Material Adverse
Effect. To the Company’s knowledge, it has not infringed,
misappropriated, or otherwise conflicted with the Intellectual Property of any
third parties, which infringement, misappropriation or conflict would if
adversely decided have a Material Adverse Effect.
(q) Permits. The
Company has made all filings, applications and submissions required by, and possesses all
approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other authorizations
issued by, the appropriate federal, state or foreign regulatory authorities
necessary to own or lease its properties and to conduct its businesses
(collectively, “Permits”), except for
such Permits the failure of which to possess or obtain would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received any written notice of proceedings relating to the
limitation, revocation, cancellation, suspension, modification or non-renewal of
any such Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect,
and has no reason to believe that any such Permit will not be renewed in the
ordinary course.
(a) Organization;
Authority. Seaside is a limited partnership duly organized,
validly existing and in good standing under the laws of the state of Florida,
with full right, power and authority to own and use its properties and assets
and to carry on its business as currently conducted and to enter into and to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution, delivery and performance by Seaside of the
transactions contemplated by this Agreement and each other Transaction Document
have been duly authorized by all necessary action on the part of Seaside and no
such further action is required. Each Transaction Document to which
Seaside is a party has been (or upon delivery will have been) duly executed by
Seaside, and, when delivered by Seaside in accordance with the terms thereof,
will constitute the valid and legally binding obligation of Seaside, 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.
ARTICLE
IV
4.2 Furnishing of Information;
Rule 144 Reporting; Penalty for Non-Compliance with Rule. As
long as Seaside owns Shares, the Company shall timely file with the Commission
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports and other documents required to be filed by the Company
after the date hereof pursuant to the Exchange Act and make and keep adequate,
current public information available, as those terms are understood and defined
in Rule 144, at all times. As long as Seaside owns Shares for less
than one year in accordance with Rule 144(d), if the Company is not required to
file reports pursuant to the Exchange Act, it will prepare and furnish to
Seaside and make publicly available in accordance with Rule 144(c) such
information as is required for Seaside to sell the Shares under Rule
144. If at any time or times Seaside is not permitted to sell Shares
pursuant to Rule 144 as a result of the Company’s failure to be in compliance
with all of the requirements of such rule, including but not limited to all
requirements regarding the availability of current public information under Rule
144(c), then the Company shall be obligated to issue to Seaside, at no
additional cost to Seaside, additional shares of Common Stock in an amount equal
to twenty percent (20.0%) of the number of Shares then owned or held by
Seaside.
4.6 Indemnification of
Seaside. Subject to the provisions of this Section 4.6, the
Company will indemnify and hold Seaside, Seaside’s Affiliates and their
respective directors, officers, stockholders, partners, members, employees and
agents (each, a “Seaside Party”)
harmless from any and all losses, liabilities, obligations, claims, demands,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation reasonably incurred in connection with defending or investigating
any suit or action in respect thereof to which any Seaside Party is or may
become a party under the Securities Act, the Exchange Act or any other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, liabilities, obligations, claims, demands, contingencies, damages,
costs and expenses arise out of or are based on (a) any inaccuracy in or breach
of any representation or warranty made by the Company in this Agreement or other
Transaction Document, or any certificate, instrument or document furnished or
delivered by the Company pursuant hereto or thereto, (b) any breach or
non-fulfillment of any covenant made by or on the part of the Company in this
Agreement or other Transaction Document, or any certificate, instrument or
document furnished or delivered by the Company pursuant hereto or thereto, or
(c) any fraud or intentional misrepresentation or intentional breach by or on
the part of the Company. If any action shall be brought against any
Seaside Party in respect of which indemnity may be sought pursuant to this
Agreement, such Seaside 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 Seaside 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 Seaside
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 Seaside Party. The Company will not be liable to
any Seaside Party under this Agreement (x) for any settlement by a Seaside Party
effected without the Company’s prior written consent, which consent shall not be
unreasonably withheld or delayed; or (y) to the extent, but only to the extent,
that a loss, liability, obligation, claim, demand, damage, cost or expense is
attributable to any Seaside Party’s breach of any of the representations,
warranties, covenants or agreements made by Seaside in this Agreement or in the
other Transaction Documents.
ARTICLE
V
(a) by
written notice to the Company, if the Initial Closing has not been consummated
on or before December 18, 2009, or
(b) immediately
upon written notice to the Company if, at any time prior to the Subsequent
Closing Date, the Company consummates a financing to which Seaside is not a
party, provided, however, that no such
termination pursuant to this Section 5.1 will affect the right of any party to
xxx for any breach by the other party (or parties).
5.2 Fees and
Expenses. Except as otherwise set forth in this Agreement and
as set forth in this Section 5.2 below, each party shall pay the fees and
expenses of its own 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. The Company shall pay all stamp and other taxes and duties
levied in connection with the delivery of the Shares. Notwithstanding
the foregoing, at the Initial Closing the Company shall reimburse Seaside for
the fees and expenses of its counsel, White White & Van Etten PC, in an
amount equal to $25,000 and at the Subsequent Closing the Company shall
reimburse Seaside for the fees and expenses of its counsel, White White &
Van Etten PC, in an amount equal to $2,500. Such legal fees may be
withheld by Seaside from the amount to be paid for the Shares purchased at the
Initial Closing and the Subsequent Closing.
5.15 Payment Set
Aside. To the extent that either party hereto makes a payment
or payments to the other party hereto pursuant to any Transaction Document or
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 other party, 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.
(Signature
Pages Follow)
Defense
Solutions Holding, Inc. |
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Address for
Notice:
|
By: |
|
|
|
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Name: Xxxxxxx
X. Xxxxxxxx
Title: Chief
Executive Officer
|
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000
Xxxxxxxxx Xxxxxxxxx
Xxxxx,
XX 00000-0000
Attention:
Xxxxxxx X. Xxxxxxxx
Fax:
(000) 000-0000
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With
a copy (which shall not constitute notice) to: |
|
Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.C.
000
Xxxx Xxxx Xxxx
Xxxxx
000
Red
Bank, NJ 07701
Attention: Xxxxxx
X. Xxxxxxxx, Esq.
Fax: (000)
000-0000
|
Seaside
88, LP |
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Address for
Notice: |
By: |
Seaside
88 Advisors, LLC
|
|
|
|
|
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000
Xxxxx Xxxxxx Xxx |
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|
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Xxxxx
000 |
By: |
|
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Xxxxx
Xxxx Xxxxx, XX 00000 |
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Name:
Xxxxxxx X. Xxxxxx |
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Attention: Xxxxxxx
X. Xxxxxx and |
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Title: Manager
|
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Xxxxx
X. X’Xxxxxxx, M.D.
Fax: 000-000-0000
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With
a copy (which shall not constitute notice) to:
|
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White
White & Van Etten PC
00
Xxxxxxxxx Xxxxxxx
Xxxxxxxxx,
XX 00000
Attention: Xxxxx
X. Xxxxx, Esq.
Fax: 000-000-0000
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Exhibit
A
Officer’s
Certificate
In connection with a Closing on the
date set forth below pursuant to that certain Common Stock Purchase Agreement
dated as of December __, 2009 (the “Agreement”) by and between Defense Solutions
Holding, Inc., a Nevada corporation (the “Company”) and Seaside 88, LP, a
Florida limited partnership (“Seaside”), the undersigned, the duly elected and
qualified ________________ of the Company, does hereby certify to the Company as
follows:
(i)
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all
representations and warranties of the Company contained in the Agreement
are true and correct in all material respects (without giving effect to
any limitation as to “materiality” or “knowledge” set forth therein) on
and as of the date hereof as if made on and as of the date hereof (provided that
representations and warranties that speak as of a specific date shall
continue to be true and correct as of the Closing with respect to such
date); and
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(ii)
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the
Company has performed or complied with all of its covenants and agreements
contained in the Agreement and required to be performed or complied with
by the Company on or before the date
hereof.
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Capitalized
terms used but not defined herein shall have the meanings given to them in the
Agreement.
Exhibit
B
1. The
Company is a corporation duly organized under the General Corporation Law of the
State of Nevada, with corporate power and authority to enter into the Agreement
and the other Transaction Documents and perform its obligations thereunder. The
Company is validly existing and in good standing under the laws of the State of
Nevada and is qualified to do business and in good standing under the laws of
____________ and _________, the only states where the failure to be so qualified
and in good standing could have a Material Adverse Effect.
2. The
execution and delivery of the Agreement and the other Transaction Documents and
the issuance and sale of the Shares thereunder has been duly authorized by all
necessary corporate action of the Company, no further action is required by the
Company or its stockholders in connection therewith; and the Agreement and each
other Transaction Document has been duly executed and delivered by the Company
and is enforceable against the Company in accordance with its
terms.
3. The
Shares have been duly authorized and, when issued and delivered in accordance
with the terms of the Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights set forth in the Company’s Certificate of
Incorporation or Bylaws (or similar organizational documents) or any agreement
known to us or filed as an exhibit to any SEC Report.
4. The
execution and delivery by the Company of, and the performance by the Company of
its obligations under, the Agreement (including the issuance and sale of the
Shares) and the other Transaction Documents will not contravene any provision of
any statute, law, rule or regulation applicable to the Company, any agreement
filed as an exhibit to any SEC Report, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company that is
applicable to the Company or its properties.
5. No
consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental body, regulatory authority or
Trading Market is required for the execution, delivery and performance by the
Company of its obligations under the Agreement or any other Transaction
Document, other than any notice filings as are required to be made in connection
with the Closing Date under applicable federal and state securities
laws.
6. The
Company is not, and will not be after consummation of the Agreement, the sale of
the Shares to Seaside and the application of the proceeds thereof, an
“investment company” as defined in the Investment Company Act of 1940, as
amended.