EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
October 10, 2003, among Matritech, Inc., a Delaware corporation (the "Company"),
and the purchasers identified on the signature pages hereto (each a "Purchaser"
and collectively the "Purchasers"); and
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder, the Company desires to issue and
sell to the Purchasers, and each Purchaser, severally and not jointly, desires
to purchase from the Company shares of Common Stock and Warrants on the Closing
Date, as more fully described in this Agreement.
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, for all purposes of 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).
"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. 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.
"Business Day" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law
or other governmental action to close.
"Closing" means the closing of the purchase and sale of the
Common Stock and the Warrants 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 the
Purchasers' obligations to pay the Subscription Amount have been
satisfied or waived.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, $0.01
par value per share, and any securities into which such common stock
may hereafter be reclassified.
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"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 Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP,
outside counsel to the Company, with offices at 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000.
"Disclosure Schedules" means the Disclosure Schedules
delivered concurrently herewith.
"Effective Date" means the date that the Registration
Statement is first declared effective by the Commission.
"Evaluation Date" shall have the meaning ascribed to such term
in Section 3.1(r).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FW" means Xxxxxxx Xxxxxxxxx LLP with offices located at 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000.
"GAAP" shall have the meaning ascribed to such term in Section
3.1(h).
"Intellectual Property Rights" shall have the meaning ascribed
to such term in Section 3.1(o).
"Legend Removal Date" shall have the meaning ascribed to such
term in Section 4.1(c).
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.
"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).
"Per Share Purchase Price" equals $1.67, subject to adjustment
for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that
occur after the date of this Agreement.
"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.
"Pro Rata Portion" shall have the meaning ascribed to such
term in Section 4.11.
"Purchaser Parties" shall have the meaning ascribed to such
term in Section 4.8.
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"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 Shares and the Warrant
Shares.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company
and each Purchaser, in the form of Exhibit A hereto.
"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.
"SEC Reports" shall have the meaning ascribed to such term in
Section 3.1(h).
"Securities" means the Shares, the Warrants and the Warrant
Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued or issuable
to each Purchaser pursuant to this Agreement.
"Subscription Amount" means, as to each Purchaser, the amounts
set forth below such Purchaser's signature block on the signature page
hereto, in United States dollars and in immediately available funds.
"Subsequent Financing" shall have the meaning ascribed to such
term in Section 4.11.
"Subsequent Financing Notice" shall have the meaning ascribed
to such term in Section 4.11.
"Subsidiary" shall mean the subsidiaries of the Company, if
any, set forth on Schedule 3.1(a).
"Trading Day" means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed
on a Trading Market, a day on which the Common Stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
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"Trading Market" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the Nasdaq SmallCap Market.
"Transaction Documents" means this Agreement, the Warrants and
the Registration Rights Agreement and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
"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 primary 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. ET to 4:02 p.m. Eastern Time) using the VAP
function; (b) if the Common Stock is not then listed or quoted on an
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 (c) in all other cases, the fair
market value of a share of Common Stock as determined by a nationally
recognized-independent appraiser selected in good faith by Purchasers
holding a majority of Shares then outstanding.
"Warrants" means collectively the Common Stock purchase
warrants, in the form of Exhibit C, issuable to the Purchasers at the
Closing, which warrants shall be exercisable immediately and have an
exercise price equal to $2.45 and be exercisable for a period of 5
years.
"Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. At the Closing, 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, (a) a number of Shares equal to
such Purchaser's Subscription Amount divided by the Per Share Purchase Price and
(b) the Warrants as determined pursuant to Section 2.2(a)(iii). The maximum
aggregate Subscription Amounts shall not exceed $8,000,000. Upon satisfaction of
the conditions set forth in Section 2.2, the Closing shall occur at the offices
of FW, or such other location as the parties shall mutually agree.
2.2 Closing Conditions.
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(a) At the Closing, the Company shall deliver or cause to
be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) within 3 Trading Days of the Closing Date, a
certificate evidencing a number of Shares equal to such
Purchaser's Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;
(iii) within 3 Trading Days of the Closing Date, a
Warrant, registered in the name of such Purchaser, pursuant to
which such Purchaser shall have the right to acquire up to the
number of shares of Common Stock equal to 35% of the Shares to
be issued to such Purchaser at the Closing;
(iv) the Registration Rights Agreement duly
executed by the Company; and
(v) a legal opinion of Company Counsel, in the
form of Exhibit B attached hereto.
(b) At the Closing each Purchaser shall deliver or cause
to be delivered to the Company the following:
(i) this Agreement duly executed by such
Purchaser;
(ii) such Purchaser's Subscription Amount by wire
transfer to an account as specified in writing by the Company;
and
(iii) the Registration Rights Agreement duly
executed by such Purchaser.
(c) All representations and warranties of the other party
contained herein shall remain true and correct as of the Closing Date.
(d) From the date hereof to the Closing Date, trading in
the Common Stock shall not have been suspended by the Commission
(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 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
each Purchaser, makes it impracticable or inadvisable to purchase the
Shares at the Closing.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set
forth in the Disclosure Schedules delivered concurrently herewith and, other
than with respect to Sections 3.1(g), 3.1(t), 3.1(w), 3.1(v), 3.1(z), 3.1(aa),
3.1(bb) and 3.1(cc), except as set forth in the SEC Reports, the Company hereby
makes the following representations and warranties as of the date hereof and as
of the Closing Date to each Purchaser:
(a) Subsidiaries. Scheduled 3.1(a) sets forth all of the
Company's direct and indirect subsidiaries. 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. 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 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").
(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 have been
duly authorized by all necessary action on the part of the Company and
no further action is required by the Company 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 binding obligation of the Company
enforceable against the Company in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
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limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(d) No Conflicts. The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the
Company of the 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, 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, except to the extent that such
conflict, default or right is waived in writing, or (iii) subject to
the Required Approvals, 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 would not have or 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 or other
Person in connection with the execution, delivery and performance by
the Company of the Transaction Documents, other than (i) filings
required pursuant to Section 4.4 of this Agreement, (ii) the filing
with the Commission of the Registration Statement, (iii) the notice
and/or application(s) to each applicable Trading Market for the listing
of the Shares and Warrant Shares for trading thereon in the time and
manner required thereby, and (iv) the filing of Form D with the
Commission and such filings as are required to be made under applicable
state securities laws (collectively the "Required Approvals").
(f) Issuance of the Securities. The Shares and Warrants
are duly authorized and, when issued and paid for in accordance with
the Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents. The Warrant Shares, when issued in accordance with the terms
of the Transaction Documents, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company. The
Company has reserved from its duly authorized capital stock the maximum
number of shares of Common Stock issuable pursuant to this Agreement
and the Warrants.
(g) Capitalization. The capitalization of the Company is
as described in the Company's most recent periodic report filed with
the Commission. The Company has not issued any capital stock since such
filing other than pursuant to the exercise of employee stock options
under the Company's stock option plans, the issuance of shares
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of Common Stock to employees pursuant to the Company's employee stock
purchase plan, in connection with the payment of interest on the
Company's 7.5% Convertible Debentures and pursuant to the conversion or
exercise of outstanding Common Stock Equivalents. 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, 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, or securities or rights convertible or exchangeable into shares
of Common Stock. The issue 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, Xxxx Capital Partners, Century
Capital and Sands Brothers International Ltd.) 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.
(h) SEC Reports; Financial Statements. 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, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (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 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 and provided that such unaudited
statements may not include footnotes otherwise required by GAAP.
(i) Material Changes. Since the date of the latest
audited financial statements included within the SEC Reports, except as
disclosed in the SEC Reports, (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
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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, (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. The Company
does not have pending before the Commission any request for
confidential treatment of information.
(j) Litigation. Except as disclosed in the SEC Reports,
there is no action, suit, proceeding or investigation pending or, to
the knowledge of the Company, threatened against 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, to the Company's
knowledge, any director or officer thereof, acting in his capacity as
such, 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 that is required to be disclosed in
the Company's filings with the SEC pursuant to Regulation S-K. 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.
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.
(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. Except as disclosed in the SEC Reports,
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.
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(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 as described in the
SEC Reports, except where the failure to possess such permits would not
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. 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 and 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, except where the failure to be in
compliance would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(o) Patents and Trademarks. To the knowledge of the
Company and each Subsidiary, 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 as described in the
SEC Reports and which the failure to so have could have or reasonably
be expected to result in 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, except to the extent that the Company reasonably
believes that such alleged violation or infringement can be resolved
without having a Material Adverse Effect. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable.
(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.
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. Except as
set forth in the SEC Reports, 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
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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 each of
its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company,
including its subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which
the Company's most recently filed periodic report under the Exchange
Act, as the case may be, is being prepared. The Company's certifying
officers have evaluated the effectiveness of the Company's controls and
procedures as of a date within 90 days prior to the filing date of the
most recently filed periodic report under the Exchange Act (such date,
the "Evaluation Date"). The Company presented in its most recently
filed period report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes in
the Company's internal controls (as such term is defined in Item 307(b)
of Regulation S-K under the Exchange Act).
(s) Certain Fees. Except as set forth on the Disclosure
Schedule, 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. 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
Purchasers 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 in accordance with the terms of the Transaction Documents. The
issuance and sale of the Securities hereunder does not contravene the
rules and regulations of the Trading Market.
11
(u) Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(v) Registration Rights. Except as set forth on the
disclosure schedule to the Registration Rights Agreement, no Person has
any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company that have not been
satisfied.
(w) Listing and Maintenance Requirements. The Company has
not, in the 12 months preceding the date hereof, received notice from
any Trading Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements.
(x) Tax Status. 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 and which are due (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 or has obtained an extension of the deadline for such
filing) 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. To the
Company's knowledge, 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. To the Company's knowledge, none of the
Company's tax returns is presently being audited by any taxing
authority.
(y) Disclosure. The Company confirms that, neither the
Company nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that
constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchasers will rely on the
foregoing representations and covenants in effecting transactions in
securities of the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, furnished
by or on behalf of the Company are true and correct and do not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(z) No Integrated Offering. Assuming the accuracy of the
Purchasers' representations and warranties set forth in Section 3.2,
neither the Company, nor any of its affiliates, nor any Person acting
on its or their behalf has, directly or indirectly, made
12
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 any applicable shareholder approval
provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any
of the securities of the Company are listed or designated.
(aa) Solvency. Based on the financial condition of the
Company as of the Closing Date after giving effect to the receipt by
the Company of the proceeds from the sale of the Securities hereunder,
(i) the Company's fair saleable value of its assets exceeds the amount
that will be required to be paid on or in respect of the Company's
existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company's assets do not
constitute unreasonably small capital to carry on its business for the
current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof; and (iii) the
current cash flow of the Company, together with the proceeds the
Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such
amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect
of its debt).
(bb) Form S-3 Eligibility. The Company is eligible to
register the resale of its Common Stock by the Purchasers under Form
S-3 promulgated under 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 employed by the Company and the Company
is current with respect to any fees owed to its accountants and
lawyers.
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 action
on the part of such Purchaser. Each Transaction Document to which it is
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
13
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) Investment Intent. 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 for
investment purposes only 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.
(f) Residence. If such Purchaser is an individual, then
such Purchaser resides in the state or province identified in the
address of such Purchaser set forth on the signature page hereto; if
such Purchaser is a partnership, corporation, limited liability company
or other entity, then the office or offices of such Purchaser in which
its investment decision was made is located at the address or addresses
of such Purchaser set forth on the signature page hereto.
(g) Rule 144. Subject to Section 4.1(a), such Purchaser
acknowledges and agrees that the Securities are "restricted securities"
as defined in Rule 144 promulgated under the Securities Act as in
effect from time to time and must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from
such registration is available. Such Purchaser has been advised or is
aware of the
14
provisions of Rule 144, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring
following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(k) Company Information. Such Purchaser has read the SEC
Reports and has had an opportunity to discuss the Company's business,
management and financial affairs with directors, officers and
management of the Company and has had the opportunity to review the
Company's operations and facilities. Such Purchaser has also had the
opportunity to ask questions of and receive answers from, the Company
and its management regarding the terms and conditions of this
investment.
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.
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 and, in the
case of the Warrants and the Warrant Shares, subject to the terms of
the Warrants. In connection with any transfer of Securities other than
pursuant to an effective registration statement, to the Company, 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, the form and substance of which opinion and choice of
counsel 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) The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of a legend on any of the Securities
in the following form:
THESE SECURITIES HAVE NOT 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
15
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
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, 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) Certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section
4.1(b)), (i) while a registration statement (including the Registration
Statement) covering the resale of such security is effective under the
Securities Act, or (ii) following any sale of such Shares or Warrant
Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission). 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. If all or any portion of a Warrant is
exercised at a time when there is an effective registration statement
to cover the resale of the Warrant Shares, such Warrant Shares shall be
issued free of all legends. The Company agrees that following the
Effective Date relating to the Shares and Warrant Shares or at such
time as such legend is no longer required under this Section 4.1(c), it
will, no later than five Trading Days following the delivery by a
Purchaser to the Company or, if the Company so directs, to the
Company's transfer agent of a certificate representing Shares or
Warrant Shares, as the case may be, issued with a restrictive legend
(such date, the "Legend Removal Date"), deliver or cause to be
delivered to such Purchaser a certificate representing such Securities
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.
16
(d) In addition to such Purchaser's other available
remedies, the Company shall pay to a Purchaser, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Shares or Warrant
Shares (based on the VWAP of the Common Stock on the date such
Securities are submitted to the Company's transfer agent) subject to
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 such third 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.
(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.
(f) Until the date that each Purchaser holds less than
20% of the Shares initially purchased hereunder by such Purchaser, the
Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent
of the Purchasers holding a majority in interest of the Shares.
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. 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
the Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers 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 Securities Laws Disclosure; Publicity. The Company shall,
within one Trading Day following the Closing Date, issue a press release or file
a Current Report on Form 8-K, in each case reasonably acceptable to each
Purchaser disclosing the transactions contemplated hereby. The Company and each
Purchaser shall consult with each other in issuing any press
17
releases with respect to the transactions contemplated hereby, and neither the
Company nor any Purchaser shall issue any such press release or otherwise make
any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).
4.5 Shareholders Rights Plan. No claim will be made or enforced by
the Company or, to the knowledge of the Company, any other Person that any
Purchaser is an "Acquiring Person" under any shareholders rights plan or similar
plan or arrangement in effect or hereafter adopted by the Company, or that any
Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public Information. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, 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.
4.7 Use of Proceeds. Except as set forth on Schedule 4.7 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and not for the satisfaction of any
portion of the Company's debt (other than payment of trade payables, capital
lease obligations, fees of Xxxx Capital Partners, Sands Brothers International
and Century Capital and accrued expenses in the ordinary course of the Company's
business and prior practices), to redeem any Company equity or equity-equivalent
securities or to settle any outstanding litigation.
4.8 Indemnification of Purchasers. Subject to the provisions of
this Section 4.8, 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
18
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.
4.9 Reservation of Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock for the purpose of enabling the Company to issue Shares pursuant
to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.10 Listing of Common Stock. The Company hereby agrees to use
commercially reasonably efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably practicable following the Closing
(but not later than the earlier of the Effective Date and the first anniversary
of the Closing Date) to list all of the Shares and Warrant Shares on the Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will include in such application
all of the Shares and Warrant Shares, and will take such other action as is
necessary to cause the Shares and Warrant Shares to be listed on such other
Trading Market as promptly as possible. The Company will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the Trading Market.
4.11 Participation in Future Financing. From the date hereof until
12 months after the Effective Date, the Company shall not effect a financing of
its Common Stock or Common Stock Equivalents (a "Subsequent Financing") unless
(i) the Company delivers to each of such Purchasers a written notice at least 5
Trading Days prior to the closing of such Subsequent Financing (the "Subsequent
Financing Notice") of its intention to effect such Subsequent Financing, which
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 and (ii) such Purchaser shall not
19
have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th)
Trading Day after its receipt of the Subsequent Financing Notice of its
willingness to provide (or to cause its designee to provide), subject to
completion of mutually acceptable documentation, all or part of such financing
to the Company on the same terms set forth in the Subsequent Financing Notice.
If one or more Purchasers shall fail to so notify the Company of their
willingness to participate in the Subsequent Financing, 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; provided that the Company
must provide the Purchasers with a second Subsequent Financing Notice, and the
Purchasers will again have the right of first refusal set forth above in this
Section 4.11, 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 60 Trading Days after the date of the
initial Subsequent Financing Notice with the Person identified in the Subsequent
Financing Notice. In the event the Company receives responses to Subsequent
Financing Notices from Purchasers seeking to purchase more than the financing
sought by the Company in the Subsequent Financing such Purchasers shall have the
right to purchase their Pro Rata Portion (as defined below) of the Common Stock
or Common Stock Equivalents to be issued in such Subsequent Financing. "Pro Rata
Portion" is the ratio of (x) such Purchaser's Subscription Amount and (y) the
aggregate sum of all of the Subscription Amounts. Notwithstanding the foregoing,
this Section 4.11 shall not apply in respect of the issuance of (a) shares of
Common Stock or options to employees, key consultants, advisors, officers 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 Company or
a majority of the members of a committee of non-employee directors established
for such purpose, (b) securities upon the conversion of, or in connection with
the payment of interest on or redemption of, the Company's 7.5% Convertible
Debentures outstanding on the date of this Agreement; (c) securities upon the
exercise of or conversion of any convertible securities, options or warrants
issued and outstanding on the date of this Agreement and warrants issued to Xxxx
Capital Partners, Century Capital and Sands Brothers International Ltd. in
connection with the transactions contemplated by this Agreement, in each case
provided that such securities have not been amended since the date of this
Agreement, (d) securities in connection with acquisitions or strategic
investments (including, without limitation, any licensing or distribution
arrangements), the primary purpose of which is not to raise capital, (e)
securities to financial institutions or lessors in connection with commercial
credit arrangements, equipment financings or similar transactions, where the
principal consideration for such transaction is not the issuance of such
securities.
4.12 Subsequent Equity Sales. From the date hereof until 90 days
after the Effective Date, neither the Company nor any Subsidiary shall issue
shares of Common Stock or Common Stock Equivalents; provided, however, the 90
day period set forth in this Section 4.12 shall be extended for the number of
Trading Days during such period in which (y) trading in the Common Stock is
suspended by any Trading Market, or (z) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the
Registration Statement may not be used by the Purchasers for the resale of the
Shares and Warrant Shares. Notwithstanding the foregoing, this Section 4.12
shall not apply in respect of the issuance of (a) shares of Common Stock or
options to employees, key consultants, advisors, officers 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 Company or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities upon the conversion of, or in connection with the
payment of interest on or redemption of, the Company's
20
7.5% Convertible Debentures outstanding on the date of this Agreement; (c)
securities upon the exercise of or conversion of any convertible securities,
options or warrants issued and outstanding on the date of this Agreement and
warrants issued to Xxxx Capital Partners, Century Capital and Sands Brothers
International Ltd. in connection with the transactions contemplated by this
Agreement, in each case provided that such securities have not been amended
since the date of this Agreement, (c) securities in connection with acquisitions
or strategic investments (including, without limitation, any licensing or
distribution arrangements), the primary purpose of which is not to raise
capital, (d) securities to financial institutions or lessors in connection with
commercial credit arrangements, equipment financings or similar transactions,
where the principal consideration for such transaction is not the issuance of
such securities.
4.13 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.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. The Company agrees to pay $35,000 to
Omicron Master Trust for its legal fees and expenses incurred in connection with
the investigation and negotiation of the transaction and the preparation and
negotiation of the Transaction Documents. Accordingly, in lieu of the foregoing
payments, the Company, on the Closing Date, will direct that the aggregate
amount that Omicron Master Trust is to pay for the Shares and Warrants at the
Closing, be reduced by at least $35,000. 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. The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.
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 set forth on the signature pages attached hereto prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 6:30 p.m. (New York City time) on
any Trading Day, (c) the second Trading Day following the
21
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 address for such notices and communications shall be as set
forth on the signature pages attached hereto.
5.3 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.
5.4 Construction. The headings herein are for convenience only, do
not constitute a part 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.
5.5 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".
5.6 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 4.8.
5.7 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 hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, New York 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. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by delivering a copy thereof via overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement
22
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. Each party
hereto (including its affiliates, agents, officers, directors and employees)
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence an action or proceeding to enforce any provisions of a
Transaction Document, 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.
5.8 Survival. The representations and warranties contained herein
shall survive the earlier of (a) the second anniversary of the Closing Date and
(b) the date on which the Shares and Warrant Shares are no longer outstanding.
The agreements and covenants contained herein shall survive, as to a Purchaser
and unless otherwise set forth in the Transaction Documents, until such
Purchaser no longer holds any Securities.
5.9 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.
5.10 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.
5.11 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.
5.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers 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.
23
5.13 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.
5.14 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 was introduced to the Company by Sands Brothers
International Ltd., Xxxx Capital Partners, LLC and Century Capital, which have
acted solely as agent for the Company and not for any Purchaser. Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents. For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen to
communicate with the Company through FW. FW does not represent all of the
Purchasers but only Omicron Master Trust. 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.
(Signature Page Follows)
24
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.
MATRITECH, INC.
By: /s/ Xxxxxxx X. Xxxxx
______________________________
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
Address for Notice:
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx, 00000
Attn: Xxxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
25
[PURCHASERS SIGNATURE PAGE - NMPS]
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.
OMICRON MASTER TRUST Address for Notice:
By: Omicron Capital L.P., as subadvisor c/o Omicron Capital L.P.
By: Omicron Capital Inc., its general partner 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxx Xxxxxxxxx Attn: Xxxxx Xxxx
___________________________________ Fax: (000) 000-0000
Name: Xxxxx Xxxxxxxxx
Title: Managing Partner
Subscription Amount: $1,000,001.01
Shares: 598,803
Warrant Shares: 209,581
With a copy to:
Xxxxxxx Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
[PURCHASER'S SIGNATURE PAGES FOLLOW]
26
[PURCHASERS SIGNATURE PAGE - NMPS]
MIDSUMMER INVESTMENT, LTD. Address for Notice:
c/o Midsummer Capital, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxxx X. Xxxxxxx Tel: (000) 000-0000
--------------------------- Fax: (000) 000-0000
Name: Xxxxxx X. Xxxxxxx Attn: Xxxxx Xxxxxxx
Title: Director
Subscription Amount: $700,000
Shares:
Warrant Shares:
27
[PURCHASERS SIGNATURE PAGE - NMPS]
PROMED PARTNERS LP Address for Notice:
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx 000 Xxxx Xxxxxx, 0xx Xx.
Title: Managing Director Xxx Xxxx, XX 00000
Subscription Amount: $559,715.53
Shares: 335,159
Warrant Shares: 117,306
28
[PURCHASERS SIGNATURE PAGE - NMPS]
PROMED OFFSHORE FUND LTD. Address for Notice:
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx 000 Xxxx Xxxxxx, 0xx Xx.
Title: Managing Director Xxx Xxxx, XX 00000
Subscription Amount: $90,285.21
Shares: 54,063
Warrant Shares: 18,922
29
[PURCHASERS SIGNATURE PAGE - NMPS]
OTAPE INVESTMENTS LLC Address for Notice:
By: /s/ Xxxxxxx X. Xxxxx One Manhattanville Rd.
_______________________ Xxxxxxxx, XX 00000
Name: Xxxxxxx X. Xxxxx Attn: Xxxx Xxxxxxx
Title: General Counsel Xxxx Xxxxxx
Subscription Amount: $200,000
Shares: 119,760
Warrant Shares: 41,916
30
[PURCHASERS SIGNATURE PAGE - NMPS]
ISLANDIA, L.P. Address for Notice:
By: /s/ Xxxxx Xxxxxx Islandia, LP.
________________________________ 000 Xxxxxxx Xxxxxx
Name: Xxxxx Xxxxxx 23rd Floor
Title: V.P. of Xxxx Xxxx, Inc., G.P. Xxx Xxxx, XX 00000
Subscription Amount: $350,000
Shares:
Warrant Shares:
31
[PURCHASERS SIGNATURE PAGE - NMPS]
BLUEGRASS GROWTH FUND LP Address for Notice:
By: /s/ Xxxxx Xxxxx 000 X 00xx Xxxxxx
______________________________________ Apartment 10L
Name: Xxxxx Xxxxx Xxx Xxxx, XX 00000
Title: Managing Member
Subscription Amount: $250,000
Shares: 149,701
Warrant Shares: 52,395
32
[PURCHASERS SIGNATURE PAGE - NMPS]
INCAP COMPANY LTD. Address for Notice:
By: /s/ Xxxx Xxxxx & Xxxx Xxxxxxxx
______________________________________
Name: Xxxx Xxxxx and Xxxx Xxxxxxxx
Title: Authorized signatories of First Xxxxxx (Guernsey Limited - Director)
Subscription Amount: $250,000
Shares:
Warrant Shares:
33
[PURCHASERS SIGNATURE PAGE - NMPS]
VERTICAL VENTURES INVESTMENTS, LLC Address for Notice:
By: /s/ Xxxxxx Xxxxxxxxx Vertical Ventures Investments, LLC
------------------------------- 00x Xxxxxxxxx Xxxxxx, 00xx Xx
Name: Xxxxxx Xxxxxxxxx Xxx Xxxx, XX 00000
Title: Manager
Subscription Amount: $249,999
Shares: 149,700
Warrant Shares: 52,395
34
[PURCHASERS SIGNATURE PAGE - NMPS]
BRISTOL INVESTMENTS FUND, LTD. Address for Notice:
Bristol Capital Advisors, LLC
By: /s/ Xxxx Xxxxxxx 0000 Xxxxxx Xxxxxxxxx, Xxxxx Xxxxx
--------------------------- Xxxxxxxxx, XX 00000
Name: Xxxx Xxxxxxx Attn: Any Wang, Esq.
Title: Director Phone: (000) 000-0000
Fax: (000) 000-0000
Subscription Amount: $350,000
Shares: 209,581
Warrant Shares: 73,353
35
[PURCHASERS SIGNATURE PAGE - NMPS]
CLOSE FINSBURY GLOBAL INVESTMENT FUNDS Address for Notice:
PLC -- UNIVERSAL LIFE SCIENCES FUND XX Xxxxxx Ireland PLC, as Custodian
to Finsbury Universal Life Sciences
By: /s/ Huaizheng Peng XX Xxxxxx House
_________________________________ IFSC
Name: Huaizheng Peng Xxxxxx 0
Title: Fund Manager Ireland
Subscription Amount: $50,000
Shares: 29,940
Warrant Shares: 10,479
36
[PURCHASERS SIGNATURE PAGE - NMPS]
CRESCENT INTERNATIONAL LTD Address for Notice:
By: /s/ Xxx Xxxx /s/ Maxi Brezzi c/o Greenlight (Switzerland) S.A.
----------------------------------- 00 Xx. Xxxxx-Xxxxx
Name: Xxx Xxxx Maxi Brezzi 1216 Cointrin, Geneva
Title: Authorized Signatories Switzerland
Tel: 000 00 00 000 0000
Subscription Amount: $400,800 Fax: 000 00 00 000 0000
Shares: 240,000 Email: xxxx@xxxxxxxxxx.xxxxxxxx.xxx
Warrant Shares: 84,000
37
[PURCHASERS SIGNATURE PAGE - NMPS]
HSBC REPUBLIC Address for Notice:
By: /s/ Xxxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxx Staines HSBC Republic Bank
-------------------------- ------------------------ (Suisse) SA
Name: Xxxxxxx Xxxxxxxxx Xxxxxx Xxxxx Staines 00-00 Xxx Xx Xxxxxxxx
Title: Deputy Member Management Associate PO-Box 2019
Geneva
Subscription Amount: $250,000 Switzerland
Shares: 149,700
Warrant Shares: 52,395
38
[PURCHASERS SIGNATURE PAGE - NMPS]
HEADWATERS HOLDINGS LLC Address for Notice:
By: /s/ Xxxx Gosmay Headwaters Capital
_________________________________ 00 Xxxxxxx Xxxx Xxx
Name: Xxxx Gosmay Xxxxxxxxx, XX 00000
Title: Managing Member
Subscription Amount: $300,000
Shares: 179,640
Warrant Shares: 62,874
39
[PURCHASERS SIGNATURE PAGE - NMPS]
XXXXXXX PARTNERS, L.P. Address for Notice:
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx c/x Xxxxxxx Capital, LLC
Title: Managing Partner of G.P. 000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Subscription Amount: $501,000 000-000-0000 Telephone
Shares: 300,000 000-000-0000 Facsimile
Warrant Shares: 105,000
40
[PURCHASERS SIGNATURE PAGE - NMPS]
GAMMA OPPORTUNITY CAPITAL PARTNERS, LP Address for Notice:
By: Gamma Capital Advisors, Ltd, as advisor
By: /s/ Xxxxxxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx c/o Gamma Capital Advisers, Ltd.
Title: Managing Director British Colonial Centre of Commerce
Xxx Xxx Xxxxxx, Xxxxx 000
Subscription Amount: $200,000 Nassau (NP), The Bahamas
Shares: 119,761 Attn: Xxxxxxxxxxx Xxxxxxx
Warrant Shares: 41,916 Fax: (000) 000-0000
41
[Purchaser Signature Page -- NMPS]
ALPHA CAPITAL AKTIENGESELLSCHAFT
By: /s/ Xxxxxx Xxxxxxxxx Address for Notice:
------------------------------
Name: Xxxxxx Xxxxxxxxx c/o LH Financial Services Corp.
Title: Director 000 Xxxxxxx Xxxx Xxxxx
Xxxxx 0000
Subscription Amount: $300,000 Xxx Xxxx, XX 00000
Shares: Attn: Xxxx Xxxxxxxxxx
Warrants: Fax: (000) 000-0000
42
