EXHIBIT 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is dated as of February 6,
2004 by and between Indus International, Inc., a Delaware corporation located at
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx 00000 (the "Company"), and each of
the various purchasers (each, a "Purchaser", and collectively, the "Purchasers")
identified on, and a party to, an executed copy of the Subscription Agreement to
which this Agreement is an Exhibit (the "Subscription Agreement").
SECTION 1
SALE OF COMMON STOCK
Subject to the terms and conditions hereof, the Company has offered,
and will issue and sell (the "Offering") to the Purchasers, and the Purchasers
will, severally and not jointly, buy from the Company a total of up to 5,000,000
shares of the common stock, $0.001 par value per share, of the Company (the
"Common Stock") for the purchase price of $3.10 per share, with each Purchaser,
severally and not jointly, purchasing the number of shares of Common Stock for
the aggregate cash purchase price indicated in such Purchaser's Subscription
Agreement. The shares of Common Stock to be issued and sold by the Company and
purchased by the Purchasers pursuant to this Agreement are herein referred to as
the "Shares." This Agreement and each Purchaser's obligation hereunder are not
conditioned on the sale of any minimum number of Shares.
The Shares will be offered and sold without registration under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the
exemption from registration provided by Section 4(2) of the Securities Act and
Regulation D thereunder. The Company has prepared and delivered to each
Purchaser copies of a Confidential Private Placement Memorandum, dated as of the
date hereof (as it may be amended or supplemented, and including the exhibits
and/or schedules thereto and the information incorporated therein by reference,
the "Offering Document").
The Purchasers of Shares (and any subsequent permitted transferees)
will be entitled to the benefits of a Registration Rights Agreement, to be dated
as of the date hereof (as attached to the Subscription Agreement as Exhibit B,
the "Registration Rights Agreement"), by and among the Company and the
Purchasers. Pursuant to the Registration Rights Agreement, the Company will file
with the Securities and Exchange Commission (the "SEC" or the "Commission") as
soon as practicable after the closing of the Purchasers' commitment (the
"Closing"), and in no event later than 30 days thereafter, a shelf registration
statement on Form S-3 pursuant to SEC Rule 415 (the "Registration Statement")
under the Securities Act relating to the resale of the Shares by the Purchasers.
The Company shall use its commercially reasonable efforts to cause such
Registration Statement to be declared effective as soon as practicable and
within 90 days after the Closing or, in the event of a review of the
Registration Statement by the Commission, within 120 days after the Closing and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective from the date such Registration Statement becomes
effective until the earlier of (i) the date on which all of the Shares have been
resold under the Registration Statement and (ii) the date on which all of the
Shares may be traded by the Purchasers without restriction under the federal
securities laws (the "Effectiveness Period"). Should the Registration Statement
not be declared effective within 90 days after the Closing, or in the event of a
review by the Commission, within 120 days after the Closing, or should its
effectiveness lapse prior to the end of the Effectiveness Period, then the
Company shall pay to each Purchaser certain liquidated damages, as set forth in
the Registration Rights Agreement.
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SECTION 2
FUNDING; CLOSING; DELIVERY
2.1. FUNDING. The Closing and the Purchasers' delivery of funds (the
"Funding") to purchase the Shares for which they have subscribed in the
Subscription Agreement shall be held at the Atlanta, Georgia offices of Xxxxxx &
Bird LLP, counsel to the Company, or at such other place upon which the Company
and the Purchasers shall agree. At Funding, the Purchasers shall, severally and
not jointly, pay the purchase price (as to each Purchaser, the "Purchase Price")
for their Shares by wire transfer to an account designated by the Company. The
Funding shall occur simultaneously with or immediately after the execution and
delivery of this Agreement by the Purchasers and the Company, or on such later
date as the Company and the Purchasers may agree.
2.2. CLOSING AND DELIVERY. At the Closing, or as soon as practicable
thereafter, the Company will deliver to each Purchaser, as applicable, a
certificate, registered in the name of such Purchaser as shown in the
appropriate Subscription Agreement, for the number of Shares to be purchased by
such Purchaser.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to the Purchasers and
the Placement Agent as follows:
3.1. ORGANIZATION AND STANDING; ARTICLES AND BY-LAWS. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to carry on
it business as now conducted and to own, lease and operate its properties and
assets. The Company is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states of the United States and
foreign jurisdictions where the character of its properties and assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect. The term "Material Adverse Effect" shall mean an event,
change or occurrence that individually, or together with any other event, change
or occurrence, has a material adverse impact on the Company or the Company's
subsidiaries' financial position, business or results of operations, taken as a
whole, or on the ability of the Company to execute, deliver and perform its
obligations under this Agreement, the Subscription Agreement or the Registration
Rights Agreement (collectively, the "Agreements"); provided, however, that the
term "Material Adverse Effect" shall not include the impact of (a) changes in
laws of general applicability or interpretations thereof by courts or other
Governmental Authorities (as defined below); (b) changes in GAAP; (c) changes,
conditions or events that are generally applicable to the industry in which the
Company operates or the economy in general of the jurisdictions in which the
Company operates, including, without limitation, conditions arising from any
terrorist attacks or the outbreak of hostilities or war and the general
economic, business and political disruptions arising thereafter; (d) changes in
prevailing interest rates; (e) changes in the stock price of the Common Stock or
(f) seasonal fluctuations in the Company's performance.
3.2. CORPORATE POWER. The Company has the corporate power and authority
necessary to execute, deliver and perform the Agreements, and at Funding to
sell, and at Closing to issue, the Shares as set forth in the Agreements, and to
carry out and perform its obligations under the Agreements.
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3.3. SUBSIDIARIES. Each subsidiary of the Company is a corporation that
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its properties and to conduct its business
and is duly registered, qualified and authorized to transact business and is in
good standing in each jurisdiction in which the conduct of its business or the
nature of its properties requires such registration, qualification or
authorization, except where such failure to so qualify or register would not be
reasonably likely to have a Material Adverse Effect. All of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued, is fully paid and non-assessable, and is owned by
the Company free and clear of all security interests, liens, pledges or negative
pledges, charges, encumbrances, mortgages, hypothecations, adverse claims or
equities (each, a "Lien").
3.4. CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock (the "Preferred Stock"). As of February 2,
2004, there were 51,995,666 shares of Common Stock issued and outstanding, and
no shares of Preferred Stock issued and outstanding. No other shares of capital
stock are issued and outstanding. As of February 2, 2004, there were options and
warrants outstanding issued by the Company to purchase an aggregate of
11,080,074 and 357,469 shares of Common Stock, respectively. All of the
outstanding shares of Common Stock and Preferred Stock are, and all of the
Shares, when issued, will be, duly authorized, validly issued, fully paid and
nonassessable, and all such shares were, and the Shares, will be, issued in
material compliance with all applicable federal and state securities laws,
including available exemptions therefrom, and none of such issuances were, and
the issuance of the Shares will not be, made in violation of any pre-emptive or
other rights. Except as set forth above, there are no options, warrants or other
rights (including conversion, pre-emptive or other rights) or agreements
outstanding to purchase any of the Company's authorized and unissued capital
stock.
3.5. AUTHORIZATION; VALID ISSUANCE. (a) All corporate action on the
part of the Company, its officers, directors and stockholders, if any, necessary
for the authorization, execution, delivery and performance of the Agreements by
the Company, and for the authorization, the sale, issuance and delivery of the
Shares has been taken or will be taken prior to the Funding or the Closing, as
appropriate. The Agreements have been duly executed and delivered by the
Company, and represent legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
laws affecting the enforcement of creditors' rights generally, and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought (the "Bankruptcy and Equity Exception")). The Board of Directors of
the Company (the "Board of Directors") has taken all action necessary to render
inapplicable, as such provisions may relate to any Purchaser's purchase of
Shares, the provisions of Section 203 of the General Corporation Law of the
State of Delaware.
(b) The Shares being purchased by the Purchasers hereunder will, upon
issuance pursuant to the terms hereof and upon payment therefor, be duly
authorized and validly issued, fully paid and non-assessable shares of Common
Stock, free of preemptive or similar rights.
(c) Subject to the accuracy of the representations made by the
Purchasers in Section 5 hereof, the Shares will be issued to the Purchasers in
compliance with applicable exemptions from (i) the registration and prospectus
delivery requirements of the Securities Act, and (ii) the registration and
qualification requirements of all applicable securities laws of the states of
the United States.
3.6. REPORTS AND FINANCIAL STATEMENTS. The Company has delivered, as
exhibits to the Offering Document, to the Purchasers prior to the execution of
this Agreement a copy of the Company's
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Transition Report on Form 10-K for the transition period from January 1, 2003 to
March 31, 2003, the Company's Quarterly Reports on Form 10-Q that have been
filed for all quarters ended since March 31, 2003, the Company's Current Reports
on Form 8-K that were filed on January 23, 2004 and January 28, 2004, the
definitive proxy statement for the Company's 2003 annual meeting of
stockholders, and will deliver upon request any other Current Reports on Form
8-K filed since March 31, 2003 (as such documents have since the time of their
filing been amended or supplemented, and together with all reports, documents
and information filed on or after the date first written above through the date
of Closing with the SEC, including all information incorporated therein by
reference, collectively, the "SEC Reports"). The SEC Reports (a) complied and
will comply as to form in all material respects with the requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (b) did not, at the time of their filing, contain any
untrue statement of a material fact or omit 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 SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto, 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,
year-end audit adjustments.
3.7. DISCLOSURES. The Offering Document, including all exhibits
thereto, as amended or supplemented, did not and will not, as of the date
thereof through the Closing, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The Company has provided to each prospective offeree of the Shares who has
requested further information concerning the Company and its subsidiaries such
information (to the extent that such information is available or can be acquired
and made available to prospective Purchasers without unreasonable effort or
expense and to the extent the provision thereof is not prohibited by applicable
law). The Company confirms that neither it nor any of its officers, directors or
affiliates (as defined in Rule 501(b) under the Securities Act) ("Affiliates")
has provided any of the Purchasers or their agents or counsel with any
information that constitutes material, nonpublic information (other than the
existence and terms of the issuance of the Shares as contemplated herein). The
Company understands and confirms that each of the Purchasers will rely on the
foregoing representations in effecting transactions in securities of the
Company.
3.8. NO INTEGRATION. Neither the Company nor its Affiliates has,
directly or through any authorized agent, during the six month period ending on
the date of this Agreement, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) in a manner that would cause the offer and sale of the Shares to fail to be
entitled to the exemption afforded by Rule 506 of Regulation D, or under Section
4(2) of the Securities Act.
3.9. NO PUBLIC OFFERING. Neither the Company nor its Affiliates nor any
Person (as defined in Section 3.11 below) has engaged, in connection with the
offering of the Shares (i) in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act, (ii) in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act, (iii) in any action which would violate applicable state
securities, or "blue sky," laws, or (iv) in any directed selling efforts within
the meaning of SEC Regulation S.
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3.10. CONFORMITY OF DESCRIPTIONS. The Shares, when issued, will conform
in all material respects to the description of the Company's Common Stock
contained in the Company's SEC Reports and other filings with the SEC.
3.11. NO CONFLICTS. The execution, delivery and performance of the
Agreements, the issuance and delivery of the Shares, when issued, by the Company
and the consummation by the Company of the transactions contemplated in the
Agreements do not and will not (i) conflict with or violate any provision of the
Certificate of Incorporation, Bylaws or other organizational documents of the
Company or any of its subsidiaries, (ii) conflict with, or constitute a default
(or an event which, with notice or lapse of time or both, would become a
default) under, or give to any other individual, partnership, joint stock
company, corporation, trust, unincorporated organization, government agency or
political subdivision (each of the foregoing, a "Person") any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture, patent, license or instrument (whether evidencing a Company debt or
otherwise) to which the Company or any of its subsidiaries is a party or by
which any property or asset of the Company or any of its subsidiaries is bound
or affected, except for such defaults that would not, individually or in the
aggregate, result in a Material Adverse Effect, or (iii) 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 any
of its subsidiaries is subject (including federal and state securities laws and
regulations and the rules and regulations of the principal market, system or
exchange on which the Common Stock is traded, quoted or listed), or by which any
material assets of the Company or any of its subsidiaries is bound or affected.
3.12. CONSENTS AND APPROVALS. No notice to, filing with, or consent of
any federal, state, county, local, foreign or other governmental, public or
regulatory agencies, authorities (including self-regulatory authorities),
courts, instrumentalities, commissions, boards or bodies having jurisdiction
over the Company and its subsidiaries ("Governmental Authorities") or any third
party is necessary for the consummation by the Company or any of its
subsidiaries of the transactions contemplated by the Agreements, other than (i)
the filing of the Registration Statement with the Commission in accordance with
the Registration Rights Agreement, (ii) the application(s) or any letter(s)
acceptable to Nasdaq for the listing or quoting of the Shares on Nasdaq (and
with any other national securities exchange or automated quotation system or
market on which the Common Stock is then traded, listed or quoted), and the
notice, if any, required by Nasdaq, (iii) any filings, notices or registrations
under applicable state securities laws, (iv) the disclosure requirements of the
Exchange Act and the disclosure requirements of Item 701 of SEC Regulation S-K,
and (v) the filing of a Form D and a Form 8-K in respect of the sale and
issuance of the Shares with the Commission (collectively, the "Required
Approvals").
3.13. PROCEEDINGS. Except as disclosed in the Company's SEC Reports,
there is no action, suit, hearing, claim, notice of violation, arbitration or
other proceeding, hearing or investigation (each, a "Proceeding") pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
of its subsidiaries or any of their respective assets before or by any
Governmental Authority or any arbitrator, which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Agreements,
(ii) could reasonably be expected to, individually or in the aggregate, have or
result in a Material Adverse Effect, or (iii) if adversely decided, could
reasonably be expected to have a material adverse effect on, or delay the
issuance of, the Shares or the consummation of the transactions contemplated by
the Agreement. The foregoing includes, without limitation, any such action,
suit, proceeding or investigation that questions this Agreement or seeks to
delay or prevent the consummation of the transactions contemplated hereunder or
the right of the Company to execute, deliver and perform under same. The Company
is not a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any Governmental Authority that is reasonably likely to
have a Material Adverse Effect. Except as disclosed in the Company's SEC
Reports, no action, suit, proceeding, claim, investigation or inquiry by the
Company or any subsidiary is currently pending nor does the Company
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intend to initiate any action, suit, proceeding, claim, investigation or
inquiry, in each case, that if resolved in a manner adverse to the Company, is
reasonably likely to have a Material Adverse Effect.
3.14. NO DEFAULT OR VIOLATION. Except for those that would not,
individually or in the aggregate, result in a Material Adverse Effect, none of
the Company or any of its subsidiaries is in (i) default under or in violation
of any indenture, loan or other credit agreement or any other agreement or
instrument to which any of them is a party or by which any of them or their
respective assets or properties is bound, or (ii) violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
arbitrator or Governmental Authority applicable to it. None of the Company or
any of its subsidiaries is in default under, or in violation of, its certificate
of incorporation, bylaws or other organizational documents or in default under
or in violation of any of the listing or quotation requirements of Nasdaq (or of
any other national securities exchange or automated quotation system or market
on which the Common Stock is then traded, listed or quoted) as in effect on the
date hereof, and the Company is not aware of any facts which could reasonably
lead to de-listing or suspension of trading in the Common Stock by Nasdaq (or
any other national securities exchange or automated quotation system or market
on which the Common Stock is then traded, listed or quoted) in the foreseeable
future. The business of the Company and its subsidiaries is not being conducted
in violation of any law, statute, ordinance, rule or regulation of any
Governmental Authority, except where such violations have not resulted or are
not reasonably likely to result, individually or in the aggregate, in a Material
Adverse Effect. None of the Company or any of its subsidiaries is in breach of
any agreement where such breach, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect.
3.15. BROKER'S FEES. The Company has incurred no liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or other
similar payments in connection with the Agreements or the transactions
contemplated therein, other than fees payable to X.X. Xxxxxxxxx, Towbin as the
placement agent of the Company for the Offering (the "Placement Agent"), and the
Company shall indemnify and hold harmless the Purchasers from and against any
such claims.
3.16. LISTING COMPLIANCE. The only securities exchange or automated
quotation system or market on which the Common Stock is traded is Nasdaq, and
the Company has no other securities listed or traded on any other securities
exchange or automated quotation system or market. The Company is in compliance
in all material respects with the listing or maintenance requirements of Nasdaq.
The approval of the Company's stockholders is not required under the listing or
maintenance requirements of Nasdaq for the consummation of the transactions
contemplated herein. After giving effect to the transactions contemplated by the
Agreements, the Company is and will be in compliance with all such maintenance
requirements.
3.17. INTELLECTUAL PROPERTY RIGHTS. The Company and its subsidiaries
own or possess adequate rights or licenses to use material (A) patents (and any
renewals and extensions thereof), patent rights (and any applications therefor),
rights of priority and other rights in inventions; (B) trademarks, service
marks, trade names and trade dress, and all registrations and applications
therefor and all legal and common-law equivalents of any of the foregoing; (C)
copyrights and rights in mask works (and any applications or registrations for
the foregoing, and all renewals and extensions thereof), common-law copyrights
and rights of authorship including all rights to exploit any of the foregoing in
any media and by any manner and means now known or hereafter devised; (D)
industrial design rights, and all registrations and applications therefor; (E)
rights in data, collections of data and databases, and all legal or common-law
equivalents thereof; (F) rights in domain names and domain name reservations;
(G) rights in trade secrets, proprietary information and know-how (collectively
with all licenses and other agreements providing the Company or its subsidiaries
with the right to use any item of the type referred to in clauses (A) through
(G) (collectively, "Intellectual Property Rights") which are necessary for use
in connection with their business as now conducted and as described in the SEC
Reports, except for those Intellectual Property
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Rights the absence of which would not, individually or in the aggregate, result
in a Material Adverse Effect. None of the Company or any of its subsidiaries has
knowledge that any of them has infringed on any of the Intellectual Property
Rights of any Person and, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, none of the Company or
any of its subsidiaries is infringing on any of the Intellectual Property Rights
of any Person. Except as disclosed in the SEC Reports, there is no Proceeding
that is pending, or to the Company's knowledge, is threatened against, the
Company regarding the infringement of any of the Intellectual Property Rights.
The Company is not, to its knowledge, making unauthorized use of any
confidential information or trade secrets of any third party, and the Company
has not received any notice of any asserted infringement (nor is the Company
aware of any reasonable basis for any third party asserting an infringement) by
the Company, of the rights of a third party with respect to any Intellectual
Property Rights that, individually or in the aggregate, would have a Material
Adverse EFFECT. The Company and its subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights.
3.18. REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as disclosed
in the Company's SEC Reports, the Company has not granted or agreed to grant to
any Person any rights (including "piggy-back" registration rights) to have any
securities of the Company registered with the Commission or any other
Governmental Authority which have not been satisfied. Except as disclosed on
Schedule 3.18, no Person, including current or former stockholders of the
Company, underwriters, brokers or agents, has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Agreements or to require that the Company
include any such securities in the registration of Shares as contemplated
herein.
3.19. FORM S-3 ELIGIBILITY. The Company meets the requirements for use
of the SEC's registration statement on Form S-3 under the Securities Act
relating to the resale of the Shares by the Purchasers and is eligible for
filing and maintaining registration statements on Form S-3 relating to the
resale of the Shares by the Purchasers.
3.20. ABSENCE OF CERTAIN CHANGES. Since the date of the financial
statements included in the Company's most recent Quarterly Report on Form 10-Q,
Transition Report on Form 10-K, or latest Current Report on Form 8-K, whichever
is more recently filed prior to the date of this Agreement, except as disclosed
publicly, the Company and its subsidiaries have conducted their business only in
the ordinary course of such business consistent with past practice and there has
not been (i) any Material Adverse Effect, (ii) any material commitment,
contractual obligation, borrowing, capital expenditure or transaction (each, a
"Commitment") entered into by the Company or any of its subsidiaries, other than
(a) Commitments in the ordinary course of business and (b) this Agreement, (iii)
any action taken which, if taken after the date hereof, would constitute a
material breach of any provision or covenant herein, or (iv) any material change
in the Company's accounting principles, practices or methods other than as
required by concurrent changes in GAAP.
3.21. BOOKS AND RECORDS. The minute books and other records of the
Company and its subsidiaries contain in all material respects accurate records
of all Company board, committee and stockholders' meetings and accurately
reflect in all material respects all other corporate action of the stockholders
and directors and any committees thereof of the Company and its subsidiaries and
all actions of the directors of the Company's subsidiaries, in each case since
March 31, 2003.
3.22. NO MANIPULATION OF STOCK. The Company has not taken, in violation
of applicable law, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the transactions contemplated hereby or the sale or resale
of the shares of Common Stock.
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3.23. COMPANY NOT AN "INVESTMENT COMPANY." The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Shares will not be, an "investment company"
within the meaning of the Investment Company Act.
3.24. LABOR RELATIONS. Neither the Company nor its subsidiaries is
party to any collective bargaining agreement covering any individual who
performs services as an employee primarily for the Company or any of its
subsidiaries (including such persons who are on an approved leave of absence,
vacation, short-term disability or otherwise treated as an active employee of
the Company or any of its subsidiaries, "Employees"), and there are no
controversies or unfair labor practice proceedings pending or, to the Company's
knowledge, threatened between the Company or any of its subsidiaries and any of
their current or former Employees or any labor or other collective bargaining
unit representing any current or former Employee of the Company or any of its
subsidiaries that would reasonably be expected to result in a labor strike,
dispute, slow-down or work stoppage or otherwise have a Material Adverse Effect.
To the Company's knowledge, no organizational effort is presently being made or,
to the Company's knowledge, threatened by or on behalf of any labor union.
3.25. EMPLOYEE BENEFITS.
(a) "Benefit Plans" shall mean (i) all "employee pension benefit
plans," as defined in section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), established, maintained, or contributed to by
the Company or its subsidiaries for the benefit of any employees or agents of
the Company or its subsidiaries; (ii) all "employee welfare benefit plans," as
defined in section 3(1) of ERISA, established, maintained, or contributed to by
the Company or its subsidiaries for the benefit of any employees or agents of
the Company or its subsidiaries; and (iii) to the knowledge of the Company, all
other material incentive, employment, supplemental retirement, severance,
deferred compensation and other employee benefit plans, programs, agreements and
arrangements established, maintained, or contributed to by the Company or its
subsidiaries for the benefit of any employees or agents of the Company or its
subsidiaries, without regard to the coverage of any such plan, program,
agreement or arrangement by ERISA or any provision of the Internal Revenue Code
of 1986, as amended (the "Code").
(b) Each of the Benefit Plans has been administered in accordance with
its terms and any federal, state or local statute, law, ordinance, regulation,
order, writ, injunction, directive, judgment or decree applicable to the
Company, its subsidiaries, or any of their respective properties, or assets, as
the case may be (including, where applicable, ERISA and the Code), except where
the failure to so administer such Benefit Plan would not have a Material Adverse
Effect.
(c) Each of the Benefit Plans intended to be "qualified" within the
meaning of section 401(a) of the Code has been determined by the United States
Internal Revenue Service to be so qualified, except where the failure to so
qualify such Benefit Plan would not have a Material Adverse Effect.
3.26. ENVIRONMENTAL MATTERS.
(a) The Company and its subsidiaries are in compliance with all
applicable Federal, state, and local laws and regulations relating to Releases
or threatened Releases of Hazardous Materials or otherwise relating to the
generation, treatment, storage, transport or handling of Hazardous Materials,
except where failure to be in compliance would not have a Material Adverse
Effect; and, to the Company's knowledge, there is no Environmental Claim pending
or threatened against the Company or its subsidiaries which would have a
Material Adverse Effect.
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(b) For the purpose of this Section 3.26, (i) "Environmental Claim"
means any claim, action, demand, order, or written notice by or on behalf of,
any Governmental Entity or Person alleging potential liability arising out of,
based on or resulting from the violation of any Environmental Law or permit;
(ii) "Hazardous Materials" means all substances defined as hazardous substances
in the Comprehensive Environmental Response, Compensation and Liability Act; and
(iii) "Release" has the meaning set forth in the Comprehensive Environmental
Response, Compensation and Liability Act.
3.27. TAXES.
(a) (i) The Company has filed (or joined in the filing of) when due all
Tax Returns required by applicable law to be filed with respect to the Company
and all Taxes shown to be due on such Tax Returns have been paid; (ii) all such
Tax Returns were true, correct and complete in all material respects as of the
time of such filing; or (iii) any liability of the Company for Taxes not yet due
and payable, or which are being contested in good faith, in each case as of
March 31, 2003, has been accrued or reserved for on the financial statements of
the Company in accordance with GAAP, in each case except that any such failure
to file or pay Taxes would not result in a Material Adverse Effect.
(b) For purposes of this Section 3.27, (i) the term "Taxes" shall mean
any federal, state, county, local, or foreign taxes, charges, fees, levies,
imposts, duties, or other assessments, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use, commercial
rent, customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax or governmental fee of any kind whatsoever,
imposes or required to be withheld by the United States or any state, county,
local or foreign government or subdivision or agency thereof, including any
interest, penalties, and additions imposed thereon or with respect thereto and
(ii) the term "Tax Return" shall mean any report, return, information return, or
other information required to be supplied to a Governmental Authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes the Company and any amendments thereof.
3.28. INSURANCE. All insurance policies carried by the Company or any
subsidiary or covering the Company's properties are in full force and effect,
and, to the Company's knowledge, no notice of cancellation has been given with
respect to any such policy, except where the lapse of such coverage or
cancellation of such policy would not reasonably be expected to have a Material
Adverse Effect. The insurance coverage provided by such policies is provided by
insurers that, to the knowledge of the Company, are solvent and is in such
amount and types of coverage which are adequate and customary for the industries
in which the Company operates.
3.29. ACCOUNTING CONTROLS. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances 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 accordance with generally accepted
accounting principles and to maintain assets 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, except for any controls the absence of which would
not result in a Material Adverse Effect.
3.30 XXXXXXXX-XXXXX. The Company is in compliance in all material
respects with all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 and
applicable rules and regulations promulgated by the Commission thereunder.
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SECTION 4
COVENANTS OF THE COMPANY
The Company hereby covenants with the Purchasers and the Placement
Agent as follows:
4.1. OFFERING LIMITATIONS. None of the Company or any of its Affiliates
or any attorney, accountant, financial adviser or other representative
(collectively, "Representatives") will solicit any offer to buy or offer to sell
shares of Common Stock or securities convertible into or exchangeable for Common
Stock by means of any form of general solicitation or general advertising (as
such terms are used in Regulation D under the Securities Act) in any manner
involving a public offering (within the meaning of Section 4(2) of the
Securities Act) prior to the effective date of the Registration Statement.
4.2. INTEGRATION. None of the Company or any of its Affiliates will
offer, sell or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) in a manner that would cause the
offer and sale of the Shares to fail to be entitled to the exemption from
registration afforded by Rule 506 of Regulation D and Section 4(2) of the
Securities Act.
4.3. DISCLOSURES. Subject to Section 8.14, as applicable, the Company,
promptly following the Closing will (i) issue a press release announcing the
sale of the Shares through the Placement Agent, (ii) file such press release and
other appropriate information with the SEC on a Form 8-K, and (iii) include in
the filing of its next Form 10-Q or Form 10-K, as applicable, appropriate
disclosures relating to the sale of the Shares, including, without limitation,
the disclosure required by Item 701 of Regulation S-K. The Company shall not,
and shall cause each of its subsidiaries and its and each of their
Representatives, not to, provide any Purchaser with any material, nonpublic
information regarding the Company or any of its subsidiaries from and after the
issuance of the press release described in this Section without the express
written consent of such Purchaser.
4.4. USE OF PROCEEDS. The Company will use the proceeds from the sale
of the Shares in the manner specified in the Offering Document under the caption
"Use of Proceeds."
4.5. COMPLIANCE. Except as disclosed on Schedule 4.5, the Company has
complied in all respects with the provisions of those agreements which evidence
the rights covered by Section 3.18 regarding any right of first refusal,
preemptive right, right of participation, or any similar right of a stockholder
or any other third party to participate in the transactions contemplated by the
Agreements, including, but not limited to, any notice, consent and waiver
requirements. Except as disclosed on Schedule 4.5, the Company has performed the
timely notification of all affected Persons and has either (i) solicited and
obtained the appropriate consent and waiver from such Person, or (ii)
affirmatively received notice of participation in the transactions contemplated
by the Agreements from each of the affected Persons. For purposes of the
immediately preceding sentence only, the failure of any such affected Person to
exercise its rights or participate in the transactions contemplated by the
Agreements during any specified exercise or participation period shall be deemed
a waiver by the affected Person of such rights.
SECTION 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
Each Purchaser, severally and not jointly, hereby represents, warrants
and covenants to the Company with respect to the purchase of Shares by such
Purchaser as follows:
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5.1. EXPERIENCE. Such Purchaser has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company, and the Purchaser is capable of evaluating the
merits and risks of its investment in the Company and has the capacity to
protect its own interests.
5.2. QUALIFIED INSTITUTIONAL BUYER; ACCREDITED INVESTOR. Such Purchaser
is a "qualified institutional buyer," as defined in Rule 144A of the Securities
Act, or an "accredited investor," as defined in SEC Regulation D promulgated
pursuant to the Securities Act (an "Accredited Investor").
5.3. RULE 144. Such Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered for resale under the Securities Act
or unless an exemption from such registration is available. Such Purchaser is
aware of the provisions of the SEC's Rule 144 promulgated under the Securities
Act, which permit limited resale of securities purchased in a private placement,
subject to the satisfaction of certain conditions, including, among other
things, (i) the existence of a public market for the securities, (ii) the
availability of certain current public information about the Company, (iii) the
resale occurring not less than one year after a party has purchased and fully
paid for the security to be sold, (iv) the sale being effected through a
"broker's transaction" or in a transaction directly with a "market maker," and
(v) the number of securities being sold during any three-month period not
exceeding specified limitations.
5.4. ACCESS TO INFORMATION. Such Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with its
management. It has also had an opportunity to ask questions of officers of the
Company, which questions were answered to its satisfaction. Such Purchaser
understands that such discussions, as well as any written information issued by
the Company, were intended to describe certain aspects of the Company's business
and prospects. Further, such Purchaser acknowledges and understands that the
fact that the Company is seeking to effect the private placement of the Shares
is itself material, non-public information, and disclosure of such information
or use of such information by such Purchaser or anyone receiving such
information from such Purchaser in connection with the purchase, sale or trade
of the Company's securities (other than use by such Purchaser in acquiring the
Shares) is a violation of securities laws. Neither such inquiries nor any other
due diligence investigation conducted by such Purchaser or any of its advisors
or representatives shall modify, amend or affect such Purchaser's right to rely
on the Company's representations, warranties and covenants contained herein or
in the other Agreements. Such Purchaser understands that its investment in the
Shares involves a high degree of risk.
5.5 ORGANIZATION; AUTHORIZATION. Such Purchaser is either (i) an
individual who hereby certifies that he or she is an Accredited Investor who
possesses the legal capacity, understanding and financial ability necessary and
appropriate to enter into, and bear the risks of, the transactions contemplated
hereby, or (ii) a corporation, a limited liability company or a partnership duly
formed, validly existing and in good standing under the laws of the jurisdiction
of its organization. Such Purchaser shall acquire the Shares in this Offering in
the ordinary course of business, without any agreement, plan or understanding,
directly or indirectly, with any Person to distribute such Shares. Such
Purchaser, if a corporation, a limited liability company or a partnership, has
the requisite power and authority, to enter into and to consummate the
transactions contemplated by the Agreements and otherwise to carry out its
obligations under the Agreements. The purchase by such Purchaser of the Shares
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. This Agreement, when executed and delivered by such Purchaser, will
constitute a valid and binding obligation of the Purchaser, enforceable in
accordance with its terms, subject to the Bankruptcy and Equity Exception.
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5.6. RESTRICTIVE LEGEND. Such Purchaser understands that the
certificates evidencing the Shares will bear the following legends when issued:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES, OR "BLUE
SKY," LAWS OF ANY STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION AND RESALE AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO A REGISTRATION STATEMENT IN EFFECT UNDER THE SECURITIES ACT
AND OTHER APPLICABLE LAWS OR A WRITTEN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH
TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS."
In addition, the Purchasers acknowledge that each certificate for
Shares shall bear any additional legend required by any other applicable
domestic or foreign securities or blue sky laws.
The Company will direct its transfer agent and registrar to maintain
stop transfer instructions on record for the Shares until it has been notified
by the Company, upon the advice of counsel, that such instructions may be waived
consistent with the Securities Act and applicable domestic and foreign
securities laws. Such stop transfer instructions will limit the method of sale
or transfer of the Shares, consistent with Rule 144 or other available
exemptions from registration under the Securities Act. Any transfers other than
pursuant to a registration statement under the Securities Act will require an
opinion of counsel reasonably satisfactory to the Company and its counsel prior
to such transfers.
5.7. NO GOVERNMENTAL REVIEW. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency or
authority has passed upon or made any recommendation or endorsement of the
Shares or the contents of the Offering Document.
5.8. RESIDENCY. Such Purchaser is a resident of the jurisdiction set
forth immediately below such Purchaser's name on the Subscription Agreement.
5.9. INVESTMENT INTENT. Such Purchaser is acquiring the Shares for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof; provided,
however, that by making the representations herein, such Purchaser is not
prohibited from selling or otherwise disposing of any of such Purchaser's Shares
in compliance with applicable federal and state securities laws and as otherwise
contemplated by this Agreement. Such Purchaser understands and agrees that the
Shares have not been registered under the Securities Act by reason of the
exemption from the registration provisions of the Securities Act contained in
Rule 506 of Regulation D and Section 4(2) of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of such Purchaser's representations,
warranties and covenants as expressed herein, which are being relied upon by the
Company and the Placement Agent.
5.10. NO MANIPULATION. Neither such Purchaser nor, to such
Purchaser's knowledge, any of its directors, officers,
managers, subsidiaries, controlling persons or other
affiliates has taken, or presently plans to take, directly or
indirectly, any action designed to or which might reasonably
be expected to cause or result in, or which has constituted,
under the Exchange
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Act, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the Shares.
Since the time of becoming aware of the Offering, such persons
have not engaged in any (i) "short sales" (as such term is
defined in Rule 3b-3 promulgated under the Exchange Act) of
the Common Stock, including, without limitation, any such
transaction that transfers to another, in whole or in part,
any economic consequences or ownership, or otherwise dispose
of, any of the Shares or (ii) hedging transaction which
establishes a net short position with respect to the Shares.
SECTION 6
CONDITIONS TO PURCHASERS' OBLIGATIONS TO CLOSE
The obligation of each Purchaser to close the Offering is subject to
the fulfillment, as of the date of Closing, of the following conditions, any of
which may be waived by each such Purchaser:
6.1. REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties by the Company contained herein qualified as to materiality shall be
true and correct (in light of such qualification(s)) and those not so qualified
shall be true and correct in all material respects as of the date hereof and at
and as of the Closing as though such representations and warranties were made at
and as of such date unless limited by their terms to a prior date.
6.2. COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing shall
have been performed or complied with in all material respects.
6.3. NO INJUNCTION. No statute, rule, regulation, order, decree, ruling
or injunction shall have been enacted, entered, promulgated, endorsed or
threatened or is pending by or before any Governmental Authority of competent
jurisdiction which in any material respect restricts, prohibits or threatens to
restrict or prohibit the consummation of any of the transactions contemplated by
the Agreements.
6.4. NO SUSPENSIONS OF TRADING IN COMMON STOCK. The trading in the
Common Stock shall not have been restricted or suspended by the Commission,
Nasdaq or any other market or exchange where such Common Stock is traded (except
for any suspension of trading of limited duration solely to permit dissemination
of material information regarding the Company).
6.5 ADVERSE CHANGES. Since the date of this Agreement, no event which
has had or could reasonably be expected to have a Material Adverse Change shall
have occurred.
6.6. LITIGATION. No Proceeding shall have been instituted or threatened
against the Company that could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect.
6.7. COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Purchasers a certificate of the Company executed by the President of the
Company, dated as of the Closing, certifying to the fulfillment of the
conditions specified in Section 6 of this Agreement.
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6.8. SECRETARY'S CERTIFICATE. The Company shall have delivered to the
Purchasers a certificate of the Company executed by an officer of the Company,
dated as of the Closing, certifying (i) resolutions adopted by the Board of
Directors of the Company authorizing the execution of the Agreements, the
issuance of the Shares, the filing of the Registration Statement, and the
transactions contemplated hereby; (ii) the Certificate of Incorporation and
Bylaws of the Company, each as amended, and copies of the third party consents,
approvals and filings required in connection with the consummation of the
transactions contemplated by the Agreements; and (iii) such other documents
relating to the transactions contemplated by the Agreements as the Purchasers
may reasonably request.
6.9. OPINION OF COUNSEL. At the Closing, the Purchasers and the
Placement Agent shall have received the opinion of Xxxxxx & Bird LLP, as counsel
to the Company, dated as of Closing, in the form set forth below to the effect
that:
(a) The Company is validly existing and in good standing under
the laws of the State of Delaware, with corporate power and authority
to carry on its business as now conducted and to own, lease and operate
its assets and properties and to enter into and perform its obligations
under this Agreement, the Subscription Agreement, the Registration
Rights Agreement and the other documents and agreements to be executed
by the Company in connection with the Closing (collectively, the
"Operative Documents");
(b) The execution, delivery and performance by the Company of
each of the Operative Documents to which the Company is a party have
been duly authorized by the Company;
(c) No consent or other action by, or filing or registration
with, any Governmental Authority is required for (i) the execution and
delivery by the Company of the Operative Documents, (ii) the offer,
sale, and issuance of the Shares in accordance with the Operative
Documents, (iii) the performance by the Company of its obligations
under the Operative Documents, except such as may be required (a) in
connection with the registration under the Securities Act of the Shares
pursuant to the Registration Rights Agreement (including any filing
with the National Association of Securities Dealers, Inc.), (b) under
the "blue sky" or securities laws of any jurisdiction in connection
with the purchase and sale or resale of the Shares; (c) to provide
notice and application to list or quote the Shares on Nasdaq (and with
any other national securities exchange or automated quotation system or
market on which the Common Stock is then traded, listed or quoted), (d)
to satisfy the disclosure requirements of the Exchange Act, and the
disclosure requirements of Item 701 of SEC Regulation S-K, and (v) to
file a Form D and a Form 8-K in respect of the sale and issuance of the
Shares with the Commission (collectively, the "Required Approvals").
(d) Neither the execution and delivery of this Agreement or
the other Operative Documents, nor the consummation by the Company of
the transactions contemplated hereby or thereby (including the
issuance, sale and delivery of the Shares), nor compliance by the
Company with any of the provisions hereof or thereof, will (i)
constitute or result in a default under, or require any consent
pursuant to any contract or permit of the Company listed on Schedule A
to the opinion, (ii) conflict with or result in a breach of any
provision of the Certificate of Incorporation or Bylaws of the Company,
or any federal or state law, rule or regulation known to such counsel
of any court or federal, state or other regulatory board or body or
administrative agency having jurisdiction over the Company or over its
properties or business, or (iii) conflict with or constitute a default
under any judgment, writ, decree or order known to such counsel to be
applicable by its terms to the Company;
A-14
(e) Each of this Agreement, Subscription Agreement and the
Registration Rights Agreement have been duly authorized, executed and
delivered by the Company;
(f) When issued to a Purchaser against payment therefor in
accordance with the Agreement and other Operative Documents, each Share
will be duly and validly authorized and issued, fully paid and
nonassessable;
(g) To the knowledge of such counsel, there is no action,
suit, investigation or proceeding pending or threatened against the
Company or any of its properties or assets by or before any court,
arbitrator or Governmental Authority, department, commission, board,
bureau, agency or instrumentality, which questions the validity of the
Agreement or any action taken or to be taken pursuant hereto or
thereto;
(h) The Company is not an "investment company" or required to
register as an investment company as such term is defined in the 1940
Act and the SEC's rules and regulations thereunder; and
(i) Assuming the accuracy of the Purchasers' representations
and warranties in Section 5 of this Agreement, the accuracy of the
Company's representations and warranties in Sections 3.8 and 3.9 of
this Agreement, and the Company's and the Purchasers' satisfaction of
their respective covenants hereunder, the offer, sale and issuance of
the Shares, as contemplated by the Agreements is exempt from the
registration requirements under Section 5 of the Securities Act.
Such opinions may be subject to such assumptions, qualifications and
limitations as are customary. Without limiting the foregoing, such counsel (i)
need not express any opinion with regard to the application of laws of any
jurisdiction other than the Federal law of the United States and the relevant
corporate act of the State where the issuer is organized and (ii) may rely, as
to matters of fact, to the extent appropriate on representations or certificates
of responsible officers of the Company and certificates of public officials.
6.10 OTHER DOCUMENTS. The Company shall have delivered to each
Purchaser such other documents relating to the transactions contemplated by the
Agreements as the Purchasers or their counsel may reasonably request.
6.11. LISTING APPROVALS. The Company shall have obtained any necessary
approvals for the listing of the Shares on Nasdaq.
6.12. REGISTRATION RIGHTS AGREEMENT. The Company and the Purchasers
shall have executed, entered into and delivered the Registration Rights
Agreement to each such Purchaser.
SECTION 7
CONDITIONS TO THE COMPANY'S OBLIGATIONS TO CLOSE
The Company's obligation to close the Offering is subject to the
fulfillment as of the date of Closing, of the following conditions, any of which
may be waived by the Company:
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7.1. REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchasers herein shall be true and correct in all
material respects on the dates made and on the date of Closing.
7.2. PERFORMANCE BY THE PURCHASERS. Each Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Agreements to be performed, satisfied
or complied with by such Purchaser at or before the Closing.
7.3. NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated,
endorsed or threatened or is pending by or before any Governmental Authority of
competent jurisdiction which prohibits or threatens to prohibit the consummation
of any of the transactions contemplated by the Agreements.
7.4. RECEIPT OF FUNDS. The Company shall have received the Purchase
Price from each of the Purchasers.
SECTION 8
MISCELLANEOUS
8.1. GOVERNING LAW.
(a) This Agreement shall be governed in all respects by the laws of the
State of New York, without giving effect to the conflict of law rules thereof to
the extent that the application of the law of another jurisdiction would be
required thereby.
(b) Each of the parties hereto acknowledges and agrees that damages
will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of New York, equitable relief
of a kind appropriate in light of the nature of the ongoing or threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief. Such remedies shall not be the parties'
exclusive remedies, but shall be in addition to all other remedies provided in
this Agreement, and this provision shall survive the termination of this
Agreement.
8.2. SURVIVAL. The representations and warranties made herein shall
survive any investigation made by the Purchasers and the closing of the
transactions contemplated hereby until the first anniversary date of the
Closing.
8.3. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided that the rights of the Purchasers to purchase the Shares shall not be
assignable without the consent of the Company, not to be unreasonably withheld,
other than to Affiliates.
8.4. AMENDMENT AND WAIVER. This Agreement may not be amended or waived
except in writing executed by the party against which such amendment or waiver
is sought to be enforced. No course of dealing between or among any Persons
having any interest in this Agreement will be deemed effective to modify or
amend any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
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8.5. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
mail, postage prepaid, by reliable overnight delivery service such as UPS or
FedEx, or by facsimile transmission, or otherwise delivered by hand or by
messenger, addressed (a) if to any Purchaser, at the Purchaser's address set
forth on the Subscription Agreement, or at such other address as such Purchaser
shall have furnished to the Company in writing in the manner set forth herein,
with a copy to the Purchasers' Counsel listed below, (b) if to any other holder
of any shares, at such address as such holder shall have furnished the Company
in writing, or, until any such holder so furnishes an address to the Company,
then to and at the address of the last holder of such shares who has so
furnished an address to the Company, with a copy to the Purchasers' Counsel
listed below, or (c) if to the Company, one copy should be sent to the Company
at the address listed below, in each case with a copy to the Placement Agent at
the address also listed below. In the event that any notice or other
communication is sent by facsimile transmission to the Company, such
transmission shall be followed immediately by overnight delivery to the Company
of such notice or other communication.
Company: Placement Agent:
Indus International, Inc.. X.X. Xxxxxxxxx, Towbin
0000 Xxxxx Xxxxx Xxxxxxx 000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
with a copy to: with a copy to:
Company Counsel: Placement Agent Counsel:
Xxxxxx & Bird LLP Mayer, Brown, Xxxx & Maw LLP
One Atlantic Center 0000 Xxxxxxxx, Xxxxx 0000
0000 Xxxx Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxxxx 00000-0000 Attention: Xxxxxx X. Xxxxx
Attention: Xxxxx Xxxxxxx Facsimile: (000) 000-0000
Facsimile: 404) 253-8376
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered, or if by
facsimile transmission, as indicated by the facsimile imprint date.
8.6. DELAYS OR OMISSIONS; RIGHTS CUMULATIVE. Except as expressly
provided herein, no delay or omission to exercise any right, power or remedy
accruing to any Purchaser upon any breach or default of the Company under the
Agreements shall impair any such right, power or remedy of such Purchaser, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Purchaser of any
breach or default under this Agreement, or any waiver on the part of any party
hereto of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
Purchaser, shall be cumulative and not alternative.
8.7. EXPENSES. All fees, costs and expenses (including attorneys' fees
and expenses) incurred by any party hereto in connection with the preparation,
negotiation and execution of this Agreement and the
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exhibits and schedules hereto and the consummation of the transactions
contemplated hereby and thereby (including the costs associated with any filings
with, or compliance with any of the requirements of any governmental
authorities), shall be the sole and exclusive responsibility of such party.
8.8 SUBSCRIPTION AGREEMENT; COUNTERPARTS. Persons may become parties to
this Agreement by executing the Subscription Agreement, which may be executed in
two or more identical counterparts and by facsimile, each of which shall be
deemed an original and all of which shall constitute one and the same agreement.
Any signature that is delivered by facsimile transmission shall be valid and
binding, with the same force and effect as if an original, manually signed
counterpart.
8.9. SEVERABILITY. In the event that any provision of this Agreement is
unenforceable, the remaining provisions shall continue in full force and effect.
8.10. SECTION HEADINGS, ETC. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement. As used herein, any gender shall include all other
genders, and the singular shall include the plural and vice versa. The terms
"include," "including" and similar terms shall mean include without limitation,
whether by enumeration or otherwise.
8.11. NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and no other person is intended to or shall have any rights hereunder
whether as a third party beneficiary or otherwise.
8.12. INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. The obligations of each Purchaser are not conditioned upon
the action of any other Purchaser. Nothing contained herein or in any other
agreement or document delivered at the Closing, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of Person, or create a presumption that the Purchasers are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to protect and enforce its
rights, including, without limitation, the rights arising out of the Agreements,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.
8.13. FURTHER ASSURANCES; COOPERATION. Each party shall do and perform,
and shall cooperate with and assist each other to do or perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other parties may reasonably request in order to carry out the intent and
accomplish the purposes of the Agreements and the consummation of the
transactions contemplated thereby in a timely manner, and further agrees not to
take any actions, or to permit, authorize or direct any of its affiliates to
take any actions, that would have the effect of delaying, threatening the
success of, or preventing in any way the transactions contemplated by each of
the Agreements.
8.14. PUBLIC STATEMENTS OR RELEASES. Neither the Company nor any
Purchaser shall make any public announcement with respect to the existence or
terms of this Agreement or the transactions provided for herein without the
prior approval of the other parties, which shall not be unreasonably withheld or
delayed. Any such public announcement shall not include the name of any
Purchaser without the express approval of such Purchaser. Notwithstanding the
foregoing, nothing in this Section 8.14 shall prevent any party from making any
public announcement it considers necessary in order to satisfy its obligations
under the law or the rules of any national securities exchange or Nasdaq;
provided such party,
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to the extent practicable, provides the other parties or their representatives
with an opportunity to review and comment on any proposed public announcement
before it is made.
8.15. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Registration
Rights Agreement, the Subscription Agreement and the other Agreements constitute
the entire understanding and agreement between the Purchasers and the Company
with regard to the subject matter. Except as expressly provided herein, this
Agreement, any of the other Agreements or any term hereof may be amended,
modified, waived or discharged only by a written instrument signed by the party
waiving any term, condition, or right or remedy that benefits it hereunder.
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SCHEDULE OF INVESTORS
Amaranth L.L.C.
Anno, L.P.
Atlas Equity I, Ltd.
Bald Eagle Fund LTD
Basso Equity Opportunity Holding Fund Ltd.
Basso Multi-Strategy Holding Fund Ltd.
Chestnut Ridge Partners, L.P.
Columbia Xxxxx Fund
Common Fund Hedged Equity Company
Contra Offshore Partners, Ltd.
DKR SoundShore Strategic Holding Fund Ltd.
GW 2001 Fund, L.P.
Iroquois Capital L.P.
Xxxx Xxxxxxxx XXX
Kensington Partners, X.X.
Xxxxx Partners L.P.
Laddcap Value Partners XX
Xxxxxxx Partners, L.P.
MAIG Partners
Matterhorn Offshore Fund Ltd.
Optimum Small Cap Growth Fund
PCM Partners X.X. XX
Paulou Children's Trust DTD 10/15/97
RHP Master Fund, Ltd.
S.A.C. Capital Associates, LLC
SF Capital Partners Ltd.
Shoshone Partners, LLP
Smithfield Fiduciary LLC
Smart Xxxxxxxx Money Purchase Plan
STG Capital Fund Ltd.
STG Capital Partners (AP) LP
TCMP(3) Partners
Truk International Fund, LP
Truk Opportunity Fund, LLC
Xxxxxx Partners, LP
UT Technology Fund, Ltd.
UT Technology Partners I, L.P.
UT Technology Partners II, L.P.
Vertical Ventures, LLC
Xxxxxx US Smaller Companies
Xxxxx Capital Partners, L.P.
