SECURITIES PURCHASE AGREEMENT
among
XXXXXXXX.XXX, INC.
and
THE PURCHASERS LISTED ON SCHEDULE I
Dated as of February 9, 2000
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
February 9, 2000, among Xxxxxxxx.Xxx, Inc., a Nevada corporation (the
"Company"), and the various purchasers identified and listed on Schedule I
hereto (each referred to herein as a "Purchaser" and, collectively, the
"Purchasers").
WHEREAS, the Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 under Regulation D as promulgated by the United States Securities
and Exchange Commission (the "Commission") under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"); and
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchasers, and the Purchasers
desire to acquire from the Company, in the aggregate 769,231 shares of the
Company's Series B Convertible Preferred Stock, par value $ 0.01 per share
(the "Preferred Stock"), and warrants (the "Warrants") to purchase the
Company's common stock, par value $0.01 per share (the "Common Stock"), in the
form of Exhibit B annexed hereto; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement in the form of Exhibit C annexed hereto (the "Registration
Rights Agreement") pursuant to which the Company has agreed to provide certain
registration rights under the Securities Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter contained, the Company and the Purchasers hereby agree
as follows:
ARTICLE I.
PURCHASE AND SALE OF THE PREFERRED STOCK
AND WARRANTS
1.1 Purchase and Sale. Subject to the terms and conditions set forth
herein, the Company shall issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, shall purchase from the Company on the
Closing Date (as defined below), the number of shares of Preferred Stock and
a Warrant to purchase the number of shares of Common Stock as set forth for
such Purchaser on Schedule I hereto. The Preferred Stock shall have the
respective rights, preferences and privileges set forth in the Certificate of
Designation (the "Certificate of Designation"), in the form of Exhibit A
annexed hereto, which shall be approved by the Purchasers and the Company's
Board of Directors and shall be filed on or prior to the Closing Date (as
defined in Section 1.2 hereof) by the Company with the Secretary of State of
the State of Nevada.
1.2 Closing. The closing of the purchase and sale of the Preferred
Stock and the issuance of the Warrants (the "Closing") shall take place at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or by transmission by facsimile and overnight courier,
immediately following the execution hereof, or such later date or different
location as the parties shall agree, but not prior to the date that the
conditions set forth in Section 4.1 have been satisfied or waived by the
appropriate party (the "Closing Date"). At the Closing:
(a) Each Purchaser shall deliver, as directed by the Company,
its portion of the purchase price as set forth next to its name on Schedule I
hereto in United States dollars in immediately available funds to an account
or accounts designated in writing by the Company;
(b) The Company shall deliver to each Purchaser a
certificate(s) representing the shares of Preferred Stock purchased by such
Purchaser as set forth on Schedule I hereto;
(c) The Company shall deliver to each Purchaser a Warrant, in
the form of Exhibit B hereto, representing the right to acquire the number of
shares of Common Stock purchased by such Purchaser as set forth on Schedule I
hereto; and
(d) The parties shall execute and deliver each of the
documents referred to in Section 4.1 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to each of
the Purchasers:
(a) Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. Except as set forth on Schedule 2.1(a), the Company has
no subsidiaries (collectively, the "Subsidiaries"). Each of the Subsidiaries
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns the majority of such entity's capital stock or
holds an equivalent equity or similar interest) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
full corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. Each of the Company and
its Subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing as a foreign corporation 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, would not, individually or in the
aggregate, (x) adversely affect the legality, validity or enforceability of
any of this Agreement or the Transaction Documents (as defined in Section
2.1(b)) or any of the transactions contemplated hereby or thereby, (y) have or
result in a material adverse effect on the business, operations, properties,
assets, liabilities, prospects, results of operations or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole or (z)
impair the Company's ability to perform fully on a timely basis its
obligations under any Transaction Document (any of (x), (y) or (z), being a
"Material Adverse Effect.
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Certificate of Designation, the
Warrants and the Registration Rights Agreement (collectively, the "Transaction
Documents"), and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action and no further action is required by the Company,
its Board of Directors or its stockholders in connection therewith. This
Agreement and each of the Transaction Documents have been duly executed by the
Company and, when delivered in accordance with the terms hereof or thereof,
will constitute the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application, and except that rights to
indemnification and contribution may be limited by federal or state securities
laws or public policy relating thereto.
(c) Capitalization. As of the date hereof, the authorized
capital stock of the Company is as set forth in Schedule 2.1(c). All of such
outstanding shares of capital stock have been, or upon issuance will be, duly
authorized and validly issued, fully paid and nonassessable and were issued in
accordance with the registration or qualification provisions of the Securities
Act, or pursuant to valid exemptions therefrom. Except as disclosed in
Schedule 2.1(c), (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens, claims or
encumbrances suffered or permitted by the Company, nor is any holder of the
Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of any Transaction
Document, (ii) there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable or exercisable for, or
giving any Person (as defined below) any right to subscribe for or acquire,
any shares of capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable or
exercisable for, any shares of capital stock of the Company or any of its
Subsidiaries, (iii) there are no outstanding debt securities of the Company or
any of its Subsidiaries, (iv) there are no contracts, commitments,
understandings, agreements or arrangements under which the Company or any of
its Subsidiaries is obligated to register the sale of any of their securities
under the Securities Act (except the Registration Rights Agreement), (v) there
are no outstanding securities of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings, agreements or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries, (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the shares of Preferred Stock or Warrants, or
upon the conversion of the Preferred Stock or exercise of the Warrants, (vii)
the Company does not have any stock appreciation rights or "phantom stock"
plans or agreements, or any similar plan or agreement and (viii) except as
specifically disclosed in the SEC Documents (as defined in Section 2.1(k)
hereof), no Person or group of related Persons beneficially owns (as
determined pursuant to Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or has the right to acquire by
agreement with or by obligation binding upon the Company beneficial ownership
of in excess of 5% of the Common Stock. As used herein, "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 political subdivision thereof) or other entity of
any kind.
(d) Authorization, Validity and Issuance of Shares. Prior to
the Closing Date the Certificate of Designation has been filed with the
Secretary of State of the State of Nevada. The shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants
(collectively, the "Underlying Shares") are and will at all times hereafter
continue to be duly authorized and reserved for issuance and the shares of
Common Stock issued upon conversion of the Preferred Stock (the "Conversion
Shares") and exercise of the Warrants (the "Warrant Shares") will be validly
issued, fully paid and non-assessable, free and clear of all liens, claims,
encumbrances, other than rights created by the Transaction Documents and
liens, claims and encumbrances created by the Purchasers (collectively,
"Liens") and will not be subject to any preemptive or similar rights.
(e) No Conflicts. The execution, delivery and performance of
this Agreement and each of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby (including the issuance of the Underlying Shares) do not and will not
(i) conflict with or violate any provision of the Company's Articles of
Incorporation as amended and in effect on the date hereof (the "Articles of
Incorporation"), the Company's Bylaws, as in effect on the date hereof (the
"Bylaws"), or other organizational documents of the Company or any of its
Subsidiaries, (ii) subject to obtaining the consents referred to in Section
2.1(f), conflict with, or constitute a breach or a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
other Persons any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, license or instrument
(evidencing a Company or Subsidiary 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 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 or
exchange on which the Common Stock is traded or listed) applicable to the
Company or any of its Subsidiaries, or by which any material property or asset
of the Company or any of its Subsidiaries is bound or affected.
(f) Consents and Approvals. Except as specifically set forth
on Schedule 2.1(f), neither the Company nor any of its Subsidiaries is
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority, regulatory or self
regulatory agency, or other Person in connection with the execution, delivery
and performance by the Company of this Agreement or any of the Transaction
Documents, other than (i) the filing of a registration statement with the
Commission, which shall be filed in accordance with and in the time periods
set forth in the Registration Rights Agreement, (ii) the application(s) or any
letter(s) acceptable to the American Stock Exchange ("AMEX") for the listing
of the Underlying Shares with AMEX, (iii) any filings, notices or
registrations under applicable state securities laws and (iv) the approval of
the Company's Board of Directors and the filings of the Certificate of
Designation with the Secretary of State of the State of Nevada, which filing
and approval shall be effected on or prior to the Closing Date (together with
the consents, waivers, authorizations, orders, notices and filings referred to
on Schedule 2.1(f), the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically set forth
on Schedule 2.1(g), there is no action, suit, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties or assets before or by any
court, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) or any arbitrator, which (i) adversely
affects or challenges the legality, validity or enforceability of any of this
Agreement or any of the Transaction Documents, (ii) could reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect
or (iii) if adversely decided, could reasonably be expected to have a material
adverse effect on the issuance or conversion of the Preferred Stock or the
Conversion Shares, or the issuance or exercise of the Warrants or the Warrant
Shares, or the consummation of the transactions contemplated by this Agreement
and the Transaction Documents.
(h) No Default or Violation. Neither the Company nor any of
its Subsidiaries is (i) in default under or in violation of any indenture,
loan or other credit agreement or any other agreement or instrument to which
it is a party or by which it or any of its properties or assets is bound, (ii)
in violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court, arbitrator or governmental authority
applicable to it or any law, statute, ordinance, rule or regulation of any
governmental authority to which it is subject or (iii) in violation of any of
the provisions of its Articles of Incorporation, Bylaws or other charter
documents such that any right of a holder of the Preferred Stock would be
affected. The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, statute,
ordinance, rule or regulation of any governmental authority, except where such
violations have not resulted or would not reasonably result, individually or
in the aggregate, in a Material Adverse Effect.
(i) Disclosure; Absence of Certain Changes. None of this
Agreement, the Schedules to this Agreement, the Transaction Documents, the SEC
Documents or any other written or formally presented information, report,
financial statement, exhibit, schedule or document furnished by or on behalf
of the Company in connection with the negotiation of the transactions
contemplated hereby contained, contains, or will contain at the time it was or
is so furnished any untrue statement of a material fact or omitted, omits or
will omit at such time to state any material fact necessary in order to make
the statements made herein and therein, in light of the circumstances under
which they were made, not misleading. Except as disclosed on Schedule 2.1(i)
or in SEC Documents filed on XXXXX at least five (5) business days prior to
the date hereof, since March 31, 1999, there has been no material adverse
change and no material adverse development in the business, properties,
operations, condition (financial or otherwise), assets, liabilities or results
of operations or, insofar as can reasonably be foreseen, prospects of the
Company or its Subsidiaries. The Company has not taken any steps, and does
not currently expect to take any steps, to seek protection pursuant to any
bankruptcy law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that their respective creditors intend to
initiate involuntary bankruptcy proceedings. No event, liability, development
or circumstance has occurred or exists, or is contemplated to occur, with
respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, condition (financial or otherwise), assets,
liabilities or results of operations or, insofar as can reasonably be
foreseen, prospects, that would be required to be disclosed by the Company
under applicable securities laws on a registration statement (including by way
of incorporation by reference) filed with the Commission, on the date this
representation is made or deemed to be made, relating to an issuance and sale
by the Company of its Common Stock and which has not been publicly disclosed.
(j) Private Offering; Solicitation. The Company and all
Persons acting on its behalf have not (i) made, directly or indirectly, and
will not make, offers or sales of any securities or solicited any offers to
buy any security under circumstances that would require registration of the
Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares or
the issuance of such securities under the Securities Act, (ii) distributed any
offering materials in connection with the offering and sale of the Preferred
Stock or the Warrants, other than the SEC Documents, the Schedules to this
Agreement, any amendments and any supplements thereto, or (iii) solicited any
offer to buy or sell the Preferred Stock or the Warrants by means of any form
of general solicitation or advertising (as those terms are used in Rule 502(c)
of Regulation D under the Exchange Act) in a manner which would require
registration under the Securities Act. The offer, issuance and sale of the
Preferred Stock, the Warrants, the Conversion Shares and the Warrant Shares to
the Purchasers will not be integrated with any other offer, sale and issuance
of the Company's securities (past, current, or future) under the Securities
Act or any regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed, quoted or designated or for
purposes of any stockholder approval provision applicable to the Company or
its securities. Subject to the accuracy and completeness of the
representations and warranties of the respective Purchasers contained in
Section 2.2 hereof, the offer, issuance and sale by the Company to the
Purchasers of the Preferred Stock, the Warrants and the Underlying Shares is
exempt from the registration requirements of the Securities Act.
(k) SEC Documents; Financial Statements. The Common Stock of
the Company is registered pursuant to Section 12(g) of the Exchange Act. The
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission pursuant to the
reporting requirements of the Exchange Act, including pursuant to Section 13,
14 or 15(d) thereof (the foregoing materials and all exhibits included therein
and financial statements and schedules thereto and documents (other than
exhibits to such documents) incorporated by reference therein being
collectively referred to herein as the "SEC Documents"), on a timely basis or
has received a valid extension of such time of filing and has filed any such
SEC Documents prior to the expiration of any such extension. As of their
respective dates, the SEC Documents 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
Documents, 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. All agreements to which the Company or
any of its Subsidiaries is a party or to which the property or assets of the
Company or any of its Subsidiaries are subject and which are required to be
filed as exhibits to the SEC Documents have been filed as exhibits to the SEC
Documents as required and neither the Company nor any of its Subsidiaries nor,
to the Company's knowledge, any other party is in breach of any such
agreement. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved, 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 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. No other information provided by or on behalf of the
Company to the Purchasers which is not included in the SEC Documents,
including, without limitation, information referred to in Section 2.1(i) of
this Agreement, contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they are or were made, not misleading.
Neither the Company nor any of its Subsidiaries nor any of their officers,
directors, employees or agents have provided the Purchasers with any material
non-public information. The Company acknowledges that the Purchasers will be
trading in the securities of the Company in reliance on the foregoing
representation and warranty.
(l) Investment Company. The Company is not, and is not
controlled by or under common control with an Affiliate (as defined in Section
3.11) of an "investment company" within the meaning of the Investment Company
Act of 1940, as amended. As used herein, "Affiliate" means, with respect to
any Person, any other Person that directly or indirectly controls or is
controlled by or under common control with such Person.
(m) Broker's Fees. No fees or commissions or similar payments
with respect to the transactions contemplated by this Agreement or the
Transaction Documents have been paid or will be payable by the Company to any
broker, financial advisor, finder, investment banker or bank, other than as
set forth in Schedule 2.1(m). 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 2.1(m) that may
be due in connection with the transactions contemplated by this Agreement and
the Transaction Documents.
(n) Form S-3 Eligibility. The Company is, and at the Closing
Date will be, eligible to register securities (including the Underlying
Shares) for resale with the Commission under Form S-3 promulgated under the
Securities Act.
(o) Listing and Maintenance Requirements Compliance. The
principal market on which the Common Stock is currently traded is AMEX.
Except as disclosed on Schedule 2.1(o), the Company has not, since the initial
listing of its Common Stock on AMEX, received notice (written or oral) from
AMEX to the effect that the Company is not in compliance with the listing or
maintenance requirements of such exchange, market or trading facility. The
Company is not in default under or in violation of any of the listing or
quotation requirements of AMEX as in effect on the date hereof and the Company
is not aware of any facts which could reasonably lead to delisting or
suspension of the Common Stock by AMEX. After giving effect to the
transactions contemplated by this Agreement and the Transaction Documents, the
Company will be in compliance with all such listing and maintenance
requirements.
(p) Intellectual Property Rights. The Company and each of its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trademark applications, trade names and service marks, whether or not
registered, and all patents, patent applications, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and
intellectual property rights (collectively, "Intellectual Property Rights")
which are necessary for use in connection with their respective businesses as
now conducted and as described in the SEC Documents. Except as set forth on
Schedule 2.1(p), none of the Intellectual Property Rights of the Company or
any of its Subsidiaries has expired or terminated, or is expected to expire or
terminate within two (2) years from the date of this Agreement. Neither the
Company nor any of its Subsidiaries has infringed or is infringing on any of
the Intellectual Property Rights of any other Person and, except as set forth
on Schedule 2.1(p), there is no claim, action or proceeding which has been
made or brought or alleged against, or to the knowledge of the Company and its
Subsidiaries, is being made, brought or threatened against, the Company or any
of its Subsidiaries regarding the infringement of any of the Intellectual
Property Rights of the Company or any of its Subsidiaries, and the Company and
its Subsidiaries are unaware of any facts or circumstances which might give
rise to any of the foregoing, except where any of the foregoing would not 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.
(q) Tax Status; Firpta. Except as set forth on Schedule
2.1(q), the Company and each of its Subsidiaries have made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
(which are set forth on Schedule 2.1(q) hereof), and have set aside on their
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due
from the Company or any of its Subsidiaries by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company is not a "United States real property holding corporation"
within the meaning of Section 847(c)(2) of the Internal Revenue Code of 1986,
as amended.
(r) Registration Rights; Rights of Participation. Except as
described on Schedule 2.1(r) hereto, (i) 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 and (ii) no Person,
including, but not limited to, 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 this Agreement or any Transaction Document.
(s) Title. Except as disclosed on Schedule 2.1(s), the
Company and each of its Subsidiaries have good and marketable title in fee
simple to all real property and personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each case
free and clear of all Liens, except for Liens that do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and its Subsidiaries. Any real
property and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and, to the best knowledge of the
Company and its Subsidiaries, enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and the Subsidiaries.
(t) Permits. The Company and each of its Subsidiaries possess
all certificates, authorizations, licenses, easements, consents, approvals,
orders and permits necessary to own, lease and operate their respective
properties and to conduct their respective businesses as currently conducted
except where the failure to possess such permits would not, individually or in
the aggregate, have a Material Adverse Effect ("Material Permits"), and there
is no claim, action or proceeding pending, or, to the knowledge of the Company
or its Subsidiaries, threatened, relating to the revocation, modification,
suspension or cancellation of any Material Permit. Neither the Company nor
any of the Subsidiaries is in conflict with, in default under or in violation
of any Material Permit.
(u) Insurance. The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverages as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business, at a cost that
would not materially and adversely affect the business, operations,
properties, assets, liabilities, prospects, results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole.
(v) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorizations 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.
(w) Transactions With Affiliates. Except as set forth on
Schedule 2.1(w), and other than the granting of stock options and documents
disclosed on Schedule 2.1(c), none of the officers, directors or employees of
the Company is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real property
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 Person in which any officer, director or any such employee has a
substantial interest or is an officer, director, trustee or partner.
(x) Application to Takeover Protection. The Company and its
Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination or other
similar anti-takeover provision under the Articles of Incorporation, Bylaws or
the laws of the state of incorporation of the Company which is or could become
applicable to the Purchasers or the Transaction Documents as a result of the
transactions contemplated by this Agreement and the Transaction Documents.
None of the transactions contemplated by this Agreement and the Transaction
Documents, including the conversion of the Preferred Stock and the exercise of
the Warrants, will trigger any poison pill provisions of any of the Company's
stockholders' rights or similar agreements.
(y) Foreign Corrupt Practices. Neither the Company, nor any
of its Subsidiaries, nor any director, officer, agent, employee or other
Person acting on behalf of the Company or any of its Subsidiaries has, in the
course of its actions for, or on behalf of, the Company or any of its
Subsidiaries (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds, (iii) violated (or is in
violation of) any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended, or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
(z) Acknowledgment of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Conversion Shares and Warrant Shares upon conversion of the
Preferred Stock or exercise of the Warrants. The Company further acknowledges
that its obligation to issue Conversion Shares and Warrant Shares upon
conversion of the Preferred Stock or exercise of the Warrants in accordance
with this Agreement, the Certificate of Designation and the Warrants is
absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other stockholders of the
Company.
(aa) Acknowledgment Regarding Purchasers' Purchase of
Preferred Stock and Warrants. The Company acknowledges and agrees that the
Purchasers are acting solely in the capacity of arm's length purchasers with
respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that no Purchaser is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect
to this Agreement and the transactions contemplated hereby and any statement
made by any Purchaser or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to the Purchasers'
purchase of the Preferred Stock and the Warrants. The Company further
represents to each Purchaser that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation of the Company
and its representatives.
(bb) Solvency. The Company (both before and after giving
effect to the transactions contemplated by this Agreement) is solvent (i.e.,
its assets have a fair market value in excess of the amount required to pay
its probable liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would lead it to
reasonably conclude that the Company would not have the ability to, nor does
it intend to take any action that would impair its ability to, pay its debts
from time to time incurred in connection therewith as such debts mature. The
Company did not receive a qualified opinion from its auditors with respect to
its most recent fiscal year end and does not anticipate or know of any basis
upon which its auditors might issue a qualified opinion in respect of its
current fiscal year.
(cc)
(dd) Other Agreements. The Company has not, directly or
indirectly, made any agreements with any Purchasers relating to the terms and
conditions of the transactions contemplated by this Agreement and the
Transaction Documents except as set forth in this Agreement and the
Transaction Documents.
2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers, severally and not jointly, hereby represents and warrants to the
Company (as to itself) as follows:
(a) Organization; Authority. Such Purchaser is a corporation
or a limited duration company or a limited liability company or limited
partnership duly formed, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, organization or formation with the
requisite power and authority, corporate or otherwise, to enter into and to
consummate the transactions contemplated hereby and by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The purchase by such Purchaser of the Preferred Stock and the Warrants
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. This Agreement and the Registration Rights Agreement have been
duly executed and delivered by such Purchaser and constitute the valid and
legally binding obligations of such Purchaser, enforceable against such
Purchaser in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable
principles of general application, and except that rights to indemnification
and contribution may be limited by federal or state securities laws or public
policy relating thereto.
(b) Investment Intent. Such Purchaser is acquiring the
Preferred Stock and the Warrants for its own account and not with a present
view to (i) acquiring control of the Company or taking any actions or causing
any of the effects set forth in Items 4(b), (c), (h) or (i) of Schedule 13D or
(ii) for distributing or reselling the Preferred Stock, the Warrants, the
Conversion Shares or the Warrant Shares or any part thereof or interest
therein in violation of the Securities Act; provided, however, that by making
the representations herein, such Purchaser does not agree to hold any of the
Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of the
Preferred Stock, the Warrants, the Conversion Shares and the Warrant Shares at
any time in accordance with or pursuant to a registration statement or an
exemption under the Securities Act.
(c) Purchaser Status. At the time such Purchaser was offered
the Preferred Stock and the Warrants, and at the Closing Date, (i) it was and
will be an "accredited investor" as defined in Rule 501 under the Securities
Act and (ii) such Purchaser, either alone or together with its
representatives, had and will have 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 Preferred Stock and
the Warrants.
(d) Reliance. Such Purchaser understands and acknowledges
that (i) the Preferred Stock and the Warrants are being offered and sold to
such Purchaser without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities
Act under Section 4(2) of the Securities Act or Regulation D promulgated
thereunder and (ii) the availability of such exemption depends in part on, and
the Company will rely upon the accuracy and truthfulness of, the
representations set forth in this Section 2.2 and such Purchaser hereby
consents to such reliance.
(e) Information. Such Purchaser and its advisors, if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Preferred Stock and the Warrants which have been requested by such Purchaser
or its advisors. Such Purchaser and its advisors, if any, have been afforded
the opportunity to ask questions of the Company. 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 Purchaser's
right to rely on the Company's representations and warranties contained in
Section 2.1 above or representations and warranties of the Company contained
in any other Transaction Document. Such Purchaser understands that its
investment in the Preferred Stock and the Warrants involves a significant
degree of risk.
(f) 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 Preferred Stock or the Warrants.
(g) Residency. Such Purchaser is a resident of the
jurisdiction set forth immediately below such Purchaser's name on Schedule II
hereto.
The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2. The
Company further acknowledges that the Purchasers, collectively, are not acting
as a group pursuant to Rule 13-d of the Exchange Act.
ARTICLE III.
OTHER AGREEMENTS
3.1 Transfer Restrictions; Legend.
(a) Transfer Restrictions. If any Purchaser should decide to
sell or dispose of any of the Preferred Stock and/or Warrants held by it, such
Purchaser shall give notice to the Company (in accordance with Section 6.2
hereof) of the name(s) of the proposed transferee(s), the proposed purchase
price and other terms of the proposed transfer. The Company shall have ten
(10) Business Days from the date of such notice to purchase the Preferred
Stock and/or Warrants proposed to be sold for the purchase price, and upon the
same terms and conditions, specified in such notice. Further, If any
Purchaser should decide to dispose of the Preferred Stock, the Warrants, the
Conversion Shares or the Warrant Shares held by it, such Purchaser understands
and agrees that it may do so only pursuant to an effective registration
statement under the Securities Act, pursuant to an available exemption from
the registration requirements of the Securities Act or Rule 144 promulgated
under the Securities Act ("Rule 144") or the Company. The Company shall
announce any material non-public information that it legally is required to
announce on or prior to the Effectiveness Date (as defined in the Registration
Rights Agreement) of the registration statement filed pursuant to the
Registration Rights Agreement and shall not enter into any subsequent
non-disclosure agreements that would prevent it from announcing any such
information that otherwise legally could have been announced on or prior to
the Effectiveness Date, unless confidential treatment for such information is
granted by the Commission. In connection with any transfer or disposition of
any Preferred Stock, Warrants, Conversion Shares or Warrant Shares other than
pursuant to an effective registration statement, Rule 144 or to the Company,
the Company may require the transferor thereof to provide to the Company a
written opinion of counsel experienced in the area of United States securities
laws selected by the transferor, the form and substance of which opinion shall
be customary for opinions of counsel in comparable transactions, to the effect
that such transfer or disposition does not require registration of such
transferred securities under the Securities Act; provided, however, that if
the Preferred Stock, Warrants, Conversion Shares or Warrant Shares may be sold
pursuant to Rule 144(k), no written opinion of counsel shall be required from
the Purchaser if such Purchaser provides reasonable assurances that such
security can be sold pursuant to Rule 144(k). Notwithstanding the foregoing,
the Company hereby consents to and agrees to register any transfer by any
Purchaser to an Affiliate of such Purchaser, provided that the transferee
certifies to the Company that it is an "accredited investor" as defined in
Rule 501(a) under the Securities Act. Any such transferee shall also 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 Transaction Documents. If a
Purchaser provides the Company with an opinion of counsel, the form and
substance of which opinion shall be customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Preferred Stock, the Conversion Shares, the Warrants and/or
the Warrant Shares may be made without registration under the Securities Act,
or the Purchaser provides the Company with reasonable assurances that the
Preferred Stock, the Warrants, the Conversion Shares and/or the Warrant Shares
can be sold pursuant to Rule 144 without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold,
the Company shall permit the transfer. Notwithstanding the foregoing or
anything else contained herein to the contrary, the Preferred Stock, the
Warrants, the Conversion Shares and the Warrant Shares may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement. Each Purchaser shall give the Company five (5) Business Days
advance notice of any intended sale or transfer (whether or not pursuant to a
registration statement) of a number of shares of Common Stock equal to or in
excess of five percent (5%) of the number of shares of Common Stock of the
Company then outstanding.
(b) Legend. Each Purchaser hereby agrees to the imprint of a
legend on the Preferred Stock and the Warrants referring to the rights of the
Company under Section 3.1(a). Further, each Purchaser agrees to the
imprinting, so long as is required by this Section 3.1(b), of the following
legend on the Preferred Stock, the Warrants, the Conversion Shares and the
Warrant Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION 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.
Neither the Conversion Shares nor the Warrant Shares shall contain
the legend set forth above (or any other legend) (i) at any time while a
registration statement is effective under the Securities Act covering such
security, (ii) if, in the written opinion of counsel to the Company
experienced in the area of United States securities laws, such legend is not
required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the
Commission) or (iii) if such Conversion Shares or Warrant Shares may be sold
pursuant to Rule 144. The Company agrees that it will provide each Purchaser,
upon request, with a certificate or certificates representing the Conversion
Shares or the Warrant Shares, free from such legend at such time as such
legend is no longer required hereunder. If such certificate or certificates
had previously been issued with such a legend or any other legend, the Company
shall, upon request and delivery of such certificate or certificates to the
Company by such Purchaser, reissue to such Purchaser such certificate or
certificates free of any legend.
3.2 Stop Transfer Instruction. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company which
enlarge the restrictions on transfer set forth in Section 3.1.
3.3 Furnishing of Information. As long as any Purchaser owns any
Preferred Stock, Warrants, Conversion Shares or Warrant Shares, the Company
will cause the Common Stock to continue at all times to be registered under
Section 12 of the Exchange Act, will 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 Sections
13, 14 or 15(d) of the Exchange Act and, unless filed by XXXXX, will promptly
furnish, but in no event later than two (2) business days after the filing
thereof with the Commission, the Purchasers with true and complete copies of
all such filings, and will not take any action or file any document (whether
or not permitted by the Exchange Act or the rules thereunder) to terminate or
suspend such reporting and filing obligations, and will make and keep public
information available, as those terms are defined in Rule 144. As long as any
Purchaser owns any Preferred Stock, Warrants, Conversion Shares or Warrant
Shares, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been
made under the Exchange Act. The Company also agrees to send the following to
each Purchaser prior to and during the Effectiveness Period (as defined in the
Registration Rights Agreement): (i) on the same day as the release thereof,
facsimile copies of all press releases issued by the Company or any of its
Subsidiaries and (ii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders. The Company further covenants that it will take such further
action as any holder of the Preferred Stock, the Warrants, the Conversion
Shares or the Warrant Shares may reasonably request, all to the extent
required from time to time to enable such Person to sell the Preferred Stock,
the Warrants, the Conversion Shares or the Warrant Shares without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 promulgated under the Securities Act, including the legal opinion
referenced above in Section 3.1(b). Upon the request of any such Person, the
Company shall deliver to such Person a written certification of a duly
authorized officer as to whether it has complied with such requirements.
3.4 Blue Sky Laws. In accordance with the Registration Rights
Agreement, the Company shall (a) qualify the Conversion Shares and the Warrant
Shares under the securities or "blue sky" laws of such jurisdictions as the
Purchasers may request (or to obtain an exemption from such qualification),
(b) provide evidence of any such action so taken to each Purchaser on or prior
to the Effectiveness Date (as defined in the Registration Rights Agreement)
and (c) continue such qualification at all times through the resale of all
Conversion Shares or Warrant Shares.
3.5 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 Preferred Stock, the Warrants, the Conversion Shares or
the Warrant Shares in a manner that would require the registration under the
Securities Act of the sale to any Purchaser of the Preferred Stock, the
Warrants, the Conversion Shares or the Warrant Shares or cause the offering of
such securities to be integrated with any other offering of securities by the
Company for the purpose of any stockholder approval provision applicable to
the Company or its securities.
3.6 Listing, Registration and Reservation of Conversion Shares and
Warrant Shares.
(a) Listing of Shares. Prior to the Closing Date the Company
shall (i) prepare and file with AMEX an additional shares listing application
covering and listing a number of shares of Common Stock which is at least
equal to 100% of the maximum number of Underlying Shares then issuable, (ii)
take all steps necessary to cause the Underlying Shares to be approved for
listing on AMEX and (iii) provide the Purchasers evidence, in the form
customarily given by AMEX and acceptable to Purchasers, of such listing. The
Company shall maintain, so long as any Purchaser owns any shares of Preferred
Stock, Conversion Shares, Warrants or Warrant Shares, such listing of all such
Underlying Shares (and any shares of the Company's capital stock issued with
respect to the Underlying Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise) on AMEX
(as well as on any other national securities exchange or market quotation
system on which the Common Stock is then listed or quoted) and neither the
Company nor any of its Subsidiaries shall take any action which may result in
the delisting or suspension of the Common Stock on AMEX (or such other
national securities exchange or market quotation system on which the Common
Stock is then listed or quoted). The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 3.6(a).
(b) Registration of Shares. The number of shares of Common
Stock initially included in the Initial Registration Statement (as defined in
the Registration Rights Agreement) shall be determined pursuant to Section
2(a) of the Registration Rights Agreement.
(c) Reservation of Shares. The Company at all times shall
reserve a sufficient number of shares of its authorized but unissued Common
Stock to provide for 100% of the full conversion of the outstanding Preferred
Stock and exercise of the outstanding Warrants. Shares of Common Stock
reserved for issuance upon conversion of the Preferred Stock and the exercise
of the Warrants shall be allocated pro rata to each of the Purchasers in
accordance with the amount of Preferred Stock and Warrants issued and
delivered to such Purchaser at the Closing. If at any time the number of
shares of Common Stock authorized and reserved for issuance is insufficient to
cover 100% of the number of Conversion Shares and Warrant Shares issued and
issuable upon conversion of the Preferred Stock and exercise of the Warrants
(based on the Conversion Price (as defined in the Certificate of Designation)
of the Preferred Stock in effect from time to time) without regard to any
limitation on conversions or exercises, the Company will promptly take all
corporate action necessary to authorize and reserve 100% of such shares
pursuant to Section 3(b) of the Registration Rights Agreement, including,
without limitation, calling a special meeting of stockholders to authorize
additional shares to meet the Company's obligations under this Section 3.6(c),
in the case of an insufficient number of authorized shares, and using its best
efforts to obtain stockholder approval of an increase in such authorized
number of shares.
3.7 Notice of Breaches and Violations; Purchaser Default.
(a) Notice of Breach. The Company and each Purchaser shall
give prompt written notice to each other of any breach by it of any
representation, warranty or other agreement contained in this Agreement or in
the Transaction Documents, as well as any events or occurrences arising after
the date hereof and prior to the Closing Date, which would reasonably be
likely to cause any representation or warranty or other agreement of such
party, as the case may be, contained herein to be incorrect or breached as of
the Closing Date; provided such notice will not constitute material non-public
information. However, no disclosure by any party pursuant to this Section 3.7
shall be deemed to cure any breach of any representation, warranty or other
agreement contained herein or in the Transaction Documents.
(b) Notice of Violation. Notwithstanding the generality of
Section 3.7(a), the Company shall promptly notify (provided such notification
will not constitute material non-public information) each Purchaser of any
notice or claim (written or oral) that it receives from any lender of the
Company or any of its Subsidiaries to the effect that the consummation of the
transactions contemplated hereby and by the Transaction Documents violates or
would violate any written agreement or understanding between such lender and
the Company or any of its Subsidiaries, and the Company shall promptly furnish
by facsimile to the Purchasers a copy of any written statement in support of
or relating to such claim or notice.
(c) Purchaser Default. The default by any Purchaser of any of
its obligations, representations or warranties under this Agreement or the
Transaction Documents shall not be imputed to, and shall have no effect upon,
any other Purchaser or affect the Company's obligations under this Agreement
or any Transaction Document to any non-defaulting Purchaser.
3.8 Form D. The Company agrees to file a Form D with respect to the
Preferred Stock and the Warrants as required by Rule 506 under Regulation D
and to provide a copy thereof to each Purchaser promptly after such filing.
3.9 Use of Proceeds. The Company shall use the proceeds from the
sale of the Preferred Stock and the exercise of the Warrants for working
capital, expansion of its business and general corporate purposes.
3.10 Transactions with Affiliates. So long as any shares of
Preferred Stock or Warrants are outstanding, the Company shall not, and shall
cause each of its Subsidiaries not to, enter into, amend, modify or
supplement, or permit any of its Subsidiaries to enter into, amend, modify or
supplement, any agreement, transaction, commitment or arrangement with any of
its or any Subsidiary's officers, directors or persons who were officers or
directors at any time during the previous two (2) years, stockholders who
beneficially own 5% or more of the Common Stock, or Affiliates or any
individual related by blood, marriage or adoption to any such individual or
with any Person in which any such Person owns a 5% or more beneficial interest
(each, a "Related Party"), except for (a) customary employment arrangements
and benefit programs on reasonable terms, (b) any agreement, transaction,
commitment or arrangement on an arm's length basis on terms no less favorable
than terms which would have been obtainable from a Person other than such
Related Party or (c) any agreement, transaction, commitment or arrangement
which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any
Subsidiary of the Company shall not be a disinterested director with respect
to any such agreement, transaction, commitment or arrangement. For purposes
hereof, "Affiliate" means, with respect to any Person, another Person that,
directly or indirectly, (i) has a 5% or more equity interest in that Person,
(ii) has 5% or more common ownership with that Person, (iii) controls that
Person or (iv) shares common control with that Person. "Control" or
"Controls" for purposes of this Section only means that a Person has the
power, direct or indirect, to conduct or govern the policies of another
Person, whether through the ownership of voting securities, by contract or
otherwise.
3.11 Transfer Agent Instructions. At the Closing, the Company shall
issue instructions to its transfer agent (and shall issue to any subsequent
transfer agent as required), to issue certificates, registered in the name of
each such Purchaser or its respective nominee(s), for the Conversion Shares
and/or the Warrant Shares in such amounts as specified from time to time by
each Purchaser to the Company in a form acceptable to such Purchasers (the
"Transfer Agent Instructions"). The Company warrants that no instruction
other than the Transfer Agent Instructions referred to in this Section 3.11,
and stop transfer instructions to give effect to Section 3.1 hereof (in the
case of the Conversion Shares and the Warrant Shares, prior to registration of
the Conversion Shares and the Warrant Shares under the Securities Act) will be
given by the Company to its transfer agent and that the Preferred Stock, the
Warrants, the Conversion Shares and the Warrant Shares shall otherwise be
freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the Transaction Documents. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Purchasers by violating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 3.11 will
be inadequate and agrees, in the event of a beach or threatened breach by the
Company of the provisions of this Section 3.11, that the Purchasers shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and
transfer without the necessity of showing economic loss and without any bond
or other security being required.
3.12 Ordinary Course Brokerage and Trading. Subject to compliance
with all applicable securities laws and AMEX regulations, no Purchaser shall
be prohibited from engaging in its ordinary course brokerage and trading
activities in respect of the Common Stock; provided, that the personnel
engaged in such activities have not been involved with the transactions
contemplated hereby and have not been provided with confidential information
with respect to the Company.
3.13 Best Efforts. Each of the parties hereto shall use its
reasonable best efforts to satisfy each of the conditions to be satisfied by
it as provided in Article IV of this Agreement.
3.14 Corporate Existence. Until such time as all of the Purchasers
provide the Company with written notice that the Purchasers do not
beneficially own any shares of Preferred Stock or Warrants, the Company shall
maintain its corporate existence and shall not sell all or substantially all
of the Company's assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company's assets, where the surviving
or successor Person in such transaction (i) assumes the Company's obligations
hereunder and under the agreements and instruments entered into in connection
herewith and (ii) is a publicly traded corporation whose common stock is
listed for trading or quoted on the National Market System of the Nasdaq Stock
Market, the New York Stock Exchange or AMEX.
3.15 Press Release; Filing of Form 8-K. Subject to the provisions of
Section 6.10 hereof, prior to the opening of AMEX on February 14, 2000, the
Company shall file a press release in form and substance acceptable to the
Purchasers. On or before the third (3rd) business day following the Closing
Date, the Company shall file a Form 8-K with the Commission describing the
terms of the transaction contemplated by this Agreement and the Transaction
Documents in the form required by the Exchange Act.
3.16 Seniority; Exclusivity. No class of equity securities of the
Company will be senior to the Preferred Stock in right of payment, whether
upon liquidation, dissolution or otherwise. The Series A Preferred Stock of
the Company shall rank pari passu with the Preferred Stock to be issued
hereunder. So long as any Preferred Stock issued hereunder remains
outstanding, the Company shall not exchange, redeem or convert any of the
Company's capital stock for indebtedness, including convertible debt, of the
Company. So long as any Preferred Stock issued hereunder remains outstanding,
the Company shall not issue and sell any shares (of any class) of its
preferred stock that ranks senior to the Preferred Stock issued hereunder,
without the prior written consent of the Purchasers then holding a majority of
the Preferred Stock issued hereunder.
ARTICLE IV.
CONDITIONS
4.1 Closing Conditions.
(a) Conditions Precedent to the Obligation of the Company to
Sell. The obligation of the Company to sell the Preferred Stock and the
Warrants hereunder is subject to the satisfaction or waiver (with prior
written notice to each Purchaser) by the Company, at or before the Closing, of
each of the following conditions:
(i) Accuracy of the Purchasers' Representations and
Warranties. The representations and warranties of each Purchaser set forth in
this Agreement shall be true and correct in all material respects as of the
date when made (except for representations and warranties that speak as of a
specific date) and as of the Closing Date;
(ii) Performance by the Purchasers. Each Purchaser
shall have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement and the
Transaction Documents to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing; and
(iii) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated, endorsed or threatened or shall be pending by or before
any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement or
the Transaction Documents.
(b) Conditions Precedent to the Obligation of the Purchasers
to Purchase. The obligation of each Purchaser hereunder to acquire and pay
for the Preferred Stock and the Warrants at the Closing is subject to the
satisfaction or waiver (with prior written notice to the Company and each
other Purchaser) by such Purchaser, at or before the Closing, of each of the
following conditions:
(i) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company set forth in
this Agreement and in each of the Transaction Documents shall be true and
correct in all respects as of the date when made (except for representations
and warranties that speak as of a specific date) and as of the Closing Date;
(ii) Performance by the Company. The Company shall
have performed, satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement and the Transaction
Documents to be performed, satisfied or complied with by the Company at or
prior to the Closing;
(iii) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated, endorsed or threatened or shall be pending by or before
any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement and
the Transaction Documents;
(iv) No Suspensions of Trading in Common Stock. The
trading in the Common Stock shall not have been suspended by the Commission or
AMEX (except for any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company);
(iv) Listing of Common Stock. The Common Stock shall
be listed for trading on AMEX, and the Company shall have obtained the
approval from AMEX for the listing of the number of shares of Common Stock
underlying the Preferred Stock and the Warrants as of the Closing Date;
(v) Required Approvals. All Required Approvals shall
have been obtained and copies thereof delivered to such Purchaser;
(vi) Shares of Common Stock. The Company shall have
duly reserved the number of Underlying Shares required by this Agreement and
the Transaction Documents to be reserved for issuance upon conversion of the
Preferred Stock and the exercise of the Warrants;
(vii) Transfer Agent Instructions. The Transfer Agent
Instructions, in a form acceptable to the Purchasers, shall have been
delivered to and acknowledged in writing by the Company's transfer agent with
a copy forwarded to each Purchaser; and
(viii) Resolutions. The Board of Directors of the
Company shall have adopted resolutions consistent with Section 2.1(b) and in a
form reasonably acceptable to each Purchaser (the "Resolutions").
(c) Documents and Certificates. At the Closing, the Company
shall have delivered to the Purchasers the following in form and substance
reasonably satisfactory to the Purchasers:
(i) Opinion. An opinion of the Company's legal
counsel, substantially in the form attached hereto as Exhibit D, dated as of
the Closing Date;
(ii) Security. A security(ies) representing the
number of shares of Preferred Stock purchased by such Purchaser as set forth
next to such Purchaser's name on Schedule I hereto, registered in the name of
such Purchaser, each in form satisfactory to the Purchaser;
(iii) Warrant. A Warrant(s), substantially in the
form of Exhibit B hereto, representing the Warrants purchased by such
Purchaser as set forth next to such Purchaser's name on Schedule I hereto,
registered in the name of such Purchaser;
(iv) Registration Rights. The Company shall have
executed and delivered the Registration Rights Agreement, substantially in the
form of Exhibit C hereto;
(v) Officer's Certificate. An Officer's Certificate
dated the Closing Date and signed by an executive officer of the Company
confirming the accuracy of the Company's representations, warranties and
covenants as of the Closing Date and confirming the compliance by the Company
with the conditions precedent set forth in this Section 4.1 as of the Closing
Date;
(vi) Secretary's Certificate. A Secretary's
Certificate dated the Closing Date and signed by the Secretary or Assistant
Secretary of the Company certifying that (A) attached thereto is a true and
complete copy of the Articles of Incorporation of the Company, as in effect on
the Closing Date, (B) attached thereto is a true and complete copy of the
By-laws of the Company, as in effect on the Closing Date and (C) attached
thereto is a true and complete copy of the Resolutions duly adopted by the
Board of Directors of the Company authorizing the execution, delivery and
performance of this Agreement and of the Transaction Documents, and that such
Resolutions have not been modified, rescinded or revoked;
(vii) Articles of Incorporation. The Company shall
have delivered to each of the Purchasers a copy of a certificate evidencing
the incorporation and good standing of the Company and each Subsidiary, in
such corporation's state of incorporation issued by the Secretary of State of
such state of incorporation as of a date within ten (10) days of the Closing
Date. The Company shall have delivered to each of the Purchasers a copy of
its Articles of Incorporation as certified by the Secretary of State of the
State of Nevada within ten (10) days of the Closing Date;
(viii) Certificate of Designation. The Certificate of
Designation shall have been duly approved by the Company's Board of Directors
and filed with the Secretary of State of the State of Nevada, and the Company
shall have delivered a copy thereof to the Purchaser certified as filed by the
office of the Secretary of State of the State of Nevada;
(ix) Transfer Agent Letter. The Company shall have
delivered to each Purchaser a letter from the Company's transfer agent
certifying the number of shares of Common Stock outstanding as of a date
within five days of the Closing Date; and
(x) Other Documents. The Company shall have delivered
to each Purchaser such other documents relating to the transactions
contemplated by the Transaction Documents as the Purchasers or their counsel
may reasonably request.
ARTICLE V.
INDEMNIFICATION
5.1 Indemnification.
(a) Indemnification. In addition to all of the Company's
other obligations under this Agreement and the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless each Purchaser, its
past and present Affiliates and their successors and assigns (in accordance
with the provisions of Section 6.5 hereof), each other holder of the
Underlying Shares and all of their stockholders, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons'
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, proceedings, costs (as incurred), penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought), and including interest, penalties
and attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to
(i) any misrepresentation or breach of any representation or warranty made by
the Company in this Agreement or in any of the Transaction Documents, or any
other certificate, instrument or document contemplated hereby or thereby, (ii)
any breach of any covenant, agreement or obligation of the Company contained
in this Agreement or any of the Transaction Documents, or any other
certificate, instrument or document contemplated hereby or thereby or (iii)
any cause of action, suit or claim brought or made or threatened, other than
by the Company, against such Indemnitee and arising out of or resulting from
(A) the execution, delivery, registration, performance or enforcement of this
Agreement or any of the Transaction Documents, (B) any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds
of the issuance of the Preferred Stock or the Warrants or (C) solely the
status of such Purchasers or holder of the Preferred Stock, the Conversion
Shares, the Warrants or the Warrant Shares as an investor in the Company. The
indemnification obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliate of the Purchasers and
partners, directors, agents, employees and controlling Persons (if any), as
the case may be, of the Purchasers and any such Affiliate, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Company, the Purchasers and any such Affiliate
and any such Person. The Company also agrees that neither the Purchasers nor
any such Affiliates, partners, directors, agents, employees or controlling
Persons shall have any liability to the Company or any Person asserting claims
on behalf of or in right of the Company in connection with or as a result of
the consummation of this Agreement or any of the Transaction Documents except
to the extent that any losses, claims, damages, liabilities or expenses
incurred by the Company result from the gross negligence or willful misconduct
of such Purchaser or Person in connection with the transactions contemplated
by this Agreement and the Transaction Documents. To the extent that the
foregoing undertakings by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.
(b) Indemnification Payments. All fees and expenses
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such actions, causes of action,
suits, claims or other proceedings in a manner not inconsistent with this
Section) of the Indemnitees shall be paid to the Indemnitees as incurred,
within ten (10) Business Days of written notice thereof to the Company, which
notice shall be delivered no more frequently than on a monthly basis
(regardless of whether it is ultimately determined that an Indemnitee is not
entitled to indemnification hereunder; provided, that the Company may require
such Indemnitee to undertake to reimburse all such fees and expenses to the
extent it is finally judicially determined that such Indemnitee is not
entitled to indemnification hereunder).
ARTICLE VI.
MISCELLANEOUS
6.1 Entire Agreement. This Agreement, together with the Exhibits and
Schedules hereto and the Transaction Documents, contains 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.
6.2 Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally, (ii) upon receipt, when sent by facsimile, provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party (if received by or before 5:30 p.m. Eastern
Time where such notice is received) or the first (1st) business day following
such delivery (if received after 5:30 p.m. Eastern Time where such notice is
received) or (iii) one (1) business day after deposit with a nationally
recognized overnight courier, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
(i) If to the Company:
Xxxxxxxx.Xxx, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx XxXxxx
Chairman and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Greenberg, Glusker, Fields, Claman & Machtinger LLP
1900 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to Xxxxx Xxxxxxx Strategic Growth Fund L.P. or Xxxxx
Xxxxxxx Strategic Growth Fund, Ltd., to:
Xxxxx Xxxxxxx Asset Management, LLC
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Each party shall provide written notice to the other parties of any change in
address or facsimile number in accordance with the provisions hereof.
6.3 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 both the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom a waiver of any such provision 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 other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right accruing to it thereafter.
Notwithstanding the foregoing, no such amendment shall be effective to the
extent that it applies to less than all of the holders of the Preferred Stock
outstanding. The Company shall not offer or pay any consideration to a
Purchaser for consenting to such an amendment or waiver unless the same
consideration is offered to each Purchaser and the same consideration is paid
to each Purchaser which consents to such amendment or waiver.
6.4 Headings. The table of contents, titles and headings contained
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.
6.5 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 of the
Purchasers. The Purchasers may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company. This
provision shall not limit a Purchaser's right to transfer securities in
accordance with all of the terms of this Agreement or the Transaction
Documents.
6.6 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.
6.7 Governing Law. The corporate laws of the State of Nevada shall
govern all issues concerning the relative rights of the Company and the
Purchasers as its stockholders. All other questions concerning this Agreement
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 hereby irrevocably submits to the
nonexclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, 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, or that such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
6.8 Survival. The representations and warranties of the Company and
the Purchasers contained in Sections 2.1 and 2.2, the agreements and covenants
set forth in Article III, and the indemnification provisions set forth in
Article V, shall survive the Closing and any conversion of the Preferred Stock
or exercise of the Warrants regardless of any investigation made by or on
behalf of the Purchasers or by or on behalf of the Company, except that, in
the case of representations and warranties such survival shall be limited to
the period of six (6) years following the Closing Date on which they were made
or deemed to have been made (other than with respect to any claim by a third
party against the party to this Agreement who seeks to assert a claim based on
such representations and warranties). This Section shall have no effect on
the survival of the indemnification provisions of the Registration Rights
Agreement.
6.9 Counterparts. 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 parties, 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) the same with the same force and effect as if such
facsimile signature page were an original thereof.
6.10 Publicity. The Company and the Purchasers shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and no party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing party shall provide the other parties with prior notice of such
public statement. The Company shall not publicly or otherwise disclose the
names of any of the Purchasers without each such Purchaser's prior written
consent, which consent shall not be unreasonably withheld. The Purchasers and
their affiliated companies shall, without further cost, have the right to use
in its advertising, marketing or other similar materials, the Company's logo
and trademarks and all or parts of the Company's press releases that focus on
the transactions contemplated hereby forming the subject matter of this
Agreement or which make reference to the transactions contemplated hereby.
The Purchasers understand that this grant by the Company only waives
objections that the Company might have to the use of such materials by the
Purchasers and in no way constitutes a representation by the Company that
references in such materials to the activities of third-parties have been
cleared or constitute a fair use.
6.11 Severability. In case any one or more of the provisions of this
Agreement shall 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 which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
6.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the
Purchasers will be entitled to specific performance of the obligations of the
Company under this Agreement or the Transaction Documents without the showing
of economic loss and without any bond or other security being required. The
Company and each of the Purchasers (severally and not jointly) agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the foregoing sentence
and hereby agree to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
6.13 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. 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 this Agreement
or out of the 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.
6.14 Payment Set Aside. To the extent that the Company makes a
payment or payments to the Purchasers hereunder or pursuant to the Transaction
Documents or the Purchasers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared
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.
6.15 Further Assurances. Each party shall do and 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 this Agreement and the consummation
of the transactions contemplated hereby.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons
as of the date first indicated above.
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx XxXxxx
Name: Xxxxxxx XxXxxx
Title: CEO
XXXXX XXXXXXX STRATEGIC
GROWTH FUND, LTD.
By: Xxxxx Xxxxxxx Asset Management, LLC
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Principal
XXXXX XXXXXXX STRATEGIC
GROWTH FUND, L.P.
By: Xxxxx Xxxxxxx Capital, LLC
its general partner
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Principal
