SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of December 23, 2004
(this "Agreement"), is entered into by and between INFINIUM LABS, INC., a
Delaware corporation with headquarters located at 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, XX 00000 (the "Company"), and each individual or entity named on a
signature page hereto (as used herein, each such signatory is referred to as the
"Lender") (each agreement with a Lender being deemed a separate and independent
agreement between the Company and such Lender, except that each Lender
acknowledges and consents to the rights granted to each other Lender [each, an
"Other Lender"] under such agreement and the Transaction Agreements, as defined
below, referred to therein).
W I T N E S S E T H:
WHEREAS, the Company and the Lender are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration for offers and sales to accredited investors afforded,
inter alia, by Rule 506 under Regulation D ("Regulation D") as promulgated by
the United States Securities and Exchange Commission (the " SEC") under the
Securities Act of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the
1933 Act; and
WHEREAS, the Lender wishes to lend to the Company, subject to and
upon the terms and conditions of this Agreement and acceptance of this Agreement
by the Company, the Lender's Purchase Price amount set forth on the Lender's
signature page hereto, the repayment of which will be represented by 8%
Convertible Debentures Series 04-03 of the Company (the "Convertible
Debentures"), which Convertible Debentures will be convertible into shares of
Common Stock, $.0001 par value per share, of the Company (the "Common Stock"),
upon the terms and subject to the conditions of such Convertible Debentures,
together with the Warrants (as defined below) exercisable for the purchase of
shares of Common Stock;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
A. PURCHASE OF THE SECURITIES.
(i) Subject to the terms and conditions of this Agreement and the
other Transaction Agreements, the undersigned hereby agrees to loan to the
Company the principal amount set forth on the Lender's signature page of this
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Agreement (the "Purchase Price"), out of the aggregate amount being loaned by
all Lenders of US $_____________(1) (the "Total Purchase Price"). The obligation
to repay the loan from the Lender shall be evidenced by the Company's issuance
of one or more Convertible Debentures to the Lender in such principal amount
(the Convertible Debentures issued to the Lender, the "Debentures"). Each
Debenture (i) shall provide for its conversion into Common Stock at the
Conversion Price (as defined below), which price may be adjusted from time to
time as provided in the Debenture, (ii) mature on the day which is the first
anniversary of the Closing Date, subject to acceleration under certain
circumstances described in the form of the Convertible Debenture annexed hereto
as ANNEX I, (iii) will be guaranteed by the Guarantor (as defined below)
pursuant to, and subject to, the terms of a Personal Guarantee of Guarantor (the
"Guaranty") attached to the Debenture, and (iv) shall have the terms and
conditions of, and be substantially in the form attached hereto as, said ANNEX
I.
(ii) The loan to be made by the Lender and the issuance of the
Debentures and the Warrants (collectively, the "Purchased Securities") to the
Lender are sometimes referred to herein and in the other Transaction Agreements
as the purchase and sale of the Debentures and the Warrants, and are referred
to collectively as the "Transactions."
b. CERTAIN DEFINITIONS. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:
"Affiliate" means, with respect to a specific Person referred to in
the relevant provision, another Person who or which controls or is controlled by
or is under common control with such specified Person.
"Certificates" means the ink-signed originals of (i) (x) the
Debentures and (y) the Warrants, each duly executed by the Company and issued on
the Closing Date in the name of the Lender, and (ii) the Guaranty attached to
the Debentures, each duly executed by the Guarantor in favor of the Lender.
"Closing Date" means the date of the closing of the purchase and
sale of the Purchased Securities.
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(1) Amount to be inserted at Closing Date (as defined below), not less than
$1,000,000 and not more than $1,400,000.
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"Closing Price" shall mean the 4:00 P.M. closing bid price of the
Common Stock (in U.S. Dollars) on the Principal Trading Market on the relevant
Trading Day(s), as reported by the Reporting Service.
"Company Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the Company
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as
defined below).
"Conversion Price" means the amount which is seventy-five percent
(75%) of the lowest Closing Price during the five (5) Trading Days ending on the
Trading Day immediately before the Conversion Date; provided, however, that in
no event will the Conversion Price (i) be more than US$0.266667 (the "Maximum
Conversion Price") or (ii) until the earlier of the date which is the four (4)
months after the Closing Date or the date after the Closing Date on which the
Company files a registration statement on Form S-8, lower than US$0.106667 (the
"Minimum Conversion Price") (as each such amount may be adjusted from time to
time as provided in the Debenture).
"Conversion Shares" means the shares of Common Stock issuable upon
conversion of the Debentures (including, if relevant, accrued interest on the
Debentures so converted).
"Effective Date" means the date the Registration Statement covering
the Registrable Securities is declared effective by the SEC.
"Escrow Agent" means the escrow agent identified in the Joint Escrow
Instructions attached hereto as ANNEX II (the "Joint Escrow Instructions").
"Escrow Funds" means the Purchase Price delivered to the Escrow
Agent as contemplated by Sections 1(c) and (d) hereof.
"Escrow Property" means the Escrow Funds and the Certificates
delivered to the Escrow Agent as contemplated by Section 1(c) hereof.
"Exercise Price" means the per share exercise price of the relevant
Warrant, as in effect at the relevant time.
"Finder" means West Hastings Limited.
"Guarantor" means the person named as guarantor in the Guaranty.
"Holder" means the Person holding the relevant Securities at the
relevant time.
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"Issue Date Conversion Shares" means the number of shares of Common
Stock equal to (x) the Purchase Price paid by the Lender, divided by (y) the
Conversion Price in effect on the Closing Date.
"Last Audited Date" means December 31, 2003.
"Lender Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the Lender
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.
"Lender's Allocable Share" means the fraction, of which the
numerator is the Lender's Purchase Price and the denominator is the Total
Purchase Price.
"Majority in Interest of the Holders" means one or more Holders
whose respective outstanding principal amounts of the Debentures held by each of
them on the relevant date, aggregate more than seventy-five percent (75%) of the
total of the Lender's and the Other Lenders' aggregate outstanding principal
amounts of the Debentures held by the Lender and the Other Lenders them on that
date.
"Maximum Issue Date Conversion Shares" means the number of shares of
Common Stock equal to (x) the Purchase Price paid by the Lender, divided by (y)
the Minimum Conversion Price in effect on the Closing Date.
"Material Adverse Effect " means an event or combination of events,
which individually or in the aggregate, would reasonably be expected to (w)
adversely affect the legality, validity or enforceability of the Securities or
any of the Transaction Agreements, (x) have or result in a material adverse
effect on the results of operations, assets, prospects, or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, (y)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Agreements or the transactions
contemplated thereby, or (z) materially and adversely affect the value of the
rights granted to the Lender in the Transaction Agreements.
"New Common Stock" means shares of Common Stock and/or securities
convertible into, and/or other rights exercisable for, the issuance of Common
Stock, which are offered or sold in a New Transaction.
"New Investor" means the third party invest or, purchaser or lender
(howsoever denominated) in a New Transaction.
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"New Transaction" means the sale of New Common Stock by or on behalf
of the Company to a New Investor in a transaction offered or consummated after
the date hereof; provided, however, that it is specifically understood that the
term "New Transaction" (1) includes, but is not limited to, a transaction for
the sale of Common Stock or of a security convertible into Common Stock or an
equity or credit line transaction, but (2) does not include (a) the sale of the
Purchased Securities to the Lender and the Other Lenders, (b) the issuance of
Common Stock upon the exercise or conversion of options, warrants or convertible
securities outstanding on the date hereof, or in respect of any other financing
agreements outstanding on the date hereof and identified on Annex V attached
hereto (provided the same is not amended after the date hereof), or (c) the
issuance of Common Stock upon the exercise of any options or warrants referred
to in the preceding clauses of this paragraph (provided the same is not amended
after the date hereof).
"Person" means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.
"Principal Trading Market" means the Over the Counter Bulletin Board
or such other market on which the Common Stock is principally traded at the
relevant time, but shall not include the "pink sheets."
"Registrable Securities" shall have the meaning ascribed to it in
the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement in the form annexed hereto as ANNEX IV as executed by the Lender and
the Company simultaneously with the execution of this Agreement.
"Registration Statement" means an effective registration statement
covering the Registrable Securities.
"Reporting Service" means Bloomberg LP or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by a Majority in Interest
of the Holders and reasonably acceptable to the Company.
"Securities" means the Debentures, the Conversion Shares, the
Warrants, and the Warrant Shares.
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"Shares" means the shares of Common Stock representing any or all
of the Conversion Shares, the Warrant Shares, or the Payment Shares (as defined
in the Registration Rights Agreement).
"State of Incorporation" means Delaware.
"Trading Day" means any day during which the Principal Trading
Market shall be open for business.
"Transaction Agreements" means this Securities Purchase Agreement,
the Debentures, the Registration Rights Agreement, the Joint Escrow
Instructions, and the Warrants, and includes all ancillary documents referred to
in those agreements and documents.
"Transfer Agent" means, at any time, the transfer agent for the
Company's Common
"Warrant Shares" means the shares issuable on exercise of the
Warrants.
c. FORM OF PAYMENT; DELIVERY OF CERTIFICATES.
(i) The Lender shall pay the Purchase Price by delivering
immediately available good funds in United States Dollars to the Escrow Agent no
later than the date prior to the Closing Date.
(ii) No later than the Closing Date, but in any event promptly
following payment by the Lender to the Escrow Agent of the Purchase Price, the
Company shall deliver the Certificates to the Escrow Agent.
(iii) By signing this Agreement, each of the Lender and the Company,
subject to acceptance by the Escrow Agent, agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.
d. METHOD OF PAYMENT. Payment into escrow of the Purchase Price
shall be made by wire transfer of funds to:
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Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
For credit to the account of Xxxxxxx & Xxxxxx LLP
Account No.: [To be provided by Escrow Agent]
Re: Infinium Debenture Transaction 2/[Name of Lender]
2. LENDER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
The Lender represents and warrants to, and covenants and agrees
with, the Company as follows:
A. Without limiting Lender's right to sell the Securities pursuant
to an effective registration statement or otherwise in compliance with the 1933
Act, the Lender is purchasing the Securities for its own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.
B. The Lender is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its Affiliates or selling agents), to protect its own
interests in connect ion with the transactions described in this Agreement, and
the related documents, and to evaluate the merits and risks of an investment in
the Securities, and (iv) able to afford the entire loss of its investment in the
Securities.
C. All subsequent offers and sales of the Securities by the Lender
shall be made pursuant to registration of the relevant Securities under the 1933
Act or pursuant to an exemption from registration.
D. The Lender understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Lender's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
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the Lender set forth herein in order to determine the availability of such
exemptions and the eligibility of the Lender to acquire the Securities.
E. The Lender and its advisors, if any, have been furnished with or
have been given access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Purchased Securities and the Warrants which have been requested by the Lender,
including those set forth on in any annex attached hereto. The Lender and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management and have received complete and satisfactory answers
to any such inquiries. Without limiting the generality of the foregoing, the
Lender has also had the opportunity to obtain and to review the Company's
filings on XXXXX listed on ANNEX VII hereto (the documents listed on such Annex
VII, to the extent available on XXXXX or otherwise provided to the Lender as
indicated on said Annex VII, collectively, the "Company's SEC Documents").
F. The Lender understands that its investment in the Securities
involves a high degree of risk.
G. The Lender hereby represents that, in connection with its
purchase of the Securities, it has not relied on any statement or representation
by the Company or the Finder or any of their respective officers, directors and
employees or any of their respective attorneys or agents, except as specifically
set forth herein. The Finder is a third party beneficiary of this provision.
H. The Lender understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
I. This Agreement and the other Transaction Agreements to which the
Lender is a party, and the transactions contemplated thereby, have been duly
and validly authorized, executed and delivered on behalf of the Lender and are
valid and binding agreements of the Lender enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants
to the Lender on the date hereof and as of the Closing Date that, except as
otherwise provided in the ANNEX VI or in the Company's SEC Documents:
A. RIGHTS OF OTHERS AFFECTING THE TRANSACTIONS. There are no
preemptive rights of any shareholder of the Company, as such, to acquire the
Purchased Securities or the Shares.
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No party has a currently exercisable right of first refusal which would be
applicable to any or all of the transactions contemplated by the Transaction
Agreements.
B. STATUS. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have or result in a Material Adverse Effect. The Company
has registered its stock and is obligated to file reports pursuant to Section 12
or Section 15(d) of the Securities and Exchange Act of 1934, as amended (the
"1934 Act"). The Common Stock is quoted on the Principal Trading Market. The
Company has received no notice, either oral or written, with respect to the
continued eligibility of the Common Stock for such quotation on the Principal
Trading Market, and the Company has maintained all requirements on its part for
the continuation of such quotation.
C. AUTHORIZED SHARES.
(i) The authorized capital stock of the Company consists of (i)
200,000,000 shares of Common Stock, $.0001 par value per share, of which
approximately 112,275,903 shares are outstanding as of the date hereof, and (ii)
approximately 8,407,081 shares of common stock underlying warrants.
(ii) As of the date hereof and as of the Closing Date, (1) there
are no outstanding securities which are convertible into shares of Common Stock,
whether such conversion is currently exercisable or exercisable only upon some
future date or the occurrence of some event in the future and (2) the Company
has not issued any warrants or other rights to acquire shares of the Common
Stock other than those referred to in the Company's SEC Documents. If any such
securities are listed on Annex VI, the number or amount of each such outstanding
convertible security and the conversion terms thereof or of each such warrant or
other right and the terms of its exercise are set forth in said Annex VI.
(iii) All issued and outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and non-assessable. The
Company has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Shares on the Closing Date.
(iv) As of the Closing Date, the Shares shall have been duly
authorized by all necessary corporate action on the part of the Company, and,
when issued on the Closing Date or upon conversion of the Debentures or exercise
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of the Warrants or pursuant to other relevant provisions of the Transaction
Agreements, in each case in accordance with their respective terms, will be duly
and validly issued, fully paid and non-assessable and will not subject the
Holder thereof to personal liability by reason of being such Holder.
D. TRANSACTION AGREEMENTS AND STOCK. This Agreement and each of the
other Transaction Agreements, and the transactions contemplated thereby, have
been duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the
Debentures, the Warrants and each of the other Transaction Agreements, when
executed and delivered by the Company, will be, valid and binding agreements of
the Company enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
E. NON-CONTRAVENTION. The execution and delivery of this Agreement
and each of the other Transact ion Agreements by the Company, the issuance of
the Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Debentures, the Warrants and the other
Transaction Agreements do not and will not conflict with or result in a breach
by the Company of any of the terms or provisions of, or constitute a default
under (i) the certificate of incorporation or by-laws of the Company, each as
currently in effect, (ii) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the Company is a party or by which it
or any of its properties or assets are bound, including any listing agreement
for the Common Stock except as herein set forth, or (iii) to its knowledge, any
existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal or state regulatory body,
administrative agency, or other governmental body having jurisdiction over the
Company or any of its properties or assets, except such conflict, breach or
default which would not have or result in a Material Adverse Effect.
F. APPROVALS. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Lender as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
G. FILINGS. None of the Company's SEC Documents contained, at the
time they were filed, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were
made, not misleading. Since January 5, 2004, the Company has filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.
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H. ABSENCE OF CERTAIN CHANGES. Since the Last Audited Date, there
has been no material adverse change and no Material Adverse Effect, except as
disclosed in the Company's SEC Documents. Since the Last Audited Date, except
as provided in the Company's SEC Documents, the Company has not (i) incurred or
become subject to any material liabilities (absolute or contingent) except
liabilities incurred in the ordinary course of business consistent with past
practices; (ii) discharged or satisfied any material lien or encumbrance or paid
any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to shareholders with respect to its capital stock, or purchased or
redeemed, or made any agreements to purchase or redeem, any shares of its
capital stock; (iv) sold, assigned or transferred any other tangible assets, or
canceled any debts owed to the Company by any third party or claims of the
Company against any third party, except in the ordinary course of business
consistent with past practices; (v) waived any rights of material value, whether
or not in the ordinary course of business, or suffered the loss of any material
amount of existing business; (vi) made any increases in employee compensation,
except in the ordinary course of business consistent with past practices; or
(vii) experienced any material problems with labor or management in connection
with the terms and conditions of their employment.
I. FULL DISCLOSURE. To the best of the Company's knowledge, there is
no fact known to the Company (other than general economic conditions known to
the public generally or as disclosed in the Company's SEC Documents) that has
not been disclosed in writing to the Lender that would reasonably be expected to
have or result in a Material Adverse Effect.
J. ABSENCE OF LITIGATION. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or body pending
or, to the knowledge of the Company, threatened against or affecting the Company
before or by any governmental authority or nongovernmental department,
commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding would have a Material Adverse
Effect or which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, any of the
Transaction Agreements. The Company is not aware of any valid basis for any such
claim that (either individually or in the aggregate with all other such events
and circumstances) could reasonably be expected to have a Material Adverse
Effect. There are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which the Company is a party or by which
it or any of its properties is bound, that involve the transaction contemplated
herein or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect.
K. ABSENCE OF EVENTS OF DEFAULT. Except as set forth in Section 3(e)
hereof, no Event of Default (or its equivalent term), as defined in the
respective agreement to which the Company or its subsidiary is a party, and no
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event which, with the giving of notice or the passage of time or both, would
become an Event of Default (or its equivalent term) (as so defined in such
agreement), has occurred and is continuing, which would have a Material Adverse
Effect.
L. ABSENCE OF CERTAIN COMPANY CONTROL PERSON ACTIONS OR EVENTS. To
the Company's knowledge, none of the following has occurred during the past five
(5) years with respect to a Company Control Person:
(1) A petition under the federal bankruptcy laws or any state insolvency
law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such
Company Control Person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer
at or within two years before the time of such filing;
(2) Such Company Control Person was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
(i) acting, as an investment advisor, underwriter, broker or dealer
in securities, or as an affiliated person, director or employee of
any investment company, bank, savings and loan association or
insurance company, as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor
broker, any other Person regulated by the Commodity Futures Trading
Commission ("CFTC") or engaging in or continuing any conduct or
practice in connection with such activity;
(ii) engaging in any type of business practice; or (iii) engaging in
any activity in connection with the purchase or sale of any security
or commodity or in connection with any violation of federal or state
securities laws or federal commodities laws;
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(4) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting for more than
60 days the right of such Company Control Person to engage in any activity
described in paragraph (3) of this item, or to be associated with Persons
engaged in any such activity; or
(5) Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended,
or vacated.
M. NO UNDISCLOSED LIABILITIES OR EVENTS. To the best of the
Company's knowledge, the Company has no liabilities or obligations other than
those disclosed in the Transaction Agreements or the Company's SEC Documents or
those incurred in the ordinary course of the Company's business since the Last
Audited Date, or which individually or in the aggregate, do not or would not
have a Material Adverse Effect. No event or circumstances has occurred or exists
with respect to the Company or its properties, business, operations, condition
(financial or otherwise), or results of operations, which, under applicable law,
rule or regulation, requires public disclosure or announcement prior to the date
hereof by the Company but which has not been so publicly announced or disclosed.
There are no proposals currently under consideration or currently anticipated to
be under consideration by the Board of Directors or the executive officers of
the Company which proposal would (x) change the articles or certificate of
incorporation or other charter document or by-laws of the Company, each as
currently in effect, with or without shareholder approval, which change would
reduce or otherwise adversely affect the rights and powers of the shareholders
of the Common Stock or (y) materially or substantially change the business,
assets or capital of the Company, including its interests in subsidiaries.
N. NO INTEGRATED OFFERING. Neither the Company nor any of its
Affiliates nor any Person acting on its or their behalf has, directly or
indirectly, at any time since May 1, 2004, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under
Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.
O. DILUTION. The number of shares issuable upon conversion of the
Debentures, or upon exercise of the Warrants or pursuant to the other terms of
the Transaction Agreements may have a dilutive effect on the ownership interests
of the other shareholders (and Persons having the right to become shareholders)
of the Company. The Company's executive officers and directors have studied and
fully understand the nature of the Securities being sold hereby and recognize
that they have such a potential dilutive effect. The board of directors of the
Company has concluded, in its good faith business judgment, that such issuance
is in the best interests of the Company. The Company specifically acknowledges
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that its obligation to issue the Conversion Shares upon conversion of the
Debentures, the Warrant Shares upon exercise of the Warrants, or the Payment
Shares as provided in the Registration Rights Agreement is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company, and the Company will
honor such obligations, including honoring every Notice of Conversion (as
contemplated by the Debentures), every Notice of Exercise (as contemplated by
the Warrants), every demand for Payment Shares (as contemplated by the
Registration Rights Agreement), unless the Company is subject to an injunction
(which injunction was not sought by the Company) prohibiting the Company from
doing so.
P. FEES TO BROKERS, FINDERS AND OTHERS. Except for payment of the
fees to the Finder's Compensation (as defined below) to the Finder, payment of
which is the sole responsibility of the Company, the Company has taken no action
which would give rise to any claim by any Person for brokerage commission,
finder's fees or similar payments by Lender relating to this Agreement or the
transactions contemplated hereby. Lender shall have no obligation with respect
to such fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this paragraph that may be due in connection
with the transactions contemplated hereby. The Company shall indemnify and hold
harmless each of Lender, its employees, officers, directors, agents, and
partners, and their respective Affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any such claimed or existing fees, as and when
incurred. The term "Finder's Compensation" means, in connection with the
consummation of the transactions contemplated by this Agreement, a cash fee and
expense allowance in the amount and other consideration as contemplated by the
Joint Escrow Instructions.
Q. DISCLOSURE. All information relating to or concerning the Company
set forth in this Agreement or in the Company's SEC Documents is true and
correct in all material respects and have not omitted to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading. No event or circumstance has
occurred or exists with respect to the Company or its business, properties,
prospects, operations or financial conditions, which under applicable law,
rule or regulation, requires public disclosure or announcement by the Company.
R. CONFIRMATION. The Company confirms that all statements of the
Company contained herein shall survive acceptance of this Agreement by the
Lender. The Company agrees that, if any events occur or circumstances exist
prior to the Closing Date which would make any of the Company's
representations, warranties, agreements or other information set forth herein
materially untrue or materially inaccurate as of such date, the Company shall
immediately notify the Lender and the Escrow Agent in writing prior to such date
14
of such fact, specifying which representation, warranty or covenant is affected
and the reasons therefor.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
A. TRANSFER RESTRICTIONS. The Lender acknowledges that (1) the
Purchased Securities have not been and are not being registered under the
provisions of the 1933 Act and, except as provided in the Registration Rights
Agreement or otherwise included in an effective registration statement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Lender shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the Person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other Person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and conditions
of any exemption thereunder.
B. RESTRICTIVE LEGEND. The Lender acknowledges and agrees that,
until such time as the relevant Shares have been registered under the 1933 Act,
as contemplated by the Registration Rights Agreement, and sold in accordance
with an effective Registration Statement or otherwise in accordance with
another effective registration statement or until such Shares can otherwise be
sold without restriction, whichever is earlier, the Certificates and other
instruments representing any of the Securities shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of any such Securities):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
15
C. FILINGS. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Lender under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Lender promptly after such filing.
D. REPORTING STATUS. So long as the Lender beneficially owns any of
the Securities and for at least twenty (20) Trading Days thereafter, the Company
shall file all reports required to be filed with the SEC pursuant to Section 13
or 15(d) of the 1934 Act, shall take all reasonable action under its control to
ensure that adequate current public information with respect to the Company, as
required in accordance with Rule 144(c)(2) of the 1933 Act, is publicly
available, and shall not terminate its status as an issuer required to file
reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination. The Company will take all reasonable
action under its control to maintain the continued listing and quotation and
trading of its Common Stock (including, without limitation, all Registrable
Securities) on the Principal Trading Market or a listing on the NASDAQ/Small Cap
or National Markets, and, to the extent applicable to it, will comply in all
material respects with the Company's reporting, filing and other obligations
under the by-laws or rules of the Principal Trading Market and/or the National
Association of Securities Dealers, Inc., as the case may be, applicable to it at
least through the date which is sixty (60) days after the later of the date on
which (x) all of the Debentures have been converted or have been paid in full or
(y) all of the Warrants have been exercised or have expired.
E. USE OF PROCEEDS. The Company will use the proceeds received
hereunder for the general corporate purposes.
F. WARRANTS.
(i) The Company agrees to issue to the Lender on the Closing Date a
transferable warrant (each, a "Warrant"), designated as Class 2004-A2.
(ii) Each Warrant shall be for the purchase the a number of shares
of Common Stock equal to fifty percent (50%) of the number of Maximum Issue Date
Conversion Shares. Each Warrant will be exercisable commencing on the
Commencement Date specified in the Warrant and expire on the date which is on
the last day of the calendar month in which the fifth annual anniversary of the
Closing Date occurs.
(iii) Each Warrant shall have an exercise price (each, an "Exercise
Price") of US$0.266667; such Exercise Price will be subject to adjustment as
provided in the respective Warrant.
16
(iv) Each of the Warrants shall be in the form annexed hereto as
Annex IV (v) All Warrant Shares shall be subject to the provisions of the
Registration Rights Agreement.
G. CERTAIN AGREEMENTS.
(i) The Company agrees that, in the event there is a New Transaction
during the period (the "New Transaction Period") from the Closing Date and
continuing through and including the Final New Transaction Date (as defined
below) where either (X) any one or more of the following conditions apply:
(I) the Applicable Percentage is below the Current Percentage (as those
terms are defined below),
(II) during such time as the Minimum Conversion Price is applicable to
conversions of the Debenture, the New Transaction Price (as defined below)
is less than the then applicable Minimum Conversion Price, or
(III) either the Fixed New Transaction Price or the Maximum Formula New
Transaction Price (as those terms are defined below), as the case may be,
is or could be lower than the then applicable Maximum Conversion Price, or
(Y) the New Transaction Exercise Price of any New Transaction Warrants (as
defined below) is or could be lower than the then applicable Exercise Price for
the Class A Warrants (a New Transaction meeting the conditions of either or both
of clauses (X) and (Y) of the immediately preceding sentence is referred to as a
"Lower Price Transaction"), then
(1) if the Applicable Percentage is lower than the then applicable
Current Percentage, then, effective as of the closing date of the relevant
New Transaction, the Current Percentage for Unconverted Debentures shall
be adjusted to be equal to the Applicable Percentage; and
(2) if the New Transaction Price is a Formula New Transaction Price (as
defined below), then:
(i) if the Minimum Formula New Transaction Price (as defined
below) is less than the then applicable Minimum Conversion
Price, then, effective as of the closing date of the relevant
New Transaction
17
and for as long as a Minimum Conversion Price shall be
applicable under the terms of the Debenture, the Minimum
Conversion Price of any Unconverted Debenture shall be
adjusted to be equal to the Minimum Formula New Transaction
Price; and
(ii) if the Maximum Formula New Transaction Price (as defined
below) is less than the then applicable Maximum Conversion
Price, then, effective as of the closing date of the relevant
New Transaction, the Maximum Conversion Price of any
Unconverted Debenture shall be adjusted to be equal to the
Maximum Formula New Transaction Price; and
(3) if the lower of the Fixed New Transaction Price (as defined below) or
the New Transaction Exercise Price is less than the then applicable
Maximum Conversion Price, the Maximum Conversion Price of any Unconverted
Debenture shall be adjusted to be equal to the lower of the Fixed New
Transaction Price or the New Transaction Exercise Price, and
(4) if the New Transaction Exercise Price is or could be lower than the
then effective Exercise Price on the Class A Warrants, then the Exercise
Price of the Class A Warrants shall be adjusted to equal the lower of (x)
the New Transaction Exercise Price, or (y) one hundred sixty-six and
67/100 percent (166.67%) of the New Transaction Price; but in no event
shall the Exercise Price of any Class A Warrant be adjusted to an Exercise
Price higher than the Exercise Price for such Class A Warrant in effect
immediately before the relevant New Transaction.
(ii) For purposes of this Agreement, the following terms shall have
meanings indicated:
(A) "Applicable Percentage" means, with respect a New Transaction, the
lower of (i) if the conversion price, if any, applicable to convert the
convertible securities in the New Transaction is determined by multiplying
a market price of the Common Stock (howsoever denominated) by a
percentage, the percentage so provided(2), or (ii) if the purchase price
for the Common Stock or if the conversion price applicable to convert the
convertible securities in the New Transaction is a fixed price, the
percentage equal to the fraction, of which (1) the numerator is such fixed
----------
(2) If the conversion is stated as a discount from the market price, the
Applicable Percentage will be 100% less the stated discount. By way of
illustration, if the conversion price is stated as a 30% discount from the
market price, the Applicable Percentage would be 100% - 30%, or 70%.
18
price and (2) the denominator is the lowest Closing Price during the five
(5) Trading Days ending on the Trading Day immediately before the
consummation of the New Transaction.
(B) "Current Percentage" means the lower of (1) seventy-five percent (75%)
or (2) the lowest Applicable Percentage, if any, from any prior New
Transaction.
(C) "Final New Transaction Date" means the date which is ninety (90) days
after the Effective Date, but not counting for such purposes the days, if
any, during which sale of Registrable Securities was suspended after the
Effective Date(3), except that, with respect to the provisions of Section
4(g)(i)(4) [with respect to adjustments to the Exercise Price of the Class
A Warrants], it means the date which is three hundred sixty-five (365)
days after the Effective Date, but not counting for such purposes the
days, if any, during which sale of Registrable Securities was suspended
after the Effective Date.(4)
(D) "Fixed New Transaction Price" means a New Transaction Price which is
fixed and which is not a Formula New Transaction Price.
(E) "Formula New Transaction Price" means a New Transaction Price which is
not fixed but is determined by application of a formula provided in the
New Transaction.
(F) "Maximum Formula New Transaction Price" means, if the New Transaction
Price is a Formula New Transaction Price, but there is a maximum price for
the New Transaction Price, that maximum price.
(G) "Minimum Formula New Transaction Price" means, if the New Transaction
Price is a Formula New Transaction Price, but there is a minimum price for
the New Transaction Price, that minimum price.
(H) "New Transaction Conversion Price" means conversion price or put or
call price which would be applicable under the terms of the New
Transaction; in each such case, whether such purchase or conversion price
or put or call price is stated or could result from adjustments or
revisions contemplated in the relevant agreements for the New Transaction
and whenever such adjustment or revision would be applicable.
----------
(3) By way of illustration: If the sale of Registrable Securities was
suspended for ten (10) days in the interim, the applicable Final New
Transaction Date will be one hundred (100) days after the Effective Date.
If on day 95, the sale of Registrable Securities was suspended again for
five (5) days, the Final New Transaction Date will be one hundred five
(105) days after the Effective Date.
(4) See footnote 3 for illustration of application of this provision.
19
(I) "New Transaction Exercise Price" means the lowest exercise price per
share applicable to a New Transaction Warrant, whether such exercise price
is stated or could result from adjustments or revisions contemplated in
the relevant agreements for the New Transaction and whenever such exercise
price would be applicable.
(J) "New Transaction Price" means the lowest of (1) the lowest fixed
purchase price of any shares of the New Common Stock contemplated in the
New Transaction, (2) the New Transaction Exercise Price, or (3) the lowest
New Transaction Conversion Price; provided, however, if any of the
foregoing is not a fixed amount and no minimum purchase price, exercise
price or New Transaction Conversion Price, as the case may be, is set, it
shall be assumed that such minimum purchase price, exercise price or New
Transaction Conversion Price is zero(5)); and provided, further, that, if
the securities issued in the New Transaction are issued at a discount, the
New Transaction Price shall be adjusted to reflect such discount.(6)
(K) "New Transaction Warrants" means the warrant, option or similar
instrument (howsoever denominated; collectively, "New Transaction
Warrants") included in a New Transaction.
(iii) Nothing in the foregoing provisions reflects either an
obligation on the part of any Lender to participate in any New Transaction or a
limitation on any Lender from participating in any New Transaction.
(iv) Any of the foregoing provisions of this Section 4(g) or any
other provision of this Agreement or any of the other Transaction Agreements to
the contrary notwithstanding, the Company shall not engage in any offers, sales
or other transactions of its securities which would adversely affect the
exemption from registration available for the transactions contemplated by the
Transaction Agreements.
H. RESERVED.
----------
(5) It is the intention of this provision that, in such event, there shall no
longer be a Minimum Conversion Price for the Debentures.
(6) By way of illustration, if convertible preferred shares having a stated
value of $1 million and a fixed conversion price of $0.05 were sold for a
purchase price of $800,000, the effective New Transaction Price would be
$0.04.
20
I. AVAILABLE SHARES. The Company shall have at all times authorized
and reserved for issuance, free from preemptive rights, a number of shares (the
"Minimum Available Shares") at least equal to one hundred fifty percent (150%)
of (x) the number of shares of Common Stock issuable as may be required to
satisfy the conversion rights of the Holders of principal on all Unconverted
Debentures outstanding at any time Debentures plus (y) the number of shares
issuable upon exercise of all outstanding Warrants held by all Holders as of
such date (in each case, whether such Debentures or Warrants were originally
issued to the Holder, the Lender or to any other party). For the purposes of
such calculations, the Company should assume that all Convertible Debentures
were then convertible and all related Warrants were then exercisable, in each
case without regard to any restrictions (including restrictions as to date or
amount) which might limit any Holder's right to convert any of the Convertible
Debentures or to exercise any of the Warrants held by any Holder.
J. PUBLICITY, FILINGS, RELEASES, ETC. Each of the parties agrees
that it will not disseminate any information relating to the Transaction
Agreements or the transactions contemplated thereby, including issuing any press
releases, holding any press conferences or other forums, or filing any reports
(collectively, "Publicity"), without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such Publicity any statement or statements or other material to
which the other party reasonably objects, unless in the reasonable opinion of
counsel to the party proposing such statement, such statement is legally
required to be included. In furtherance of the foregoing, the Company will
provide to the Lender drafts of the applicable text of the first filing of a
Current Report on Form 8-K or a Quarterly or Annual Report on Form 10-Q or 10-K
intended to be made with the SEC which refers to the Transaction Agreements or
the transactions contemplated thereby as soon as practicable (but at least two
(2) Trading Days before such filing will be made) will not include in such
filing any statement or statements or other material to which the other party
reasonably objects, unless in the reasonable opinion of counsel to the party
proposing such statement, such statement is legally required to be included.
Notwithstanding the foregoing, each of the parties hereby consents to the
inclusion of the text of the Transaction Agreements in filings made with the SEC
as well as any descriptive text accompanying or part of such filing which is
accurate and reasonably determined by the Company's counsel to be legally
required. Notwithstanding, but subject to, the foregoing provisions of this
Section 4(j), the Company will, after the Closing Date, promptly issue a press
release and file a Current Report on Form 8-K or, if appropriate, a quarterly or
annual report on the appropriate form, referring to the transactions
contemplated by the Transaction Agreements.
K. INDEPENDENT NATURE OF LENDERS' OBLIGATIONS AND RIGHTS. The
obligations of each Lender under the Transaction Agreements are several and not
joint with the obligations of any other Lender, and no Lender shall be
responsible in any way for the performance of the obligations of any Other
Lender under any one or more of the Transaction Agreements. The decision of each
Lender or Other Lender to purchase Purchased Securities pursuant to the
Transaction Agreements has been made by such Lender independently of any Other
21
Lender. Nothing contained herein or in any Transaction Agreement, and no action
taken by any Lender pursuant thereto, shall be deemed to constitute any two or
more Lenders as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Lenders are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Agreements. Each Lender acknowledges that no
Other Lender has acted as agent for such Lender in connection with making its
investment hereunder and that no Lender will be acting as agent of such Other
Lender in connection with monitoring its investment in the Purchased Securities
or enforcing its rights under the Transaction Agreements. Each Lender shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Agreements, and it shall not be necessary for any Other Lender to be
joined as an additional party in any proceeding for such purpose. The Company
acknowledges that each of the Lenders has been provided with the same
Transaction Agreements for the purpose of closing a transaction with multiple
Lenders and not because it was required or requested to do so by any Lender.
L. EQUAL TREATMENT OF LENDERS. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Agreements unless the same consideration is
also offered to all of the parties to the Transaction Agreements.
M. INDEPENDENT INVESTMENT DECISION. No Lender has agreed to act with
any Other Lender for the purpose of acquiring, holding, voting or disposing of
the Securities purchased hereunder for purposes of Section 13(d) under the
Exchange Act, and each Lender is acting independently with respect to its
investment in the Securities. The decision of each Lender to purchase Purchased
Securities pursuant to this Agreement has been made by such Lender independently
of any other purchase and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or its subsidiaries which may have made
or given by any Other Lender or by any agent or employee of any Other Lender,
and no Lender or any of its agents or employees shall have any liability to any
Other Lender (or any other person) relating to or arising from any such
information, materials, statements or opinions.
5. TRANSFER AGENT INSTRUCTIONS.
A. The Company warrants that, with respect to the Securities, other
than the stop transfer instructions to give effect to Section 4(a) hereof, it
will give the Transfer Agent no instructions inconsistent with instructions to
issue Common Stock from time to time upon conversion of the Debentures or
exercise of the Warrants or in connection with the issuance of Payment Shares,
22
as may be applicable from time to time, in such amounts as specified from time
to time by the Company to the Transfer Agent, bearing the restrictive legend
specified in Section 4(b) of this Agreement prior to registration of the Shares
under the 1933 Act, registered in the name of the Lender or its nominee and in
such denominations to be specified by the Holder in connection therewith. Except
as so provided, the 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 other Transaction Agreements. Nothing in this Section shall affect in any
way the Lender's obligations and agreement to comply with all applicable
securities laws upon resale of the Securities. If the Lender provides the
Company with an opinion of counsel reasonably satisfactory to the Company that
registration of a resale by the Lender of any of the Securities in accordance
with clause (1)(B) of Section 4(a) of this Agreement is not required under the
1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of
this Agreement) permit the transfer of the Securities and, in the case of the
Conversion Shares, Warrant Shares, or Payment Shares, as may be applicable,
promptly instruct the Transfer Agent to issue one or more certificates for
Common Stock without legend in such name and in such denominations as specified
by the Lender.
B. Subject to the provisions of this Agreement, the Company will
permit the Lender to exercise its right to convert the Debentures in the manner
provide in the Debentures and to exercise the Warrants in the manner
contemplated by the Warrants.
C. (i) The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date (as defined in the Debenture)
could result in economic loss to the Lender. As compensation to the Lender for
such loss, the Company agrees to pay late payments to the Lender for late
issuance of Shares upon conversion in accordance with the following schedule
(where "No. Business Days Late" refers to the number of Trading Days which is
beyond two (2) Trading Days after the Delivery Date):(7)
----------
(7) Example: Notice of Conversion is delivered on Monday, August 1, 2005. The
Delivery Date would be Thursday, August 4 (the third Trading Day after
such delivery ). If the certificate is delivered by Monday, August 8 (2
Trading Days after the Delivery Date), no payment under this provision is
due. If the certificates are delivered on August 9, that is 1 "Business
Day Late" in the table below; if delivered on August 16, that is 6
"Business Days Late" in the table.
23
LATE PAYMENT FOR EACH $10,000
OF PRINCIPAL OR INTEREST
NO. BUSINESS DAYS LATE BEING CONVERTED
---------------------- ------------------------------
1 $ 100
2 $ 200
3 $ 300
4 $ 400
5 $ 500
6 $ 600
7 $ 700
8 $ 800
9 $ 900
10 $1,000
>10 $1,000+ $200 for each
Business Day Late beyond
10 days
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand as the Lender's exclusive remedy (other than the
following provisions of this Section 5(c)) for such delay. Furthermore, in
addition to any other remedies which may be available to the Lender, in the
event that the Company fails for any reason to effect delivery of such shares of
Common Stock by close of business on the Delivery Date, the Lender will be
entitled to revoke the relevant Notice of Conversion by delivering a notice to
such effect to the Company, whereupon the Company and the Lender shall each be
restored to their respective positions immediately prior to delivery of such
Notice of Conversion; provided, however, that an amount equal to any payments
contemplated by this Section 5(c) which have accrued through the date of such
revocation notice shall remain due and owing to the Converting Holder
notwithstanding such revocation.
(ii) If, by the relevant Delivery Date, the Company fails for any
reason to deliver the Shares to be issued upon conversion of a Debenture and
after such Delivery Date, the Holder of the Debentures being converted (a
"Converting Holder") purchases, in an arm's-length open market transaction or
otherwise, shares of Common Stock (the "Covering Shares") in order to make
delivery in satisfaction of a sale of Common Stock by the Converting Holder
(the "Sold Shares"), which delivery such Converting Holder anticipated to make
using the Shares to be issued upon such conversion (a "Buy-In"), the Converting
Holder shall have the right, in addition to and not in lieu of all other amounts
contemplated in other provisions of the Transaction Agreements, including, but
not limited to, the provisions of the immediately preceding Section 5(c)(i)),
the Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment Amount"
is the amount equal to the number of Sold Shares multiplied by the excess, if
24
any, of (x) the Converting Holder's total purchase price per share (including
brokerage commissions, if any) for the Covering Shares(8) over (y) the net
proceeds per share (after brokerage commissions, if any) received by the
Converting Holder from the sale of the Sold Shares. The Company shall pay the
Buy-In Adjustment Amount to the Converting Holder in immediately available funds
immediately upon demand by the Converting Holder. By way of illustration and not
in limitation of the foregoing, if the Converting Holder purchases shares of
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net
proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required
to pay to the Converting Holder will be $1,000.
D. In lieu of delivering physical certificates representing the
Common Stock issuable upon conversion of the Debenture or exercise of a Warrant
or at the request of the Holder with respect to any Shares previously issued,
provided the Transfer Agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer program, upon request of the Holder
and its compliance with the provisions contained in this paragraph, so long as
the certificates therefor do not bear a legend and the Holder thereof is not
obligated to return such certificate for the placement of a legend thereon, the
Company shall use its best efforts to cause the Transfer Agent to electronically
transmit to the Holder the Common Stock issuable upon conversion of the
Debenture or exercise of the Warrant or in replacement of any Shares previously
issued by crediting the account of Holder's Prime Broker with DTC through its
Deposit Withdrawal Agent Commission system.
E. The Company shall assume any fees or charges of the Transfer
Agent or Company counsel regarding (i) the removal of a legend or stop transfer
instructions with respect to Registrable Securities, and (ii) the issuance of
certificates or DTC registration to or in the name of the Holder or the Holder's
designee or to a transferee as contemplated by an effective Registration
Statement.
----------
(8) Provided, however, that if the Covering Shares were acquired other than by
way of an arm's length open market transaction, the total purchase price
for such shares (before brokerage commissions, if any) shall be the lower
of (x) the amount actually charged to the Converting Holder for such
shares or (y) the closing sale price for shares of Common Stock on the
Principal Trading Market, as reported by the Reporting Service, for the
Trading Day on which the Covering Shares were transferred to or credited
to the Converting Holder's account, multiplied by the number of Covering
Shares.
25
F. The holder of any Debenture shall be entitled to exercise its
conversion privilege with respect to the Debenture notwithstanding the
commencement of any case under 11 U.S.C. ss.101 et seq. (the "Bankruptcy Code").
In the event the Company is a debtor under the Bankruptcy Code, the Company
hereby waives, to the fullest extent permitted, any rights to relief it may have
under 11 U.S.C. ss.362 in respect of such holder's conversion privilege. The
Company hereby waives, to the fullest extent permitted, any rights to relief it
may have under 11 U.S.C. ss.362 in respect of the conversion of the Debenture.
The Company agrees, without cost or expense to such holder, to take or to
consent to any and all action necessary to effectuate relief under 11 U.S.C.
ss.362.
G. The Company will authorize the Transfer Agent to give information
relating to the Company directly to the Lender or the Lender's representatives
upon the request of the Lender or any such representative, to the extent such
information relates to (i) the status of shares of Common Stock issued or
claimed to be issued to the Lender in connection with a Notice of Conversion or
a Notice of Exercise, or (ii) the aggregate number of outstanding shares of
Common Stock of all shareholders (as a group, and not individually) as of a
current or other specified date. At the request of the Lender, the Company will
provide the Lender with a copy of the authorization so given to the Transfer
Agent.
6. CLOSING DATE.
A. The Closing Date shall occur on the date which is the first
Trading Day after each of the conditions contemplated by Sections 7 and 8 hereof
shall have either been satisfied or been waived by the party in whose favor such
conditions run.
B. The closing of the purchase and issuance of the Purchased
Securities shall occur on the Closing Date at the offices of the Escrow Agent
and shall take place no later than 3:00 P.M., New York time, on such day or such
other time as is mutually agreed upon by the Company and the Lender.
C. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the Escrow Funds to the Company and
to others and to release the other Escrow Property on the Closing Date upon
satisfaction of the conditions set forth in Sections 7 and 8 hereof and as
provided in the Joint Escrow Instructions.
26
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Lender understands that the Company's obligation to sell the
Purchased Securities to the Lender pursuant to this Agreement on the Closing
Date is conditioned upon:
A. The execution and delivery by the Lender of this Agreement and
the other Transactions Agreements required to be signed by the Lender on or
before the Closing Date;
B. Delivery by the Lender to the Escrow Agent by the Closing Date of
good funds as payment in full of an amount equal to the Purchase Price in
accordance with this Agreement;
C. The accuracy on such Closing Date of the representations and
warranties of the Lender contained in this Agreement, each as if made on such
date, and the performance by the Lender on or before such date of all covenants
and agreements of the Lender required to be performed on or before such date;
and
D. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
8. CONDITIONS TO THE LENDER'S OBLIGATION TO PURCHASE.
The Company understands that the Lender's obligation to purchase the
Purchased Securities on the Closing Date is conditioned upon:
A. The execution and delivery by the Company of this Agreement and
the other Transaction Agreements required to be signed by the Company on or
before the Closing Date;
B. Delivery by the Company to the Escrow Agent of the ink-signed
original Certificates in accordance with this Agreement;
C. Delivery by the Guarantor to the Escrow Agent of the ink-signed
original Guaranty for each Debenture;
D. On such Closing Date, each of the Transaction Agreements executed
by the Company on or before such date shall be in full force and effect and the
Company shall not be in default thereunder;
27
E. The accuracy in all material respects on such Closing Date of
the representations and warranties of the Company contained in this Agreement,
each as if made on such date, and the performance by the Company on or before
such date of all covenants and agreements of the Company required to be
performed on or before such date;
F. On such Closing Date, the Escrow Agent, on behalf of the Lender,
shall have received an ink-signed original opinion of counsel for the Company,
dated such Closing Date, and addressed to the Lender and the Other Lenders, in
form, scope and substance reasonably satisfactory to the Lender, substantially
to the effect set forth in ANNEX III attached hereto;
G. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained; and
H. From and after the date hereof to and including the Closing Date,
each of the following conditions will remain in effect: (i) the trading of the
Common Stock shall not have been suspended by the SEC or on the Principal
Trading Market; (ii) trading in securities generally on the Principal Trading
Market shall not have been suspended or limited; (iii) no minimum prices shall
have been established for securities traded on the Principal Trading Market; and
(iv) there shall not have been any material adverse change in any financial
market.
9. INDEMNIFICATION AND REIMBURSEMENT.
A. (i) The Company agrees to indemnify and hold harmless the Lender
and its officers, directors, employees, and agents, and each Lender Control
Person from and against any losses, claims, damages, liabilities or expenses
incurred (collectively, "Damages"), joint or several, and any action in respect
thereof to which the Lender, its partners, Affiliates, officers, directors,
employees, and duly authorized agents, and any such Lender Control Person
becomes subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of Company contained in this Agreement, as
such Damages are incurred, except to the extent such Damages result primarily
from Lender's failure to perform any covenant or agreement contained in this
Agreement or the Lender's or its officer's, director's, employee's, agent's or
Lender Control Person's gross negligence, recklessness or bad faith in
performing its obligations under this Agreement.
(ii) The Company hereby agrees that, if the Lender, other than
by reason of its gross negligence, illegal or willful misconduct (in each case,
as determined by a non-appealable judgment to such effect ), (x) becomes
involved in any capacity in any action, proceeding or investigation brought by
any shareholder of the Company, in connection with or as a result of the
28
consummation of the transactions contemplated by this Agreement or the other
Transaction Agreements, or if the Lender is impleaded in any such action,
proceeding or investigation by any Person, or (y) becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC, any
self-regulatory organization or other body having jurisdiction, against or
involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by this Agreement or the other Transaction
Agreements, or (z) is impleaded in any such action, proceeding or investigation
by any Person, then in any such case, the Company shall indemnify, defend and
hold harmless the Lender from and against and in respect of all losses, claims,
liabilities, damages or expenses resulting from, imposed upon or incurred by the
Lender, directly or indirectly, and reimburse such Lender for its reasonable
legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith, as such expenses are incurred.
The indemnification and reimbursement 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 Affiliates of the
Lender who are actually named in such action, proceeding or investigation, and
partners, directors, agents, employees and Lender Control Persons (if any), as
the case may be, of the Lender 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 Lender, any such Affiliate and any such
Person. The Company also agrees that neither the Lender nor any such Affiliate,
partner, director, agent, employee or Lender Control Person 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 the other Transaction Agreements, except as may be expressly and
specifically provided in or contemplated by this Agreement.
B. All claims for indemnification by any Indemnified Party (as
defined below) under this Section shall be asserted and resolved as follows:
(i) In the event any claim or demand in respect of which any Person
claiming indemnification under any provision of this Section (an "Indemnified
Party") might seek indemnity under paragraph (a) of this Section is asserted
against or sought to be collected from such Indemnified Party by a Person other
than a party hereto or an Affiliate thereof (a "Third Party Claim"), the
Indemnified Party shall deliver a written notification, enclosing a copy of all
papers served, if any, and specifying the nature of and basis for such Third
Party Claim and for the Indemnified Party's claim for indemnification that is
being asserted under any provision of this Section against any Person (the
"Indemnifying Party"), together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to indemnify the
29
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party
as soon as practicable within the period ending thirty (30) calendar days
following receipt by the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute Period") whether the
Indemnifying Party disputes its liability or the amount of its liability to the
Indemnified Party under this Section and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim. The following provisions shall also apply.
(x) If the Indemnifying Party notifies the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to
this paragraph (b) of this Section, then the Indemnifying Party
shall have the right to defend, with counsel reasonably satisfactory
to the Indemnified Party, at the sole cost and expense of the
Indemnifying Party, such Third Party Claim by all appropriate
proceedings, which proceedings shall be vigorously and diligently
prosecuted by the Indemnifying Party to a final conclusion or will
be settled at the discretion of the Indemnifying Party (but only
with the consent of the Indemnified Party in the case of any
settlement that provides for any relief other than the payment of
monetary damages or that provides for the payment of monetary
damages as to which the Indemnified Party shall not be indemnified
in full pursuant to paragraph (a) of this Section). The Indemnifying
Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however,
that the Indemnified Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the Indemnifying Party's
delivery of the notice referred to in the first sentence of this
subparagraph (x), file any motion, answer or other pleadings or take
any other act ion that the Indemnified Party reasonably believes to
be necessary or appropriate protect its interests; and provided
further, that if requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party Claim that the
Indemnifying Party elects to contest. The Indemnified Party may
participate in, but not control, any defense or settlement of any
Third Party Claim controlled by the Indemnifying Party pursuant to
this subparagraph (x), and except as provided in the preceding
sentence, the Indemnified Party shall bear its own costs and
expenses with respect to such participation. Notwithstanding the
foregoing, the Indemnified Party may take over the control of the
defense or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under paragraph (a) of
this Section with respect to such Third Party Claim.
30
(y) If the Indemnifying Party fails to notify the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to paragraph (b) of this
Section, or if the Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the Third Party Claim,
or if the Indemnifying Party fails to give any notice whatsoever
within the Dispute Period, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified Party in a
reasonable manner and in good faith or will be settled at the
discretion of the Indemnified Party (with the consent of the
Indemnifying Party, which consent will not be unreasonably
withheld). The Indemnified Party will have full control of such
defense and proceedings, including any compromise or settlement
thereof; provided, however, that if requested by the Indemnified
Party, the Indemnifying Party will, at the sole cost and expense of
the Indemnifying Party, provide reasonable cooperation to the
Indemnified Party and its counsel in contesting any Third Party
Claim which the Indemnified Party is contesting. Notwithstanding the
foregoing provisions of this subparagraph (y), if the Indemnifying
Party has notified the Indemnified Party within the Dispute Period
that the Indemnifying Party disputes its liability or the amount of
its liability hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is resolved in favor of
the Indemnifying Party in the manner provided in subparagraph (z)
below, the Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to this
subparagraph (y) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the Indemnified
Party shall reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may
participate in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this subparagraph
(y), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
(z) If the Indemnifying Party notifies the Indemnified Party that it
does not dispute its liability or the amount of its liability to the
Indemnified Party with respect to the Third Party Claim under
paragraph (a) of this Section or fails to notify the Indemnified
Party within the Dispute Period whether the Indemnifying Party
disputes its liability or the amount of its liability to the
Indemnified Party with respect to such Third Party Claim, the
amount of Damages specified in the Claim Notice shall be
conclusively deemed a liability of the Indemnifying Party under
paragraph (a) of this Section and the Indemnifying Party shall pay
the amount of such Damages to the Indemnified Party on demand. If
the Indemnifying Party has timely disputed its liability or the
31
amount of its liability with respect to such claim, the Indemnifying
Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute; provided, however, that if
the dispute is not resolved within thirty (30) days after the Claim
Notice, the Indemnifying Party shall be entitled to institute such
legal action as it deems appropriate.
(ii) In the event any Indemnified Party should have a claim
under paragraph (a) of this Section against the Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall deliver a written
notification of a claim for indemnity under paragraph (a) of this Section
specifying the nature of and basis for such claim, together with the amount or,
if not then reasonably ascertainable, the estimated amount, determined in good
faith, of such claim (an "Indemnity Notice") with reasonable promptness to the
Indemnifying Party. The failure by any Indemnified Party to give the Indemnity
Notice shall not impair such party's rights hereunder except to the extent that
the Indemnifying Party demonstrates that it has been irreparably prejudiced
thereby. If the Indemnifying Party notifies the Indemnified Party that it does
not dispute the claim or the amount of the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim or the amount of the claim
described in such Indemnity Notice, the amount of Damages specified in the
Indemnity Notice will be conclusively deemed a liability of the Indemnifying
Party under paragraph (a) of this Section and the Indemnifying Party shall pay
the amount of such Damages to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days
after the Claim Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.
C. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar rights of the indemnified party against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to.
10. JURY TRIAL WAIVER. The Company and the Lender hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with the Transaction Agreements.
11. GOVERNING LAW: MISCELLANEOUS.
A. (i) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
County of New York or the state courts of the State of New York sitting in the
32
County of New York in connection with any dispute arising under this Agreement
or any of the other Transaction Agreements and hereby waives, to the maximum
extent permitted by law, any objection, including any object ion based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions or
to any claim that such venue of the suit, action or proceeding is improper. To
the extent determined by such court, the Company shall reimburse the Lender for
any reasonable legal fees and disbursements incurred by the Lender in
enforcement of or protection of any of its rights under any of the Transaction
Agreements. Nothing in this Section shall affect or limit any right to serve
process in any other manner permitted by law.
(ii) The Company and the Lender acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Transaction Agreements were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and the other Transaction
Agreements and to enforce specifically the terms and provisions hereof and
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
B. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
C. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
D. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
E. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.
F. This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.
G. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
H. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
33
I. This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.
J. This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.
12. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of
(a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission,
(b) the fifth Trading Day after deposit, postage prepaid, in the
United States Postal Service by registered or certified mail, or
(c) the third Trading Day after mailing by domestic or international
express courier, with delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):
COMPANY: At the address set forth at the head of this Agreement.
Attn: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
34
LENDER: At the address set forth on the signature page of this Agreement.
with a copy to:
Xxxxxxx & Xxxxxx LLP , Esqs.
00 Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No. (000) 000-0000
ESCROW AGENT: Xxxxxxx & Xxxxxx LLP , Esqs.
00 Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No. (000) 000-0000
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and
the Lender's representations and warranties herein shall survive the execution
and delivery of this Agreement and the delivery of the Certificates and the
payment of the Purchase Price, for a period of five (5) years after the Closing
Date, and shall inure to the benefit of the Lender and the Company and their
respective successors and assigns.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]
35
[SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]
IN WITNESS WHEREOF, with respect to the Purchase Price specified
below, each the undersigned represents that the foregoing statements made by it
above are true and correct and that it has caused this Agreement to be duly
executed on its behalf (if an entity, by one of its officers thereunto duly
authorized) as of the date first above written.
PURCHASE PRICE: $________________________
LENDER:
_________________________________ ___________________________________
Address Printed Name of Lender
_________________________________ By:________________________________
Telecopier No. (Signature of Authorized Person)
___________________________________
Printed Name and Title
_________________________________
Jurisdiction of Incorporation
or Organization
COMPANY:
INFINIUM LABS, INC.
By:______________________________
Title:___________________________
ANNEX I FORM OF DEBENTURE AND GUARANTY
ANNEX II JOINT ESCROW INSTRUCTIONS
ANNEX III OPINION OF COUNSEL
ANNEX IV REGISTRATION RIGHTS AGREEMENT
ANNEX V FORM OF WARRANT
ANNEX VI COMPANY DISCLOSURE MATERIAL
ANNEX VII COMPANY'S SEC DOCUMENTS AVAILABLE ON XXXXX
