STOCK PURCHASE AGREEMENT
by and between
UNIFAB INTERNATIONAL, INC.
and
THE PURCHASERS LISTED ON SCHEDULE A
Dated as of September 18, 2000
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is dated as of
September 18, 2000 between UNIFAB International, Inc., a Louisiana
corporation (the "COMPANY"), and The Purchasers Listed On Schedule A (the
"PURCHASERS"). The Company and the Purchasers may hereinafter be referred
to collectively as the "PARTIES" or individually as a "PARTY." Except as
otherwise indicated herein, capitalized terms used herein are defined in
APPENDIX A.
PRELIMINARY STATEMENTS
----------------------
A. The Company wishes the Purchasers to make an equity investment in
the Company.
B. The Company and the Purchasers desire to enter into an agreement
pursuant to which the Purchasers will purchase from the Company, and the
Company will sell to the Purchasers, the restricted common stock described
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereof, and for other good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to
be legally bound, hereby agree as follows:
STATEMENT OF AGREEMENT
----------------------
ARTICLE I
ISSUANCE AND PURCHASE OF SHARES
-------------------------------
1.1 ISSUANCE AND PURCHASE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, the Company shall sell to the Purchasers, and
the Purchasers shall purchase from the Company, One Million Three Hundred
Thousand (1,300,000) shares (the "SHARES") of the Company's common stock,
par value $.01 per share, for a purchase price of $9.50 per share (the
"PURCHASE PRICE").
1.2 SETTLEMENT. The settlement of the transactions contemplated
herein (the "SETTLEMENT") shall take place at the offices of Bass, Berry &
Sims PLC, 100 Peabody Place, Suite 950, Memphis, Tennessee 38103 at 10:00
a.m. Memphis, Tennessee time on or before September 27, 2000, or such
other time, date or place as the Parties may mutually agree (the
"SETTLEMENT DATE"). At the Settlement, (a) Purchasers shall pay to the
Company, by wire transfer of immediately available funds to such account or
accounts designated in writing by the Company, the Purchase Price per share
of Common Stock purchased pursuant hereto; (b) the Company shall issue
to Purchasers the Shares and deliver to Purchasers certificates for
the Shares duly registered in the name of Purchasers; and (c) the
Company shall deliver a legal opinion from the Company's counsel,
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in form
1
and substance satisfactory to Purchasers, and expressing the opinions
identified on SCHEDULE 1.2(C) hereto.
ARTICLE II
RESTRICTIONS ON TRANSFERABILITY
-------------------------------
The Shares shall not be transferred before satisfaction of the
conditions specified in this Article II, which conditions are intended to
ensure compliance with the provisions of the Securities Act and applicable
state securities laws with respect to the transfer of any Shares.
Purchasers, by entering into this Agreement and accepting the Shares, agree
to be bound by the provisions of this Article II.
2.1 RESTRICTIVE LEGEND. Except as otherwise provided in this Article
II, each certificate representing Shares (the "RESTRICTED COMMON STOCK")
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED, UNLESS AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE SECURITIES
LAWS, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER, IS AVAILABLE.
SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES
SPECIFIED IN THE STOCK PURCHASE AGREEMENT, DATED AS OF SEPTEMBER 18,
2000, BETWEEN UNIFAB INTERNATIONAL, INC. AND THE PURCHASERS LISTED ON
SCHEDULE A THERETO, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
UNIFAB INTERNATIONAL, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE
HOLDER HEREOF UPON WRITTEN REQUEST. THE HOLDER OF THIS CERTIFICATE
AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF SUCH STOCK PURCHASE
AGREEMENT."
2.2 TRANSFERS. Each Holder agrees that it will not sell, transfer or
otherwise dispose of any shares of Restricted Common Stock, in whole or in
part, except pursuant to an effective registration statement under the
Securities Act or an exemption from registration thereunder. Each
certificate, if any, evidencing such shares of Restricted Common Stock
issued upon such transfer shall bear the restrictive legend set forth in
Section 2.1, unless in the written opinion of the transferee's or Holder's
counsel delivered to the Company in connection with such transfer (which
opinion shall be reasonably satisfactory to the Company) such legend is not
required in order to ensure compliance with the Securities Act.
2.3 TERMINATION OF RESTRICTIONS. The restrictions imposed by
this Article II upon the transferability of the Restricted
Common Stock and the legend requirement of Section 2.1 shall
2
terminate as to any particular Share (i) when and so long as such security
shall have been registered under the Securities Act and disposed of
pursuant thereto, or (ii) when the Holder thereof shall have delivered to
the Company the written opinion of counsel to such Holder, which opinion
shall be reasonably satisfactory to the Company, stating that such legend
is not required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by this Article II shall terminate
as to any Restricted Common Stock, as herein above provided, the Holder
thereof shall be entitled to receive from the Company, at the expense of
the Company, a new certificate representing such Common Stock, not bearing
the restrictive legend set forth in Section 2.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
----------------------------------------------
As a material inducement to Purchasers entering into this Agreement
and purchasing the Shares, the Company represents and warrants to
Purchasers as follows:
3.1 CORPORATE STATUS. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Louisiana. The Company has all requisite corporate power and
authority to own or lease, as the case may be, its properties and to carry
on its business as now conducted. The Company and its Subsidiaries are
qualified or licensed to conduct business in all jurisdictions where its or
their ownership or lease of property and the conduct of its or their
business requires such qualification or licensing, except to the extent
that failure to so qualify or be licensed would not have a Material Adverse
Effect on the Company. There is no pending, or to the knowledge of the
Company threatened, proceeding for the dissolution, liquidation or
insolvency of the Company or any of its Subsidiaries.
3.2 CORPORATE POWER AND AUTHORITY. The Company has the corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and consummate the transactions contemplated hereby.
The Company has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
3.3 ENFORCEABILITY. Each of this Agreement and the Registration
Rights Agreement of even date herewith between the Company and the
Purchasers (the "Registration Rights Agreement") has been duly executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at
law or in equity.
3.4 NO VIOLATION. The execution and delivery by the Company
of each of this Agreement and the Registration Rights Agreement,
the consummation of the transactions contemplated hereby and
thereby, and the compliance by the Company with the terms and
3
provisions hereof and thereof, will not (a) result in a violation or
breach of, or constitute, with the giving of notice or lapse of time,
or both, a material default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any Contract to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or any
material portion of the Company's or its Subsidiaries' properties or assets
may be bound, (b) violate any Requirement of Law applicable to the Company
or any of its Subsidiaries or any material portion of the Company's
properties or assets or (c) result in the imposition of any Lien upon
any of the properties or assets of the Company or any of its Subsidiaries;
except where any of the foregoing would not have a Material Adverse Effect
on the Company.
3.5 CONSENTS/APPROVALS. The Company has obtained any and all
consents, approvals, waivers or other actions by any Person(s) under any
Contract(s) to which either the Company or any of its Subsidiaries is a
party, or by which any of their respective properties or assets are bound,
which are required or necessary for the execution, delivery or performance
by the Company of this Agreement or the Registration Rights Agreement and
the consummation of the transactions contemplated hereby, except where the
failure to obtain such consents, filings, authorizations, approvals or
waivers or make such filings would not have a Material Adverse Effect on
the Company.
3.6 CAPITALIZATION. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock. As of August 1, 2000, the Company had outstanding
6,825,950 shares of Common Stock, all of which were duly authorized,
validly issued, fully paid and non-assessable and had no outstanding shares
of Preferred Stock. Except (a) as contemplated by this Agreement, (b)
options to acquire no more than 888,000 shares of Common Stock under the
Company's option plans, and (c) as set forth in the Company's SEC Reports,
there are (y) no rights, options, warrants, convertible securities,
subscription rights or other agreements, calls, plans, contracts or
commitments of any kind relating to the issued and unissued capital stock
of, or other equity interest in, the Company outstanding or authorized and
(z) no contractual obligations of the Company to repurchase, redeem or
otherwise acquire any shares of the Company Common Stock. Upon delivery to
the Purchasers of the certificates representing the Shares and payment of
the Purchase Price, the Purchasers will acquire good, valid and marketable
title, subject to the limitations on marketability contained in this
Agreement or imposed pursuant to the Securities Act, to and beneficial and
record ownership of the Shares, and the Shares will be validly issued,
fully paid and non-assessable. The Company has duly reserved, solely for
purposes of issuance upon exercise of warrants to purchase Common Stock
issued to Morgan Keegan & Company, Inc. (the "Placement Warrant") and the
Penalty Warrant (as defined in Section 5.6 below), the shares of Common
Stock issuable upon exercise of the Placement Warrants and the Penalty
Warrant.
3.7 SEC REPORTS AND NASDAQ ELIGIBILITY. Since September 30, 1998,
the Company has made all filings (the "SEC REPORTS") required to
be made by it under the Securities Act of 1933 (the SECURITIES
ACT") and the Securities Exchange Act of 1934, (the "EXCHANGE
ACT"). The SEC Reports, when filed, complied in all material
respects with all applicable requirements of the Securities Act and
the Exchange Act and the securities laws, rules and regulations of any
4
state and pursuant to any Requirements
of Law. The SEC Reports, when filed, did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The
Company has delivered or made accessible to Purchasers true, accurate and
complete copies of the SEC Reports which were filed with the SEC since
September 30, 1998. The Company's Common Stock is currently eligible for
trading on the Nasdaq National Market.
3.8 FINANCIAL STATEMENTS. Each of the balance sheets included in the
SEC Reports (including any related notes and schedules) fairly presents in
all material respects the consolidated financial position of the Company
and its Subsidiaries as of its date, and each of the other financial
statements included in the SEC Reports (including any related notes and
schedules) fairly presents in all material respects the consolidated
results of operations or other information therein of the Company and its
Subsidiaries for the periods or as of the dates therein set forth in
accordance with GAAP consistently applied during the periods involved
(except that the interim reports are subject to normal recording
adjustments which might be required as a result of year-end audit and
except as otherwise stated therein).
3.9 UNDISCLOSED LIABILITIES. As of August 15, 2000, except for
liabilities and losses incurred in the ordinary course of business since
June 30, 2000, the Company and its Subsidiaries do not have any material
direct or indirect indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, subordinated or
unsubordinated, matured or unmatured, accrued, absolute, contingent,
regulatory or administrative charges or lawsuits brought, whether or not of
a kind required by GAAP to be set forth on a financial statement, that were
not fully and adequately reflected or reserved for in the financial
statements contained in the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2000 or otherwise disclosed in the SEC
Reports.
3.10 MATERIAL CHANGES. Except as set forth in the SEC Reports, since
June 30, 2000 there has been no Material Adverse Change in the Company. In
addition, the description of the Company's business contained in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31,
2000 is not materially inconsistent with its current operations. Except as
set forth in the SEC Reports, since June 30, 2000 there has not been
(i) any direct or indirect redemption, purchase or other acquisition by the
Company of any shares of the Common Stock or (ii) declaration, setting
aside or payment of any dividend or other distribution by the Company with
respect of the Common Stock.
3.11 LITIGATION. Except as set forth in the SEC Reports, neither the
Company nor any of its Subsidiaries has received any notice of any
outstanding judgments, rulings, orders, writs, injunctions, awards or
decrees of any court, government or other authority against the Company or
its Subsidiaries which could have a Material Adverse Effect. Except as set
forth in the SEC Reports, neither the Company nor any of its Subsidiaries
is party to any litigation or similar proceeding which will have a Material
Adverse Effect on the Company.
5
3.12 INVESTMENT COMPANY. The Company is not and after giving effect
to the sale of the Shares will not be an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
3.13 NO COMMISSIONS. Except for fees payable to Morgan Keegan &
Company, Inc., the Company has not incurred any obligation for any finder's
or broker's or agent's fees or commissions in connection with the purchase
of the Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
--------------------------------------------
As a material inducement to the Company entering into this Agreement
and issuing and/or selling the Shares, each Purchaser represents and
warrants to the Company as follows:
4.1 INVESTMENT INTENT. The Purchaser is acquiring the Shares for the
Purchaser's own account and with no present intention of distributing or
selling the Shares or any interest in the Shares. The Purchaser agrees
that it will not sell or otherwise dispose of any of the Shares or any
interest in the Shares unless such sale or other disposition has been
registered or qualified (as applicable) under the Securities Act and
applicable state securities laws or, in the opinion of the Purchaser's
counsel delivered to the Company (which opinion shall be reasonably
satisfactory to the Company) such sale or other disposition is exempt from
registration or qualification under the Securities Act and applicable state
securities laws. The Purchaser understands that the sale of the Shares
acquired by the Purchaser hereunder has not been registered under the
Securities Act, but the Shares are issued through transactions exempt from
the registration and prospectus delivery requirements of Section 4(2) of
the Securities Act, and that the reliance of the Company on such exemption
from registration is predicated in part on these representations and
warranties of the Purchaser. The Purchaser acknowledges that pursuant to
Section 2.1 a restrictive legend consistent with the foregoing has been or
will be placed on the certificates representing the Shares until such
legend is permitted to be removed under applicable law. The Purchaser will
have no right to require registration of the Shares, and the Company is
under no obligation to cause an exemption to be available, except as
provided in the Registration Rights Agreement attached as EXHIBIT B hereto
(the "Registration Rights Agreement").
4.2 ADEQUATE INFORMATION. The Company has made available and the
Purchaser has reviewed such information that the Purchaser considers
necessary or appropriate to evaluate the risks and merits of an investment
in the Shares (including, without limitation, the Company's Form 10-K for
the fiscal year ended March 31, 2000, Form 10-Qs for the quarterly period
ended June 30, 2000, and Current Reports on Form 8-K since April 1, 2000.
4.3 OPPORTUNITY TO QUESTION. The Purchaser has had the opportunity
to question, and, to the extent deemed necessary or appropriate, has
questioned representatives of the Company so as to receive answers and
verify information obtained in the Purchaser's examination of the Company,
including the information that the Purchaser has reviewed in relation to
its investment in the Shares.
6
4.4 NO OTHER REPRESENTATIONS. No oral or written representations
have been made to the Purchaser in connection with the Purchaser's
acquisition of the Shares which were in any way inconsistent with the
information reviewed by the Purchaser. The Purchaser acknowledges that no
representations or warranties of any type or description have been made to
it by any Person with regard to the Company, any of its Subsidiaries, any
of their respective businesses, properties or prospectus or the investment
contemplated herein, other than the representations and warranties set
forth in Article III hereof. The Purchaser has not made its decision to
acquire Shares or to execute and deliver this Agreement on the basis of any
belief that any officer, director or affiliate of the Company or any
current stockholder of the Company would make an investment in the Company
now or in the future.
4.5 KNOWLEDGE AND EXPERIENCE. The Purchaser is a Qualified
Institutional Buyer as such term is defined in Rule 144A under the
Securities Act. The Purchaser has such knowledge and experience in
financial, tax and business matters, including substantial experience in
evaluating and investing in common stock and other securities (including
the common stock and other securities of new and speculative companies), so
as to enable the Purchaser to utilize the information made available to the
Purchaser in order to evaluate the merits and risks of an investment in the
Shares and to make an informed investment decision with respect thereto.
4.6 ADDITIONAL REPRESENTATIONS. Each Purchaser will make such
additional representations and warranties and furnish such information
regarding the Purchaser's investment experience and financial position as
the Company may reasonably require, and if there should be any material
change in the information set forth herein or in the Purchaser Suitability
Questionnaire prior to the closing of the sale of the Shares, the Purchaser
will immediately furnish such revised or corrected information to the
Company.
4.7 OFFERING MEMORANDUM. The Purchaser has received a copy of the
Confidential Memorandum dated September 6, 2000 and any and all amendments,
supplements and Appendices thereto. Except for the information contained
in the Memorandum and except for the information that the Purchaser or its
advisors, if any, have requested, neither the Purchaser nor its advisors
has been furnished any offering material or literature by the Company.
4.8 INDEPENDENT DECISION. The Purchaser is not relying on the
Company or on any legal or other opinion in the materials reviewed by the
Purchaser with respect to the financial or tax considerations of the
Purchaser relating to its investment in the Shares. The Purchaser has
relied solely on the representations, warranties, covenants and agreements
of the Company in this Agreement (including the Exhibits and Schedules
hereto) and on its examination and independent investigation in making its
decision to acquire the Shares. The Purchaser has been afforded the
opportunity to obtain, and has been furnished, all material that it has
requested relating to the proposed operation of the Company, any other
matters relating to the business and properties of the Company and the
offering and sale of the Shares.
7
4.9 LEGAL EXISTENCE AND AUTHORITY. If the Purchaser is a
corporation, partnership, limited liability company, trust or other entity,
the Purchaser has been duly formed and is validly existing and in good
standing under the laws of the jurisdiction of its formation with full
power and authority to acquire and hold the Shares and to execute, deliver
and comply with the terms of this Agreement and such other documents
required to be executed and delivered by the undersigned in connection with
this subscription.
4.10. NO DEFAULTS OR CONFLICTS. The execution and delivery of this
Agreement by the Purchaser and the performance of its obligations hereunder
does not conflict with or constitute a default under any instruments
governing the Purchaser, or any law, regulation, order or agreement to
which the Purchaser is a party or to which the undersigned is bound.
4.12. VALIDITY; ENFORCEABILITY; BINDING EFFECT. This Agreement and
the Registration Rights Agreement delivered herewith have been duly and
validly authorized, executed and delivered by the Purchaser, and the
agreements herein and therein constitute valid, binding and enforceable
agreements of the Purchaser. The Purchaser is not a partnership, common
trust fund, special trust, pension fund, retirement plan or other entity in
which the partners or participants, as the case may be, may designate the
particular investments to be made or the allocation thereof.
4.13. CONFIDENTIALITY. The Purchaser has agreed not to disclose and
to maintain as confidential and use solely for purposes of evaluating the
transaction described herein all non-public information related to the
Company of which it is in possession. Unless required by law, the
Purchaser has not disclosed and shall not disclose, and shall maintain
confidential any non-public information related to the Company, provided
that the undersigned may disclose such information to any of its advisors,
attorneys and accountants, if such advisor, attorney and/or accountant
shall have agreed to be bound by this provision.
ARTICLE V
COVENANTS
---------
5.1 FILINGS. Each of the Company and the Purchasers shall make on a
prompt and timely basis all governmental or regulatory notifications and
filings required to be made by it for the consummation of the transactions
contemplated hereby.
5.2 FURTHER ASSURANCES. Each of the Company and the Purchasers shall
execute and deliver such additional instruments and other documents and
shall take such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this Agreement
and the transactions contemplated hereby.
5.3 COOPERATION. Each of the Company and the Purchasers agree
to cooperate with the other in the preparation and filing of
all forms, notifications, reports and information, if any,
required or reasonably deemed advisable pursuant to any Requirement
of Law in connection with the transactions contemplated by this
Agreement and to use their respective best efforts to agree
8
jointly on a method to overcome any objections by any Governmental
Authority to any such transactions; provided that, any reasonable, out-of-
pocket expenses incurred by the Purchasers shall be reimbursed by the
Company. Except as may be specifically required hereunder, none of the
Parties or their respective Affiliates shall be required to agree to take
any action that in the reasonable opinion of such Party would result in or
produce a Material Adverse Effect on such Party.
5.4 NOTIFICATION OF CERTAIN MATTERS. Each of the Company and the
Purchasers shall give prompt notice to the other of the occurrence, or non-
occurrence, of any event which would be likely to cause any representation
or warranty herein to be untrue or inaccurate, or any covenant, condition
or agreement herein not to be complied with or satisfied.
5.5 SHARE MAINTENANCE. The Company covenants and agrees that (a) all
shares of Common Stock issuable upon exercise of the Penalty Warrant, upon
issuance in accordance with the terms thereof, and the payment of the
purchase price therefor, will be duly authorized, validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens
and charges with respect to the issuance thereof other than those created
by or arising through the Purchasers, and all such shares shall be sold to
the Purchasers pursuant to an exemption from registration under the
Securities Act or an effective registration statement, (b) the Company will
from time to time take all actions necessary to assure that the par value
per share of the Common Stock is at all times equal to or less than the
applicable price for such shares, and (c) the Company will at all times
during the exercise period have authorized and reserved sufficient shares
of Common Stock to provide for the exercise of the Penalty Warrant in full.
5.6 ISSUANCE OF PENALTY WARRANT. The Company agrees to issue the
warrant to purchase Common Stock described in Section 9.11 of the
Registration Rights Agreement at the time provided therein.
ARTICLE VI
INDEMNIFICATION
---------------
6.1 INDEMNIFICATION GENERALLY. The Company, on the one hand, and the
Purchasers, on the other hand, shall indemnify the other from and against
any and all losses, damages, liabilities, claims, charges, actions,
proceedings, demands, judgments, settlement costs and expenses of any
nature whatsoever (including, without limitation, attorneys' fees and
expenses) or deficiencies resulting from any breach of a representation,
warranty or covenant by the Indemnifying Party (including indemnification
by the Company of the Purchasers for any failure by the Company to deliver,
or for any failure by the Purchasers to receive, stock certificates
representing the Shares on the Settlement Date) and all claims, charges,
actions or proceedings incident to or arising out of the foregoing
("LOSSES"). Notwithstanding the foregoing, the Indemnifying Party shall
not be liable for any Losses to the extent such Losses arise out of, result
from, or are increased by, the breach of this Agreement by, or the
fraudulent acts of, the Indemnified Party.
9
6.2 INDEMNIFICATION PROCEDURES. Each Person entitled to
indemnification under this Article VI (an "INDEMNIFIED PARTY") shall give
notice as promptly as reasonably practicable to each party required to
provide indemnification under this Article VI (an "INDEMNIFYING PARTY") of
the commencement of any action, suit, proceeding or investigation or threat
thereof made in writing in respect of which indemnity may be sought
hereunder; provided, however, failure to so notify an Indemnifying Party
shall not relieve such Indemnifying Party from any liability that it may
have otherwise than on account of this indemnity agreement so long as such
failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall
assume the defense of such action if it is a claim brought by a third
party, and after such assumption the Indemnified Party shall not be
entitled to reimbursement of any expenses incurred by it in connection with
such action except as described below. In any such action, any Indemnified
Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the contrary or (ii) the named parties in any such
action (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing or
conflicting interests between them. An Indemnifying Party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel in any one
jurisdiction for all parties indemnified by such Indemnifying Party with
respect to such claim, unless in the reasonable judgment of any Indemnified
Party a conflict of interest may exist between such Indemnified Party and
any other of such Indemnified Parties with respect to such claim, in which
event the Indemnifying Party shall be obligated to pay the fees and
expenses of such additional counsel or counsels. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without
its written consent (which shall not be unreasonably withheld or delayed by
such Indemnifying Party), but if settled with such consent or if there be
final judgment for the plaintiff, the Indemnifying Party shall indemnify
the Indemnified Party from and against any loss, damage or liability by
reason of such settlement or judgment.
ARTICLE VII
MISCELLANEOUS
-------------
7.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage
pre-paid) or guaranteed overnight delivery, to the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers which such
Party shall designate in writing to the other Party):
(a) if to the Company to:
10
UNIFAB International, Inc.
5007 Fort Road
New Iberia, Louisiana 70562
Attention: Chief Executive Officer
Telecopy: (337) 367-8291
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P.
201 St. Charles Avenue
New Orleans, Louisiana 70170-5100
Attention: Carl Hanemann
Telecopy: (504) 589-8156
(b) if to a Purchaser, at its last known address appearing on the
books of the Company maintained for such purpose with a copy to:
Bass, Berry & Sims PLC
100 Peabody Place, Suite 950
Memphis, Tennessee 38103
Attention: John A. Good
Telecopy: (901) 543-5901
7.2 LOSS OR MUTILATION. Upon receipt by the Company from any Holder
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of a certificate representing Shares and
indemnity reasonably satisfactory to it (it being understood that the
written agreement of the Holder or an Affiliate thereof shall be sufficient
indemnity) and in case of mutilation upon surrender and cancellation hereof
or thereof, the Company will execute and deliver in lieu hereof or thereof
a new stock certificate of like tenor to such Holder; provided, in the case
of mutilation, no indemnity shall be required if the certificate
representing Shares in identifiable form is surrendered to the Company for
cancellation.
7.3 SURVIVAL. Each representation, warranty, covenant and agreement
of the parties set forth in this Agreement is independent of each other
representation, warranty, covenant and agreement. Each representation and
warranty made by any Party in this Agreement shall survive the Settlement
through the period ending on the date six months from the date of this
Agreement. Notwithstanding the foregoing, the Purchasers expressly
acknowledges that, pursuant to Section 2.1 a restrictive legend will be
placed on the certificates representing the Shares and the shares of Common
Stock issued pursuant to the Penalty Warrant until such legend is permitted
to be removed under applicable law.
7.4 REMEDIES.
(a) Each Party acknowledges that the other Parties
would not have an adequate remedy at law for money
damages in the event that any of the covenants or agreements
11
of such Party in this Agreement was not performed in accordance with its
terms, and it is therefore agreed that each Party in addition to and
without limiting any other remedy or right such Party may have, shall have
the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach and enforcing
specifically the terms and provisions hereof, and each Party hereby waives
any and all defenses such Party may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or
other equitable relief.
(b) All rights, powers and remedies under this Agreement or
otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any Party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such Party.
7.5 ENTIRE AGREEMENT. This Agreement (including the exhibits,
appendices and schedules attached hereto) and other documents delivered at
the Settlement pursuant hereto, contain the entire understanding of the
Parties in respect of the subject matter hereof and supersede all prior
agreements and understandings between or among the Parties with respect to
such subject matter. The exhibits and schedules hereto constitute a part
hereof as though set forth in full above.
7.6 EXPENSES; TAXES. Except as otherwise provided in this Agreement,
the Parties shall pay their own fees and expenses, including their own
counsel fees, incurred in connection with this Agreement or any transaction
contemplated hereby. Further, except as otherwise provided in this
Agreement, any sales tax, stamp duty, deed transfer or other tax (except
taxes based on the income of the Purchasers) arising out of the sale of the
Shares by the Company to the Purchasers and consummation of the
transactions contemplated by this Agreement shall be paid by the Company.
7.7 AMENDMENT. This Agreement may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Purchasers.
7.8 WAIVER. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor
shall any waiver be implied from any course of dealing between the Parties.
No extension of time for performance of any obligations or other acts
hereunder or under any other agreement shall be deemed to be an extension
of the time for performance of any other obligations or any other acts.
The rights and remedies of the Parties under this Agreement are in addition
to all other rights and remedies, at law or equity, that they may have
against each other.
7.9 BINDING EFFECT; ASSIGNMENT. The rights and obligations of
this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and legal assigns. The
12
provisions of this Agreement are intended to be for the benefit of all
Holders from time to time of the Shares and shall be enforceable by any
such Holder.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
7.11 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Agreement.
7.12 GOVERNING LAW; INTERPRETATION. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE STATE
OF NEW YORK.
7.13 SEVERABILITY. The parties stipulate that the terms and
provisions of this Agreement are fair and reasonable as of the date of this
Agreement. However, if any provision of this Agreement shall be determined
by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If, moreover, any of those provisions
shall for any reason be determined by a court of competent jurisdiction to
be unenforceable because excessively broad or vague as to duration,
geographical scope, activity or subject, it shall be construed by limiting,
reducing or defining it, so as to be enforceable.
[Signature Page Follows.]
13
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By: /s/ Dailey J. Berard
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
_________________________________
[Name of Purchaser]
By:______________________________
Name:____________________________
Title:_____________________________
Shares of Common Stock Subscribed by Purchaser:_______________
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Trigon Blue Cross (A/C 1610-9500)
- ---------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------
Name: Theodore W. Price
Title: Managing Director - Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 3750
-----------------
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
The Stuart Trust (A/C 7606-8656)
- ---------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------
Name: Theodore W. Price
Title: Chief Investment Officer
Managing Director
Shares of Common Stock Subscribed by Purchaser: 950
-------------
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Gladys and Franklin Clark Foundation #2 (A/C 7757-5808)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
Name: Theodore W. Price
Title: Managing Director - Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 650
---------------
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
The Fondren Foundation (A/C 8443-7472)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------
Name: Theodore W. Price
Title: Managing Director - Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 3450
--------------
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Universal Corporation (A/C 7967-0550)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director -- Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 3600
--------------
14
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Evergreen Growth Fund (A/C 7396-9050)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director / Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 239850
--------------
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Evergreen VA Growth Fund (A/C 4524-9937)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director -- Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 7500
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Chicago Transit Authority (A/C 6299-9933)
- ----------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director -- Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 12600
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Nash General Hospital (A/C 5914-1794)
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director -- Chief Investment Officer
Shares of Common Stock Subscribed by Purchaser: 1400
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
John P. Imlay, Jr.
- ---------------------------------------
[Name of Purchaser]
By: /s/ Theodore W. Price
------------------------------------
Name: Theodore W. Price
Title: Managing Director -- Chief Investment Officer
(A/C 4398-1838)
Shares of Common Stock Subscribed by Purchaser: 2250
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Columbus Capital Partners, L.P.
- ---------------------------------------
[Name of Purchaser]
By: /s/ Matthew D. Ockner
------------------------------------
Name: Matthew D. Ockner
Title: Managing Member of Columbus Management, LLC,
General Partner
Shares of Common Stock Subscribed by Purchaser: 236,000
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Franklin Street Trust Co.
- ---------------------------------------
[Name of Purchaser]
By: /s/ George M. Salley
------------------------------------
Name: George M. Salley
Title: Vice President
Shares of Common Stock Subscribed by Purchaser: 236,000
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Lone Wolf Trading, LLC
- ---------------------------------------
[Name of Purchaser]
By: /s/ Richard C. McKenzie, Jr. (Maria Prawdzik, as attorney in fact.)
------------------------------------
Name: Richard C. McKenzie, Jr.
Title: Sole member
Shares of Common Stock Subscribed by Purchaser: 100,000
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Jupiter Fund/Beacon Management
- ---------------------------------------
[Name of Purchaser]
By: /s/ Brian Sites
------------------------------------
Name: Brian Sites
Title: Partner
Shares of Common Stock Subscribed by Purchaser: 58,000
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Trusco Capital Management
- ---------------------------------------
[Name of Purchaser]
By: /s/ Jason Ling
------------------------------------
Name: Jason Ling
Title: Portfolio Assistant
Shares of Common Stock Subscribed by Purchaser: 58,000
--------------
-14-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
UNIFAB INTERNATIONAL, INC.
By:
----------------------------
Name: Dailey J. Berard
Title: Chief Executive Officer
PURCHASER:
Dynamis Fund, LP
- ---------------------------------------
[Name of Purchaser]
By: /s/ Frederic S. Bocock
------------------------------------
Name: Frederic S. Bocock
Title: Managing Member, Dynamis Advisors, LLC/General Partner
Managing Director
Shares of Common Stock Subscribed by Purchaser: 48,000
--------------
APPENDIX A
DEFINITIONS
-----------
1. DEFINED TERMS. As used herein the following terms shall have the
following meanings:
"AGREEMENT" means this Stock Purchase Agreement.
"BUSINESS DAY" means any day that is not a Saturday or Sunday or
a day on which banks are required or permitted to be closed in the State of
New York.
"COMMON STOCK" means the common stock, $.01 par value per share,
of the Company, as constituted on the date hereof, and any capital stock
into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class (regardless of
how denominated) issued to the holders of shares of Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
assets over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of common stock of any successor or
acquiring corporation received by or distributed to the holders of Common
Stock of the Company.
"THE COMPANY" has the meaning set forth in the Preamble of this
Agreement.
"CONTRACT" means any agreement, indenture, lease, sublease,
license, sublicense, promissory note, evidence of indebtedness, insurance
policy, annuity, mortgage, restriction, commitment, obligation or other
contract, agreement or instrument (whether written or oral).
"CONVERTIBLE SECURITIES" means evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property,
for additional shares of Common Stock, either immediately or upon the
occurrence of a specified date or a specified event.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
promulgated thereunder, all as the same shall be in effect from time to
time.
"GAAP" means generally accepted accounting principles in effect
in the United States of America from time to time.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any entity or official
exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, government.
"HOLDER" means each Person in whose name the Shares are
registered on the books of the Company maintained for such purpose.
1
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.2 of
this Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in Section 6.2 of
this Agreement.
"LIEN" means any mortgage, pledge, security interest, assessment,
encumbrance, lien, lease, sublease, adverse claim, levy, or charge of any
kind, or any conditional Contract, title retention Contract or other
contract to give or refrain from giving any of the foregoing.
"LOSSES" has the meaning set forth in Section 6.1 of this
Agreement.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means,
with respect to any Person, any change or effect that is or is reasonably
likely to be materially adverse to the financial condition, business or
results of operations of such Person.
"PERSON(S)" means any individual, sole proprietorship,
partnership, joint venture, trust, limited liability company, incorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"PURCHASE PRICE" has the meaning set forth in Section 1.1 of this
agreement.
"PURCHASERS" has the meaning set forth in the Preamble of this
Agreement.
"REQUIREMENT OF LAW" means as to any Person, the articles of
incorporation, bylaws or other organizational or governing documents of
such Person, and any domestic or foreign and federal, state or local law,
rule, regulation, statute or ordinance or determination of any arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its properties or to which such Person
or any of its property is subject.
"RESTRICTED COMMON STOCK" has the meaning set forth in Section
2.1 of this Agreement.
"SEC" means the Securities and Exchange Commission.
"SEC REPORTS" has the meaning set forth in Section 3.7 of this
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the applicable time.
"SETTLEMENT" has the meaning set forth in Section 1.2 of this
Agreement.
"SETTLEMENT DATE" has the meaning set forth in Section 1.2 of
this Agreement.
2
"SHARES" has the meaning set forth in Section 1.1 of this
Agreement.
"SUBSIDIARY" means each of those Persons of which another Person,
directly or indirectly owns beneficially securities having more than 50% of
the voting power in the election of directors (or persons fulfilling
similar functions or duties) of the owned Person (without giving effect to
any contingent voting rights).
2. OTHER DEFINITIONAL PROVISIONS.
(a) All references to "dollars" or "$" refer to currency of the
United States of America.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
(e) The words "hereof," "herein" and "hereunder," and words of
similar import, when used in this Agreement shall refer to this Agreement
as a whole (including any exhibits or schedules hereto) and not to any
particular provision of this Agreement.
3
SCHEDULE A
PURCHASERS
----------
NAME OF PURCHASER NUMBER OF SHARES OF COMMON STOCK
----------------- --------------------------------
Mentor Investment Group 288,000
Franklin Street Trust Co. 224,000
Beacon Management 58,000
SSCM, LLC 48,000
Lone Wolfe Trading LLC 100,000
Trusco Capital Management 58,000
Columbus Capital Partners, L.P. 236,000
-------------
1,012,000
SCHEDULE 1.2(C)
---------------
FORM OF LEGAL OPINION FOR COMPANY'S COUNSEL
-------------------------------------------
Counsel for the Company shall opine to the following, subject to reasonable
assumptions and qualifications:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of Louisiana. The Company has the
corporate power and authority to own its properties and conduct its
business.
2. The Company has the corporate power and authority to execute and
deliver the Purchase Agreement, Warrant Agreement, Warrants and Placement
Warrant, to perform its obligations thereunder and to consummate the
transactions contemplated thereby.
3. Each of the Purchase Agreement, Warrant Agreement, Warrants and
Placement Warrant has been duly authorized, executed and delivered by the
Company.
4. The Company has an authorized capitalization as set forth in the
Purchase Agreement, and the Shares have been duly and validly authorized
and issued and are fully paid and non-assessable. The Warrant Shares and
shares of Common Stock issuable pursuant to the Placement Warrant have been
duly and validly authorized and, upon exercise of the Warrants and
Placement Warrant pursuant to the terms thereof, will be validly issued,
fully paid and non-assessable.
5. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or governmental
body is required for the issue and sale of the Shares or the consummation
by the Company of the transactions contemplated by the Purchase Agreement,
Warrant Agreement, Warrants and Placement Warrant.
6. Based solely on a certificate of an officer of the Company, and
without any independent review by the undersigned of any litigation to
which the Company may be a party, to the undersigned's knowledge, except as
disclosed in the SEC Reports, there are no material legal or governmental
proceedings pending to which the Company or any of its Subsidiaries is a
party or of which any property of the Company or any of its Subsidiaries is
the subject; and to the undersigned's knowledge, no such proceedings are
threatened by governmental authorities or by others.
7. The issue and sale of the Shares and the Warrants, the Placement
Warrant and the Common Stock issuable upon exercise thereof, and the
compliance by the Company with all of the provisions of the Purchase
Agreement, Warrants and Placement Warrant do not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed
by the Company with the Commission or otherwise known to the
undersigned to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is subject,
except to the extent that such conflict, breach, violation or default
would not have a Material Adverse Effect on the Company, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule
or regulation known to the undersigned of any court or governmental agency
or governmental body having jurisdiction over the Company or any of its
properties except to the extent that such violation would not have a
Material Adverse Effect on the Company.