MRU HOLDINGS, INC.
Securities Purchase Agreement
This Securities Purchase Agreement (this "Agreement") is dated as of
December 31, 2005, and is made by and among MRU Holdings, Inc., a Delaware
corporation (the "Company"), and the investors identified on the signature pages
hereto (each, an "Investor" and collectively, the "Investors").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below)
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
each Investor, and each Investor, severally and not jointly, desires to purchase
from the Company certain securities of the Company, as more fully described in
this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"Action" means any action, suit, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility.
"Affiliate" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144.
"Amended and Restated Certificate" has the meaning set forth in Section
2.1.
"Business Day" means any day except Saturday, Sunday and any day which
is a federal legal holiday or a day on which banking institutions in New York,
NY, are authorized or required by law or other governmental action to close.
"Claim" has the meaning set forth in Section 4.6(c).
"Closing" means the closing of the purchase and sale of the Shares and
the Warrants pursuant to Article 2.
"Closing Date" means the third Business Day immediately following the
date on which all of the conditions set forth in Sections 6.1 and 6.2 hereof are
satisfied.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value $0.001
per share, and any securities into which such common stock may hereafter be
reclassified.
"Common Stock Equivalents" means any securities of the Company or any
Subsidiary which entitle the holder thereof to acquire Common Stock at any time,
including without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.
"Company Counsel" means McGuireWoods LLP.
"Company Deliverables" has the meaning set forth in Section 2.3(a).
"Company Stock Options" has the meaning set forth in Section 3.1(g).
"Contingent Obligations" has the meaning set forth in Section 3.1(r).
"Conversion Shares" means the shares of Common Stock issuable upon
conversion of the Shares or conversion of the Warrant Shares.
"Convertible Securities" has the meaning set forth in Section 3.1(g).
"Courts" means the state and federal courts sitting in the State of New
York.
"Disclosure Materials" has the meaning set forth in Section 3.1(h).
"Effective Date" means the date that any Registration Statement filed
pursuant to Article 4 is first declared effective by the Commission.
"Effectiveness Date" has the meaning set forth in Section 4.1.
"Environmental Law" has the meaning set forth in Section 3.1(aa).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business, whether or not
incorporated, that together with the Company would be deemed to be a single
employer for purposes of Section 4001 of ERISA or Sections 414(b), (c), (m), (n)
or (o) of the Internal Revenue Code of 1986, as amended.
"Evaluation Date" has the meaning set forth in Section 3.1(r).
"Event" has the meaning set forth in Section 4.8.
"Event Date" has the meaning set forth in Section 4.8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" has the meaning set forth in Section 4.8.
"Filing Date" has the meaning set forth in Section 4.1.
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"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" has the meaning set forth in Section 3.1(e).
"Hazardous Substance" has the meaning set forth in Section 3.1(aa).
"Indebtedness" has the meaning set forth in Section 3.1(r).
"Indemnified Party" has the meaning set forth in Section 4.6(c).
"Indemnified Person" has the meaning set forth in Section 4.6(a).
"Indemnifying Party" has the meaning set forth in Section 4.6(c).
"Intellectual Property Rights" has the meaning set forth in Section
3.1(o).
"Investment Amount" means, with respect to each Investor, the
Investment Amount indicated on such Investor's signature page to this Agreement.
"Investor Party" has the meaning set forth in Section 5.7.
"Investor Lock-up Period" means the period ending on the one year
anniversary of the Closing.
"Legend Removal Date" has the meaning set forth in Section 5.1(a).
"Lien" means any lien, charge, encumbrance, security interest, right of
first refusal or other restrictions of any kind.
"Losses" has the meaning set forth in Section 5.7.
"Material Adverse Effect" means any of (i) a material and adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material and adverse effect on the results of operations, assets,
prospects, business or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material impairment of the Company's
ability to perform on a timely basis its obligations under any Transaction
Document.
"NASD Rules" has the meaning set forth in Section 4.3(o).
"Non-Responsive Investor" has the meaning set forth in Section 4.4(a).
"OFAC" has the meaning set forth in Section 3.1(ee).
"Outside Date" means February 28, 2006.
"Per Share Purchase Price" equals $3.80.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
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"Prior Warrants" has the meaning set forth in Section 3.1(g).
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" has the meaning set forth in Section 4.3.
"Registrable Securities" means the Conversion Shares and the Warrant
Shares; provided, however, that the Investors shall not be required to convert
any Shares or to exercise any Warrants in order to have the Conversion Shares
issuable upon conversion of such Shares or the Warrant Shares issuable upon
exercise of such Warrants included in any Registration Statement.
"Registration Period" has the meaning set forth in Section 4.3.
"Registration Statement" means a registration statement filed on the
appropriate Form with, and declared effective by, the Commission under the
Securities Act and covering the resale by the Investors of the Registrable
Securities.
"Requested Information" has the meaning set forth in Section 4.4(a).
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SEC Reports" has the meaning set forth in Section 3.1(h).
"Securities" means the Shares, the Warrants, the Conversion Shares and
the Warrant Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Series B Preferred Stock" means the shares of the preferred stock of
the Company, par value $.001 per share, that have been designated as "Series B
Convertible Preferred Stock."
"Shares" means the shares of Series B Preferred Stock issued or
issuable to the Investors pursuant to this Agreement.
"Short Sales" include, without limitation, all "short sales" as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.
"Subsequent Adjustment Date" has the meaning set forth in Section 4.8.
"Subsidiary" means any "significant subsidiary" as defined in Rule
1-02(w) of Regulation S-X promulgated by the Commission under the Exchange Act.
"Trading Day" means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a
day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not then
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listed or quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
"Trading Market" means whichever of the New York Stock Exchange or the
Nasdaq National Market on which the Common Stock is listed or quoted for trading
on the date in question.
"Transaction Documents" means this Agreement, the Warrants and any
other documents or agreements executed in connection with the transactions
contemplated hereunder.
"Warrants" means the Warrants in the form of Exhibit A, which are
issuable to the Investors at the Closing.
"Warrant Shares" means the shares of capital stock issuable upon
exercise of the Warrants.
ARTICLE 2
Purchase and Sale
Section 2.1. Amended and Restated Certificate of Incorporation. The
Company shall adopt and file with the Secretary of State of the State of
Delaware on or before the Closing Date an Amended and Restated Certificate of
Incorporation, in the form of Exhibit B attached to this Agreement (the "Amended
and Restated Certificate").
Section 2.2. Closing. Subject to the terms and conditions set forth in
this Agreement, at the Closing the Company shall issue and sell to each Investor
Shares and Warrants, and each Investor shall, severally and not jointly,
purchase from the Company by delivering such Investor's Investment Amount, the
Shares and the Warrants representing such Investor's Investment Amount. The
Closing shall take place at the offices of Nixon Peabody, LLP, 100 Summer
Street, Boston, MA 02110 on the Closing Date or at such other location or time
as the parties may agree.
Section 2.3. Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be
delivered to each Investor the following (the "Company
Deliverables"):
(i) A certificate evidencing a number of Shares equal to
such Investor's Investment Amount divided by the Per
Share Purchase Price, registered in the name of such
Investor;
(ii) A Warrant, registered in the name of such Investor,
pursuant to which such Investor shall have the right
to acquire the number of Warrant Shares equal to (i)
the number of Shares issuable to such Investor
pursuant to Section 2.3(a)(i) multiplied by (ii)
0.325 (which number of Warrant Shares shall be
subject to adjustment in accordance with the
Warrant);
(iii) The legal opinion of Company Counsel, in form and
substance acceptable to the Investors, addressed to
the Investors;
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(iv) Copies of each of the following documents, in each
case certified by the Secretary of the Company to be
in full force and effect on the Closing Date:
(A) the Amended and Restated Certificate, certified
by the Secretary of State of the State of
Delaware as of a date not more than five
Business Days prior to the Closing Date;
(B) resolutions of the board of directors of the
Company determining the preferences,
limitations and rights of the Series B
Preferred Stock;
(C) resolutions of the board of directors of the
Company approving the execution, delivery and
performance of the Transaction Documents and
the transactions or other actions contemplated
thereby, and recommending the approval of such
transactions or other actions by the
stockholders of the Company;
(D) a good standing certificate of the Company
issued by the Secretary of State of the State
of Delaware, and each other jurisdiction where
the Company is qualified to do business, each
dated as of a date no earlier than five
Business Days prior to the Closing Date;
(E) the By-laws of the Company; and
(F) irrevocable instructions to the Company's
transfer agent as to the reservation and
issuance of the Conversion Shares and the
Warrant Shares.
(b) At the Closing, each Investor shall deliver or cause to be
delivered to the Company its Investment Amount, in United
States dollars in immediately available funds, by wire
transfer to an account designated by the Company. At the
option of an Investor, the delivery of an Investor's
Investment Amount may be satisfied, in whole or in part, by
cancellation of indebtedness of the Company to such Investor.
ARTICLE 3
Representations and Warranties
Section 3.1. Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to each Investor:
(a) Subsidiaries. The Company has no direct or indirect
Subsidiaries other than as disclosed in Section 3.1(a) of the
Disclosure Letter delivered by the Company to the Investors on
the date hereof (the "Disclosure Letter"). Except as disclosed
in Section 3.1(a) of the Disclosure Letter, the Company owns,
directly or indirectly, all of the capital stock of each
Subsidiary free and clear of any and all Liens, and all the
issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.
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(b) Organization and Qualification. Each of the Company and each
Subsidiary is duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as
currently conducted. Neither the Company nor any Subsidiary is
in violation of any of the provisions of its respective
certificate or certificate of incorporation, bylaws or other
organizational or charter documents. Each of the Company and
each Subsidiary is duly qualified to conduct its respective
business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not,
individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, and no
proceedings have been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, such
power and authority or qualification.
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by
it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company
and no further action is required by the Company in connection
therewith. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies
or by other equitable principles of general application.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated thereby do not
and will not (i) conflict with or violate any provision of the
Company's or any Subsidiary's Certificate of Incorporation,
bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of
time or both) of, or result in the imposition of any Lien upon
any of the material properties or assets of the Company or of
any Subsidiary pursuant to, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of
the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. Except as disclosed in
Section 3.1(e) of the Disclosure Letter, the Company is not
required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other
governmental authority (a "Governmental Authority") or other
Person in connection with the execution, delivery and
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performance by the Company of the Transaction Documents and
the consummation of the transactions contemplated thereby,
other than (i) the filing with the Secretary of State of the
State of Delaware, on or prior to the Closing Date, of the
Amended and Restated Certificate, (ii) the filing with the
Commission of one or more Registration Statements in
accordance with the requirements of Article 4 of this
Agreement, (iii) filings required by state securities laws,
(iv) the filing of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act,
(v) any filings required in accordance with Section 4.3(d),
and (vi) those that have been made or obtained prior to the
date of this Agreement.
(f) Issuance of the Securities. The Securities have been duly
authorized. The Shares and Warrants, when issued and paid for
in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all
Liens. The Company has reserved and set aside from its duly
authorized capital stock a sufficient number of shares to
satisfy in full the Company's obligations (i) to issue the
Warrant Shares upon exercise of the Warrants and (ii) to issue
the Conversion Shares upon conversion of the Shares. The
Warrant Shares, when issued and paid for upon exercise of the
Warrants in accordance with their terms, and the Conversion
Shares, when issued upon conversion of the Shares in
accordance with their terms, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens.
(g) Capitalization. The authorized capital stock of the Company
consists of 200,000,000 shares of Common Stock and 25,000,000
shares of preferred stock, par value $0.001 per share. As of
the close of business on the Business Day immediately prior to
the date hereof, (i) 4,500,000 shares of the Company's
preferred stock have been designated Series A Convertible
Preferred Stock, and 2,809,966 shares of the Series A
Convertible Preferred Stock are issued and outstanding; (ii)
14,256,942 shares of Common Stock were issued and outstanding,
all of which are validly issued, fully-paid and
non-assessable, (iii) 0 shares of Common Stock were held by
the Company in Treasury, (iv) 5,000,000 shares of Common Stock
were reserved for issuance upon exercise of authorized options
pursuant to the Company's 2004 Omnibus Incentive Plan and
1,500,000 shares of Common Stock were reserved for issuance
upon exercise of authorized options pursuant to the Company's
2005 Consulting Incentive Plan (such plans being the only
plans authorized by the Company) to employees, directors, and
consultants of the Company (the "Company Stock Options"), with
options totaling 3,631,250 shares having been granted pursuant
to the 2004 Omnibus Incentive Plan and 183,500 shares having
been granted pursuant to the 2005 Consultant Incentive Plan;
(v) 11,407,906 shares of Common Stock were reserved for
issuance upon exercise of outstanding warrants to purchase
Common Stock (the "Prior Warrants"); and (vi) 0 shares of
Common Stock were reserved for issuance upon conversion of
outstanding convertible notes, debentures or securities
("Convertible Securities"). Upon filing of the Amended and
Restated Certificate with the Secretary of State of the State
of Delaware, 12,000,000 shares of the Company's authorized
preferred stock will be designated as Series B Convertible
Preferred Stock. The Company has not issued any capital stock
since its most recently filed SEC Report. Except as disclosed
in Section 3.1(g) of the Disclosure Letter, no Person has any
right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except
pursuant to the Company Stock Options or the Prior Warrants,
as a result of the purchase and sale of the Securities as
contemplated by this Agreement, pursuant to the warrants
issuable to Merrill Lynch Bank USA on December 23, 2005 in
connection with the closing of the Company's warehouse line of
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credit, or as otherwise disclosed in Section 3.1(g) of the
Disclosure Letter, there are no outstanding options, warrants,
script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or
Common Stock Equivalents. The issue and sale of the Securities
will not obligate the Company to issue shares of Common Stock
or other securities to any Person (other than the Investors)
and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or
reset price under such securities. All of the outstanding
shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others
is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company's capital stock
to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company's stockholders.
(h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act
and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law to
file such reports) (the foregoing materials, being
collectively referred to herein as the "SEC Reports" or the
"Disclosure Materials") on a timely basis or has timely filed
a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none
of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements
of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and
the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with GAAP applied
on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the
notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results
of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) Material Changes. Since the date of the latest audited
financial statements included within the SEC Reports, except
as specifically disclosed in the SEC Reports, (i) there has
been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables,
accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the
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Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock, and (v)
the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending
before the Commission any request for confidential treatment
of information.
(j) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of
the Transaction Documents or the Securities or (ii) except as
specifically disclosed in the SEC Reports, could, if there
were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action
involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary
duty, except as specifically disclosed in the SEC Reports.
There has not been, and to the knowledge of the Company, there
is not pending any investigation by the Commission involving
the Company or any current or former director or officer of
the Company (in his or her capacity as such). The Commission
has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the
Securities Act. There are no outstanding comments by the Staff
of the Commission on any filing by the Company or any
Subsidiary under the Exchange Act or the Securities Act.
(k) Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of
the employees of the Company.
(l) Compliance. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and
local laws relating to taxes, consumer lending, environmental
protection, occupational health and safety, product quality
and safety and employment and labor matters.
(m) Regulatory Permits. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory
authorities or self-regulatory organizations necessary to
conduct their respective businesses as described in the SEC
Reports except where the failure to have such permits could
not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
such permits.
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(n) Title to Assets. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned
by them that is material to their respective businesses and
good and marketable title in all personal property owned by
them that is material to their respective businesses, in each
case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not
materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries. Any real
property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries
are in compliance, except as could not, individually or in the
aggregate, have or reasonably be expected to result in a
Material Adverse Effect.
(o) Patents and Trademarks. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with their
respective businesses as described in the SEC Reports
(collectively, the "Intellectual Property Rights"). The SEC
Reports describe all claims and Actions made or filed by
others against the Company deemed material by the Company to
the effect that Intellectual Property Rights used by the
Company or any Subsidiary violate or infringe upon the rights
of such claimant. Except as set forth in the SEC Reports, all
of the Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the
Intellectual Property Rights.
(p) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the
Subsidiaries are engaged. The Company has no reason to believe
that it will not be able to renew its and the Subsidiaries'
existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its business on terms consistent with
market for the Company's and such Subsidiaries' respective
lines of business.
(q) Transactions with Affiliates and Employees. Except as set
forth in the SEC Reports, none of the officers or directors of
the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
(r) Sarbanes-Oxley; Internal Accounting Controls. The Company is
in compliance with all provisions of the Sarbanes-Oxley Act of
2002 (including the rules and regulations of the Commission
adopted thereunder) which are applicable to it as of the
Closing Date. The Company's certifying officers have evaluated
the effectiveness of the Company's controls and procedures as
of the date prior to the filing date of the most recently
filed periodic report under the Exchange Act (such date, the
"Evaluation Date"). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company's internal
controls (as such term is defined in Item 307(b) of Regulation
S-K under the Exchange Act) or, to the Company's knowledge, in
other factors that could significantly affect the Company's
internal controls.
11
(s) Solvency. Based on the financial condition of the Company as
of the Closing Date (and assuming that the Closing shall have
occurred), (i) the Company's assets do not constitute
unreasonably small capital to carry on its business for the
current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by
the Company, and projected capital requirements and capital
availability thereof; and (ii) the current cash flow of the
Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such
amounts are required to be paid. The Company does not intend
to incur indebtedness beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt).
(t) Certain Fees. Except as disclosed in Section 3.1(f) of the
Disclosure Letter, no brokerage or finder's fees or
commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement. The Investors
shall have no obligation with respect to any fees or with
respect to any claims (other than such fees or commissions
owed by an Investor pursuant to written agreements executed by
such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other
Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by
this Agreement.
(u) Certain Registration Matters. Except as disclosed in Section
3.1(u) of the Disclosure Letter and assuming the accuracy of
the Investors' representations and warranties set forth in
Section 3.2(b)-(e), no registration under the Securities Act
is required for the offer and sale of the Securities by the
Company to the Investors under the Transaction Documents.
Except as specified in the Disclosure Materials, the Company
has not granted or agreed to grant to any Person any rights
(including "piggy-back" registration rights) to have any
securities of the Company registered with the Commission or
any other governmental authority that have not been satisfied.
(v) Investment Company. The Company is not, and is not an
Affiliate of, and immediately following the Closing will not
have become, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(w) Application of Anti-Takeover Protections. The Company has
taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision
under the Company's Certificate of Incorporation or the laws
of its state of incorporation that is or could become
applicable to the Investors as a result of the Investors and
the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without
limitation the Company's issuance of the Securities and the
Investors' ownership of the Securities.
12
(x) No Additional Agreements. The Company does not have any
agreement or understanding with any Investor with respect to
the transactions contemplated by the Transaction Documents
other than as specified in the Transaction Documents.
(y) Material Non-Public Information. The Company confirms that
neither it nor any Person acting on its behalf has provided
any Investor or its respective agents or counsel with any
information that the Company believes constitutes material,
non-public information except:
(i) Insofar as the existence and terms of the proposed
transactions hereunder may constitute such
information.
(ii) As to Investors who executed non-disclosure or
confidentiality agreements with the Company in
connection with the transactions contemplated hereby.
The Company understands and confirms that the Investors will
rely on the foregoing representations and covenants in
effecting transactions in securities of the Company.
(z) Full Disclosure. All disclosure provided to the Investors
regarding the Company, its business and the transactions
contemplated hereby, furnished by or on behalf of the Company
(including the Company's representations and warranties set
forth in this Agreement) are true and correct and do not
contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading.
(aa) Environmental Matters. To the Company's knowledge: (i) the
Company and its Subsidiaries have complied with all applicable
Environmental Laws; (ii) the properties currently owned or
operated by Company (including soils, groundwater, surface
water, buildings or other structures) are not contaminated
with any Hazardous Substances; (iii) the properties formerly
owned or operated by Company or its Subsidiaries were not
contaminated with Hazardous Substances during the period of
ownership or operation by Company and its Subsidiaries; (iv)
Company and its Subsidiaries are not subject to liability for
any Hazardous Substance disposal or contamination on any third
party property; (v) Company and its Subsidiaries have not been
associated with any release or threat of release of any
Hazardous Substance; (vi) Company and its Subsidiaries have
not received any notice, demand, letter, claim or request for
information alleging that Company and its Subsidiaries may be
in violation of or liable under any Environmental Law; and
(vii) Company and its Subsidiaries are not subject to any
orders, decrees, injunctions or other arrangements with any
Governmental Authority or subject to any indemnity or other
agreement with any third party relating to liability under any
Environmental Law or relating to Hazardous Substances.
As used in this Agreement, the term "Environmental Law" means
any federal, state, local or foreign law, regulation, order,
decree, permit, authorization, opinion, common law or agency
requirement relating to: (A) the protection, investigation or
restoration of the environment, health and safety, or natural
resources; (B) the handling, use, presence, disposal, release
or threatened release of any Hazardous Substance or (C) noise,
odor, wetlands, pollution, contamination or any injury or
threat of injury to persons or property.
13
As used in this Agreement, the term "Hazardous Substance"
means any substance that is: (i) listed, classified or
regulated pursuant to any Environmental Law; (ii) any
petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon; or (iii) any other substance
which is the subject of regulatory action by any Governmental
Authority pursuant to any Environmental Law.
(bb) Taxes. The Company and its Subsidiaries have filed all
necessary federal, state and foreign income and franchise tax
returns when due (or obtained appropriate extensions for
filing) and have paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency
which has been or might be asserted or threatened against it
or any Subsidiary which would have a Material Adverse Effect.
(cc) Private Offering. Assuming the correctness of the
representations and warranties of the Investors set forth in
this Agreement, the offer and sale of the Shares and the
Warrants hereunder are, and upon (i) exercise of the Warrants,
the issuance of the Warrant Shares and (ii) upon conversion of
the Shares, the issuance of the Conversion Shares will be,
exempt from registration under the Securities Act. Neither the
Company nor any person acting on behalf of the Company has
offered or sold any of the Shares or the Warrants by any form
of general solicitation or general advertising. The Company
has offered the Shares and Warrants for sale only to the
Investors and certain other "accredited investors" within the
meaning of Rule 501 under the Securities Act.
(dd) ERISA. Neither the Company nor any ERISA Affiliate maintains,
contributes to or has any liability or contingent liability
with respect to any employee benefit plan subject to ERISA.
(ee) Foreign Assets Control Regulations and Anti-Money Laundering.
(i) OFAC. Neither the issuance of the Shares and Warrants to
the Investors, nor the use of the respective proceeds thereof,
shall cause the Investors to violate the U.S. Bank Secrecy
Act, as amended, and any applicable regulations thereunder or
any of the sanctions programs administered by the U.S.
Department of the Treasury's Office of Foreign Assets Control
("OFAC") of the United States Department of Treasury, any
regulations promulgated thereunder by OFAC or under any
affiliated or successor governmental or quasi-governmental
office, bureau or agency and any enabling legislation or
executive order relating thereto. Without limiting the
foregoing, neither the Company nor any Subsidiary (i) is a
person whose property or interests in property are blocked or
subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 200l Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in
any dealings or transactions prohibited by Section 2 of such
executive order, or is otherwise associated with any such
person in any manner violative of Section 2, or (iii) is a
person on the list of Specially Designated Nationals and
Blocked Persons or subject to the limitations or prohibitions
under any other OFAC regulation or executive order.
(ii) Patriot Act and Other Matters. Each of the Company and
each of its Subsidiaries are in compliance, in all material
respects, with the Uniting and Strengthening of America by
Providing the Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001. No part of the proceeds of the
sale of the Shares and the Warrants hereunder will be used,
directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political
party, candidate for political office, or anyone else acting
in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as
amended.
14
(ff) Agreements to Protect Confidential Information, Assign Inventions
and Work, and Prevent Unfair Competition and Unfair Solicitation. Each employee,
consultant or contractor of the Company has executed and delivered an Agreement
to Protect Confidential Information, Assign Inventions and Work, and Prevent
Unfair Competition and Unfair Solicitation in the form delivered to the
Investors on the date hereof. The Company has no knowledge of any breach of any
such agreement by any person that is a party thereto.
Section 3.2. Representations and Warranties of the Investors. Each
Investor hereby, for itself and for no other Investor, represents and warrants
to the Company as follows:
(a) Organization; Authority. Such Investor is an entity duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by
the applicable Transaction Documents and otherwise to carry
out its obligations thereunder. The execution, delivery and
performance by such Investor of the transactions contemplated
by this Agreement has been duly authorized by all necessary
corporate or, if such Investor is not a corporation, such
partnership, limited liability company or other applicable
like action, on the part of such Investor. This Agreement has
been duly executed by such Investor, and when delivered by
such Investor in accordance with terms hereof, will constitute
the valid and legally binding obligation of such Investor,
enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable
principles of general application.
(b) Investment Intent. Such Investor is acquiring the Securities
as principal for its own account for investment purposes only
and not with a view to or for distributing or reselling such
Securities or any part thereof, without prejudice, however, to
such Investor's right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance
with applicable federal and state securities laws. Subject to
the immediately preceding sentence, nothing contained herein
shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time. Such Investor
is acquiring the Securities hereunder in the ordinary course
of its business. Such Investor does not have any agreement or
understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(c) Investor Status. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, and on each
date on which it exercises Warrants it will be, an "accredited
investor" as defined in Rule 501(a) under the Securities Act.
Such Investor is not a registered broker-dealer under Section
15 of the Exchange Act.
(d) Access to Information. Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i)
the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing
in the Securities; (ii) access to information about the
15
Company and the Subsidiaries and their respective financial
condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can
acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect
to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Investor or
its representatives or counsel shall modify, amend or affect
such Investor's right to rely on the truth, accuracy and
completeness of the Disclosure Materials and the Company's
representations and warranties contained in the Transaction
Documents.
(e) Certain Trading Activities. Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant
to any understanding with such Investor, engaged in any
transactions in the securities of the Company (including,
without limitations, any Short Sales involving the Company's
securities) since the earlier to occur of (1) the time that
such Investor was first contacted by the Company or any other
Person regarding an investment in the Company and (2) the 30th
day prior to the date of this Agreement. Such Investor
covenants that neither it nor any Person acting on its behalf
or pursuant to any understanding with it will engage in any
transactions in the securities of the Company (including Short
Sales) prior to the time that the transactions contemplated by
this Agreement are publicly disclosed.
The Company acknowledges and agrees that no Investor has made or makes
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE 4
Registration Rights
Section 4.1. Registration Statement. The Company shall prepare and file
with the Commission (the date of such filing hereinafter referred to as the
"Filing Date"), a Registration Statement relating to the offer and sale from
time to time on a continuous basis by the Investors of the Registrable
Securities and shall use best efforts to cause the Commission to declare such
Registration Statement effective under the Securities Act as promptly as
practicable but in no event later than the expiration of the Investor Lock-up
Period (the "Effectiveness Date"). The Company shall not include any securities
other than the Registrable Securities in the Registration Statement.
Section 4.2. Registration Process. The Company shall promptly (and, in
any event, no more than 72 hours after it receives comments from the
Commission), notify the Investors whose Registrable Securities are covered by
the Registration Statement filed pursuant to this Article 4 when and if it
receives any comments from the Commission on such Registration Statement or any
amendment thereof and promptly forward a copy of such comments, if they are in
writing, to such Investors. At such time as the Commission indicates, either
orally or in writing, that it has no further comments with respect to such
Registration Statement or any amendment thereof or that it is willing to
entertain appropriate requests for acceleration of effectiveness of such
Registration Statement or any amendment thereof, the Company shall promptly, and
in no event later than two Business Days after receipt of such indication from
the Commission, request that the effectiveness of such Registration Statement or
any amendment thereof be accelerated within 48 hours of the Commission's receipt
of such request. Within 24 hours of such declaration by the Commission, the
Company shall notify the Investors whose Registrable Securities are covered by
such Registration Statement that such Registration Statement or any amendment
thereof has been declared effective by the Commission.
16
Section 4.3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall:
(a) Prepare and file the Registration Statement in accordance
with the time period set forth in Section 4.1 and promptly prepare and
file with the Commission such amendments (including post-effective
amendments) to the Registration Statement and supplements to the
prospectus included therein (a "Prospectus") as may be necessary to
keep the Registration Statement continuously effective and in
compliance with the provisions of the Securities Act applicable thereto
so as to permit the Prospectus forming part thereof to be current and
useable by Investors for resales of the Registrable Securities until
such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold or (y)
the date on which the Registrable Securities may be sold without any
restriction (including volume limitations) pursuant to Rule 144 (the
"Registration Period") and take all lawful action such that the
Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, not misleading and that the
Prospectus forming part of the Registration Statement, and any
amendment or supplement thereto, does not at any time during the
Registration Period include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(b) During the Registration Period, comply with the
provisions of the Securities Act with respect to the Registrable
Securities covered by the Registration Statement until such time as all
of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the Investors as set forth in
the Prospectus forming part of the Registration Statement;
(c) Prior to the filing with the Commission of the
Registration Statement (including any amendments thereto) and the
distribution or delivery of any Prospectus (including any supplements
thereto), provide draft copies thereof to the Investors and reflect in
such documents all such comments as the Investors (and their counsel)
reasonably may propose and furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal
counsel identified to the Company, (i) promptly after the same is
prepared and publicly distributed, filed with the Commission, or
received by the Company, one copy of the Registration Statement, each
Prospectus, and each amendment or supplement thereto, and (ii) such
number of copies of the Prospectus and all amendments and supplements
thereto and such other documents, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(d) (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or "blue
sky" laws of such jurisdictions as the Investors reasonably request,
(ii) prepare and file in such jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness
thereof at all times during the Registration Period, (iii) take all
such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all such other lawful actions
reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto
to (A) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify, (B) subject itself to general
taxation in any such jurisdiction or (C) file a general consent to
service of process in any such jurisdiction;
17
(e) As promptly as practicable after becoming aware of such
event, notify each Investor of the occurrence of any event, as a result
of which the Prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and promptly prepare an amendment to
the Registration Statement and supplement to the Prospectus to correct
such untrue statement or omission, and deliver a number of copies of
such supplement and amendment to each Investor as such Investor may
reasonably request;
(f) As promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being sold
(or, in the event of an underwritten offering, the managing
underwriters) of the issuance by the Commission of any stop order or
other suspension of the effectiveness of the Registration Statement and
take all lawful action to effect the withdrawal, rescission or removal
of such stop order or other suspension;
(g) Take all such other lawful actions reasonably necessary
to expedite and facilitate the disposition by the Investors of their
Registrable Securities in accordance with the intended methods therefor
provided in the Prospectus which are customary under the circumstances;
(h) Make generally available to its security holders as soon
as practicable, but in any event not later than eighteen (18) months
after (i) the Effective Date of the Registration Statement, and (ii)
the effective date of each post-effective amendment to the Registration
Statement, as the case may be, an earnings statement of the Company and
its subsidiaries complying with Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder;
(i) In the event of an underwritten offering, promptly
include or incorporate in a Prospectus supplement or post-effective
amendment to the Registration Statement such information as the
underwriters reasonably agree should be included therein and to which
the Company does not reasonably object and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;
(j) In the event of an underwritten offering, make reasonably
available for inspection by Investors, any underwriter participating in
any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by such Investors or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries,
and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any
such underwriter, attorney, accountant or agent in connection with the
Registration Statement, in each case, as is customary for similar due
diligence examinations; provided, however, that all records,
information and documents that are designated in writing by the
Company, in good faith, as confidential, proprietary or containing any
nonpublic information shall be kept confidential by such Investors and
any such underwriter, attorney, accountant or agent (pursuant to an
appropriate confidentiality agreement in the case of any such holder or
18
agent), unless such disclosure is made pursuant to judicial process in
a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit the scope of the
information sought to be disclosed) or is required by law, or such
records, information or documents become available to the public
generally or through a third party not in violation of an accompanying
obligation of confidentiality; and provided, further, that, if the
foregoing inspection and information gathering would otherwise disrupt
the Company's conduct of its business, such inspection and information
gathering shall, to the maximum extent possible, be coordinated on
behalf of the Investors and the other parties entitled thereto by one
firm of counsel designated by and on behalf of the majority in interest
of Investors and other parties;
(k) In connection with any offering, make such
representations and warranties to the Investors participating in such
offering and to the underwriters if an underwritten offering, in form,
substance and scope as are customarily made by the Company to
underwriters in secondary underwritten offerings;
(l) In connection with the Registration Statement, obtain
opinions of counsel to the Company (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the
Investors) addressed to the Investors and the underwriters, if any,
covering such matters as are customarily covered in opinions requested
in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of
the date of the opinion and as of the Effective Time of the
Registration Statement or most recent post-effective amendment thereto,
as the case may be, the absence from the Registration Statement and the
Prospectus, including any documents incorporated by reference therein,
of an untrue statement of a material fact or the omission of a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, subject to customary
limitations);
(m) In connection with the Registration Statement, obtain
"cold comfort" or "procedures" letters and updates thereof from the
independent public accountants of the Company (and, if necessary, from
the independent public accountants of any subsidiary of the Company or
of any business acquired by the Company, in each case for which
financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each Investor and
each underwriter, if any, participating in an underwritten, if any, in
customary form and covering matters of the type customarily covered in
such letters in connection with secondary offerings;
(n) In connection with any underwritten offering, deliver
such documents and certificates as may be reasonably required by the
managers, if any;
(o) In the event that any broker-dealer registered under the
Exchange Act shall be an "Affiliate" (as defined in Rule 2729(b)(1) of
the rules and regulations of the National Association of Securities
Dealers, Inc. (the "NASD Rules") (or any successor provision thereto))
of the Company or has a "conflict of interest" (as defined in Rule
2720(b)(7) of the NASD Rules (or any successor provision thereto)) and
such broker-dealer shall underwrite, participate as a member of an
underwriting syndicate or selling group or assist in the distribution
of any Registrable Securities covered by the Registration Statement,
whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, the Company shall assist such
broker-dealer in complying with the requirements of the NASD Rules,
including, without limitation, by (i) engaging a "qualified independent
19
underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any
successor provision thereto)) to participate in the preparation of the
Registration Statement relating to such Registrable Securities, to
exercise usual standards of due diligence in respect thereof and to
recommend the public offering price of such Registrable Securities,
(ii) indemnifying such qualified independent underwriter to the extent
of the indemnification of underwriters provided in Section 6 hereof,
and (iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the
requirements of the NASD Rules;
(p) Cooperate with the Investors to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Registration Statement, which
certificates shall, if required under the terms of this Agreement, be
free of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as
any Investor may request and maintain a transfer agent for the Common
Stock; and
(q) Use its commercially reasonable efforts to cause all
Registrable Securities covered by the Registration Statement to be
listed or qualified for trading on the principal Trading Market, if
any, on which the Common Stock is traded or listed on the Effective
Date of the Registration Statement.
Section 4.4. Obligations and Acknowledgements of the Investors. In
connection with the registration of the Registrable Securities, the Investors
shall have the following obligations and hereby make the following
acknowledgements:
(a) It shall be a condition precedent to the obligations of
the Company to include the Registrable Securities of a particular
Investor in the Registration Statement that such Investor (i) shall
furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be
reasonably required to effect the registration of such Registrable
Securities and (ii) shall execute such documents in connection with
such registration as the Company may reasonably request. At least ten
Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor of the
information the Company requires from such Investor (the "Requested
Information") if such Investor elects to have any of its Registrable
Securities included in the Registration Statement. If at least two
Business Days prior to the anticipated filing date the Company has not
received the Requested Information from an Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement
without including any Registrable Securities of such Non-Responsive
Investor and the Company shall have no further obligations under this
Article 4 to the Non-Responsive Investor after such Registration
Statement has been declared effective. If such Non-Responsive Investor
notifies the Company and provides the Company the information required
hereby prior to the time the Registration Statement is declared
effective, the Company will file an amendment to the Registration
Statement that includes the Registrable Securities of such
Non-Responsive Investor; provided, however, that the Company shall not
be required to file such amendment to the Registration Statement at any
time less than five Trading Days prior to the Effectiveness Date.
(b) Each Investor agrees to cooperate with the Company in
connection with the preparation and filing of a Registration Statement
hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such
Registration Statement;
20
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described
in Section 4.3(e) or 4.3(f), it shall immediately discontinue its
disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Investor's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4.3(e) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company)
or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the Prospectus covering
such Registrable Securities current at the time of receipt of such
notice; and
(d) Each Investor acknowledges that it may be deemed to be a
statutory underwriter within the meaning of the Securities Act with
respect to the Registrable Securities being registered for resale by
it, and each Investor which includes Registrable Securities for offer
and sale within a Registration Statement hereby consents to the
inclusion in such Registration Statement of a disclosure to such
effect.
Section 4.5. Expenses of Registration. All expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to this Article 4, including,
without limitation, all registration, listing, and qualifications fees, printing
and engraving fees, accounting fees, and the fees and disbursements of counsel
for the Company, and (with respect to the preparation and filing of the
Registration Statement) the reasonable fees of one firm of legal counsel for the
Investors (selected by Investors holding a majority of the Registrable
Securities being included in the Registration Statement) shall be borne by the
Company.
Section 4.6. Indemnification and Contribution.
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each Investor and each underwriter, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and
directors and each Person who controls such Investor or underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such Person being sometimes hereinafter referred to as an "Indemnified
Person") from and against any losses, claims, damages or liabilities, joint or
several, to which such Indemnified Person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, not misleading, or arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Prospectus or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company hereby
agrees to reimburse such Indemnified Person for all reasonable legal and other
expenses incurred by them in connection with investigating or defending any such
action or claim as and when such expenses are incurred; provided, however, that
the Company shall not be liable to any such Indemnified Person in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 4.3(e), the use
by the Indemnified Person of an outdated or defective Prospectus after the
Company has provided to such Indemnified Person an updated Prospectus correcting
the untrue statement or alleged untrue statement or omission or alleged omission
giving rise to such loss, claim, damage or liability.
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(b) Indemnification by the Investors and Underwriters. Each Investor
agrees, severally and not jointly, as a consequence of the inclusion of any of
its Registrable Securities in a Registration Statement, and each underwriter, if
any, which facilitates the disposition of Registrable Securities shall agree,
severally and not jointly, as a consequence of facilitating such disposition of
Registrable Securities to (i) indemnify and hold harmless the Company, its
directors (including any person who, with his or her consent, is named in the
Registration Statement as a director nominee of the Company), its officers who
sign any Registration Statement and each Person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities to
which the Company or such other persons may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Registration
Statement or Prospectus or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in light of the circumstances under
which they were made, in the case of the Prospectus), not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
holder or underwriter expressly for use therein, and (ii) reimburse the Company
for any legal or other expenses incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no Investor or underwriter shall be liable
under this Section 4.6(b) for any amount in excess of the net proceeds paid to
such Investor or underwriter in respect of shares sold by it.
(c) Notice of Claims, etc. Promptly after receipt by a Person seeking
indemnification pursuant to this Section 4.6 (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the Person against whom indemnification pursuant to this
Section 4.6 is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (i) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (ii) the Indemnified Party shall reasonably have concluded that
representation of the Indemnified Party by the Indemnifying Party by the same
legal counsel would not be appropriate due to actual or, as reasonably
determined by legal counsel to the Indemnified Party, potentially differing
interests between such parties in the conduct of the defense of such Claim, or
if there may be legal defenses available to the Indemnified Party that are in
addition to or disparate from those available to the Indemnifying Party, or
(iii) the Indemnifying Party shall have failed to employ legal counsel
reasonably satisfactory to the Indemnified Party within a reasonable period of
time after notice of the commencement of such Claim. If the Indemnified Party
employs separate legal counsel in circumstances other than as described in the
preceding sentence, the fees, costs and expenses of such legal counsel shall be
borne exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one firm of
counsel for the Indemnified Party (together with appropriate local counsel). The
Indemnified Party shall not, without the prior written consent of the
Indemnifying Party (which consent shall not unreasonably be withheld), settle or
compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnifying Party from all liabilities
with respect to such Claim or judgment or contain any admission of wrongdoing.
22
(d) Contribution. If the indemnification provided for in this Section
4.6 is unavailable to or insufficient to hold harmless an Indemnified Party in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Party in connection with the statements or omissions
or alleged statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 4.6(d) were determined by
pro rata allocation (even if the Investors or any underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 4.6(d).
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 4.6(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.
(e) Limitation on Investors' and Underwriters' Obligations.
Notwithstanding any other provision of this Section 4.6, in no event shall any
(i) Investor have any liability under this Section 4.6 for any amounts in excess
of the dollar amount of the proceeds actually received by such Investor from the
sale of such Investor's Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) pursuant to any Registration
Statement under which such Registrable Securities are registered under the
Securities Act and (ii) underwriter be required to undertake liability to any
Person hereunder for any amounts in excess of the aggregate discount, commission
or other compensation payable to such underwriter with respect to the
Registrable Securities underwritten by it and distributed pursuant to the
Registration Statement.
(f) Other Liabilities. The obligations of the Company under this
Section 4.6 shall be in addition to any liability which the Company may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 4.6 shall be in addition to any liability which such
Indemnified Person may otherwise have to the Company. The remedies provided in
this Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to an indemnified party at law or in equity.
23
Section 4.7. Rule 144. With a view to making available to the Investors
the benefits of Rule 144, the Company agrees to use its best efforts to:
(i) comply with the provisions of paragraph (c)(1) of Rule
144; and
(ii) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company pursuant to
Section 13 or 15(d) under the Exchange Act; and, if at any time it is
not required to file such reports but in the past had been required to
or did file such reports, it will, upon the request of any Investor,
make available other information as required by, and so long as
necessary to permit sales of, its Registrable Securities pursuant to
Rule 144.
Section 4.8. Failure to Satisfy Obligations Regarding Registration. If:
(i) a Registration Statement is not filed at least sixty (60) days prior to the
expiration of the Investor Lock-up Period (if the Company files a Registration
Statement without affording the Investors the opportunity to review and comment
on the same as required by Article 4, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within two Trading Days after the date on which the
Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be "reviewed," or is not
subject to further review, or (iii) a Registration Statement filed or required
to be filed hereunder is not declared effective by the Commission on or before
the expiration of the Investor Lock-up Period, or (iv) after a Registration
Statement is first declared effective by the Commission, it ceases for any
reason to remain continuously effective as to all Securities covered thereby for
which it is required to be effective, or the Holders are not permitted to
utilize the Prospectus therein to resell such Securities (any such failure or
breach being referred to as an "Event," and for purposes of clause (i) or (iii)
the date on which such Event occurs, or for purposes of clause (ii) the date on
which such two Trading Day period is exceeded, or for purposes of clause (iv)
the date on which such 30 Trading Day period is exceeded being referred to as
"Event Date"), then in addition to any other rights the Investors may have
hereunder or under applicable law, on each such Event Date and on the same date
of each month thereafter (if the applicable Event shall not have been cured by
such date) (each, a "Subsequent Adjustment Date") until the applicable Event is
cured, the Exercise Price of the Warrants (as such term is defined in the
Warrants, the "Exercise Price") shall be reduced as provided in the Warrants.
Section 4.9. Common Stock Issued upon Stock Split, etc. The provisions
of this Article 4 shall apply to any shares of Common Stock or any other
securities issued as a dividend or distribution in respect of the Conversion
Shares or the Warrant Shares.
ARTICLE 5
Other Agreements of the Parties
Section 5.1. Certificates; Legends.
(a) Securities may only be transferred of in compliance with state
and federal securities laws. In connection with any transfer
of the Securities other than pursuant to an effective
registration statement, to the Company, to an Affiliate of an
Investor or in connection with a pledge as contemplated in
Section 5.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by
the transferor (which may be such transferor's in-house
counsel), the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such
transferred Securities under the Securities Act.
24
(b) Certificates evidencing the Shares and the Warrants to be
delivered at the Closing and certificates evidencing the
Conversion Shares and the Warrant Shares to be delivered upon
conversion of the Shares or exercise of the Warrants, as the
case may be, will contain appropriate legends referring to
restrictions on transfer relating to the registration
requirements of the Securities Act and applicable state
securities laws.
The Company acknowledges and agrees that an Investor may from
time to time pledge, and/or grant a security interest in some
or all of the Securities pursuant to a bona fide margin
agreement in connection with a bona fide margin account and,
if required under the terms of such agreement or account, such
Investor may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would
not be subject to approval or consent of the Company and no
legal opinion of legal counsel to the pledgee, secured party
or pledgor shall be required in connection with the pledge,
but such legal opinion may be required in connection with a
subsequent transfer following default by the Investor
transferee of the pledge. No notice shall be required of such
pledge. At the appropriate Investor's expense, the Company
will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities
including the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) of the Securities
Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders
thereunder.
(c) Certificates evidencing the Registrable Securities shall not
contain any legend (including the legend referred to in
Section 5.1(b)), (i) while a Registration Statement covering
the resale of such Security is effective under the Securities
Act, or (ii) following any sale of such Registrable Securities
pursuant to Rule 144, or (iii) if such Registrable Securities
are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission) and such
lack of requirement is confirmed by a legal opinion
satisfactory to the Company. If all or any portion of a
Warrant is exercised at a time when there is an effective
Registration Statement to cover the resale of the Warrant
Shares, or if such Warrant Shares may be sold under Rule
144(k) or if such legend is not otherwise required under
applicable requirements of the Securities Act (including
judicial interpretations thereof) then such Warrant Shares
shall be issued free of all legends. The Company agrees that
following the Effective Date or at such time as such legend is
no longer required under this Section 5.1(c), it will, no
later than three Trading Days following the delivery by a
Investor to the Company or the Company's transfer agent of a
certificate representing Registrable Securities, as the case
may be, issued with a restrictive legend (such date, the
"Legend Removal Date"), deliver or cause to be delivered to
such Investor a certificate representing such Securities that
is free from all restrictive and other legends. The Company
may not make any notation on its records or give instructions
to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.
(d) Each Investor, severally and not jointly with the other
Investor, agrees that the removal of the restrictive legend
from certificates representing Securities as set forth in this
Section 5.1 is predicated upon the Company's reliance that the
Investor will sell any Securities pursuant to either the
registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption
therefrom.
25
Section 5.2. Furnishing of Information; Inspection Rights. (a) As long
as any Investor owns the Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. The Company shall deliver to such holder a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence, together with a copy of all such filings.
(b) Upon the request of an Investor, the Company will deliver to such
Investor any monthly financial statement of the Company, annual budgets, or
other information as reasonably requested.
(c) The Company shall permit each Investor, or their authorized
representatives, to visit and inspect the properties of the Company, including
its corporate and financial records, and to discuss its business and finances
with officers of the Company, during normal business hours following reasonable
notice and as often as may be reasonably requested.
Section 5.3. Integration. The Company has not and shall not, and shall
use its best efforts to ensure that no Affiliate of the Company shall, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Investors, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market in a
manner that would require stockholder approval of the sale of the securities to
the Investors.
Section 5.4. Subsequent Registrations. Other than (i) pursuant to the
Registration Statement, or (ii) with respect to the warrants issuable to Merrill
Lynch Bank USA on December 23,2005 in connection with the closing of the
Company's warehouse line of credit, prior to the Effective Date of the
Registration Statement, the Company may not file any registration statement
(other than on Form S-8) with the Commission with respect to any securities of
the Company.
Section 5.5. Securities Laws Disclosure; Publicity. By 9:00 a.m. (New
York time) on the second Trading Day following the execution of this Agreement,
and by 5:00 p.m. (New York time) on the Closing Date, the Company shall issue
press releases disclosing the transactions contemplated hereby and the Closing.
On the Trading Day following the execution of this Agreement the Company will
file a Current Report on Form 8-K disclosing the material terms of the
Transaction Documents (and attach as exhibits thereto the Transaction
Documents), and on the Closing Date the Company will file an additional Current
Report on Form 8-K to disclose the Closing. In addition, the Company will make
such other filings and notices in the manner and time required by the Commission
and the Trading Market on which the Common Stock is listed. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Investor, or
include the name of any Investor in any filing with the Commission (other than
the Registration Statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency or Trading Market, without the prior written
consent of such Investor, except to the extent such disclosure is required by
law or Trading Market regulations.
Section 5.6. Limitation on Issuance of Future Priced Securities. During
the eighteen months following the Closing Date, the Company shall not issue any
future priced securities.
26
Section 5.7. Indemnification of Investors. In addition to the indemnity
provided in Article 4, the Company will indemnify and hold the Investors and
their directors, officers, shareholders, partners, employees and agents (each,
an "Investor Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation (collectively, "Losses") that any such Investor Party may
suffer or incur as a result of or relating to: (a) any misrepresentation, breach
or inaccuracy of any representation, warranty, covenant or agreement made by the
Company in any Transaction Document; and/or (b) any cause of action, suit or
claim brought or made against such Investor Party and arising solely out of or
solely resulting from the Investor's execution, delivery, performance or
enforcement of this Agreement or any of the other Transaction Documents and
without causation by any other activity, obligation, condition or liability
pertaining to such Investor. In addition to the indemnity contained herein, the
Company will reimburse each Investor Party for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.
Section 5.8. Non-Public Information. The Company covenants and agrees
that, from and after the date of this Agreement, neither it nor any other Person
acting on its behalf will provide any Investor or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Investor shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Investor shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
Section 5.9. Net Proceeds. Except as otherwise disclosed in the
Disclosure Materials, the Company shall use the net proceeds from the sale of
the Securities hereunder for working capital purposes, to purchase fixed assets
used in the development or production of the Company's business and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables in the ordinary course of the Company's business and prior practices),
to redeem any Common Stock or Common Stock Equivalents or to settle any
outstanding litigation.
Section 5.10. Regulatory Compliance. Prior to engaging in any line of
business subject to regulation by any federal, state, local or foreign
regulatory authority or self-regulatory organization, the Company will obtain
any and all certificates, authorizations, permits or other approvals required by
such authority or organization for the Company to conduct such line of business.
The Company shall use best efforts to comply with all statutes, rules or
regulations of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters.
Section 5.11. Board of Directors and Shareholder Consent. By the
earlier of (i) the time of filing of the Form 8-K required by the signing of
this Agreement pursuant to Section 5.5, and (ii) 5:00 PM on the second Trading
Day following the execution of this Agreement, the Company shall have delivered
(a) the consent of the board of directors of the Company approving the
execution, delivery and performance of the Transaction Documents and the
transactions or other actions contemplated thereby, and recommending the
approval of such transactions or other actions by the stockholders of the
Company and (b) the consents, waivers or approvals of its disclosed in Section
3.1(e) of the Disclosure Letter, to the Investors, in form and substance
reasonably satisfactory to the Investors.
Section 5.12. Preparation of Reports and Filings. After receipt of the
shareholder consents described in Section 5.11, the Company shall promptly
prepare and file with the Commission, and distribute to the holders of its
Common Stock, an Information Statement relating to the issuance of the Series B
Preferred Stock and the filing of the Amended and Restated Certificate. The
Investors shall have the right to review and approve the form and substance of
such Information Statement, as well as any report on Form 8-K or any other
filing or communication relating to the transactions contemplated hereby.
27
5.13. Reporting Matters. The Company and each of the Investors agree,
and all of them specifically contemplate, that under current law and regulations
only cash dividends declared by the Board of Directors of the Company and paid
to the stockholders of the Company are required to be reported to any
governmental authority on IRS Form 1099-DIV or other information return, and
that none of the terms of the Series B Preferred Stock as expressed in the
Amended and Restated Certificate and none of the terms of the Transaction
Documents contemplate any transaction or event, taking into account all existing
and contemplated operative facts, that would require the reporting of any
deemed, constructive or actual dividend to any of the Investors. In the event
that the Company determines, based on advice received from its tax advisers,
that this understanding is or becomes incorrect as a result of changes in law,
regulations, or operative facts, it will give reasonable advance notice to the
Investors of any proposed reporting inconsistent with the preceding sentence,
and will meet and confer with the Investors or their designated professional tax
advisers in an effort to resolve the issue in a mutually satisfactory manner
before transmitting the applicable information reports to the Investors and any
governmental authority, including the IRS. The Company agrees with each of the
Investors that for tax, accounting and all other purposes the issue price of the
Series B Preferred Stock will be the Per Share Purchase Price and that the
Series B Preferred Stock shall be treated as stock and not as debt.
ARTICLE 6
Conditions Precedent to Closing
Section 6.1. Conditions Precedent to the Obligations of the Investors
to Purchase Securities. The obligation of each Investor to acquire Securities at
the Closing is subject to the satisfaction or waiver by such Investor, at or
before the Closing, of each of the following conditions:
(a) Representations and Warranties. The Company shall have
delivered a certificate of the Company's Chief Executive
Officer certifying that the representations and warranties of
the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the
Closing as though made on and as of such date;
(b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants,
agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at
or prior to the Closing;
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of
any of the transactions contemplated by the Transaction
Documents;
(d) No Adverse Changes. Since the date of execution of this
Agreement, no event or series of events shall have occurred
that reasonably could have or result in a Material Adverse
Effect;
28
(e) No Suspensions of Trading in Common Stock. From the date
hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission (except for any
suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the
Closing), and, at any time prior to the Closing Date, trading
in securities generally as reported by Bloomberg Financial
Markets shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by
the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of
such magnitude in its effect on, or any material adverse
change in, any financial market which, in each case, in the
reasonable judgment of each Investor, makes it impracticable
or inadvisable to purchase the Shares and the Warrants at the
Closing;
(f) Lock-Up Agreements. Raza Khan and Vishal Garg (the "Locked-Up
Holders") shall have entered into Lock-Up Agreements with the
Company on terms substantially set forth in the following
paragraph.
The Locked-Up Holders shall agree: (i) for a period of one
year following the Closing, not to sell any shares of Common
Stock; (ii) during the period from one year until two years
after the Closing, not to sell more than 25% of the shares of
Common Stock held by such person in any 180 day period and no
more than 50% in total during such period; and (iii)
thereafter, no more than 25% of the shares of Common Stock
held by such person in any ninety (90) day period. In the
event that either of the Locked-Up Holders is terminated by
the Company prior to the end of the lock-up period specified
in (i) above, the schedule set forth above shall be
accelerated by one year and the period set forth in (iii)
above shall not apply. In the event that either of the
Locked-Up Holders are terminated by the Company after the end
of the lock-up period specified in (i) above, but prior to the
end of the lock-up period specified in (ii) and (iii) above,
all lock-up obligations of such terminated Locked-Up Holder
shall expire upon such termination. The Locked-Up Holders
shall agree to sign any lockup agreement deemed reasonably
necessary by any underwriter of any offering by the Company
generating gross proceeds of at least $30 million.
(g) Consents, Waivers and Approvals. All of the consents, waivers
or approvals disclosed in Section 3.1(e) of the Disclosure
Letter shall have been obtained in form and substance
reasonably acceptable to the Investors, evidence of such
consents, waivers or approvals shall have been delivered to
the Investors, and such consents, waivers and approvals shall
remain in full force and effect and shall not have been
rescinded or modified in any respect;
(h) Filings with Regulatory Authorities. The Company shall have
made, in form and substance reasonably acceptable to the
Investors, any and all filings with, or disclosures to the
Commission or any other regulatory or self-regulatory
organization or exchange deemed reasonably necessary by the
Investors in connection with the Amended and Restated
Certificate, the filing thereof with the Delaware Secretary of
State, the Transaction Documents, or the transactions
contemplated therein, and each such organization or exchange
shall have accepted such filing or disclosure and given its
approval or clearance, as applicable;
(i) Notices. The Company shall have circulated all notices or
other communications to its shareholders required under the
Exchange Act, the Delaware General Corporation Law, or other
applicable law or regulation in connection with the consents,
waivers and approvals disclosed in Section 3.1(e) of the
Disclosure Letter, in form and substance reasonably acceptable
to the Investors, and all statutory or other waiting or notice
periods with respect to such notices or communications shall
have expired;
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(j) Due Diligence. The Investors shall be reasonably satisfied
with the results of the Investors' financial, legal and
accounting due diligence;
(k) By-Laws. The By-Laws of the Company shall have been amended in
form and substance satisfactory to the Investors; and
(l) Company Deliverables. The Company shall have delivered the
Company Deliverables in accordance with Section 2.3(a).
Section 6.2. Conditions Precedent to the Obligations of the Company to
Sell Securities. The obligation of the Company to sell Securities at the Closing
is subject to the satisfaction or waiver by the Company, at or before the
Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Investor contained herein shall be true and
correct in all material respects as of the date when made and
as of the Closing Date as though made on and as of such date;
(b) Performance. Each Investor shall have performed, satisfied and
complied in all material respects with all covenants,
agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such
Investor at or prior to the Closing;
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of
any of the transactions contemplated by the Transaction
Documents; and
(d) Delivery of Investment Amount. Each Investor shall have
delivered its Investment Amount in accordance with Section
2.3(b).
ARTICLE 7
Miscellaneous
Section 7.1. Fees and Expenses. The Company shall pay all reasonable
fees and expenses of its and the Investors' advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery, performance and enforcement
of the Transaction Documents, together with costs of collection. The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.
Section 7.2. Entire Agreement. The Transaction Documents, together with
the Exhibits thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents and exhibits.
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Section 7.3. Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:
If to the Company: MRU Holdings, Inc.
Attn.: Chairman
1114 Avenue of the Americas
30th Floor
New York, NY 10036
Telephone: (212) 202-3746
Facsimile: (212) 836-4195
With a copy to: McGuireWoods LLP
Attn.: Louis W. Zehil, Esq.
1345 Avenue of the Americas, 7th Floor
New York, NY 10105
Telephone: (212) 548-2138
Facsimile: (212) 548-2175
If to an Investor: To the address set forth under such Investor's name
on such Investor's Counterpart Signature Page hereto;
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
Section 7.4. Amendments; Waivers; No Additional Consideration. Prior to
the Closing, this Agreement may only be amended by a written instrument signed
by each party to this Agreement. After the Closing, no provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company and by Investors holding at least sixty-six and two-thirds percent
(66-(2)/3%) of the then outstanding Shares. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Investor to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Investors who then hold Shares.
Section 7.5. Termination. This Agreement may be terminated prior to
Closing:
(a) by written agreement of the Investors and the Company;
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(b) by the Company or the Investors upon written notice to the
other, if the Closing shall not have taken place by 6:30 p.m.
Eastern time on the Outside Date; provided, that the right to
terminate this Agreement under this Section 7.5(b) shall not
be available to any Person whose failure to comply with its
obligations under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before
such time;
(c) by the Investors if any of the conditions precedent contained
in Section 6.1 have not been satisfied or waived on or prior
to the Outside Date.
In the event of a termination pursuant to this Section, the Company
shall promptly notify all non-terminating Investors. Upon a termination in
accordance with Section 7.5(a), the Company and the Investors shall have no
further obligation or liability (including as arising from such termination) to
the other and no Investor will have any liability to any other Investor under
the Transaction Documents as a result therefrom. Upon a termination in
accordance with Section 7.5(b) or 7.5(c) (other than a termination due to the
failure of the Company to satisfy the condition set forth in Sections 6.1(j) or
6.1(k)), the Company shall promptly (but in no event later than the third
Trading Day after the Investors give written notice of such termination to the
Company) pay to the Investors the Termination Payment (determined in accordance
with the following paragraph). Upon a termination in accordance with Section
7.5(b) or 7.5(c) due to the failure of the Company to satisfy the condition set
forth in Section 6.1(j) or 6.1(k), the sole liability of the Company shall be
for the reasonable fees and expenses of the Investors as provided in Section
7.1.
As used in this Agreement, "Termination Payment" shall mean an amount,
determined as of the date on which the Investors have given notice to the
Company of the Investors' termination of this Agreement, equal to the greater
of: (i) $2,500,000 or (ii) the aggregate of (x) all reasonable fees and expenses
of the Investors (determined in accordance with Section 7.1) plus (y) an amount
equal to (A) 1.5 times the difference (if positive) in the closing price of a
share of Common Stock of the Company on the date of such termination compared to
the closing price of a share of Common Stock of the Company on the date of this
Agreement, multiplied by (B) the number of shares of Common Stock into which the
Shares and the Warrant Shares would have converted had such Shares and Warrant
Shares been issued on the termination date. The parties hereto acknowledge and
agree that, in connection with the negotiation and signing of this Agreement,
the Investors have spent a significant amount of time and effort and have
incurred significant costs and expenses in reviewing and analyzing the business,
assets and operations of the Company and that the Termination Payment is a
reasonable estimate of the liquidated damages that would be suffered by the
Investors in the event of such termination and is not intended to be a penalty.
Section 7.6. Construction. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party. This Agreement shall be construed as if drafted jointly by the
parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents.
Section 7.7. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investors. Any Investor may
assign any or all of its rights under this Agreement to any Person to whom such
Investor assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Investors."
32
Section 7.8. No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Article 4. or
Section 5.7 (with respect to rights to indemnification and contribution).
Section 7.9. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective Affiliates,
employees or agents) shall be commenced exclusively in the New York Courts. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
any such New York Court, or that such Proceeding has been commenced in an
improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in
such Proceeding shall be reimbursed by the other party for its reasonable
attorneys' fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.
Section 7.10. Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery of the
Securities.
Section 7.11. Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
Section 7.12. Severability. If any provision of this Agreement is held
to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
Section 7.13. Rescission and Withdrawal Right. Notwithstanding anything
to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Investor exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Investor may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
33
Section 7.14. Replacement of Securities. If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities. If a
replacement certificate or instrument evidencing any Securities is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
Section 7.15. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
Section 7.16. Payment Set Aside. To the extent that the Company makes a
payment or payments to any Investor pursuant to any Transaction Document or an
Investor enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Section 7.17. Independent Nature of Investors' Obligations and Rights.
The obligations of each Investor under any Transaction Document are several and
not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.
34
Section 7.18. Limitation of Liability. Notwithstanding anything herein
to the contrary, the Company acknowledges and agrees that the liability of an
Investor arising directly or indirectly, under any Transaction Document of any
and every nature whatsoever shall be satisfied solely out of the assets of such
Investor, and that no trustee, officer, other investment vehicle or any other
Affiliate of such Investor or any investor, shareholder or holder of shares of
beneficial interest of such a Investor shall be personally liable for any
liabilities of such Investor.
[The remainder of this page is left intentionally blank.
Signature pages follow.]
35
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
MRU HOLDINGS, INC.
By: ___________________________
Name:
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
COUNTERPART SIGNATURE PAGES FOR INVESTORS FOLLOW]
Investor's Counterpart Signature Page to Securities Purchase Agreement
The undersigned hereby agrees to become a party as an Investor to the
Securities Purchase Agreement among MRU Holdings, Inc. (the "Company") and the
Investors named therein (the "Purchase Agreement"), agreeing to invest the
Investment Amount (as such term is defined in the Purchase Agreement) set forth
below. The undersigned hereby authorizes the Company to attach this Counterpart
Signature Page to the Purchase Agreement.
NAME OF INVESTOR
________________________________
Date: _____________ By:_____________________________
Signature
Name:___________________________
Title:__________________________
Investment Amount:______________
Tax ID No.:_____________________
ADDRESS FOR NOTICE DELIVERY INSTRUCTIONS
(if different from above)
Street:_______________________________
c/o:____________________________
City:_________________________________
Street:_________________________
State/Zip:____________________________
City:___________________________
Attn.:________________________________
State/Zip:______________________
Tel.:_________________________________
Attn.:__________________________
Fax:__________________________________
Tel.:___________________________
Fax:____________________________
Exhibit A
Form of Warrant
Exhibit B
Amended and Restated Certificate of Incorporation
39