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Exhibit 10.1
STANDBY EQUITY DISTRIBUTION AGREEMENT
THIS STANDBY EQUITY DISTRIBUTION AGREEMENT (the "Agreement")
dated as
of May 10, 2005 by and between CORNELL CAPITAL PARTNERS, LP, a
Delaware limited
partnership (the "Investor"), and POWER TECHNOLOGY, INC., a
Nevada corporation
(the "Company").
WHEREAS, the parties desire that, upon the terms and subject to
the
conditions contained herein, the Company shall issue and sell to
the Investor,
from time to time as provided herein, and the Investor shall
purchase from the
Company up to Five Million Dollars ($5,000,000) of the Company's
common stock,
par value $0.001 per share (the "Common Stock"); and
WHEREAS, such investments will be made in reliance upon the
provisions
of Regulation D ("Regulation D") of the Securities Act of 1933,
as amended, and
the regulations promulgated thereunder (the "Securities Act"),
and or upon such
other exemption from the registration requirements of the
Securities Act as may
be available with respect to any or all of the investments to be
made hereunder.
WHEREAS, the Company has engaged Newbridge Securities
Corporation (the
"Placement Agent"), to act as the Company's exclusive placement
agent in
connection with the sale of the Company's Common Stock to the
Investor hereunder
pursuant to the Placement Agent Agreement dated the date hereof
by and among the
Company, the Placement Agent and the Investor (the "Placement
Agent Agreement").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
Certain Definitions
Section 1.1. "Advance" shall mean the portion of the Commitment
Amount
requested by the Company in the Advance Notice.
Section 1.2. "Advance Date" shall mean the date the David
Gonzalez
Attorney Trust Account is in receipt of the funds from the
Investor and David
Gonzalez, Esq., is in possession of free trading shares from the
Company and
therefore an Advance by the Investor to the Company can be made
and David
Gonzalez, Esq. can release the free trading shares to the
Investor. The Advance
Date shall be the first (1st) Trading Day after expiration of
the applicable
Pricing Period for each Advance.
Section 1.3. "Advance Notice" shall mean a written notice to
the
Investor setting forth the Advance amount that the Company
requests from the
Investor and the Advance Date.
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Section 1.4. "Advance Notice Date" shall mean each date the
Company
delivers to the Investor an Advance Notice requiring the
Investor to advance
funds to the Company, subject to the terms of this Agreement. No
Advance Notice
Date shall be less than five (5) Trading Days after the prior
Advance Notice
Date.
Section 1.5. "Bid Price" shall mean, on any date, the closing
bid price
(as reported by Bloomberg L.P.) of the Common Stock on the
Principal Market or
if the Common Stock is not traded on a Principal Market, the
highest reported
bid price for the Common Stock, as furnished by the National
Association of
Securities Dealers, Inc.
Section 1.6. "Closing" shall mean one of the closings of a
purchase and
sale of Common Stock pursuant to Section 2.3.
Section 1.7. "Commitment Amount" shall mean the aggregate amount
of up
to Five Million Dollars ($5,000,000) which the Investor has
agreed to provide to
the Company in order to purchase the Company's Common Stock
pursuant to the
terms and conditions of this Agreement.
Section 1.8. "Commitment Period" shall mean the period
commencing on
the earlier to occur of (i) the Effective Date, or (ii) such
earlier date as the
Company and the Investor may mutually agree in writing, and
expiring on the
earliest to occur of (x) the date on which the Investor shall
have made payment
of Advances pursuant to this Agreement in the aggregate amount
of Five Million
Dollars ($5,000,000), (y) the date this Agreement is terminated
pursuant to
Section 2.4, or (z) the date occurring twenty-four (24) months
after the
Effective Date.
Section 1.9. "Common Stock" shall mean the Company's common
stock, par
value $0.001 per share.
Section 1.10. "Condition Satisfaction Date" shall have the
meaning set
forth in Section 7.2.
Section 1.11. "Damages" shall mean any loss, claim, damage,
liability,
costs and expenses (including, without limitation, reasonable
attorney's fees
and disbursements and costs and expenses of expert witnesses and
investigation).
Section 1.12. "Effective Date" shall mean the date on which the
SEC
first declares effective a Registration Statement registering
the resale of the
Registrable Securities as set forth in Section 7.2(a).
Section 1.13. "Escrow Agreement" shall mean the escrow agreement
among
the Company, the Investor, and David Gonzalez, Esq., dated the
date hereof.
Section 1.14. "Exchange Act" shall mean the Securities Exchange
Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
Section 1.15. "Material Adverse Effect" shall mean any
condition,
circumstance, or situation that would prohibit or otherwise
materially interfere
with the ability of the Company to enter into and perform any of
its obligations
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under this Agreement or the Registration Rights Agreement in any
material
respect.
Section 1.16. "Market Price" shall mean the lowest VWAP of the
Common
Stock during the Pricing Period.
Section 1.17. "Maximum Advance Amount" shall be Two Hundred
Fifty
Thousand Dollars ($250,000) per Advance Notice.
Section 1.18 "NASD" shall mean the National Association of
Securities
Dealers, Inc.
Section 1.19 "Person" shall mean an individual, a corporation,
a
partnership, an association, a trust or other entity or
organization, including
a government or political subdivision or an agency or
instrumentality thereof.
Section 1.20 "Placement Agent" shall mean Newbridge
Securities
Corporation, a registered broker-dealer.
Section 1.21 "Pricing Period" shall mean the five (5)
consecutive
Trading Days after the Advance Notice Date.
Section 1.22 "Principal Market" shall mean the Nasdaq National
Market,
the Nasdaq SmallCap Market, the American Stock Exchange, the OTC
Bulletin Board
or the New York Stock Exchange, whichever is at the time the
principal trading
exchange or market for the Common Stock.
Section 1.23 "Purchase Price" shall be set at ninety seven
percent
(97%) of the Market Price during the Pricing Period.
Section 1.24 "Registrable Securities" shall mean the shares of
Common
Stock to be issued hereunder (i) in respect of which the
Registration Statement
has not been declared effective by the SEC, (ii) which have not
been sold under
circumstances meeting all of the applicable conditions of Rule
144 (or any
similar provision then in force) under the Securities Act ("Rule
144") or (iii)
which have not been otherwise transferred to a holder who may
trade such shares
without restriction under the Securities Act, and the Company
has delivered a
new certificate or other evidence of ownership for such
securities not bearing a
restrictive legend.
Section 1.25 "Registration Rights Agreement" shall mean the
Registration Rights Agreement dated the date hereof, regarding
the filing of the
Registration Statement for the resale of the Registrable
Securities, entered
into between the Company and the Investor.
Section 1.26 "Registration Statement" shall mean a
registration
statement on Form S-1 or Form SB-2 (if use of such form is then
available to the
Company pursuant to the rules of the SEC and, if not, on such
other form
promulgated by the SEC for which the Company then qualifies and
which counsel
for the Company shall deem appropriate, and which form shall be
available for
the resale of the Registrable Securities to be registered
thereunder in
accordance with the provisions of this Agreement and the
Registration Rights
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Agreement, and in accordance with the intended method of
distribution of such
securities), for the registration of the resale by the Investor
of the
Registrable Securities under the Securities Act.
Section 1.27 "Regulation D" shall have the meaning set forth in
the
recitals of this Agreement.
Section 1.28 "SEC" shall mean the Securities and Exchange
Commission.
Section 1.29 "Securities Act" shall have the meaning set forth
in the
recitals of this Agreement.
Section 1.30 "SEC Documents" shall mean Annual Reports on Form
10-KSB,
Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K
and Proxy
Statements of the Company as supplemented to the date hereof,
filed by the
Company for a period of at least twelve (12) months immediately
preceding the
date hereof or the Advance Date, as the case may be, until such
time as the
Company no longer has an obligation to maintain the
effectiveness of a
Registration Statement as set forth in the Registration Rights
Agreement.
Section 1.31 "Trading Day" shall mean any day during which the
New York
Stock Exchange shall be open for business.
Section 1.32 "VWAP" shall mean the volume weighted average price
of the
Company's Common Stock, as quoted by Bloomberg, LP.
ARTICLE II.
Advances
Section 2.1. Investments.
(a) Advances. Upon the terms and conditions set forth herein
(including, without limitation, the provisions of Article VII
hereof), on any
Advance Notice Date the Company may request an Advance by the
Investor by the
delivery of an Advance Notice. The number of shares of Common
Stock that the
Investor shall receive for each Advance shall be determined by
dividing the
amount of the Advance by the Purchase Price. No fractional
shares shall be
issued. Fractional shares shall be rounded to the next higher
whole number of
shares. The aggregate maximum amount of all Advances that the
Investor shall be
obligated to make under this Agreement shall not exceed the
Commitment Amount.
Section 2.2. Mechanics.
(a) Advance Notice. At any time during the Commitment
Period,
the Company may deliver an Advance Notice to the Investor,
subject to the
conditions set forth in Section 7.2; provided, however, the
amount for each
Advance as designated by the Company in the applicable Advance
Notice, shall not
be more than the Maximum Advance Amount. The aggregate amount of
the Advances
pursuant to this Agreement shall not exceed the Commitment
Amount. The Company
acknowledges that the Investor may sell shares of the Company's
Common Stock
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corresponding with a particular Advance Notice on the day the
Advance Notice is
received by the Investor. There shall be a minimum of five (5)
Trading Days
between each Advance Notice Date.
(b) Date of Delivery of Advance Notice. An Advance Notice
shall be deemed delivered on (i) the Trading Day it is received
by facsimile or
otherwise by the Investor if such notice is received prior to
12:00 noon Eastern
Time, or (ii) the immediately succeeding Trading Day if it is
received by
facsimile or otherwise after 12:00 noon Eastern Time on a
Trading Day or at any
time on a day which is not a Trading Day. No Advance Notice may
be deemed
delivered on a day that is not a Trading Day.
Section 2.3. Closings. On each Advance Date, which shall be the
first
(1st) Trading Day after expiration of the applicable Pricing
Period for each
Advance, (i) the Company shall deliver to David Gonzalez, Esq.
(the "Escrow
Agent") shares of the Company's Common Stock, representing the
amount of the
Advance by the Investor pursuant to Section 2.1 herein,
registered in the name
of the Investor which shall be delivered to the Investor, or
otherwise in
accordance with the Escrow Agreement and (ii) the Investor shall
deliver to
Escrow Agent the amount of the Advance specified in the Advance
Notice by wire
transfer of immediately available funds which shall be delivered
to the Company,
or otherwise in accordance with the Escrow Agreement. In
addition, on or prior
to the Advance Date, each of the Company and the Investor shall
deliver to the
other through the Investor's counsel, all documents, instruments
and writings
required to be delivered by either of them pursuant to this
Agreement in order
to implement and effect the transactions contemplated herein.
Payment of funds
to the Company and delivery of the Company's Common Stock to the
Investor shall
occur in accordance with the conditions set forth above and
those contained in
the Escrow Agreement; provided, however, that to the extent the
Company has not
paid the fees, expenses, and disbursements of the Investor, the
Investor's
counsel, or the Company's counsel in accordance with Section
12.4, the amount of
such fees, expenses, and disbursements may be deducted by the
Investor (and
shall be paid to the relevant party) from the amount of the
Advance with no
reduction in the amount of shares of the Company's Common Stock
to be delivered
on such Advance Date.
Section 2.4. Termination of Investment. The obligation of the
Investor
to make an Advance to the Company pursuant to this Agreement
shall terminate
permanently (including with respect to an Advance Date that has
not yet
occurred) in the event that (i) there shall occur any stop order
or suspension
of the effectiveness of the Registration Statement for an
aggregate of fifty
(50) Trading Days, other than due to the acts of the Investor,
during the
Commitment Period, and (ii) the Company shall at any time fail
materially to
comply with the requirements of Article VI and such failure is
not cured within
thirty (30) days after receipt of written notice from the
Investor, provided,
however, that this termination provision shall not apply to any
period
commencing upon the filing of a post-effective amendment to such
Registration
Statement and ending upon the date on which such post effective
amendment is
declared effective by the SEC.
Section 2.5. Agreement to Advance Funds. The Investor agrees to
advance
the amount specified in the Advance Notice to the Company after
the completion
of each of the following conditions and the other conditions set
forth in this
Agreement:
(a) the execution and delivery by the Company, and the
Investor, of this Agreement and the Exhibits hereto;
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(b) The Escrow Agent shall have received the shares of
Common
Stock applicable to the Advance in accordance with Section 2.3.
Such shares
shall be free of restrictive legends.
(c) the Company's Registration Statement with respect to the
resale of the Registrable Securities in accordance with the
terms of the
Registration Rights Agreement shall have been declared effective
by the SEC;
(d) the Company shall have obtained all material permits and
qualifications required by any applicable state for the offer
and sale of the
Registrable Securities, or shall have the availability of
exemptions therefrom.
The sale and issuance of the Registrable Securities shall be
legally permitted
by all laws and regulations to which the Company is subject;
(e) the Company shall have filed with the Commission in a
timely manner all reports, notices and other documents required
of a "reporting
company" under the Exchange Act and applicable Commission
regulations;
(f) the fees as set forth in Section 12.4 below shall have
been paid or can be withheld as provided in Section 2.3; and
(g) the conditions set forth in Section 7.2 shall have been
satisfied.
(h) the Company shall have provided to the Investor an
acknowledgement, from Beckstead and Watts, LLP, Malone &
Bailey, PC and any
other of the Company's independent registered certified public
accounting firms
as to their ability to provide all consents required in order to
file a
registration statement in connection with this transaction;
(i) The Company's transfer agent shall be DWAC eligible.
Section 2.6. Lock Up Period. On the date hereof, the Company
shall
obtain from each officer and director a lock-up agreement, as
defined below, in
the form annexed hereto as Schedule 2.6 agreeing to only sell in
compliance with
the volume limitation of Rule 144.
Section 2.7. Hardship. In the event the Investor sells shares of
the
Company's Common Stock after receipt of an Advance Notice and
the Company fails
to perform its obligations as mandated in Section 2.3, and
specifically the
Company fails to deliver to the Escrow Agent on the Advance Date
the shares of
Common Stock corresponding to the applicable Advance, the
Company acknowledges
that the Investor shall suffer financial hardship and therefore
shall be liable
for any and all losses, commissions, fees, or financial hardship
caused to the
Investor.
ARTICLE III.
Representations and Warranties of Investor
Investor hereby represents and warrants to, and agrees with,
the
Company that the following are true and as of the date hereof
and as of each
Advance Date:
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Section 3.1. Organization and Authorization. The Investor is
duly
incorporated or organized and validly existing in the
jurisdiction of its
incorporation or organization and has all requisite power and
authority to
purchase and hold the securities issuable hereunder. The
decision to invest and
the execution and delivery of this Agreement by such Investor,
the performance
by such Investor of its obligations hereunder and the
consummation by such
Investor of the transactions contemplated hereby have been duly
authorized and
requires no other proceedings on the part of the Investor. The
undersigned has
the right, power and authority to execute and deliver this
Agreement and all
other instruments (including, without limitations, the
Registration Rights
Agreement), on behalf of the Investor. This Agreement has been
duly executed and
delivered by the Investor and, assuming the execution and
delivery hereof and
acceptance thereof by the Company, will constitute the legal,
valid and binding
obligations of the Investor, enforceable against the Investor in
accordance with
its terms.
Section 3.2. Evaluation of Risks. The Investor has such
knowledge and
experience in financial, tax and business matters as to be
capable of evaluating
the merits and risks of, and bearing the economic risks entailed
by, an
investment in the Company and of protecting its interests in
connection with
this transaction. It recognizes that its investment in the
Company involves a
high degree of risk.
Section 3.3. No Legal Advice From the Company. The Investor
acknowledges that it had the opportunity to review this
Agreement and the
transactions contemplated by this Agreement with its own legal
counsel and
investment and tax advisors. The Investor is relying solely on
such counsel and
advisors and not on any statements or representations of the
Company or any of
its representatives or agents for legal, tax or investment
advice with respect
to this investment, the transactions contemplated by this
Agreement or the
securities laws of any jurisdiction.
Section 3.4. Investment Purpose. The securities are being
purchased by
the Investor for its own account, and for investment purposes.
The Investor
agrees not to assign or in any way transfer the Investor's
rights to the
securities or any interest therein and acknowledges that the
Company will not
recognize any purported assignment or transfer except in
accordance with
applicable Federal and state securities laws. No other person
has or will have a
direct or indirect beneficial interest in the securities. The
Investor agrees
not to sell, hypothecate or otherwise transfer the Investor's
securities unless
the securities are registered under Federal and applicable state
securities laws
or unless, in the opinion of counsel satisfactory to the
Company, an exemption
from such laws is available.
Section 3.5. Accredited Investor. The Investor is an
"Accredited
Investor" as that term is defined in Rule 501(a)(3) of
Regulation D under the
Securities Act.
Section 3.6. Information. The Investor and its advisors (and
its
counsel), if any, have been furnished with all materials
relating to the
business, finances and operations of the Company and information
it deemed
material to making an informed investment decision. The Investor
and its
advisors, if any, have been afforded the opportunity to ask
questions of the
Company and its management. Neither such inquiries nor any other
due diligence
investigations conducted by such Investor or its advisors, if
any, or its
representatives shall modify, amend or affect the Investor's
right to rely on
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the Company's representations and warranties contained in this
Agreement. The
Investor understands that its investment involves a high degree
of risk. The
Investor is in a position regarding the Company, which, based
upon employment,
family relationship or economic bargaining power, enabled and
enables such
Investor to obtain information from the Company in order to
evaluate the merits
and risks of this investment. The Investor has sought such
accounting, legal and
tax advice, as it has considered necessary to make an informed
investment
decision with respect to this transaction.
Section 3.7. Receipt of Documents. The Investor and its counsel
have
received and read in their entirety: (i) this Agreement and the
Exhibits annexed
hereto; (ii) all due diligence and other information necessary
to verify the
accuracy and completeness of such representations, warranties
and covenants;
(iii) the Company's Form 10-KSB for the year ended year ended
January 31, 2004
and Form 10-QSB for the period ended October 31, 2004; and (iv)
answers to all
questions the Investor submitted to the Company regarding an
investment in the
Company; and the Investor has relied on the information
contained therein and
has not been furnished any other documents, literature,
memorandum or
prospectus.
Section 3.8. Registration Rights Agreement and Escrow Agreement.
The
parties have entered into the Registration Rights Agreement and
the Escrow
Agreement, each dated the date hereof.
Section 3.9. No General Solicitation. Neither the Company, nor
any of
its affiliates, nor any person acting on its or their behalf,
has engaged in any
form of general solicitation or general advertising (within the
meaning of
Regulation D under the Securities Act) in connection with the
offer or sale of
the shares of Common Stock offered hereby.
Section 3.10. Not an Affiliate. The Investor is not an
officer,
director or a person that directly, or indirectly through one or
more
intermediaries, controls or is controlled by, or is under common
control with
the Company or any "Affiliate" of the Company (as that term is
defined in Rule
405 of the Securities Act).
Section 3.11. Trading Activities. The Investor's trading
activities
with respect to the Company's Common Stock shall be in
compliance with all
applicable federal and state securities laws, rules and
regulations and the
rules and regulations of the Principal Market on which the
Company's Common
Stock is listed or traded. Neither the Investor nor its
affiliates has an open
short position in the Common Stock of the Company, the Investor
agrees that it
shall not, and that it will cause its affiliates not to, engage
in any short
sales of or hedging transactions with respect to the Common
Stock, provided that
the Company acknowledges and agrees that upon receipt of an
Advance Notice the
Investor has the right to sell the shares to be issued to the
Investor pursuant
to the Advance Notice during the applicable Pricing Period.
ARTICLE IV.
Representations and Warranties of the Company
Except as stated below, on the disclosure schedules attached
hereto or
in the SEC Documents (as defined herein), the Company hereby
represents and
warrants to, and covenants with, the Investor that the following
are true and
correct as of the date hereof:
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Section 4.1. Organization and Qualification. The Company is
duly
incorporated or organized and validly existing in the
jurisdiction of its
incorporation or organization and has all requisite corporate
power to own its
properties and to carry on its business as now being conducted.
Each of the
Company and its subsidiaries is duly qualified as a foreign
corporation to do
business and is in good standing in every jurisdiction in which
the nature of
the business conducted by it makes such qualification necessary,
except to the
extent that the failure to be so qualified or be in good
standing would not have
a Material Adverse Effect on the Company and its subsidiaries
taken as a whole.
Section 4.2. Authorization, Enforcement, Compliance with
Other
Instruments. (i) The Company has the requisite corporate power
and authority to
enter into and perform this Agreement, the Registration Rights
Agreement, the
Escrow Agreement, the Placement Agent Agreement and any related
agreements, in
accordance with the terms hereof and thereof, (ii) the execution
and delivery of
this Agreement, the Registration Rights Agreement, the Escrow
Agreement, the
Placement Agent Agreement and any related agreements by the
Company and the
consummation by it of the transactions contemplated hereby and
thereby, have
been duly authorized by the Company's Board of Directors and no
further consent
or authorization is required by the Company, its Board of
Directors or its
stockholders, (iii) this Agreement, the Registration Rights
Agreement, the
Escrow Agreement, the Placement Agent Agreement and any related
agreements have
been duly executed and delivered by the Company, (iv) this
Agreement, the
Registration Rights Agreement, the Escrow Agreement, the
Placement Agent
Agreement and assuming the execution and delivery thereof and
acceptance by the
Investor and any related agreements constitute the valid and
binding obligations
of the Company enforceable against the Company in accordance
with their terms,
except as such enforceability may be limited by general
principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or
similar laws relating to, or affecting generally, the
enforcement of creditors'
rights and remedies.
Section 4.3. Capitalization. As of the date hereof, the
authorized
capital stock of the Company consists of 750,000,000 shares of
Common Stock, par
value $0.001 per share and 1,000,000 shares of Preferred Stock.
As of the date
hereof, there were 129,924,358 shares of Common Stock and 0
shares of Preferred
Stock issued and outstanding. Except as disclosed in the SEC
Documents, no
shares of Common Stock are subject to preemptive rights or any
other similar
rights or any liens or encumbrances suffered or permitted by the
Company. Except
as disclosed in the SEC Documents, as of the date hereof, (i)
there are no
outstanding options, warrants, scrip, rights to subscribe to,
calls or
commitments of any character whatsoever relating to, or
securities or rights
convertible into, any shares of capital stock of the Company or
any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which
the Company or any of its subsidiaries is or may become bound to
issue
additional shares of capital stock of the Company or any of its
subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or
commitments of any
character whatsoever relating to, or securities or rights
convertible into, any
shares of capital stock of the Company or any of its
subsidiaries, (ii) there
are no outstanding debt securities (iii) there are no
outstanding registration
statements other than on Form S-8 and (iv) there are no
agreements or
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arrangements under which the Company or any of its subsidiaries
is obligated to
register the sale of any of their securities under the
Securities Act (except
pursuant to the Registration Rights Agreement). There are no
securities or
instruments containing anti-dilution or similar provisions that
will be
triggered by this Agreement or any related agreement or the
consummation of the
transactions described herein or therein, except for the
employment contract
between the Company and Bernard J. Walter, dated July 1, 2004.
The Company has
furnished to the Investor true and correct copies of the
Company's Articles of
Incorporation, as amended and as in effect on the date hereof
(the "Articles of
Incorporation"), and the Company's By-laws, as in effect on the
date hereof (the
"By-laws"), and the terms of all securities convertible into or
exercisable for
Common Stock and the material rights of the holders thereof in
respect thereto.
Section 4.4. No Conflict. The execution, delivery and
performance of
this Agreement by the Company and the consummation by the
Company of the
transactions contemplated hereby will not (i) result in a
violation of the
Articles of Incorporation, any certificate of designations of
any outstanding
series of preferred stock of the Company or By-laws or (ii)
conflict with or
constitute a default (or an event which with notice or lapse of
time or both
would become a default) under, or give to others any rights of
termination,
amendment, acceleration or cancellation of, any agreement,
indenture or
instrument to which the Company or any of its subsidiaries is a
party, or result
in a violation of any law, rule, regulation, order, judgment or
decree
(including federal and state securities laws and regulations and
the rules and
regulations of the Principal Market on which the Common Stock is
quoted)
applicable to the Company or any of its subsidiaries or by which
any material
property or asset of the Company or any of its subsidiaries is
bound or affected
and which would cause a Material Adverse Effect. Except as
disclosed in the SEC
Documents, neither the Company nor its subsidiaries is in
violation of any term
of or in default under its Articles of Incorporation or By-laws
or their
organizational charter or by-laws, respectively, or any material
contract,
agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or
order or any statute, rule or regulation applicable to the
Company or its
subsidiaries. The business of the Company and its subsidiaries
is not being
conducted in violation of any material law, ordinance,
regulation of any
governmental entity. Except as specifically contemplated by this
Agreement and
as required under the Securities Act and any applicable state
securities laws,
the Company is not required to obtain any consent, authorization
or order of, or
make any filing or registration with, any court or governmental
agency in order
for it to execute, deliver or perform any of its obligations
under or
contemplated by this Agreement or the Registration Rights
Agreement in
accordance with the terms hereof or thereof. All consents,
authorizations,
orders, filings and registrations which the Company is required
to obtain
pursuant to the preceding sentence have been obtained or
effected on or prior to
the date hereof. The Company and its subsidiaries are unaware of
any fact or
circumstance which might give rise to any of the foregoing.
Section 4.5. SEC Documents; Financial Statements. Since January
1,
2003, the Company has filed all reports, schedules, forms,
statements and other
documents required to be filed by it with the SEC under of the
Exchange Act. The
Company has delivered to the Investor or its
representatives,
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