Exhibit 2
STANDBY EQUITY
DISTRIBUTION AGREEMENT
THIS
AGREEMENT dated as of the ___ day of
October 2004 (the " Agreement ") between CORNELL CAPITAL
PARTNERS, LP , a Delaware limited partnership (the "
Investor "), and ELECTRIC AQUAGENICS UNLIMITED, INC.
, a corporation organized and existing under the laws of the State
of Delaware (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 Ten Million U.S. Dollars ($10,000,000) of the Company's
common stock, par value $0.0001 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 there under (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
Spencer Clarke LLC (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
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 (1 st ) 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.
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 seven (7) 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 Ten Million U.S.
Dollars ($10,000,000) 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 Ten Million U.S. Dollars ($10,000,000), (y) the
date this Agreement is terminated pursuant to Section 2.5, 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 $0.0001 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 there under.
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
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 Eighty Thousand U.S.
Dollars (US$280,000) 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 Spencer Clarke, LLC, 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 eight percent (98%) 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 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 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 corresponding with a particular Advance Notice on the
day the Advance Notice is received by the Investor. There shall be
a minimum of seven (7) 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.
(c) Pre-Closing
Share Credit. Within two (2) business days after the Advance Notice
Date, the Company shall credit shares of the Company's Common Stock
to the Investor's counsel's balance account with The Depository
Trust Company through its Deposit Withdrawal At Custodian system,
in an amount equal to the amount of the requested Advance divided
by the closing Bid Price of the Company's Common Stock as of the
Advance Notice Date. Any adjustments to the number of shares to be
delivered to the Investor at the Closing as a result of
fluctuations in the closing Bid Price of the Company's Common Stock
shall be made as of the date of the Closing. Any excess shares
shall be credited to the next Advance. In no event shall the number
of shares issuable to the Investor pursuant to an Advance cause the
Investor to own in excess of nine and 9/10 percent (9.9%) of the
then outstanding Common Stock of the Company.
(d) Hardship. In
the event the Investor sells the Company's Common Stock pursuant to
subsection (c) above and the Company fails to perform its
obligations as mandated in Section 2.5 and 2.2 (c), and
specifically fails to provide the Investor with the shares of
Common Stock for the applicable Advance, the Company acknowledges
that the Investor shall suffer financial hardship and therefore
shall be liable for any and all reasonable losses, commissions,
fees, or financial hardship caused to the Investor by the Company's
delivery failure.
Section 2.3 Closings. On each
Advance Date, which shall be the first (1 st ) Trading
Day after expiration of the applicable Pricing Period for each
Advance, (i) the Company shall deliver to the Investor's Counsel,
as defined pursuant to the Escrow Agreement, 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 David Gonzalez, Esq. (the "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 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 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:
(i) the execution and delivery
by the Company, and the Investor, of this Agreement and the
Exhibits hereto;
(ii) Investor's Counsel shall
have received the shares of Common Stock applicable to the Advance
in accordance with Section 2.2(c) hereof;
(iii) 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;
(iv) 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;
(v) 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;
(vi) 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
(vii) the conditions set forth
in Section 7.2 shall have been satisfied.
(viii) the Company shall have
provided to the Investor an acknowledgement, from Hall & Co. as
to its ability to provide all consents required in order to file a
registration statement in connection with this
transaction;
(ix) The Company's transfer
agent shall be DWAC eligible.
Section 2,6 Lock Up
Period.
(i) During the Commitment
Period, unless the Company provides the Investor with written
notice of at least ten (10) days prior thereto, the Company shall
not issue or sell (i) any Common Stock or Preferred Stock without
consideration or for a consideration per share less than the Bid
Price on the date of issuance or (ii) issue or sell any
warrant, option, right, contract, call, or other security or
instrument granting the holder thereof the right to acquire Common
Stock without consideration or for a consideration per share less
than the Bid Price on the date of issuance.
(ii) 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.
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:
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 his or 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, for investment and without any view to the
distribution, assignment or resale to others or fractionalization
in whole or in part. 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 of 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 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
December 31, 2003 and Form 10-QSB for the period ended June 30,
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). Neither the Investor nor its Affiliates has an
open short position in the Common Stock of the Company, and the
Investor agrees that it will 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 will sell the Shares to be issued to the
Investor pursuant to the Advance Notice, even if the Shares have
not been delivered to the Investor.
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 and, except as set
forth below, the Investor shall not and will cause its affiliates
not to engage in any short sale as defined in any applicable SEC or
National Association of Securities Dealers rules on any hedging
transactions with respect to the Common Stock. Without limiting the
foregoing, the Investor agrees not to engage in any naked short
transactions in excess of the amount of shares owned (or an
offsetting long position) during the Commitment Period. The
Investor shall be entitled to sell Common Stock 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:
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 power and authority 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
September 30, 2004, the authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, par value $0.0001
per share, of which 6,030,655 shares of Common Stock are issued and
outstanding. All of such outstanding shares have been validly
issued and are fully paid and nonassessable. 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 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. The
Company has furnished to the Investor true and correct copies of
the Company's Certificate of Incorporation, as amended and as in
effect on the date hereof (the "Certificate 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
Certificate 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 Art
