Exhibit 4.2
STANDBY EQUITY DISTRIBUTION
AGREEMENT
THIS AGREEMENT
dated as of the 15
th
day of November 2004
(the “ Agreement ”) between CORNELL CAPITAL
PARTNERS, LP , a Delaware limited partnership (the “
Investor ”), and KNOBIAS, INC. , a corporation
organized and existing under the laws of the State of Delaware and
formerly known as Consolidated Travel Systems, Inc. (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 $0.01 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 David Gonzalez, Esq. 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
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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 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 $0.01 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
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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 Fifty Thousand U.S.
Dollars (US$250,000) per Advance Notice, provided that aggregate
Advances in any thirty (30) day period shall not exceed One Million
Dollars ($1,000,000).
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 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
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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 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
Information 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
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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 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.
(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 multiplied by one point
one (1.1). 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 losses, commissions, fees, or
financial hardship caused to the Investor.
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 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 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, the
Investor’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
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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 .
(a) 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 Horne CPA Group,
the Company’s independent Certified Public Accountants, as to
its ability to provide all consents required in order to file a
registration statement in connection with this
transaction;
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(ix) The Company’s transfer
agent shall be DWAC eligible.
Section 2.6. Lock Up
Period.
(i) During the Commitment Period,
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.
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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 10-KSB for the
year ended December 31, 2003 and 10-QSB for the quarter ended March
31, 2004 and June 30, 2004; (iv) the Company’s definitive
Information Statement dated August 5, 2004; and (v) 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.
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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 corporate power and authority 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
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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 95,000,000 shares of Common Stock, par value $0.01 per
share and 5,000,000 shares of Preferred Stock of which 50,000,000
shares of Common Stock and 1,041,666 shares of Preferred Stock were
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 and the disclosure schedules
attached hereto, 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 and the disclosure schedules
attached hereto, 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 exercisa
