Exhibit 10.70
STANDBY EQUITY DISTRIBUTION
AGREEMENT
THIS AGREEMENT
dated as of the 11
th
day of March 2005 (the
“ Agreement ”) between CORNELL CAPITAL
PARTNERS, LP , a Delaware limited partnership (the “
Investor ”), and LITHIUM TECHNOLOGY CORPORATION
, 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 Fifteen Million
U.S. Dollars ($15,000,000) 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 the 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 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 Fifteen
Million U.S. Dollars ($15,000,000) 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 Fifteen Million U.S. Dollars
($15,000,000), (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 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.
2
Section 1.17. “ Maximum
Advance Amount ” shall be Two Hundred Thousand U.S.
Dollars (US$200,000) per Advance Notice, provided that aggregate
Advances in any thirty (30) day period shall not exceed Eight
Hundred Thousand Dollars ($800,000).
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 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.
3
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 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.
4
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 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 .
(c) 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) 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;
5
(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;
(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 BDO Seidman, LLP
as to its ability to provide all consents required in order to file
a registration statement in connection with this transaction;
and
(ix) 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:
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
6
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.
7
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, Form 10-QSB for the period ended
June 30, 2004, Form 10-QSB for the period ended September 30, 2004
and Form 8-Ks dated August 30, 2004, November 5, 2004, November 9,
2004, December 1, 2004, January 6, 2005 and February 3, 2005; 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 is
permitted 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 (the “Disclosure
Schedules”) 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
8
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 of the date hereof, the authorized capital stock of the Company
consists of 125,000,000 shares of Common Stock, par value $0.01 per
share and 100,000 shares of Preferred Stock of which 57,907,558
shares of Common Stock and no 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, 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 or the Disclosure Schedules, 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). Except as set forth on the Disclosure Schedules, 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
9
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 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
subsidia
