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INVESTMENT AGREEMENT
INVESTMENT
AGREEMENT (this "AGREEMENT"), dated as of June 12, 2008 by and
between Buyer Group International, Inc., a Nevada corporation
(the "Company"), and Dutchess Private Equities Fund, Ltd., a
Cayman Islands exempted company (the "Investor").
WHEREAS,
the parties desire that, upon the terms and subject to the
conditions contained herein, the Investor shall invest up to
Ten Million dollars ($10,000,000) to purchase the Company's
Common Stock, $.001 par value per share (the "Common
Stock");
WHEREAS,
such investments will be made in reliance upon the provisions
of Section 4(2) under the Securities Act of 1933, as amended
(the "1933 Act"), Rule 506 of Regulation D, and the rules and
regulations promulgated thereunder, and/or upon such other
exemption from the registration requirements of the 1933 Act
as may be available with respect to any or all of the
investments in Common Stock to be made hereunder;
and
WHEREAS,
contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement substantially in the form
attached hereto (the "Registration Rights Agreement") pursuant
to which the Company has agreed to provide certain
registration rights under the 1933 Act, and the rules and
regulations promulgated thereunder, and applicable state
securities laws.
NOW
THEREFORE, in consideration of the foregoing recitals, which
shall be considered an integral part of this Agreement, the
covenants and agreements set forth hereafter, and other good
and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Investor
hereby agree as follows:
SECTION
1. DEFINITIONS.
As
used in this Agreement, the following terms shall have the
following meanings specified or indicated below, and such
meanings shall be equally applicable to the singular and
plural forms of such defined terms.
“1933 Act” shall have the meaning set forth in
the preamble of this agreement.
“1934 Act” shall mean the Securities Exchange
Act of 1934, as it may be amended.
“Affiliate” shall have the meaning specified in
Section 5(H), below. “Agreement”
shall mean this Investment Agreement.
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
“ Best
Bid”
shall mean the highest posted bid price of the Common Stock during
a given period of time.
“ By-laws”
shall have the meaning specified in Section 4(C).
“ Certificate of
Incorporation” shall have the meaning specified in
Section 4(C).
“ Closing”
shall have the meaning specified in Section 2(G).
“ Closing
Date” shall mean no more than seven (7) Trading Days
following the Put Notice Date.
“ Common
Stock” shall have the meaning set forth in the
preamble of this Agreement.
“ Control”
or “
Controls”
shall have the meaning specified in Section 5(H).
“ Effective
Date” shall mean the date the SEC declares effective
under the 1933 Act the Registration Statement covering the
Securities.
“ Environmental
Laws” shall have the meaning specified in Section
4(M).
“Equity Line Transaction
Documents” shall mean this Agreement, the Registration
Rights Agreement.
“ Execution
Date” shall mean the date indicated in the preamble to
this Agreement.
“ Indemnities”
shall have the meaning specified in Section 11. “
Indemnified
Liabilities” shall have the meaning specified in
Section 11.
“ Ineffective
Period” shall mean any period of time that the
Registration Statement or any Supplemental Registration Statement
(as defined in the Registration Rights Agreement between the
parties) becomes ineffective or unavailable for use for the sale or
resale, as applicable, of any or all of the Registrable Securities
(as defined in the Registration Rights Agreement) for any reason
(or in the event the prospectus under either of the above is not
current and deliverable) during any time period required under the
Registration Rights Agreement.
“ Investor”
shall have the meaning indicated in the preamble of this
Agreement.
“ Material Adverse
Effect” shall have the meaning specified in Section
4(A).
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
“Maximum Common Stock Issuance” shall have the
meaning specified in Section 2(H).
“Open Market Adjustment Amount” shall have the
meaning specified in Section 2(I).
"Open Market Purchase" shall have the meaning specified in
Section 2(I)
“Open Market Share Purchase” shall have the
meaning specified in Section 2(I).
“Open Period” shall mean the period beginning on
and including the Trading Day immediately following the Effective
Date and ending on the earlier to occur of (i) the date which is
thirty-six (36) months from the Effective Date; or (ii) termination of the
Agreement in accordance with Section 9, below.
“Pricing Period” shall mean the period beginning
on the Put Notice Date and ending on and including the date that is
five (5) Trading Days after such Put Notice Date.
“Principal Market” shall mean the American Stock
Exchange, Inc., the National Association of Securities Dealers,
Inc. Over-the-Counter Bulletin Board, the NASDAQ National Market
System or the NASDAQ SmallCap Market, whichever is the principal
market on which the Common Stock is listed.
“Prospectus” shall mean the prospectus,
preliminary prospectus and supplemental prospectus used in
connection with the Registration Statement.
“Purchase Amount” shall mean the total amount
being paid by the Investor on a particular Closing Date to purchase
the Securities.
“Purchase Price” shall mean ninety-three percent
(93%) of the lowest closing Best Bid price of the Common Stock
during the Pricing Period.
“Put”
shall have the meaning set forth in Section 2(B)(1)
hereof.
“Put Amount” shall have the meaning set forth in
Section 2(B)(1) hereof.
“Put Notice” shall mean a written notice sent to
the Investor by the Company stating the Put Amount in U.S. dollars
the Company intends to sell to the Investor pursuant to the terms
of the Agreement and stating the current number of Shares issued
and outstanding on such date.
“Put Notice Date” shall mean the Trading Day, as
set forth below, immediately following the day on which the
Investor receives a Put Notice, however a Put Notice shall be
deemed delivered on (a) the Trading Day it
is received by facsimile or otherwise by the Investor if such
notice is received prior
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
to
9:00 am Eastern Time, or (b) the
immediately succeeding Trading Day if it is received by
facsimile or otherwise after 9:00 am Eastern Time on a Trading
Day. No Put Notice may be deemed delivered on a day that is
not a Trading Day.
“Put Restriction” shall mean the days between
the beginning of the Pricing Period and Closing Date. During this
time, the Company shall not be entitled to deliver another Put
Notice.
“Put Shares Due” shall have the meaning
specified in Section 2(I).
“Registration Period” shall have the meaning
specified in Section 5(C), below.
“Registration Rights Agreement” shall have the
meaning set forth in the recitals, above.
“Registration Statement” means the registration
statement of the Company filed under the 1933 Act covering the
Common Stock issuable hereunder.
“Related Party” shall have the meaning specified
in Section 5(H). “Resolution”
shall have the meaning specified in Section 8(E). “SEC”
shall mean the U.S. Securities & Exchange Commission.
“SEC
Documents” shall have the meaning specified in Section
4(F).
“Securities” shall mean the shares of Common
Stock issued pursuant to the terms of the Agreement.
“Shares” shall mean the shares of the
Company’s Common Stock. “Subsidiaries”
shall have the meaning specified in Section 4(A).
“Trading Day” shall mean any day on which the
Principal Market for the Common Stock is open for trading, from the
hours of 9:30 am until 4:00 pm.
SECTION
2. PURCHASE AND SALE OF COMMON STOCK.
(A)
PURCHASE
AND SALE OF COMMON STOCK. Subject to the terms and conditions set
forth herein, the Company shall issue and sell to the Investor, and
the Investor shall purchase from the Company, up to that number of
Shares having an aggregate Purchase Price of Ten Million dollars
($10,000,000).
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
(B)
DELIVERY
OF PUT NOTICES.
(I)
Subject to the terms and conditions of the Equity Line
Transaction Documents, and from time to time during the Open
Period, the Company may, in its sole discretion, deliver a Put
Notice to the Investor which states the dollar amount
(designated in U.S. Dollars) (the "Put Amount"), which the
Company intends to sell to the Investor on a Closing Date (the
"Put"). The Put Notice shall be in the form attached hereto as
Exhibit C and incorporated herein by reference. The amount
that the Company shall be entitled to Put to the Investor (the
"Put Amount") shall be equal to, at the Company's election,
either: (A) Two Hundred percent (200%) of the average daily
volume (U.S. market only) of the Common Stock for the Ten (10)
Trading Days prior to the applicable Put Notice Date,
multiplied by the average of the three (3) daily closing bid
prices immediately preceding the Put Date, or (B) two hundred
fifty thousand dollars ($250,000). During the Open Period, the
Company shall not be entitled to submit a Put Notice until
after the previous Closing has been completed. The Purchase
Price for the Common Stock identified in the Put Notice shall
be equal to ninety-three percent (93%) of the lowest closing
Best Bid price of the Common Stock during the Pricing
Period.
(C)
INTENTIONALLY
OMITTED
(D)
INTENTIONALLY
OMITTED
(E)
CONDITIONS TO INVESTOR'S OBLIGATION TO PURCHASE SHARES.
Notwithstanding anything to the contrary in this Agreement,
the Company shall not be entitled to deliver a Put Notice and
the Investor shall not be obligated to purchase any Shares at
a Closing (as defined in Section 2(G)) unless each of the
following conditions are satisfied:
(I)
a
Registration Statement shall have been declared effective and shall
remain effective and available for the resale of all the
Registrable Securities (as defined in the Registration Rights
Agreement) at all times until the Closing with respect to the
subject Put Notice;
(II)
at
all times during the period beginning on the related Put Notice
Date and ending on and including the related Closing Date, the
Common Stock shall have been listed on the Principal Market and
shall not have been suspended from trading thereon for a period of
two (2) consecutive Trading Days during the Open Period and the
Company shall not have been notified of any pending or threatened
proceeding or other action to suspend the trading of the Common
Stock;
(III)
the Company has complied with its obligations and is otherwise
not in breach of or in default under, this Agreement, the
Registration Rights Agreement or any other agreement executed
in connection herewith which has not been cured prior to
delivery of the Investor’s P
ut Notice Date;
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
(IV)
no
injunction shall have been issued and remain in force, or action
commenced by a governmental authority which has not been stayed or
abandoned, prohibiting the purchase or the issuance of the
Securities; and
(V)
the
issuance of the Securities will not violate any shareholder
approval requirements of the Principal Market.
If
any of the events described in clauses (I) through (V) above
occurs during a Pricing Period, then the Investor shall have
no obligation to purchase the Put Amount of Common Stock set
forth in the applicable Put Notice.
(F)
RESERVED
(G)
MECHANICS
OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of
the conditions set forth in Sections 2(E), 7 and 8, the closing of
the purchase by the Investor of Shares (a "Closing") shall occur on
the date which is no later than seven (7) Trading Days following
the applicable Put Notice Date (each a "Closing Date"). Prior to
each Closing Date, (I) the Company shall deliver to the Investor
pursuant to this Agreement, certificates representing the Shares to
be issued to the Investor on such date and registered in the name
of the Investor; and (II) the Investor shall deliver to the Company
the Purchase Price to be paid for such Shares, determined as set
forth in Section 2(B). In lieu of delivering physical certificates
representing the Securities and provided that the Company's
transfer agent then is participating in The Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Investor, the Company shall use all
commercially reasonable efforts to cause its transfer agent to
electronically transmit the Securities by crediting the account of
the Investor's prime broker (as specified by the Investor within a
reasonably in advance of the Investor's notice) with DTC through
its Deposit Withdrawal Agent Commission ("DWAC")
system.
The
Company understands that a delay in the issuance of Securities
beyond the Closing Date could result in economic damage to the
Investor. After the Effective Date, as compensation to the
Investor for such loss, the Company agrees to make late
payments to the Investor for late issuance of Securities
(delivery of Securities after the applicable Closing Date) in
accordance with the following schedule (where "No. of Days
Late" is defined as the number of trading days beyond the
Closing Date, with the Amounts being
cumulative.):
|
LATE
PAYMENT FOR EACH
NO.
OF DAYS LATE
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$10,000
WORTH OF COMMON STOCK
|
|
1
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$100
|
|
2
|
$200
|
|
3
|
$300
|
|
4
|
$400
|
|
5
|
$500
|
|
6
|
$600
|
|
7
|
$700
|
|
8
|
$800
|
|
9
|
$900
|
|
10
|
$1,000
|
|
Over
10
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$1,000 + $200 for each
Business Day late beyond 10 days
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BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
The
Company shall make any payments incurred under this Section in
immediately available funds upon demand by the Investor.
Nothing herein shall limit the Investor's right to pursue
actual damages for the Company's failure to issue and deliver
the Securities to the Investor, except that such late payments
shall offset any such actual damages incurred by the Investor,
and any Open Market Adjustment Amount, as set forth
below.
(H)
OVERALL
LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained
herein to the contrary, if during the Open Period the Company
becomes listed on an exchange that limits the number of shares of
Common Stock that may be issued without shareholder approval, then
the number of Shares issuable by the Company and purchasable by the
Investor, shall not exceed that number of the shares of Common
Stock that may be issuable without shareholder approval (the
"Maximum Common Stock Issuance"). If such issuance of shares of
Common Stock could cause a delisting on the Principal Market, then
the Maximum Common Stock Issuance shall first be approved by the
Company's shareholders in accordance with applicable law and the
By-laws and Amended and Restated Certificate of Incorporation of
the Company, if such issuance of shares of Common Stock could cause
a delisting on the Principal Market. The parties understand and
agree that the Company's failure to seek or obtain such shareholder
approval shall in no way adversely affect the validity and due
authorization of the issuance and sale of Securities or the
Investor's obligation in accordance with the terms and conditions
hereof to purchase a number of Shares in the aggregate up to the
Maximum Common Stock Issuance limitation, and that such approval
pertains only to the applicability of the Maximum Common Stock
Issuance limitation provided in this Section 2(H).
(I)
If,
by the third (3rd) business day after the Closing Date, the Company
fails to deliver any portion of the shares of the Put to the
Investor (the "Put Shares Due") and the Investor purchases, in an
open market transaction or otherwise, shares of Common Stock
necessary to make delivery of shares which would have been
delivered if the full amount of the shares to be delivered to the
Investor by the Company (the "Open Market Share Purchase") , then
the Company shall pay to the Investor, in addition to any other
amounts due to Investor pursuant to the Put, and not in lieu
thereof, the Open Market Adjustment Amount (as defined below). The
"Open Market Adjustment Amount" is the amount equal to the excess,
if any, of (x) the Investor's total purchase price (including
brokerage commissions, if any) for the Open Market Share Purchase
minus (y) the net proceeds (after brokerage commissions, if any)
received by the Investor from the sale of the Put Shares Due. The
Company shall pay the Open Market Adjustment Amount to the Investor
in immediately available funds within five (5) business days of
written
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
demand
by the Investor. By way of illustration and not in limitation
of the foregoing, if the Investor purchases shares of Common
Stock having a total purchase price (including brokerage
commissions) of $11,000 to cover an Open Market Purchase with
respect to shares of Common Stock it sold for net proceeds of
$10,000, the Open Market Purchase Adjustment Amount which the
Company will be required to pay to the Investor will be
$1,000.
(J)
LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to
the contrary in this Agreement, in no event shall the Investor
be entitled to purchase that number of Shares, which when
added to the sum of the number of shares of Common Stock
beneficially owned (as such term is defined under Section
13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would
exceed 4.99% of the number of shares of Common Stock
outstanding on the Closing Date, as determined in accordance
with Rule 1 3d-1 (j) of the 1934 Act.
SECTION
3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND
COVENANTS.
The
Investor represents and warrants to the Company, and
covenants, that:
(A)
SOPHISTICATED
INVESTOR. The Investor has, by reason of its business and financial
experience, such knowledge, sophistication and experience in
financial and business matters and in making investment decisions
of this type that it is capable of (I) evaluating the merits and
risks of an investment in the Securities and making an informed
investment decision; (II) protecting its own interest; and (III)
bearing the economic risk of such investment for an indefinite
period of time.
(B)
AUTHORIZATION;
ENFORCEMENT. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor
in accordance with its terms, subject as to enforceability to
general principles of equity and to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement
of applicable creditors' rights and remedies.
(C)
SECTION
9 OF THE 1934 ACT. During the term of this Agreement, the Investor
will comply with the provisions of Section 9 of the 1934 Act, and
the rules promulgated thereunder, with respect to transactions
involving the Common Stock. The Investor agrees not to sell the
Company's stock short, either directly or indirectly through its
affiliates, principals or advisors, the Company's common stock
during the term of this Agreement.
(D)
ACCREDITED
INVESTOR. Investor is an "Accredited Investor" as that term is
defined in Rule 501(a) of Regulation D of the 1933
Act.
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
(E)
NO
CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Investor and the consummation by the
Investor of the transactions contemplated hereby and thereby will
not result in a violation of Partnership Agreement or other
organizational documents of the Investor.
(F)
OPPORTUNITY
TO DISCUSS. The Investor has received all materials relating to the
Company's business, finance and operations which it has requested.
The Investor has had an opportunity to discuss the business,
management and financial affairs of the Company with the Company's
management.
(G)
INVESTMENT
PURPOSES. The Investor is purchasing the Securities for its own
account for investment purposes and not with a view towards
distribution and agrees to resell or otherwise dispose of the
Securities solely in accordance with the registration provisions of
the 1933 Act (or pursuant to an exemption from such registration
provisions).
(H)
NO
REGISTRATION AS A DEALER. The Investor is not and will not be
required to be registered as a "dealer" under the 1934 Act, either
as a result of its execution and performance of its obligations
under this Agreement or otherwise.
(I)
GOOD
STANDING. The Investor is a Limited Partnership, duly organized,
validly existing and in good standing in the Cayman
Islands.
(J)
TAX
LIABILITIES. The Investor understands that it is liable for its own
tax liabilities.
(K)
REGULATION M. The Investor will comply with Regulation M under
the 1934 Act, if applicable.
SECTION
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except
as set forth in the Schedules attached hereto, or as disclosed
on the Company's SEC Documents, the Company represents and
warrants to the Investor that:
(A)
ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized and validly existing in good standing under the
laws of the State of Nevada, and has the requisite corporate
power and authorization to own its properties and to carry on
its business as now being conducted. Both the Company and the
companies it owns or controls (“Subsidiaries”)
are duly qualified to do business and are in good standing in
every jurisdiction in which its ownership of property or 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. As used in this Agreement, "Material
Adverse Effect" means any material adverse effect on the
business, properties, assets, operations, results of
operations, financial condition
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
or
prospects of the Company and its Subsidiaries, if any, taken
as a whole, or on the transactions contemplated hereby or by
the agreements and instruments to be entered into in
connection herewith, or on the authority or ability of the
Company to perform its obligations under the Equity Line
Transaction Documents (as defined in Section 1 and 4(B),
below).
(B)
AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER
INSTRUMENTS.
(I)
The
Company has the requisite corporate power and authority to enter
into and perform this Investment Agreement and the Registration
Rights Agreement (collectively, the "Equity Line Transaction
Documents"), and to issue the Securities in accordance with the
terms hereof and thereof.
(II)
The
execution and delivery of the Equity Line Transaction Documents by
the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation the
reservation for issuance and the issuance of the Securities
pursuant to this Agreement, have been duly and validly 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 shareholders.
(III)
The
Equity Line Transaction Documents have been duly and validly
executed and delivered by the Company.
(IV)
The
Equity Line Transaction Documents 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.
(C)
CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of 400,000,000 shares of Common
Stock, $.001 par value per share, of which as of the date
hereof, 60,000,000 shares are issued and
outstanding.
Except
as disclosed in the Company's publicly available filings with
the SEC:
(I)
no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (II) there
are no outstanding debt securities; (III) there are no
outstanding shares of capital stock, 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
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
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; (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 1933 Act (except
the Registration Rights Agreement); (V) there are no
outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of
its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (VI) there are no
securities or instruments containing anti- dilution or similar
provisions that will be triggered by the issuance of the
Securities as described in this Agreement; (VII) the Company
does not have any stock appreciation rights or "phantom stock"
plans or agreements or any similar plan or agreement; and
(VIII) there is no dispute as to the classification of any
shares of the Company's capital stock.
The
Company has furnished to the Investor, or the Investor has had
access through EDGAR to, true and correct copies of the
Company's Amended and Restated Certificate of Incorporation,
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.
(D)
ISSUANCE
OF SHARES. The Company has reserved 5,000,000 Shares for issuance
pursuant to this Agreement, which have been duly authorized and
reserved those Shares for issuance (subject to adjustment pursuant
to the Company's covenant set forth in Section 5(F) below) pursuant
to this Agreement. Upon issuance in accordance with this Agreement,
the Securities will be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with
respect to the issue thereof. In the event the Company cannot
register a sufficient number of Shares for issuance pursuant to
this Agreement, the Company will use its best efforts to authorize
and reserve for issuance the number of Shares required for the
Company to perform its obligations hereunder as soon as reasonably
practicable.
(E)
NO
CONFLICTS. The execution, delivery and performance of the Equity
Line Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby
will not (I) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company
or the By-laws; or (II) conflict with, or constitute a material
default (or an event which with notice or lapse of time or both
would become a material default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of,
any material agreement, contract, indenture
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
mortgage,
indebtedness or instrument to which the Company or any of its
Subsidiaries is a party, or to the Company's knowledge result
in a violation of any law, rule, regulation, order, judgment
or decree (including United States federal and state
securities laws and regulations and the rules and regulations
of the Principal Market or principal securities exchange or
trading market on which the Common Stock is traded or listed)
applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its
Subsidiaries is bound or affected. Except as disclosed in
Schedule 4(e), neither the Company nor its Subsidiaries is in
violation of any term of, or in default under, the Certificate
of Incorporation, any Certificate of Designations, Preferences
and Rights of any outstanding series of preferred stock of the
Company or the By- laws or their organizational charter or
by-laws, respectively, or any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order
or any statute, rule or regulation applicable to the Company
or its Subsidiaries, except for possible conflicts, defaults,
terminations, amendments, accelerations, cancellations and
violations that would not individually or in the aggregate
have or constitute a Material Adverse Effect. The business of
the Company and its Subsidiaries is not being conducted, and
shall not be conducted, in violation of any law, statute,
ordinance, rule, order or regulation of any governmental
authority or agency, regulatory or self-regulatory agency, or
court, except for possible violations the sanctions for which
either individually or in the aggregate would not have a
Material Adverse Effect. Except as specifically contemplated
by this Agreement and as required under the 1933 Act or any
securities laws of any states, to the Company's knowledge, the
Company is not required to obtain any consent, authorization,
permit or order of, or make any filing or registration (except
the filing of a registration statement as outlined in the
Registration Rights Agreement between the Parties) with, any
court, governmental authority or agency, regulatory or
self-regulatory agency or other third party in order for it to
execute, deliver or perform any of its obligations under, or
contemplated by, the Equity Line Transaction Documents in
accordance with the terms hereof or thereof. All consents,
authorizations, permits, 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 and are in full force and effect as of the
date hereof. Except as disclosed in Schedule 4(e), the Company
and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is
not, and will not be, in violation of the listing requirements
of the Principal Market as in effect on the date hereof and on
each of the Closing Dates and is not aware of any facts which
would reasonably lead to delisting of the Common Stock by the
Principal Market in the foreseeable future.
(F)
SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof,
the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act
(all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference
therein being hereinafter referred to as
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
the
"SEC Documents"). The Company has delivered to the Investor or
its representatives, or they have had access through EDGAR to,
true and complete copies of the SEC Documents. As of their
respective filing dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and
the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their
respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all
material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, by a
firm that is a member of the Public Companies Accounting
Oversight Board ("PCAOB") consistently applied, during the
periods involved (except (I) as may be otherwise indicated in
such financial statements or the notes thereto, or (II) in the
case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial
position of the Company as of the dates thereof and the
results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). No other written information
provided by or on behalf of the Company to the Investor which
is not included in the SEC Documents, including, without
limitation, information referred to in Section 4(D) of this
Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary to make the
statements therein, in the light of the circumstance under
which they are or were made, not misleading. Neither the
Company nor any of its Subsidiaries or any of their officers,
directors, employees or agents have provided the Investor with
any material, nonpublic information which was not publicly
disclosed prior to the date hereof and any material, nonpublic
information provided to the Investor by the Company or its
Subsidiaries or any of their officers, directors, employees or
agents prior to any Closing Date shall be publicly disclosed
by the Company prior to such Closing Date.
(G)
ABSENCE
OF CERTAIN CHANGES. Except as otherwise set forth in the SEC
Documents, the Company does not intend to change the business
operations of the Company in any material way. The Company has not
taken any steps, and does not currently expect to take any steps,
to seek protection pursuant to any bankruptcy law nor does the
Company or its Subsidiaries have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy
proceedings.
(H)
ABSENCE
OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in
the SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the
knowledge of the
BUYER GROUP INTL, INC.INVESTMENT.AGREEMENT.JUNE.2008
executive
officers of Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock or any of
the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their
capacities as such, in which an adverse decision could have a
Material Adverse Effect.
(I)
ACKNOWLEDGMENT
REGARDING INVESTOR'S PURCHASE OF SHARES. The Company acknowledges
and agrees that the Investor is acting solely in the capacity of an
arm's length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby. The Company
further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Equity Line Transaction Documents and the
transactions contemplated hereby and thereby and any advice given
by the Investor or any of its respective representatives or agents
in connection with the Equity Line Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental
to the Investor's purchase of the Securities, and is not being
relied on by the Company. The Company further represents to the
Investor
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