================================================================================
NOTE PURCHASE AGREEMENT
BY AND BETWEEN
HAWAIIAN HOLDINGS, INC.
AND
RC AVIATION, LLC
DATED JUNE 1, 2005
================================================================================
<TABLE>
TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS.................................................................................2
Section 1.01.
Definitions.......................................................................2
Section 1.02.
Rules of
Construction.............................................................6
ARTICLE II.
ISSUANCE, SALE AND PURCHASE OF THE
NOTES....................................................6
Section 2.01.
Sale and Purchase of the
Notes....................................................6
Section 2.02.
Closing...........................................................................6
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY...............................................7
Section 3.01.
Organization and Good
Standing....................................................7
Section 3.02.
Authority; Binding
Effect.........................................................7
Section 3.03.
Capitalization....................................................................7
Section 3.04.
No Violations;
Consents...........................................................8
Section 3.05.
Financial
Statements..............................................................8
Section 3.06.
Commission
Filings................................................................9
Section 3.07.
Private
Placement.................................................................9
Section 3.08.
Financial
Advisors................................................................9
Section 3.09.
No General
Solicitation...........................................................9
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE
INVESTOR.............................................10
Section 4.01.
Authorization....................................................................10
Section 4.02.
Investment
Representations.......................................................10
Section 4.03.
Investor
Acknowledgments.........................................................10
Section 4.04.
Financial
Advisors...............................................................11
Section 4.05.
Legend...........................................................................11
Section 4.06.
No other Representations or
Warranties...........................................11
Section 4.07.
No Action Taken to Invalidate Private
Placement..................................12
ARTICLE V.
COVENANTS OF THE
COMPANY...................................................................12
Section 5.01.
Shareholder
Approvals............................................................12
Section 5.02.
Secure
Listing...................................................................12
Section 5.03.
Refinancing......................................................................13
ARTICLE VI.
[RESERVED].................................................................................13
ARTICLE VII.
CONDITIONS TO
CLOSING......................................................................13
</TABLE>
-i-
<TABLE>
TABLE OF CONTENTS
(continued)
PAGE
Section 7.01.
Conditions to Obligations of the
Investor........................................13
Section 7.02.
Conditions to Obligations of the
Company.........................................14
ARTICLE VIII.
CONVERSION.................................................................................16
Section 8.01.
Right to
Convert.................................................................16
Section 8.02.
Conversion of the
Notes..........................................................16
Section 8.03.
Conversion
Price.................................................................17
Section 8.04.
Adjustment for Stock Splits and
Combinations.....................................17
Section 8.05.
Reorganizations, Mergers, Consolidations or
Reclassifications....................18
Section 8.06.
Sale of Additional
Shares........................................................18
Section 8.07.
Additional Shares of Common
Stock................................................20
Section 8.08.
Certificate of
Adjustment........................................................20
Section 8.09.
Reservation of Stock Issuable Upon
Conversion....................................20
Section 8.10.
No
Impairment....................................................................21
Section 8.11.
Minimum
Adjustment...............................................................21
Section 8.12.
Certain
Adjustments..............................................................21
ARTICLE IX.
REDEMPTION.................................................................................21
Section 9.01.
Mandatory
Redemption.............................................................21
Section 9.02.
Provisional Redemption at the Option of the
Company..............................21
Section 9.03.
Optional
Redemption..............................................................21
Section 9.04.
Provisional Redemption of Series B Notes at the Option of the
Holders............22
Section 9.05.
Redemption at the Option of the Holders Upon a Change of
Control.................22
Section 9.06.
Redemption
Procedure.............................................................23
ARTICLE X.
EVENT OF
DEFAULT...........................................................................24
Section 10.01.
Event of
Default.................................................................24
ARTICLE XI.
FEES, Expenses and
costs...................................................................24
Section 11.01.
Expenses.........................................................................24
ARTICLE XII.
SUBORDINATION..............................................................................25
Section 12.01.
Subordination....................................................................25
ARTICLE XIII.
MISCELLANEOUS..............................................................................25
</TABLE>
-ii-
<TABLE>
TABLE OF CONTENTS
(continued)
PAGE
Section 13.01.
Note
Register....................................................................25
Section 13.02.
DTC;
CUSIP.......................................................................26
Section 13.03.
Notices and
Addresses............................................................26
Section 13.04.
No
Survival......................................................................27
Section 13.05.
Captions.........................................................................27
Section 13.06.
No
Waiver........................................................................27
Section 13.07.
Severability.....................................................................27
Section 13.08.
Exclusive
Agreement..............................................................27
Section 13.09.
Amendment........................................................................27
Section 13.10.
Limitation on Assignment; Parties in
Interest....................................28
Section 13.11.
Governing
Law....................................................................28
Section 13.12.
Jurisdiction.....................................................................28
Section 13.13.
No Third Party
Beneficiary.......................................................28
Section 13.14.
Injunctive
Relief................................................................28
Section 13.15.
Counterparts.....................................................................28
Section 13.16.
Actions
Simultaneous.............................................................28
Section 13.17.
Acknowledgement by the Company, the Investor and
HHIC............................29
</TABLE>
-iii-
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT, dated June 1, 2005 (this
"Agreement"), is by
and between Hawaiian Holdings, Inc., a Delaware corporation (the
"Company"), and
RC Aviation, LLC, a Delaware limited liability company (the
"Investor"). HHIC,
Inc., a Delaware corporation ("HHIC"), does hereby join in this
Agreement solely
for the purpose described in Section 13.17. Unless otherwise
provided,
capitalized terms used herein are defined in Article I below.
RECITALS:
---------
A. The Investor, on behalf the members of the Investor set forth on
Schedule A attached hereto (the "Purchasers"), desires to purchase
from the
Company, and the Company desires to sell to the Investor, upon the
terms and
subject to the conditions of this Agreement, Series A Subordinated
Convertible
Notes Due June 1, 2010 (the "Series A Notes") and Series B
Subordinated
Convertible Notes Due June 1, 2010 (the "Series B Notes" and,
together with the
Series A Notes, the "Notes"), each in the principal amounts set
forth on
Schedule A. The Series A Notes will be issued in the form attached
hereto as
Exhibit A, and the Series B Notes will be issued in the form
attached hereto as
Exhibit B.
B. Subject to the terms contained herein, the Series A Notes shall
be
convertible into shares of Common Stock from and after the first
anniversary of
the Closing Date, in accordance with the terms hereof.
C. Subject to the terms contained herein, the Series B Notes shall
be
convertible into shares of Common Stock upon the latest to occur of
(i) the
effectiveness of an amendment to the Company's Certificate of
Incorporation to
be filed with the Secretary of State of the State of Delaware to
increase the
aggregate number of authorized shares of Common Stock to an amount
that would
allow for the full conversion of the Series B Notes and the full
exercise of the
Common Stock Warrants (as defined herein), (ii) the receipt of
shareholder
approval authorizing the issuance of Common Stock upon conversion
of the Series
B Notes as required by Section 713 of the AMEX Company Guide, and
(iii) the
first anniversary of the Closing Date, each case in accordance with
the terms
hereof.
D. The Company and the Investor, on behalf of itself and the
Purchasers,
desire to set forth certain agreements herein.
AGREEMENT:
----------
NOW, THEREFORE, in consideration of the foregoing and of the
respective
covenants and undertakings hereunder and for other good and
valuable
consideration, the receipt and adequacy of which are hereby
acknowledged,
intending to be legally bound, the parties hereto do hereby agree
as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, the following
terms
have the meanings set forth below.
"Accredited Investor" shall mean any Person that is an "accredited
investor" within the definition contained in Rule 501(a) under the
Securities
Act.
"Affiliate" shall mean with respect to a Person, any Person which
directly
or indirectly, through one or more intermediaries, controls, is
controlled by,
or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble.
"Amendment" shall mean an amendment to the Certificate of
Incorporation to
be filed with the Secretary of State of the State of Delaware,
subject to the
receipt of the shareholder approval required by Section 5.1(i), to
increase the
aggregate number of authorized shares of Common Stock to an amount
that would
allow for the full conversion of the Series B Notes and the full
exercise of the
Common Stock Warrants.
"AMEX Company Guide" shall mean the American Stock Exchange Company
Guide.
"Bankruptcy Proceeding" shall mean the case (Case No. 03-00827)
filed by
Hawaiian Airlines, Inc. in the United States Bankruptcy Court for
the District
of Hawaii under Chapter 11 of the United States Bankruptcy Code, as
amended.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Business Day" shall mean any day other than (i) a Saturday, (ii) a
Sunday
or (iii) any other day on which banks in the City of New York are
authorized or
required to close.
"By-Laws" shall mean, when used with respect to a specified Person,
the
by-laws of a Person, as the same may be amended from time to time.
"Capital Stock" shall mean, with respect to any Person, any and all
shares,
interests, participations, rights in or other equivalents (however
designated
and whether voting or non-voting) of such Person's capital stock or
any form of
membership, ownership or participation interests, as applicable,
including
partnership interests, whether now outstanding or hereafter issued
and any and
all securities, debt instruments, rights, warrants or options
exercisable or
exchangeable for or convertible into such capital stock.
"Certificate of Incorporation" shall mean, when used with respect
to a
specified Person, the Articles or Certificate of Incorporation or
other
applicable organizational document of such Person, as currently in
effect.
2
"Closing" shall have the meaning set forth in Section 2.02(a).
"Closing Date" shall have the meaning set forth in Section 2.02(a).
"Commission Filings" shall have the meaning set forth in Section
3.06.
"Common Stock" shall mean the common stock, $0.01 par value per
share, of
the Company.
"Common Stock Warrants" shall mean warrants (to be issued to the
Investor
in exchange for the Series E Warrant upon the effectiveness of the
Amendment) to
purchase up to ten percent (10%) of the fully-diluted shares of
Common Stock, of
which warrants half had been previously earned by the Investor for
its funding
commitment with respect to the joint plan of reorganization
proposed by the
Company and the Investor in connection with the Bankruptcy
Proceeding and the
other half of which shall be earned by the Investor in connection
with its
purchase of the Notes hereunder.
"Company" shall have the meaning set forth in the preamble.
"Consents" shall mean all governmental and third party consents,
approvals,
authorizations, qualifications and waivers necessary to be received
by a Person
for the consummation of the transactions contemplated hereby.
"Contract" shall mean any legally binding contract, agreement,
mortgage,
deed of trust, bond, loan, indenture, lease, license, note, option,
warrant,
right, instrument, commitment or other similar document,
arrangement or
agreement, whether written or oral.
"Employee" shall mean any current, former or retired officers,
directors,
consultants, employees, independent contractors, agents and other
Persons who
render or have rendered services to the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended,
and the rules and regulations of the SEC promulgated thereunder.
"GAAP" shall mean generally accepted accounting principles applied
on a
consistent basis as used in the United States of America.
"Governmental Body" shall mean any government or governmental or
quasi-governmental authority including, without limitation, any
federal, state,
territorial, county, municipal or other governmental or
quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body
(public or
private), department or other instrumentality or political unit or
subdivision,
whether located in the United States or abroad, the National
Association of
Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq
National
Market, the Nasdaq SmallCap Market, the American Stock Exchange or
the Pacific
Exchange.
"Hawaiian" shall mean Hawaiian Airlines, Inc.
3
"Indebtedness" means (a) all obligations for borrowed money
(including all
obligation owing under the Wells Fargo Credit Facility and the
Second-Lien
Facility), (b) all obligations evidenced by bonds, debentures,
notes, or other
similar instruments and all reimbursement or other obligations in
respect of
letters of credit, bankers acceptances, interest rate swaps, or
other financial
products, (c) all obligations as a lessee under capital leases, (d)
all
obligations or liabilities of others secured by a Lien on any asset
of a Person
or its subsidiaries, irrespective of whether such obligation or
liability is
assumed, (e) all obligations to pay the deferred purchase price of
assets (f)
trade payables incurred in the ordinary course of business and
repayable in
accordance with customary trade practices, (g) all obligations
owing under hedge
agreements, and (h) any obligation guaranteeing or intended to
guarantee
(whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or
sold with recourse) any obligation of any other Person that
constitutes
Indebtedness under any of clauses (a) through (h) above.
"Investor" shall have the meaning set forth in the preamble.
"Law" shall mean any treaty, statute, ordinance, code, rule,
regulation,
Order or other legal requirement enacted, adopted, promulgated,
applied or
followed by any Governmental Body.
"Legend" shall mean the Legend set forth in Section 4.05.
"Lien" shall mean any mortgage, pledge, lien (statutory or
otherwise),
security interest, hypothecation, conditional sale agreement,
encumbrance or
similar restriction or agreement.
"Market Price" shall have the meaning set forth in Section 8.02(c).
"Material Adverse Effect" shall mean any event, condition or
contingency
that has had, or is reasonably likely to have, a material adverse
effect on the
business, assets, liabilities (including contingent liabilities),
results of
operations, financial condition or prospects of the Company, taken
as a whole.
For the purposes of this Agreement, a Material Adverse Effect shall
not be
deemed to arise by reason of (i) the transactions contemplated
hereby, (ii)
events of war impacting the economy in general, and (iii) changes
in general
economic conditions or in the airline industry, in general.
"Optional Redemption Price" shall have the meaning set forth in
Section
9.03.
"Order" shall mean any order, injunction, judgment, decree, ruling,
writ,
assessment or arbitration award.
"Participant Register" shall have the meaning set forth in Section
13.01(c).
"Permits" shall mean any approvals, authorizations, licenses,
permits or
certificates by or of any Governmental Body.
4
"Person" shall mean any individual, corporation, partnership, firm,
limited
liability company, joint venture, trust, association,
unincorporated
organization, group, joint-stock company, Governmental Body or
other entity.
"Purchase Price" shall mean claims in the Bankruptcy Proceeding of
Hawaiian
with a value equivalency in such proceeding of $60,000,000 in the
aggregate,
payable as set forth in Section 2.02.
"Purchaser" shall have the meaning set forth in the recitals.
"Put Redemption Price" shall have the meaning set forth in Section
9.04.
"Register" shall have the meaning set forth in Section 13.01(b).
"Registrar" shall have the meaning set forth in Section 13.01(a).
"Registration Rights Agreement" shall have the meaning set forth in
Section
7.01(i).
"Requisite Stockholder Approval" shall mean approval of the
Company's
stockholders of the issuance of Common Stock upon conversion of the
Series B
Notes pursuant to Section 713 of the American Stock Exchange
Company Guide.
"SEC" shall mean the U.S. Securities and Exchange Commission. ---
"Second-Lien Facility" shall mean that certain secured subordinated
term
loan facility available to Hawaiian, pursuant to a Credit
Agreement, by and
among Hawaiian, as borrower, the Company, as guarantor, the lenders
named
therein, and Canyon Capital Advisors, LLC, as agent for the
lenders.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the
rules and regulations of the SEC promulgated thereunder.
"Series E Certificate of Designations" shall mean the Certificate
of the
Designations, Powers, Preferences and Rights of Series E Preferred
Stock of
Hawaiian Holdings, Inc., to be filed with the Secretary of State of
the State of
Delaware on or prior to the Closing Date.
"Series E Preferred Stock" shall mean the Company's Series E
Preferred
Stock, governed by the Series E Certificate of Designations.
"Series E Warrants" shall mean those warrants to be granted at
Closing to
the Investor to purchase shares of the Series E Preferred Stock,
such warrants
to be automatically exchanged, upon the effectiveness of the
Amendment, for the
Common Stock Warrants.
"Trading Day" shall mean a trading day on the American Stock
Exchange.
5
"Transaction Documents" shall mean this Agreement, the schedules
and
exhibits hereto, the Series A Notes, the Series B Notes, the Series
E Warrants,
the Common Stock Warrants (from and after the issuance of such
Common Stock
Warrants), the Registration Rights Agreement and any certificate or
other
document delivered by or on behalf of the Company or the Investor
pursuant to
this Agreement or in connection with the transactions contemplated
by this
Agreement.
"Wells Fargo Credit Facility" shall mean that certain credit
facility
available to Hawaiian, consisting of a revolving line of credit and
a term loan,
pursuant to a Credit Agreement (the "Wells Fargo Credit
Agreement"), by and
among Wells Fargo Foothill, Inc., as arranger and agent, Hawaiian,
as borrower,
the Company, as guarantor, and the lenders named therein.
Section 1.02. Rules of Construction. Unless the context otherwise
requires:
(a) an accounting term defined by GAAP that is not otherwise
defined
herein has the meaning assigned to it in accordance with GAAP;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the
plural
include the singular;
(d) the words "include" and "including" shall be deemed to mean
"include, without limitation," and "including, without limitation";
(e) "herein," "hereof," "hereto," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular
article, section, paragraph or clause where such terms may appear;
and
(f) references to sections mean references to such section in this
Agreement, unless stated otherwise.
ARTICLE II
ISSUANCE, SALE AND PURCHASE OF THE NOTES
Section 2.01. Sale and Purchase of the Notes. Upon the terms and
subject to
the conditions of this Agreement, on the Closing Date (as defined
below), the
Company will sell to the Purchasers, and the Purchasers will
purchase from the
Company, the Series A Notes and the Series B Notes in the principal
amounts set
forth on Schedule A, for an aggregate purchase price of $60,000,000
(the
"Purchase Price").
Section 2.02. Closing.
(a) Subject to the satisfaction or waiver of the conditions set
forth
in this Agreement, the closing of the transactions contemplated by
Section 2.01
(the "Closing") shall
6
take place on the date after the date hereof (the "Closing Date");
provided,
that, if the purchase and sale of the Notes hereunder is not
consummated within
one week after the date hereof, this Agreement shall be terminated
and of no
further force or effect. The Closing shall occur at such place as
is mutually
agreeable by the parties hereto.
(b) At the Closing: (i) the Company will deliver to the Investor
(x)
the Notes to be sold in accordance with the provisions of Section
2.01 payable
to the Purchasers and (y) the Series E Warrants; (ii) the Investor
shall satisfy
payment of the Purchase Price, in full payment for the Notes,
through the
release and surrender to the Company by the Purchasers of an
undivided interest
in bankruptcy claims from the Bankruptcy Proceeding held by each of
them in an
aggregate amount equal to the Purchase Price; and (iii) each party
shall take or
cause to happen such other actions, and shall execute and deliver
such other
instruments or documents, as shall be required under Article VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as follows:
Section 3.01. Organization and Good Standing. The Company is a
corporation
duly incorporated, validly existing and in good standing under the
Laws of the
State of Delaware, has full corporate power and authority to own,
lease and
operate its properties, and carry on its business as presently
conducted. The
Company is duly qualified, registered or licensed as a foreign
corporation to do
business and is in good standing in each jurisdiction in which the
ownership or
leasing of its properties or the character of its present
operations makes such
qualification, registration or licensing necessary, except where
the failure to
so qualify or be in good standing would not reasonably be expected
to have a
Material Adverse Effect. The Company has heretofore delivered or
made available
to the Investor complete and correct copies of the Certificate of
Incorporation
and By-Laws of the Company, as in effect as of the date of this
Agreement.
Section 3.02. Authority; Binding Effect. The Company has full
corporate
power and authority to execute and deliver this Agreement and the
other
Transaction Documents, and to perform its obligations hereunder and
thereunder.
The execution and delivery of this Agreement and the other
Transaction Documents
and the consummation by the Company of the transactions
contemplated hereby and
thereby have been duly and validly approved by all necessary
corporate action on
the part of the Company. This Agreement has been duly executed and
delivered by
the Company and constitutes the legal, valid and binding obligation
of the
Company, enforceable in accordance with its terms. The other
Transaction
Documents, when executed and delivered by the Company, will be duly
executed and
delivered by the Company and constitute legal, valid and binding
obligations of
the Company, enforceable in accordance with their respective terms.
Section 3.03. Capitalization.
7
(a) As of May 31, 2005, the authorized Capital Stock of the Company
consisted of 60,000,000 shares of Common Stock, and 2,000,000
shares of
Preferred Stock.
(b) As of May 31, 2005, there were (i) 30,751,227 shares of Common
Stock issued and outstanding, (ii) three (3) shares of Preferred
Stock issued
and outstanding, (iii) 1,514,000 shares of Common Stock reserved
for issuance
upon exercise of outstanding options issued by the Company to
Employees, and
(iv) 8,933,000 shares of Common Stock reserved for issuance upon
conversion of
the Series A Notes. Except as set forth in clauses (i), (ii), (iii)
and (iv)
above, there are no shares of Common Stock reserved for the
issuance upon the
exercise, conversion or exchange of any securities of the Company.
All of the
issued and outstanding shares of the Company's Capital Stock have
been duly and
validly authorized and issued and are fully paid and non-assessable
and are not
subject to any preemptive rights. The Company is not subject to any
obligation
(contingent or otherwise) to repurchase or otherwise acquire or
retire any of
its Capital Stock.
(c) The shares of Common Stock issuable to the Investor upon
conversion
of the Series A Notes, when issued in accordance with the terms
hereof, will be
duly authorized, validly issued, fully paid and non-assessable and
free and
clear of any Liens. The shares of Common Stock issuable to the
Investor upon
conversion of the Series B Notes, when issued in accordance with
the terms
hereof and subsequent to the effectiveness of the Amendment and the
receipt of
the Requisite Stockholder Approval, will be duly authorized,
validly issued,
fully paid and non-assessable and free and clear of any Liens.
Section 3.04. No Violations; Consents. Except as set forth on
Schedule
3.04, neither the execution, delivery or performance by the Company
of this
Agreement or the other Transaction Documents nor the consummation
of the
transactions contemplated hereby or thereby, will (a) conflict
with, or result
in the breach of, any provision of the Certificate of Incorporation
or By-Laws
of the Company, (b) conflict with, violate, result in the breach or
termination
of, or constitute a default or give rise to any right of
termination or
acceleration or right to increase the obligations or otherwise
modify the terms
thereof under any Contract, Permit or Order to which the Company is
a party or
by which the Company or any of the properties or assets of the
Company is bound,
(c) constitute a violation of any Law applicable to the Company or
(d) result in
the creation of any Lien upon the properties or assets of the
Company, other
than with respect to the foregoing clauses (b), (c) and (d), such
requirements,
conflicts, violations, breaches or rights which would not
reasonably be expected
to have a Material Adverse Effect. Except as set forth on Schedule
3.04, other
than those which have been obtained or made or which would not
reasonably be
expected to have a Material Adverse Effect, no Consent is required
on the part
of the Company in connection with the execution and delivery of
this Agreement
or the Transaction Documents, or the compliance by the Company with
any of the
provisions hereof or thereof.
Section 3.05. Financial Statements. The consolidated balance sheet
of the
Company as of December 31, 2004 and 2003 and the related
consolidated income
statements, changes in stockholders' equity and cash flows for the
fiscal years
ended December 31, 2004, 2003 and 2002, as reported in the
Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004,
filed by the
Company with the SEC under the Exchange Act, and accompanied by the
8
audit report of Ernst & Young LLP, independent public
accountants, accurately
reflect the books and records of the Company and present fairly, in
all material
respects, the consolidated financial position of the Company and
the
consolidated results of its operations and its cash flows for the
periods and
dates covered thereby, in conformity with GAAP. The unaudited
consolidated
balance sheet of the Company as of March 31, 2005 and 2004 and the
related
unaudited consolidated income statements and cash flows for the
three months
ended March 31, 2005 and 2004, as reported in the Company's
Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2005, filed with
the SEC
under the Exchange Act, accurately reflect the books and records of
the Company
and present fairly, in all material respects, the consolidated
financial
position of the Company and the consolidated results of its
operations and its
cash flows for the periods and dates covered thereby, in conformity
with GAAP,
except for changes resulting from year-end adjustments (none of
which will be
material in amount) and the absence of footnote disclosures
thereto.
Section 3.06. Commission Filings. The Company has filed all
reports, proxy
statements and other materials, together with any amendments
required to be made
with respect thereto, that were required to be filed with the SEC
under the
Exchange Act from and after June 30, 2003 (all such reports and
statements are
collectively referred to herein as the "Commission Filings").
Section 3.07. Private Placement.
(a) Assuming the representations and warranties of the Investor
contained in Article IV are true, the offer and sale of the Notes
(and the
issuance of the Common Stock to the Investor upon the conversion of
such Notes)
are exempt from the registration requirements of the Securities
Act. The Company
has not taken and will not take any actions which would cause the
offers and
sales contemplated hereunder to become ineligible for exemption
under the
Securities Act.
(b) Neither the Company nor any Person acting on its behalf has
offered
the Notes to any Person by means of general or public solicitation
or general or
public advertising, such as by newspaper or magazine
advertisements, by
broadcast media, or at any seminar or meeting whose attendees were
solicited by
such means.
Section 3.08. Financial Advisors. Except as set forth on Schedule
3.08, no
agent, broker, investment banker, finder, financial advisor or
other Person is
or will be entitled to any broker's or finder's fee or any other
commission or
similar fee from the Company, directly or indirectly, in connection
with the
transactions contemplated hereby.
Section 3.09. No General Solicitation. None of the Company or any
of its
"affiliates" (as defined in Rule 501(b) of Regulation D under the
Securities Act
("Regulation D")), has, directly or through an agent, engaged in
any form of
general solicitation or general advertising in connection with the
offering of
the Notes (as those terms are used in Regulation D) under the
Securities Act or
in any manner involving a public offering within the meaning of
Section 4(2) of
the Securities Act; and the Company has not entered into any
contractual
arrangement with
9
respect to the distribution of the Notes except for this Agreement
and the
Registration Rights Agreement, and the Company will not enter into
any such
arrangement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE INVESTOR
The Investor, on behalf of itself and the Purchasers, represents
and
warrants to the Company as follows:
Section 4.01. Authorization. Each of the Investor and each
Purchaser is
duly organized and validly existing under the Laws of the state of
its
organization. The Investor and each Purchaser has the full power
and authority
to enter into this Agreement and the other Transaction Documents to
which it is
a party and to consummate the transactions contemplated hereby and
thereby. The
execution and delivery of this Agreement and the other Transaction
Documents and
the consummation by the Investor and each Purchaser of the
transactions
contemplated hereby and thereby have been duly authorized by all
necessary
action on the part of the Investor and each Purchaser. This
Agreement and the
other Transaction Documents have been and will be, as the case may
be, duly
executed and delivered by the Investor and each Purchaser that is a
party
thereto and constitute legal, valid and binding obligations of the
Investor and
each Purchaser that is a party thereto, enforceable in accordance
with their
respective terms.
Section 4.02. Investment Representations. Each of the Investor and
each
Purchaser is an Accredited Investor and is acquiring the Notes for
its own
account, for investment, and not with a current view to, or for
sale in
connection with, the distribution thereof or of any interest
therein, except as
such distribution may be permissible under applicable Law. Each of
the Investor
and each Purchaser has adequate net worth and means of providing
for its current
needs and contingencies and is able to sustain a complete loss of
the investment
in such Notes, and has no need for liquidity in such investment.
Each of the
Investor and each Purchaser, itself or through its officers,
employees or
agents, has sufficient knowledge and experience in financial and
business
matters to be capable of evaluating the merits and risks of an
investment such
as an investment in the Notes, and each of the Investor and each
Purchaser,
either alone or through its officers, employees or agents, has
evaluated the
merits and risks of the investment in such Notes. Each of the
Investor and each
Purchaser understand that the Notes have not been registered under
the
Securities Act by reason of its issuance in a transaction exempt
from the
registration requirements of the Securities Act pursuant to the
exemption
provided in Section 4(2) thereof, and that the Notes may not be
sold or
otherwise disposed of unless such transaction is registered under
the Securities
Act or exempted from such registration.
Section 4.03. Investor Acknowledgments.
(a) Each of the Investor and each Purchaser has had the
opportunity,
directly or through its representatives, to ask questions of and
receive answers
from Persons acting on behalf of the Company concerning the
transactions
contemplated by this Agreement.
10
(b) Each of the Investor and each Purchaser acknowledges that the
Series A Notes may not be converted into shares of Common Stock
until the first
anniversary of the Closing Date, in accordance with the terms
hereof.
(c) Each of the Investor and each Purchaser acknowledges that the
Series B Notes may not be converted into shares of Common Stock
until the latest
to occur of (i) the effectiveness of the Amendment, (ii) the
receipt of the
Requisite Stockholder Approval, and (iii) the first anniversary of
the Closing
Date, each case in accordance with the terms hereof.
Section 4.04. Financial Advisors. Except as set forth on Schedule
4.04, no
agent, broker, investment banker, finder, financial advisor or
other Person
engaged by the Investor is or will be entitled to any broker's or
finder's fee
or any other commission or similar fee from the Company, directly
or indirectly,
in connection with any of the trans
