SECURITIES
PURCHASE AGREEMENT, dated as of March 8, 2007 (this
"Agreement"), among
EURONET WORLDWIDE,
INC., a Delaware corporation
(the
"Company"),
and the Purchasers listed on Exhibit A hereto,
together
with their permitted
transferees
(each, a "Purchaser"
and
collectively, the "Purchasers").
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INTRODUCTION
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The Company and the
Purchasers are
executing and
delivering
this
Agreement in reliance upon the exemption from securities
registration
afforded
by Section 4(2) of the
Securities Act and
Rule 506 of Regulation D promulgated
thereunder.
The Purchasers
desire to purchase and
the Company desires to
sell,
upon the terms and conditions stated in this Agreement,
shares of the
Company's
common stock, par value $.02 per share (the "Common Stock").
The capitalized terms
used herein and not otherwise defined have the
meanings given them in Article VII.
In consideration of
the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of
which are hereby acknowledged, the Company and the Purchasers
(severally and not
jointly) hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
---------------------------
Section 1.1 Purchase and Sale of Shares. At the Closing, the Company
will issue and sell to each Purchaser, and each Purchaser will, severally and
not jointly, purchase from the Company the number of shares of
Common Stock (the
"Shares") set forth
opposite such
Purchaser's
name on Exhibit A
hereto. The
purchase price for
each Share shall be $25.00 (the "Purchase Price"), which
represents a discount
of approximately 7.7% to the closing bid price of the
Common Stock as reported on NASDAQ (symbol "EEFT") as the 4:00 p.m. EST
closing
bid price on March 7, 2007.
Section 1.2 Payment.
At the Closing, each Purchaser will pay the
aggregate Purchase Price set forth opposite its name on Exhibit A
hereto by wire
transfer of immediately available funds in accordance with wire instructions
provided by the Company to the Purchasers prior to the Closing. At or promptly
following the Closing,
the Company will instruct its transfer agent to deliver
stock certificates to the Purchasers representing the Shares
against delivery of
the aggregate Purchase Price on the Closing Date.
Section 1.3 Closing Date. The closing of the transaction
contemplated
by this Agreement
will take place on or about March 12, 2007 (the "Closing
Date") and the closing
(the "Closing")
will be held at the
offices of Stinson
Morrison Hecker LLP, 1201 Walnut, Suite 2900, Kansas City, Missouri
64106, or at
such other
time and place as shall be agreed upon by
<PAGE>
the Company
and the Purchasers hereunder of a majority in interest of the
aggregate number of Shares purchased hereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to the Purchasers
that:
Section 2.1 Organization and Qualification; Subsidiaries. Each of the
Company and its subsidiaries is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization,
with corporate
power and authority to conduct its business as currently
conducted as
disclosed
in the SEC Documents. Each of the Company and its subsidiaries is
duly qualified
to do business and is in good standing in every jurisdiction in
which the nature
of the business conducted by it or property owned by it makes such
qualification
necessary, except
where the failure to be so qualified or in good standing,
as
the case may be, would
not reasonably be expected, individually or in the
aggregate, to
have a Material Adverse Effect. The only corporations,
associations or other entities currently majority owned or
controlled,
directly
or indirectly,
by the Company are the
entities listed in Exhibit 21.1 to the
Company's Annual
Report on Form 10-K
for the fiscal year
ended December
31,
2006.
Section 2.2 Authorization; Enforcement. The Company has all
requisite corporate
power and authority to enter into and to perform its
obligations
under this
Agreement, to
consummate the transactions contemplated hereby and to issue
the
Shares in accordance with the terms hereof. The execution, delivery and
performance of this
Agreement by the Company and the consummation by it of the
transactions
contemplated
hereby (including the issuance of the
Shares) have
been duly authorized
by the Company's Board of Directors and no further consent
or authorization of
the Company, its Board of Directors, or its stockholders is
required. This Agreement has been duly
executed by the Company and constitutes
a legal, valid and binding obligation of
the Company
enforceable against
the
Company in accordance
with its terms, except
as enforceability may
be limited
by applicable
bankruptcy, insolvency, reorganization, or moratorium or
similar
laws affecting
creditors' and
contracting parties' rights generally and except
as enforceability
may be subject to
general principles of equity and except as
rights to indemnity and contribution may be limited by state or federal
securities laws or
public policy underlying such laws.
Section 2.3
Capitalization.
The authorized capital stock of the
Company, as of
February 23, 2007,
consisted of (a) 90,000,000 shares of Common
Stock, of which 37,733,605 shares were issued and outstanding and
(b) 10,000,000
shares of Preferred
Stock, $0.02 par value
per share, none of
which have been
issued. All of the
issued and outstanding shares of Common Stock have been duly
authorized, validly
issued, fully paid,
and nonassessable. As
of February 23,
2007, options to
purchase an aggregate of 2,195,740 shares of Common Stock were
outstanding, the
Company had obligations to issue 1,038,675 shares of unvested
restricted Common
Stock upon vesting and 8,486,618 shares of Common Stock were
reserved for issuance upon conversion of the Company's outstanding convertible
debentures. Except as
disclosed in or
contemplated by the
SEC Documents, the
Company does not have
outstanding
any options to
purchase, warrants,
or any
preemptive rights
or other rights to subscribe for or to purchase, any
securities or obligations convertible into or exchangeable
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for, or any contracts
or commitments
to issue or sell,
shares of its
capital
stock or any such options, rights, convertible securities or
obligations other
than options granted
under the Company's stock option plans and its
employee
stock purchase plan.
Section 2.4 Issuance of Shares. The Shares are duly authorized and,
upon issuance in accordance with the terms of this
Agreement,
will be validly
issued, fully paid and
non-assessable
and shall be free from
all taxes, liens
and charges
(excluding
taxes, liens or charges created by or through the
Purchaser) and will not be subject to preemptive rights or other similar rights
of stockholders
of the Company.
No co-sale
right, right of first refusal or
other similar
right exists with
respect to the Shares or the issuance and sale
thereof. The issue
and sale of the
Shares will not result in a right of any
holder of Company
securities to adjust
the exercise,
conversion, exchange
or
reset price under such securities.
Section 2.5 No
Conflicts; Government
Consents and Permits.
(a) The
execution, delivery
and performance
of this Agreement by the Company and
the
consummation by the Company of the transactions contemplated hereby (including
the issuance of the Shares) will not (i) conflict with or result in a violation
of any provision of its certificate of incorporation or bylaws or require the
approval of the Company's stockholders, (ii) violate or conflict
with, or result
in a breach of any provision of, or constitute a default
under, any agreement,
indenture, or
instrument to which the Company or any of its subsidiaries is a
party, or (iii)
result in a violation
of any law,
rule, regulation, order,
judgment or decree
(including United
States federal and state securities laws
and regulations and regulations of any self-regulatory organizations to which
the Company or its securities are subject) applicable to the Company or any
of
its subsidiaries,
except in the case of
clauses (ii) and (iii) only, for such
conflicts, breaches,
defaults, and violations as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
(b) 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 or any regulatory or self regulatory agency or any other Person in
order
for it to execute, deliver or perform any of its obligations under this
Agreement in accordance with the terms hereof,
or to issue and sell
the Shares
in accordance
with the terms hereof other than such as have been made or
obtained, and except for the registration of the Shares under the
Securities Act
pursuant to Section 6 hereof, any filings required to be made
under federal and
state securities laws,
and any required filings or notifications regarding the
issuance or listing of additional shares with Nasdaq.
(c)
Each of the
Company and its subsidiaries has all franchises,
permits, licenses,
and any similar
authority necessary
for the conduct of its
business as now being
conducted by it, except for such franchise, permit,
license or
similar authority, the lack of which would not reasonably be
expected, individually
or in the aggregate,
to have a Material Adverse Effect.
Neither of the Company
nor its subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such
franchise, permit,
license, or similar authority except where such revocation or
modification would
not reasonably be expected, individually or in the aggregate, to
have a Material
Adverse Effect.
Section 2.6 SEC Documents, Financial Statements. (a) The Company has
timely filed all
reports, schedules,
forms, statements and other documents
required to be filed by
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it with the SEC during
the 24 months preceding the date of this Agreement,
pursuant to the reporting requirements of the Exchange Act (all of
the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and
schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to herein as the
"SEC Documents"). As of their respective dates, the SEC Documents
complied as to
form in all material respects with the requirements of the Exchange
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
in order to make the
statements therein,
in light of the
circumstances under
which they were made,
not misleading. The
Financial Statements
have been prepared in accordance with
accounting principles
generally accepted in the United
States, consistently
applied, during the
periods involved (except (i) as may be otherwise indicated
in the Financial
Statements
or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may not include
footnotes, may
be condensed
or summary statements or may conform to the SEC's rules and
instructions for
Reports on Form 10-Q) and fairly present in all material
respects the
consolidated
financial position of the Company as of the dates
thereof and the
consolidated results
of its operations and
cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal and
recurring year-end
audit adjustments). There is no material transaction,
arrangement, or other
relationship between the Company and an unconsolidated or
other off balance
sheet entity that is
required to be disclosed by the Company
in its Exchange Act
filings and is not so
disclosed. All
material
agreements
that were required to be filed as exhibits to the Annual Report on
Form 10-K for
the fiscal year ended
December 31, 2006 under Item 601 of Regulation S-K
(collectively, the
"Material Agreements") to which the Company or any of
its
subsidiaries are a
party, or to which the
property or assets of the Company or
any of its
subsidiaries are
subject, have been filed or incorporated by
reference as
exhibits to the Annual Report on Form 10-K for the fiscal
year
ended December 31,
2006. Each of the Company and its
subsidiaries
is not in
breach of or default
under any of the Material Agreements to which it is a
party, and to the Company's Knowledge, no other party to a Material
Agreement is
in breach of or default under such Material Agreement, except, in
each case, for
such breaches or defaults as would not reasonably be expected,
individually
or
in the aggregate, to have a Material Adverse Effect. Neither the
Company nor any
of its subsidiaries
has received a written
notice of termination of any of the
Material Agreements.
Except with respect to the matters covered by the
Confidentiality
Agreement executed by
the applicable
Purchaser,
the Company
confirms that
neither it nor any
person acting on its
behalf has provided any
Purchaser or its
agents or counsel with any information that the Company
believes constitutes material, non-public information.
The Company
understands
and confirms that each
Purchaser will rely on the foregoing representation in
effecting transactions in securities of the Company.
(b) As of the date hereof the Company is a well-known seasoned issuer
(a "WKSI") and is not an ineligible issuer, each as defined in Rule 405
under
the Securities Act. The Company meets the requirements for the use of Form S-3
for the registration of the resale of the Shares by the
Purchasers.
Section 2.7 Absence of Litigation. As of the date hereof, there is
no
action, suit or
proceeding before or
by any court, public
board, government
agency,
self-regulatory
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organization or body pending or, to the Company's Knowledge,
threatened against
the Company or any of its subsidiaries that, if determined adversely would
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. To the Knowledge of the Company, as of the date
hereof, there is
no investigation
before or by any
court, public board, government agency,
self-regulatory
organization or body pending or threatened against the Company
or any of its
subsidiaries that, if
determined adversely
would reasonably
be
expected, individually
or in the aggregate,
to have a Material Adverse Effect.
To the Knowledge of the Company, there is not pending any
investigation by
the
SEC involving
the Company or any
current or former
director or officer of the
Company. The Company
has not received any stop order or other order suspending
the effectiveness of
any registration
statement filed by the Company under the
Exchange Act or the Securities Act and, to the Company's Knowledge,
the SEC has
not issued any such order.
Section 2.8 Intellectual Property Rights. Each of the
Company and its
subsidiaries owns
or possesses licenses or sufficient rights to use the
inventions (patented
and non-patented),
know-how, trade
secrets,
trademarks,
trademark applications, service marks, service names, trade names
and copyrights
and any other material intellectual property that it is currently
using and that
are necessary
to enable it to
conduct its business as conducted as of the date
hereof (the "Intellectual Property"), except for such Intellectual
Property the
lack of which could not reasonably be expected, individually or in the
aggregate, to result
in a Material Adverse
Effect. Except as
disclosed in the
SEC Documents, neither the Company nor any of its subsidiaries has
infringed the
intellectual property
rights of third parties and no third party, to the
Company's Knowledge and except as disclosed in the SEC Documents,
is infringing
the Intellectual
Property, in each case, which could reasonably be
expected,
individually or in the aggregate, to result in a Material Adverse
Effect. Except
as disclosed in the SEC Documents, there are no material options, licenses or
agreements relating to the Intellectual Property, nor is the Company or any of
its subsidiaries
bound by or a party to any material options, licenses or
agreements relating
to the patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark
applications, service
marks, service names,
trade names or
copyrights of any other person or entity.
As of the date hereof,
there is no
material claim or action or proceeding
pending or, to the Company's Knowledge, threatened, that challenges
the right of
the Company
or any of its subsidiaries with respect to any Intellectual
Property. The
Company and its subsidiaries have taken reasonable security
measures to
protect the secrecy, confidentiality and value of all of their
Intellectual Property.
Section 2.9
Placement Agent. The Company has taken no action
that
would give rise to any claim by any person for brokerage
commissions,
placement
agent's fees or similar payments relating to this Agreement or the
transactions
contemplated hereby,
except for dealings with the Placement Agent, whose
commissions and fees will be paid by the Company.
Section 2.10 Investment Company. The Company is not and, after
giving
effect to the
offering and sale of the Shares, will not be an "investment
company" as such term
is defined in the
Investment
Company Act of 1940, as
amended.
Section 2.11 No
Material Adverse
Effect. Since December 31, 2006,
except as described
or referred to in the SEC
Documents and except for cash
expenditures in the ordinary course of business, there has not been any change
in the business,
financial condition, results of
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operations, its assets
or liabilities except for any such change that would not
reasonably be
expected to result, individually or in the aggregate, in a
Material Adverse
Effect. No event, liability or development
has occurred or
exists with
respect to the
Company or its
subsidiaries
or their respective
business, properties,
operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws at
the time this
representation is made that has not been publicly disclosed at
least one trading
day prior to the date that this representation is made.
Section 2.12 Nasdaq Global Select Market. The issued and outstanding
shares of Common Stock are listed on Nasdaq, and, to the Company's Knowledge,
there are no
proceedings to revoke
or suspend such listing. The Company is in
compliance in all
material respects with the requirements of Nasdaq for
continued listing of
the Common Stock thereon and any other Nasdaq listing and
maintenance requirements and has no knowledge of any facts or
circumstances that
would reasonably
lead to delisting or
suspension of the Common Stock by Nasdaq
in the foreseeable future.
Section 2.13 Acknowledgment Regarding Purchasers' Purchase of
Shares.
The Company acknowledges and agrees that each of the Purchasers is
acting solely
in the capacity of an arm's length purchaser with respect to this
Agreement and
the transactions
contemplated hereby.
The Company further acknowledges that no
Purchaser is acting as
a financial advisor or
fiduciary of the
Company (or in
any similar
capacity with respect to the Company), with respect to this
Agreement and the transactions contemplated hereby and any advice given by
any
Purchaser or any of their respective representatives or agents to
the Company in
connection with this
Agreement and the transactions contemplated hereby is
merely incidental
to such Purchaser's purchase of the Shares. The Company
further represents to
each Purchaser that the Company's decision to enter into
this Agreement
has been based upon the independent evaluation of the
transactions contemplated hereby by the Company and its
representatives.
Section 2.14
Accountants. KPMG LLP,
who have expressed their opinion
with respect to the audited financial statements and schedules that will be
included as a part of the Registration Statement, are independent
accountants as
required by the Securities Act.
Section 2.15
Insurance.
Each
of the Company and its Material
Subsidiaries is
insured by insurers
of recognized financial responsibility
against such losses
and risks and in such
amounts as the Company
believes are
prudent for a company (i) in the businesses and location in which
the Company or
the Material Subsidiary, as applicable, is engaged, and
(ii) with the resources
of the Company or the Material Subsidiary, as applicable, as
applicable. Neither
the Company nor any of the Material Subsidiaries has received any
notice that it
will not be able to renew its existing insurance coverage as and when such
coverage expires.
The Company and its
Material Subsidiaries
have not received
any notice that the
Company will not be
able to renew its
existing insurance
coverage at a reasonable cost as and when such coverage
expires.
Section 2.16 Foreign Corrupt Practices. Neither the Company nor any
of
its subsidiaries nor, to the Company's Knowledge, any director,
officer, agent,
employee or
other person acting on behalf of the Company or any of its
subsidiaries has, in the course of its actions for, or on behalf
of, the Company
or any subsidiary, (i)
used any corporate funds for any
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unlawful contribution,
gift, entertainment or
other unlawful expenses relating
to political activity;
(ii) made any direct or indirect unlawful payment to any
foreign or domestic
government official or employee from corporate funds; (iii)
violated or is in
violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977,
as amended;
or (iv) made any
unlawful bribe,
rebate,
payoff, influence payment, kickback or other unlawful payment
to any foreign or
domestic government
official or employee;
except in the cases of
clauses (i),
(ii) and (iv) only, as would not reasonably be expected,
individually or in
the
aggregate, to have a Material Adverse Effect.
Section 2.17
Private Placement. Neither the Company nor any
person
acting on its or their behalf, has, directly or indirectly,
made any offers or
sales of any security or solicited any offers to buy any security, under any
circumstances that would require registration of the Shares under
the Securities
Act; provided
that no representation or warranty is made pursuant to this
Section 2.17 with
respect to the
Placement Agent.
None of the
Company, its
subsidiaries, any of their affiliates, or any Person acting on
their behalf has,
directly or
indirectly, made any
offers or sales of any
security or solicited
any offers
to buy any security, under circumstances that would require
registration of any of
the Shares
under the Securities Act or cause this
offering of the Shares to be integrated with prior offerings by the
Company for
purposes of
the Securities Act or any applicable stockholder approval
provisions, including,
without limitation,
under the rules and
regulations of
Nasdaq.
Section 2.18 No
Registration Rights.
No person has the
right to (i)
prohibit the Company from filing the Registration Statement or (ii) other than
as disclosed
in the SEC Documents, require the Company to register any
securities for sale
under the Securities Act by reason of the filing of the
Registration Statement. The granting and performance of
the registration rights
under this Agreement will not violate or conflict with, or result
in a breach of
any provision of, or constitute a default under, any agreement, indenture or
instrument to which the Company is a party.
Section 2.19
Application of
Takeover Protections.
Assuming that no
Purchaser will become
an Interested
Stockholder within the
meaning of Section
203 of the Delaware General Corporation Law or become an Acquiring
Person within
the meaning of the
Company's stockholder
rights plan as result
thereof, the
execution and
delivery of this Agreement and the consummation of the
transactions
contemplated hereby
will not impose any restriction on any
Purchaser, or create
in any party
(including any current
stockholder
of the
Company) any rights, under any share acquisition, business combination, poison
pill (including any
distribution under a
rights agreement),
or other similar
anti-takeover
provisions under the Company's charter documents or the laws of
its state of incorporation.
Section 2.20 Sarbanes-Oxley Act. The Company is in material
compliance
with all applicable
provisions of the U.S.
Sarbanes-Oxley Act of 2002 that are
effective and the rules and regulations promulgated in connection
therewith.
Section 2.21 Internal Accounting Controls. The Company maintains (i)
effective internal
control over financial
reporting as defined
in Rule 13a-15
under the Securities
Exchange Act of 1934, as amended, and (ii) a system of
internal accounting controls sufficient to provide reasonable
assurance that (A)
transactions are
executed in accordance with
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management's general or specific authorizations; (B) transactions are recorded
as necessary to permit
preparation of financial statements in conformity
with
generally accepted accounting principles and to maintain asset
accountability;
(C) access to assets is permitted only in accordance with
management's
general
or specific
authorization; and (D)
the recorded
accountability for
assets is
compared with the existing assets at reasonable intervals and
appropriate action
is taken with respect
to any differences.
The Company maintains disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the
Exchange Act) that are designed to provide reasonable assurance
that information
required to be
disclosed in the
Company's reports under the Exchange Act is
recorded, processed,
summarized and
reported within the time periods specified
in the rules and forms of the SEC, and that such information is accumulated and
communicated to the Company's management, including its Chief Executive
Officer
and Chief Financial Officer, as appropriate, to allow timely
decisions regarding
required disclosures.
Section 2.22
Taxes. The Company and each of its subsidiaries has
timely filed (or has
obtained an
extension of time within which to file)
all
necessary federal,
state and foreign
income and franchise
tax returns and has
paid all taxes shown as due on such tax returns, except where the failure to so
file or the failure
to so pay would not reasonably be expected to have a
Material Adverse Effect.
Section 2.23 No Manipulation of Stock. The Company has not, and to
its
knowledge no one acting on its behalf has, taken, nor will it take,
directly or
indirectly, any action
designed to
stabilize or
manipulate
the price of the
Common Stock or any security of the Company to facilitate
the sale or resale
of
any of the Shares.
Section 2.24
Related Party Transactions. Except with respect to
transactions (i) that
are not required to be
disclosed and (ii)
contemplated
hereby to the extent any director or executive officer or an Affiliate of any
director or executive officer purchases Securities hereunder, all transactions
that have occurred between or among the Company, on the one hand,
and any of its
executive officers or
directors,
or any Affiliate or Affiliates of any such
officer or director,
on the other
hand, prior to the date hereof have been
disclosed in the SEC Documents.
Section 2.25
Disclosure. The
representations
and warranties of
the
Company contained
herein are true and
correct in all material respects and do
not contain
any untrue statement of a material fact or omit to state any
material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
Section 2.26 U.S. Real Property Holding Corporation. The Company is
not, nor has it ever been, a U.S. real property holding
corporation
within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended.
Section 2.27
Insolvency.
The Company and its subsidiaries,
individually and on a
consolidated basis,
are not as of the date
hereof, and
after giving
effect to the
transactions
contemplated
hereby to occur at
the
Closing, will not be Insolvent (as defined below). For purposes of
this Section.
"Insolvent" means,
with respect to any Person (i) the
present fair
saleable
value of the such Person's assets is less than the amount
required to pay
such
Person's
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total indebtedness, (ii) such Person is unable to pay its debts and
liabilities,
subordinated,
contingent or
otherwise, as such
debts and liabilities
become
absolute and matured,
(iii) such Person
intends to incur or
believes that it
will incur debts that would be beyond its ability to pay as such debts
mature,
or (iv) such Person has unreasonably small capital with which to conduct the
business in
which it is
engaged as such business is now conducted and is
proposed to be conducted.
Section 2.28 Title.
The Company and its
subsidiaries
have good and
marketable title to
all real property and
good title to all personal property
owned by them which is material to the business of the Company and its
subsidiaries, in each
case free and clear of all liens, encumbrances and
defects, except for such liens, encumbrances and defects as are
disclosed in the
SEC Documents, or
arise under the credit facilities that have been entered into
by the Company and its
subsidiaries, or as
would not reasonably
be expected,
individually or in the aggregate, to result in a Material
Adverse Effect.
Any
real property
and facilities held under lease by the Company and any of
its
subsidiaries are held
by them under valid,
subsisting and
enforceable leases
with such exceptions as would not reasonably be expected,
individually or in the
aggregate, to result in a Material Adverse Effect.
Section 2.29 Environmental Laws. The Company and its
subsidiaries (i)
are in compliance with any and all Environmental Laws (as
hereinafter
defined),
(ii) have received all
permits, licenses or
other approvals
required of them
under applicable
Environmental Laws to conduct their respective businesses and
(iii) are in
compliance
with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (i),
(ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect. The term
"Environmental Laws" means
all federal, state, local or foreign laws relating to pollution or
protection of
human health or the environment (including, without limitation, ambient air,
surface water,
groundwater,
land surface or
subsurface
strata), including,
without limitation,
laws relating to emissions, discharges, releases or
threatened releases
of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing,
distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Materials,
as well as all
authorizations, codes,
decrees, demands or demand letters,
injunctions,
judgments, licenses,
notices or notice
letters, orders, permits,
plans or regulations issued, entered, promulgated or approved
thereunder.
Section 2.30
Employee Relations. Except as disclosed in the SEC
Documents, neither the
Company nor any of its
Subsidiaries
is a party to any
collective bargaining
agreement. Except as
disclosed in the SEC Documents, no
executive officer of
the Company has notified the Company that such executive
officer intends to
leave the Company or
otherwise terminate such executive
officer's employment
with the Company. The
Company and its subsidiaries are in
compliance with all
federal, state, local and foreign laws and regulations
respecting labor,
employment and employment practices and benefits,
terms and
conditions of
employment
and wages and hours,
except where
failure to be in
compliance would not,
either individually
or in the aggregate,
reasonably be
expected to result in a Material Adverse Effect.
Section 2.31
Subsidiary
Rights. Except as set forth in the SEC
Documents and except
as provided in the credit facilities entered into by the
Company and its
subsidiaries, the
9
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Company or one of its
subsidiaries
has the right to vote, and (subject to
limitations imposed by
applicable law) to receive dividends and distributions
on, all capital
securities of its
subsidiaries as owned by the Company or such
subsidiary.
Section 2.32 Acknowledgement Regarding Purchasers' Trading Activity.
It is understood and
acknowledged
by the Company that,
except as provided
in
Section 3.11 and subject to compliance by the Purchasers
with applicable law,
(i) none of the Purchasers have been asked by the Company or its
Subsidiaries to
agree, nor has any
Purchaser agreed with
the Company or its
Subsidiaries, to
desist from purchasing or selling, long and/or short, securities of
the Company,
or "derivative"
securities based on securities issued by the Company or to hold
the Shares for any specified term; (ii) any Purchaser, and counterparties in
"derivative"
transactions to which
any such Purchaser is a party, directly or
indirectly, presently may have a "short" position in the Common
Stock, and (iii)
each Purchaser shall not be deemed to have any affiliation
with or control
over
any arm's length
counterparty
in any "derivative" transaction. The Company
further understands
and acknowledges that, subject to compliance by the
Purchasers with
applicable
law, one or more
Purchaser may engage in hedging
and/or trading activities at various times during the period that
the Shares are
outstanding and (b) such hedging and/or trading activities, if any, can reduce
the value of the existing stockholders' equity interest in the Company
both at
and after the time the hedging and/or trading activities are being conducted.
The Company
acknowledges
that such aforementioned hedging and/or trading
activities do not constitute a breach of this Agreement, or any of
the documents
executed in connection herewith.
ARTICLE III
PURCHASER'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
Each Purchaser
represents and warrants to the Company, severally and
not jointly, with respect to itself and its purchase hereunder,
that:
Section 3.1 Investment Purpose. The Purchaser is purchasing the
Shares
for its own account
and not with a present
view toward the public sale or
distribution thereof and has no intention of selling or
distributing any of such
Shares or any arrangement or understanding with any other persons regarding
the
sale or distribution
of such Shares except in accordance with the provisions of
Article VI or except as would not result in a violation of the
Securities
Act.
The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or
otherwise dispose of
(or solicit
any offers to buy, purchase or otherwise
acquire or take a
pledge of) any of the
Shares (including
hedging in respect
thereof) except in
accordance with the
provisions of Article VI or pursuant to
and in accordance with the Securities Act.
Section 3.2
Questionnaires.
Purchaser has submitted to the Company a
Purchaser
Questionnaire and a
Registration Statement
notice and questionnaire
substantially in the
form of Exhibit B hereto and such questionnaire shall be
accurate and correct when delivered and as of the Closing Date.
Section 3.3 Reliance on Exemptions. The Purchaser understands that
the
Shares are being
offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and
state securities
laws, including
Section 4(2) of the
10
<PAGE>
Securities Act and
Rule 506 of Regulation D thereunder and that the Company is
relying upon the truth and accuracy of, and the Purchaser's
compliance with, the
representations,
warranties, agreements, acknowledgments and understandings
of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the
Shares.
Section 3.4
Information. The
Purchaser has had the
opportunity
to
review the SEC
Documents.
At a reasonable time prior to the Offering, the
Purchaser has been afforded the opportunity to ask questions and
receive answers
concerning the terms and conditions of the Offering and to obtain
any additional
information which the
Company possesses
or can acquire
without unreasonable
effort or expense that is necessary to verify the accuracy of the
information
contained in
the SEC Documents. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its
representatives
or counsel shall modify, amend or affect such Purchaser's
right to rely on
the
truth, accuracy
and completeness of the SEC Documents and the Company's
representations and warranties contained herein.
Section 3.5
Acknowledgement of
Risk. (a) The Purchaser acknowledges
and understands that its investment in the Shares involves a
significant degree
of risk, including,
without limitation, (i) an investment in the Company is
speculative, and only
Purchasers
who can afford the loss of their entire
investment should
consider investing in the Company and the
Shares; (ii) the
Purchaser may not be able to liquidate its investment; (iii) transferability of
the Shares is limited;
(iv) in the event of a
disposition of the
Shares, the
Purchaser could sustain the loss of its entire investment; (v) the Company has
not paid any dividends on its Common Stock since inception and does not
anticipate the payment of dividends in the foreseeable future and
(vi) the "Risk
Factors" included in the Company's Annual Report on Form 10-K for
the year ended
December 31, 2006. Such risks are more fully set forth in the SEC
Documents;
(b) The Purchaser
is an "accredited investor" as defined in Rule
501(a) of Regulation D under the Securities Act. The Purchaser is able to
bear
the economic
risk of holding the Shares for an indefinite period, and has
knowledge and
experience
in financial
and business matters such that it is
capable of evaluating the risks of the investment in the Shares;
and
(c) The Purchaser has, in connection with the Purchaser's
decision to
purchase Shares,
not relied upon any representations or other information
(whether oral or
written) other than as
set forth in the
representations
and
warranties of the Company contained herein, and the Purchaser has, with
respect
to all matters
relating to this Agreement and the offer and sale of the
Shares,
relied solely upon the advice of such Purchaser's own counsel and
has not relied
upon or consulted any counsel to the Placement Agent or counsel to
the Company.
Section 3.6
Governmental Review.
The Purchaser
understands that
no
United States federal
or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Shares
or an investment therein.
11
<PAGE>
Section 3.7 Transfer or Resale. The Purchaser understands that:
(a) the Shares have
not been and are not being registered under the
Securities Act (other
than as contemplated
in Article
VI) or any
applicable
state securities laws and, consequently, the Purchaser may have to
bear the risk
of owning the Shares for an indefinite period of time because the
Shares may not
be transferred unless (i) the resale of the Shares is registered
pursuant to an
effective registration
statement under the Securities Act, as
contemplated in
Article VI;
(ii) the Purchaser has delivered to the Company an opinion of
counsel (in form, substance and scope reasonably satisfactory to
the Company) to
the effect that the Shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; or (iii) the
Shares are sold or
transferred pursuant to Rule 144;
(b) any sale of the Shares made in reliance on Rule 144 may be made
only in accordance with the terms of Rule 144 and, if Rule 144 is not
applicable, any
resale of the Shares
may require
compliance
with some other
exemption under the
Securities
Act or the rules
and regulations of the SEC
thereunder; and
(c) except as set forth in Article VI, neither the Company nor any
other person is under any obligation to register the resale
of the Shares under
the Securities Act or any state securities laws or to comply with
the terms and
conditions of any exemption thereunder.
Section 3.8 Legends.
(a) The Purchaser
understands the
certificates
representing the
Shares will bear a
restrictive legend in
substantially
the
following form (and a stop-transfer order may be placed against
transfer of the
certificates for such Shares) while a legend is required on such
Shares:
THE SHARES
REPRESENTED BY THIS
CERTIFICATE HAVE NOT
BEEN REGISTERED
UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED, OR THE
SECURITIES
LAWS OF ANY
STATE OF THE UNITED
STATES. THE SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED,
TRANSFERRED
OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT
FOR THE SHARES UNDER
APPLICABLE
SECURITIES
LAWS, OR
UNLESS OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE
COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL
SATISFACTORY
TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. NOTWITHSTANDING THE FOREGOING,
THE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER
LOAN OR FINANCING
ARRANGEMENT SECURED BY
THE SHARES TO THE EXTENT EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT.
Section 3.9
Authorization;
Enforcement.
The Purchaser has all
requisite power and
authority to enter into this Agreement, to perform its
obligations hereunder
and to consummate the transactions contemplated hereby.
The Purchaser
has taken all necessary action to authorize the execution,
delivery and
performance
of this Agreement. This Agreement has been duly
executed by the Purchaser and constitutes a valid and binding
obligation of the
Purchaser enforceable in accordance with its terms, except as
enforceability may
be limited by
12
<PAGE>
applicable bankruptcy,
insolvency,
reorganization,
moratorium or similar laws
affecting creditors'
and contracting
parties' rights
generally and except
as
enforceability may be
subject to
general principles of equity and except as
rights to indemnity and contribution may be limited by state or federal
securities laws or public policy underlying such laws.
Section 3.10
Residency.
The Purchaser is a resident of the
jurisdiction set forth
immediately below such Purchaser's name on the signature
pages hereto.
Section 3.11 No Transactions. Between the time the Purchaser
learned
about the Offering
and the public
announcement
or public disclosure of the
Offering pursuant
to Section 4.4, the Purchaser has not engaged in any
transactions with
respect to the Common Stock, nor has the Purchaser, directly
or indirectly, caused
any Person to engage in any transactions with respect to
the Common Stock.
Section 3.12
Acknowledgements
Regarding Placement Agent. (a) The
Purchaser acknowledges
that the Placement Agent is acting as the exclusive
placement agent on a
"best efforts"
basis for the Shares
being offered hereby
and will be
compensated
by the Company for acting in such capacity. The
Purchaser represents that (i) the Purchaser has a pre-existing
relationship with
the Placement Agent, (ii) the Purchaser was contacted regarding the sale of the
Shares by the Placement Agent (or an authorized agent or
representative thereof)
with whom the Purchaser entered into a confidentiality agreement and (iii) no
Shares were offered or
sold to it by means of any form of general solicitation
or general advertising.
(b) The Purchaser
acknowledges
that the Placement Agent and its
directors, officers, employees, representatives and controlling
persons have no
responsibility for
making any independent
investigation
of the Company's
SEC
Documents and make no
representation or
warranty to the Purchaser, express or
implied, with respect to the Company or the Shares or the accuracy,
completeness
or adequacy of the
Company's SEC
Documents or any other publicly available
information, nor shall
any of the foregoing
persons be liable for
any loss or
damages of any kind resulting from the use of the information
contained therein
or otherwise supplied to the Purchaser. In addition, the Purchaser
acknowledges
that it has not relied on information provided by any of such
persons but has
conducted its own investigation.
Section 3.13 Review of Schedule 1. The Purchaser acknowledges receipt
and review of the information set forth in Schedule 1.
ARTICLE IV
COVENANTS
---------
Section 4.1 Reporting Status. The Company's Common Stock is
registered
under Section 12 of
the Exchange
Act. During the Registration Period, the
Company agrees to use commercially reasonable efforts to timely (or within
the
periods permitted
under Rule 12b-25 of
the Exchange Act) file with the SEC all
reports required to be so filed under the Exchange Act, and the
Company will not
terminate its status
as an issuer required
to file reports under
the Exchange
Act even if the
Exchange Act or the
rules and regulations thereunder would
permit such termination.
13
<PAGE>
Section 4.2 Expenses. The Company and each Purchaser is each
severally
and not jointly liable
for, and each will
pay, its own
expenses incurred in
connection with the
negotiation,
preparation,
execution and delivery
of this
Agreement, including,
without limitation,
attorneys' and consultants' fees and
expenses.
Section 4.3
Information. (a) The
Company agrees that
the financial
statements of the
Company to be included
in any documents
filed with the SEC
will be prepared in accordance with accounting principles generally accepted
in
the United
States, consistently applied (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 not include footnotes,
may be condensed
or summary
statements
or may conform to the
SEC's rules and
instructions for
Reports on Form 10-Q), and will fairly present in all material
respects the
consolidated financial
position of the
Company and
consolidated
results of its operations and cash flows as of, and for the periods
covered by,
such financial
statements (subject,
in the case of
unaudited statements,
to
normal and recurring year-end audit adjustments).
(b) The Company
covenants and agrees
that neither it nor
any other
Person acting on its
behalf will provide any Purchaser or its agents or counsel
with any information that the Company believes constitutes material non-public
information, unless
prior thereto such Purchaser shall have executed a written
agreement regarding
the confidentiality
and use of such
information after the
date hereof. The
Company understands
and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions
in securities
of the Company.
Section 4.4 Securities Laws Disclosure; Publicity. On or before 9:30
a.m., New York local
time, on March 8, 2007 the Company shall issue a press
release or Form 8-K
announcing the signing of this Agreement and describing the
material terms of the transactions contemplated by this Agreement,
including the
contemplated use of proceeds. The Company acknowledges that, after
the filing of
such Form 8-K or issuance of such press release, the Purchasers will no longer
be in possession of material non-public information regarding the
Company or the
Offering that has been
provided by or on
behalf of the Company.
On or before
March 12, 2007, the Company shall file a Current Report on Form 8-K
with the SEC
describing the terms of the transactions contemplated by this Agreement and
the
contemplated use of
proceeds and including as an exhibit to such Current Report
on Form 8-K this
Agreement, in the form
required by the Exchange Act. The
Company shall not
publicly disclose any information concerning a Purchaser
without the prior written consent of such Purchaser, except for disclosure of
the name of such
Purchaser and the type and amount of securities of the Company
held by such Purchaser
in connection with any legal or regulatory filings
required to be made by the Company or except as otherwise required
by law.
Section 4.5 Sales by
Purchasers. Each
Purchaser will sell any Shares
held by it in compliance with applicable prospectus delivery requirements, if
any, or otherwise in
compliance with the
requirements
for an exemption
from
registration under the Securities Act and the rules and regulations
promulgated
thereunder.
Section 4.6 Pledge of Shares. The Company acknowledges and agrees
that
the Shares may be pledged by a Purchaser in connection with a bona fide margin
agreement or
14
<PAGE>
other loan or financing arrangement that is secured by the Shares.
The pledge of
Shares shall not be deemed to be a transfer, sale or assignment of the Shares
hereunder, and no
Purchasers effecting a pledge of the Shares shall be required
to provide the Company with any notice thereof or otherwise make
any delivery to
the Company
pursuant to this
Agreement;
provided that a Purchaser and its
pledgee shall comply with the provisions of this Agreement in
order to effect a
sale, transfer, or assignment of any such Shares to such pledgee.
At the expense
of the Purchaser
pledging such Shares, the Company hereby agrees to execute and
deliver such
documentation as
pledgee of the Shares may reasonably request in
connection with a pledge of the Shares to such pledgee by a
Purchaser.
Section 4.7 Removal of
Legend. The
Purchaser may request that the
Company remove,
and the Company
agrees to authorize
the removal of any legend
from the Shares (i)
following any sale of
the Shares pursuant to
an effective
Registration Statement or Rule 144, (ii) while a registration
statement covering
the resale of such security is effective under the Securities Act (provided,
however, that
the Purchaser's prospectus delivery requirements under the
Securities Act will remain), or (iii) if such Shares are eligible
for sale under
Rule 144(k). Following
the time a legend is
no longer required for
the Shares
hereunder, the Company
will promptly
following the delivery
by a Purchaser to
the Company's
transfer agent of a legended certificate representing such
securities with notice to the Company, deliver or cause to be delivered
to such
Purchaser a
certificate
representing
such securities that is free from all
restrictive and other
legends. The Company shall cause its
counsel to issue a
legal opinion to the Company's transfer agent promptly after the
effective date
of any registration statement (the "Effective Date") if required by the
Company's transfer
agent to effect the
removal of the legend
hereunder.
The
Company agrees that
following the Effective Date or at such time as such legend
is no longer required
under clause (ii) above, it will, no later than three
trading days following
the delivery by any Purchaser to the Company's transfer
agent of a certificate representing Shares issued with a
restrictive legend with
notice to the Company,
deliver or cause to be
delivered to such Purchaser a
certificate representing such Shares that is free from all
restrictive and other
legends. The
Company may not make any notation on its records or give
instructions to
any transfer agent of the Company that enlarge(s) the
restrictions on
transfer set forth
herein. If within
three trading days after
the receipt
by the Company's transfer agent of a legended certificate
representing such Shares (the "Delivery Date"), the Company shall fail to
issue
and deliver to such
Purchaser a
certificate
representing such
Shares that is
free from all
restrictive and other
legends, and if on or
after such Delivery
Date the Purchaser purchases (in an open market transaction or
otherwise) shares
of Common Stock ("Covering Shares") to deliver in
satisfaction of a sale by the
Purchaser of Shares ("Sold Shares") that the Purchaser anticipated receiving
from the Company without any restrictive legend, then the Company shall,
within
three trading
days after the
Purchaser's
request, pay to the Purchaser in
immediately available
funds an amount equal to the number of Sold Shares
multiplied by the excess, if any, of (x) the Purchaser's total purchase price
per share (including brokerage commissions, if any) for the
Covering Shares over
(y) the net proceeds per share (after brokerage commissions, if
any) received by
the Purchaser from the sale of the Sold Shares.
15
<PAGE>
ARTICLE V
CONDITIONS TO CLOSING
---------------------
Section 5.1 Conditions to Obligations of the Company. The Company's
obligation to complete
the purchase and sale of the Shares and deliver
such
stock certificate(s)
to each Purchaser is
subject to the fulfillment or waiver
as of the Closing Date of the following conditions:
(a) Receipt of Funds.
The Company
shall have
received immediately
available funds in the
full amount of the
purchase price for the
Shares being
purchased hereunder
from Purchasers
acquiring 90% of the aggregate Shares set
forth on Exhibit A hereto.
(b) Representations and Warranties. The representations and
warranties
made by each Purchaser
in Article III shall be true and correct in all material
respects, except such
representations
and warranties that are qualified by
materiality or
Material Adverse
Effect which must be true and correct in
all
respects, as if they
had been made on and as of such
date, except that the
accuracy of
representations and
warranties
that by their terms
speak as of a
specified date will be determined as of such date.
(c) Covenants. All
covenants, agreements
and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the
Closing Date
shall have been performed or complied with in all material
respects.
(d) Blue Sky. The Company shall have obtained all necessary
blue sky
law permits and qualifications, or secured exemptions therefrom,
required by any
state for the offer and sale of the Shares.
(e) Absence of Litigation. No proceeding challenging this Agreement
or
the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the
Closing, shall have
been instituted or be
pending before
any court, arbitrator, governmental body, agency or official.
(f) No Governmental Prohibition. The sale of the Shares by the
Company
shall not be prohibited by any law or governmental order or
regulation.
(g) No Stop Order. No
stop order or
suspension of trading shall have
been imposed by Nasdaq, the SEC or any other governmental or regulatory body
with respect to public trading in the Common Stock.
Section 5.2 Conditions to Purchasers' Obligations at the Closing.
Each
Purchaser's obligation
to complete the purchase and sale of the Shares is
subject to the
fulfillment or waiver
as of the Closing Date
of the following
conditions:
(a) Representations and Warranties. The representations and
warranties
made by the Company in Article II that are qualified by
materiality
(including
in the definition of Material Adverse Effect) shall be true and correct
in all
respects as of the Closing Date as if they had been made on
and as of such date
and the
representations and
warranties made by the
Company in Article II that
are not so qualified
shall be true and correct in all material respects
16
<PAGE>
as if they had been made on and as of such date, except that the accuracy of
representations and
warranties that by their terms speak as of a specified date
will be determined as of such date.
(b) Covenants. All
covenants, agreements
and conditions contained in
this Agreement
to be performed by the Company on or
prior to the Closing Date
shall have been performed or complied with in all material
respects.
(c) Blue Sky. The Company shall have obtained all necessary
blue sky
law permits and qualifications, or secured exemptions therefrom,
required by any
state or foreign or other jurisdiction for the offer and sale of
the Shares.
(d) Legal Opinion. The
Company shall have delivered to such Purchaser
an opinion, dated as
of the Closing Date, from (i) Stinson Morrison Hecker LLP,
counsel to the
Company, and (ii) the General Counsel of the Company, in
substantially the
forms attached hereto as Exhibit C-1 and Exhibit C-2,
respectively.
(e) Certificates of
the Company. The
Company shall have delivered to
such Purchaser (i) a certificate of a senior executive officer of the Company,
dated the Closing Date, confirming the satisfaction of the
conditions set forth
in clauses (a) and (b) of this Section 5.2, (ii) a certificate
of the Secretary
or Assistant Secretary of the Company, dated the Closing Date, certifying
as to
the incumbency and
signatures of the officers executing this Agreement and
the
other documents
delivered by the
Company under this Agreement and (iii) a good
standing certificate
of the Company, dated as of a recent date, from the
Secretary of State of the State of Delaware.
(f) Transfer Agent
Instructions. The
Company shall have delivered to
its transfer agent
irrevocable
instructions
to issue to such
Purchaser or in
such nominee
name(s) as
designated
by such Purchaser in writing one or
more
certificates
representing such
number of Shares set forth opposite such
Purchaser's name on Exhibit A hereto.
(g) Absence of Litigation. No proceeding challenging this Agreement
or
the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the
Closing, shall have
been instituted or be
pending before
any court, arbitrator, governmental body, agency or official.
(h) No Governmental Prohibition. The sale of the Shares by the
Company
shall not be prohibited by any law or governmental order or
regulation.
(i) No Stop Order. No
stop order or
suspension of trading shall have
been imposed or
threatened
by Nasdaq,
the SEC or any other
governmental
or
regulatory body with respect to public trading in the Common
Stock.
(j) Outstanding
Shares. The Company shall have delivered to the
Purchasers a letter from the Company's transfer agent certifying the number of
shares of Common Stock
outstanding as of a date within five days of the Closing
Date.
(k) Listed. The Common
Stock shall be
designated
for quotation or
listed on Nasdaq, subject to official notice of issuance.
17
<PAGE>
ARTICLE VI
REGISTRATION RIGHTS
-------------------
Section 6.1 Filing of
Registration
Statement. The Company
shall use
its reasonable best efforts to (i) file with the SEC and have
declared effective
a registration
statement pursuant to Rule 415 under the
Securities
Act (the
"Registration
Statement") covering the resale of the Registrable Securities no
later than 30 days after the Closing Date (the "Filing Date"),
provided that to
the extent then available to the Company, such Registration Statement shall be
an automatic
shelf registration statement on Form S-3 and (ii) effect the
registration,
qualifications or compliances (including, without limitation,
the
execution of
any required undertaking to file post-effective amendments,
appropriate
qualifications or
exemptions under
applicable
blue sky or other
state securities
laws and appropriate
compliance
with applicable
securities
laws, requirements or
regulations) as promptly as practicable after the filing
thereof.
Section 6.2 Expenses. All Registration Expenses incurred in
connection
with any registration,
qualification,
exemption or compliance pursuant to
Section 6.1 shall be borne by the Company. All Selling Expenses relating to
the
sale of securities
registered
by or on behalf of any
Holder shall be borne by
such Holder.
Section 6.3 Registration Defaults. The Company further agrees that,
in
the event that the
Registration Statement
(i) has not been filed
with the SEC
and declared effective
within 30 days after
the Closing Date or (ii) after the
Registration Statement
is declared
effective by the SEC, is suspended by
the
Company or
ceases to remain continuously effective as to all Registrable
Securities for which
it is required to be effective, other than, in each case,
within the time period(s) permitted by Section 6.7(b) (each
such event referred
to in clauses (i) and (ii), a "Registration Default"), for any
thirty-day period
(a "Penalty Period")
during which the
Registration
Default remains uncured
(which initial
thirty-day period shall commence on the fifth Business Day
after
the date of such Registration Default if such Registration
Default has not been
cured by such date),
the Company shall pay in cash to each Purchaser 1% of such
Purchaser's aggregate Purchase Price for such Purchaser's
Registrable Securities
then held by such
Purchaser that are not
then permitted to be sold pursuant to
the Registration Statement for each Penalty Period during which the
Registration
Default remains uncured; provided, however, that if a Purchaser
fails to provide
the Company
with any information that is required to be provided in the
Registration Statement
with respect to such Purchaser as set forth herein, then
the commencement of the Penalty Period with respect to such
Purchaser
described
above shall be
extended until such time as the
Company fails to comply with
Section 6.4(k);
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