SECURITIES PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT (this
“
Agreement ”)
is dated as of March 28, 2008, by and among
INTREPID TECHNOLOGY AND RESOURCES, INC.,
an
Idaho corporation (the “
Company ”),
and the Buyers listed on Schedule I attached
hereto (individually, a “
Buyer ”
or collectively “
Buyers ”).
WITNESSETH
WHEREAS ,
the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities
registration pursuant to Section 4(2) and/or Rule 506 of
Regulation D (“
Regulation D ”)
as promulgated by the U.S. Securities and Exchange Commission (the
“
SEC ”)
under the Securities Act of 1933, as amended (the “
Securities Act ”);
WHEREAS ,
the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to
the Buyer(s), as provided herein, and the Buyer(s) shall purchase
(i) up to Five Hundred Eighty-Five Thousand Dollars ($585,000) of
secured convertible debentures in the form attached hereto as
“
Exhibit A ”
(the “
Convertible Debentures ”),
which shall be convertible into shares of the Company’s
common stock, par value $0. 005
per
share (the “
Common Stock ”
and as converted, the “
Conversion Shares ”),
and (ii) warrants substantially in the form attached hereto as
“
Exhibit B ”
(the “
Warrants ”),
to acquire up to that number of additional shares of Common Stock
set forth opposite such Buyer’s name on Schedule I (as
exercised, the “
Warrant Shares ”)
which shall be funded within five (5) business days following the
date hereof (the “
Closing ”)
for a total purchase price of up to Five Hundred Eighty-Five
Thousand Dollars ($585,000) (the “
Purchase Price ”)
in the respective amounts set forth opposite each Buyer(s) name on
Schedule I (the “
Subscription Amount ”);
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement (the “
Registration Rights Agreement ”)
pursuant to which the Company has agreed to provide certain
registration rights under the Securities Act and the rules and
regulations promulgated there under, and applicable state
securities laws;
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, (i) the
Buyer, the Company, and each subsidiary of the Company are
executing and delivering a Security Agreement (the “
Security Agreement ”)
pursuant to which the Company and its wholly owned subsidiaries
agree to provide the Buyer a security interest in Pledged Property
(as this term is defined in the Security Agreement) and(ii) each
subsidiary of the Company is executing and delivering a Guaranty
dated the date hereof (each a “
Guaranty ”)
in favor of the Buyer;
WHEREAS ,
Within thirty (30) days of the date hereof, the Company will file a
mortgage (the “
Mortgage Agreement ”
and together with the Security Agreement and the Guaranty, the
“
Security Documents ”)
pursuant to which the Company will provide the Holder a second
position security interest in such property located at (a) 501 West
Broadway Suite 200, Idaho Falls, ID 83402, (b) 675 North 700 East,
Rupert ID 83350 and (c) 1449 East 3150 South, Wendell, ID 83355
(the “
Mortgaged Property ”);
WHEREAS ,
Upon filing of the Mortgage Agreement, the Debenture will be
secured by the Mortgage Agreement;
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering
Irrevocable Transfer Agent Instructions (the “
Irrevocable Transfer Agent Instructions ”);
and
WHEREAS ,
the Convertible Debentures, the Conversion Shares, the Warrants,
and the Warrants Shares collectively are referred to herein as the
“
Securities ”.
NOW, THEREFORE ,
in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Buyer(s) hereby
agree as follows:
1.
PURCHASE AND SALE OF CONVERTIBLE DEBENTURES .
(a)
Purchase of Convertible Debentures .
Subject to the satisfaction (or waiver) of the terms and conditions
of this Agreement, each Buyer agrees, severally and not jointly, to
purchase at the Closing and the Company agrees to sell and issue to
each Buyer, severally and not jointly, at the Closing, Convertible
Debentures in amounts corresponding with the Subscription Amount
set forth opposite each Buyer’s name on Schedule I hereto and
the Warrants to acquire up that number of Warrant Shares as set
forth opposite such Buyer’s name in column (5) on Schedule I
.
(b)
Closing Dates .
The Closing of the purchase and sale of the Convertible Debentures
and Warrants shall take place at 10:00 a.m. Eastern Standard Time
on the fifth (5
th )
business day following the date hereof, subject to notification of
satisfaction of the conditions to the Closing set forth herein and
in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyer(s)) (the “
Closing Date ”).
The Closing shall occur on the Closing Date at the offices of
Yorkville Advisors, LLC, 101 Hudson Street, Suite 3700, Jersey
City, New Jersey 07302 (or such other place as is mutually agreed
to by the Company and the Buyer(s)).
(c)
Form of Payment .
Subject to the satisfaction of the terms and conditions of this
Agreement, on the Closing Date, (i) the Buyers shall deliver to the
Company such aggregate proceeds for the Convertible Debentures and
Warrants to be issued and sold to such Buyer at such Closing, minus
the fees to be paid directly from the proceeds of such Closing as
set forth herein, and (ii) the Company shall deliver to each
Buyer, Convertible Debentures and Warrants which such Buyer is
purchasing at such Closing in amounts indicated opposite such
Buyer’s name on Schedule I, duly executed on behalf of the
Company.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES
.
Each
Buyer represents and warrants, severally and not jointly,
that:
(a)
Investment Purpose .
Each Buyer is acquiring the Securities for its own account for
investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, such
Buyer reserves the right to dispose of the Securities at any time
in accordance with or pursuant to an effective registration
statement covering such Securities or an available exemption under
the Securities Act. Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person
to distribute any of the Securities.
(b)
Accredited Investor Status .
Each Buyer is an “
Accredited Investor ”
as that term is defined in Rule 501(a) of Regulation
D.
(c)
Reliance on Exemptions .
Each Buyer understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of,
and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such
Buyer set forth herein in order to determine the availability of
such exemptions and the eligibility of such Buyer to acquire the
Securities.
(d)
Information .
Each Buyer and its advisors (and his or, its counsel), if any, have
been furnished with all materials relating to the business,
finances and operations of the Company and information he deemed
material to making an informed investment decision regarding his
purchase of the Securities, which have been requested by such
Buyer. Each Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its management.
Neither such inquiries nor any other due diligence investigations
conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer’s
right to rely on the Company’s representations and warranties
contained in Section 3 below. Each Buyer understands that its
investment in the Securities involves a high degree of risk. Each
Buyer is in a position regarding the Company, which, based upon
employment, family relationship or economic bargaining power,
enabled and enables such Buyer to obtain information from the
Company in order to evaluate the merits and risks of this
investment. Each Buyer has sought such accounting, legal and tax
advice, as it has considered necessary to make an informed
investment decision with respect to its acquisition of the
Securities.
(e)
No Governmental Review .
Each Buyer understands that no United States federal or state
agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Securities, or the
fairness or suitability of the investment in the Securities, nor
have such authorities passed upon or endorsed the merits of the
offering of the Securities.
(f)
Transfer or Resale .
Each Buyer understands that except as provided in the Registration
Rights Agreement: (i) the Securities have not been and are not
being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) such
Buyer shall have delivered to the Company an opinion of counsel, in
a generally acceptable form, to the effect that such Securities to
be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration
requirements, or (C) such Buyer provides the Company with
reasonable assurances (in the form of seller and broker
representation letters) that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under
the Securities Act, as amended (or a successor rule thereto)
(collectively, “
Rule 144 ”),
in each case following the applicable holding period set forth
therein; (ii) any sale of the Securities made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the
person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption under the Securities
Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to
register the Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any
exemption thereunder.
(g)
Legends .
Each Buyer agrees to the imprinting, so long as is required by this
Section 2(g), of a restrictive legend in substantially the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS.
Certificates
evidencing the Conversion Shares or Warrant Shares shall not
contain any legend (including the legend set forth above), (i)
while a registration statement (including the Registration
Statement) covering the resale of such security is effective
under the Securities Act, (ii) following any sale of such
Conversion Shares or Warrant Shares pursuant to Rule 144,
(iii) if such Conversion Shares or Warrant Shares are eligible
for sale under Rule 144, or (iv) if such legend is not
required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued
by the staff of the SEC). The Company shall cause its counsel
to issue a legal opinion to the Company’s transfer agent
promptly after the effective date (the “
Effective Date ”)
of a Registration Statement if required by the Company’s
transfer agent to effect the removal of the legend hereunder. If
all or any portion of the Convertible Debentures or Warrants are
exercised by a Buyer that is not an Affiliate of the Company (a
“
Non-Affiliated Buyer ”)
at a time when there is an effective registration statement to
cover the resale of the Conversion Shares or the Warrant Shares,
such Conversion Shares or Warrant Shares shall be issued free of
all legends. The Company agrees that following the Effective Date
or at such time as such legend is no longer required under this
Section 2(g), it will, no later than three (3) Trading Days
following the delivery by a Non-Affiliated Buyer to the Company or
the Company’s transfer agent of a certificate representing
Conversion Shares or Warrant Shares, as the case may be, issued
with a restrictive legend (such third Trading Day, the
“
Legend Removal Date ”),
deliver or cause to be delivered to such Non-Affiliated Buyer 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 the restrictions on transfer set forth
in this Section. Each Buyer acknowledges that the Company’s
agreement hereunder to remove all legends from Conversion Shares or
Warrant Shares is not an affirmative statement or representation
that such Conversion Shares or Warrant Shares are freely tradable.
Each Buyer, severally and not jointly with the other Buyers, agrees
that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 2(g) is
predicated upon the Company’s reliance that the buyer will
sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and
that if Securities are sold pursuant to a Registration Statement,
they will be sold in compliance with the plan of distribution set
forth therein.
(h)
Authorization, Enforcement .
This Agreement has been duly and validly authorized, executed and
delivered on behalf of such Buyer and is a valid and binding
agreement of such Buyer enforceable in accordance with its terms,
except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’
rights and remedies.
(i)
Receipt of Documents .
Each Buyer and his or its counsel has received and read in their
entirety: (i) this Agreement and each representation, warranty and
covenant set forth herein and the Transaction Documents (as defined
herein); (ii) all due diligence and other information necessary to
verify the accuracy and completeness of such representations,
warranties and covenants; (iii) the Company’s Annual Report
on Form 10-KSB for the fiscal year ended June 30, 2007; (iv) the
Company’s Quarterly Report on Form 10-QSB for the fiscal
quarter ended December 31, 2007 and (v) answers to all questions
each Buyer submitted to the Company regarding an investment in the
Company; and each Buyer has relied on the information contained
therein and has not been furnished any other documents, literature,
memorandum or prospectus.
(j)
Due Formation of Corporate and Other Buyers .
If the Buyer(s) is a corporation, trust, partnership or other
entity that is not an individual person, it has been formed and
validly exists and has not been organized for the specific purpose
of purchasing the Securities and is not prohibited from doing
so.
(k)
No Legal Advice From the Company .
Each Buyer acknowledges, that it had the opportunity to review this
Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. Each
Buyer is relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
.
Except
as set forth under the corresponding section of the Disclosure
Schedules which Disclosure Schedules shall be deemed a part
hereof and to qualify any representation or warranty otherwise
made herein to the extent of such disclosure, the Company
hereby makes the representations and warranties set forth
below to each Buyer:
(a)
Subsidiaries .
All of the direct and indirect subsidiaries of the Company are set
forth in Section 3(a) of the Disclosure Schedule. The Company owns,
directly or indirectly, all of the capital stock or other equity
interests of each subsidiary free and clear of any liens, and all
the issued and outstanding shares of capital stock of each
subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or
purchase securities.
(b)
Organization and Qualification .
The Company and its subsidiaries are corporations duly organized
and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite
corporate power to own their properties and to carry on their
business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the
nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified
or be in good standing would not have or reasonably be expected to
result in (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material
adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company and the
subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “
Material Adverse Effect ”)
and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(c)
Authorization, Enforcement, Compliance with Other
Instruments .
(i) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Convertible Debentures, the Warrants, the Security
Documents, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and each of the other agreements
entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively the
“
Transaction Documents ”)
and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Securities, the reservation for
issuance and the issuance of the Conversion Shares, and the
reservation for issuance and the issuance of the Warrant Shares,
have been duly authorized by the Company’s Board of Directors
and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (iii) the Transaction
Documents have been duly executed and delivered by the Company,
(iv) the Transaction Documents constitute the valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of
creditors’ rights and remedies. The authorized officer of the
Company executing the Transaction Documents knows of no reason why
the Company cannot file the Registration Statement as required
under the Registration Rights Agreement or perform any of the
Company’s other obligations under the Transaction
Documents.
(d)
Capitalization .
The authorized capital stock of the Company consists of Three
Hundred Fifty Million (350,000,000) shares of Common Stock, par
value $0.005 and Five Million (5,000,000) shares of Preferred
Stock, par value $1.00 (“
Preferred Stock ”)
of which 295,579,104 shares of Common Stock and zero shares of
Preferred Stock are issued and outstanding as of March 19, 2008.
All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities.
Except as disclosed in Section 3(d) of the Disclosure Schedule: (i)
none of the Company's capital stock is subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered
or permitted by the Company; (ii) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or
any of its subsidiaries is or may become bound to issue additional
capital stock of the Company or any of its subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its subsidiaries; (iii) there are no
outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing
indebtedness of the Company or any of its subsidiaries or by which
the Company or any of its subsidiaries is or may become bound; (iv)
there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in
connection with the Company or any of its subsidiaries; (v) there
are no outstanding securities or instruments of the Company or any
of its subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any of its subsidiaries is
or may become bound to redeem a security of the Company or any of
its subsidiaries; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (vii) the Company does
not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (viii) the Company
and its subsidiaries have no liabilities or obligations required to
be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the
Company's or its subsidiaries' respective businesses and which,
individually or in the aggregate, do not or would not have a
Material Adverse Effect. The Company has furnished to the Buyers
true, correct and complete copies of the Company's Articles of
Incorporation, as amended and as in effect on the date hereof (the
“
Articles of Incorporation ”),
and the Company's Bylaws, as amended and as in effect on the date
hereof (the “
Bylaws ”),
and the terms of all securities convertible into, or exercisable or
exchangeable for, shares of Common Stock and the material rights of
the holders thereof in respect thereto. No further approval or
authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the
Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s
stockholders.
(e)
Issuance of Securities .
The issuance of the Convertible Debentures and the Warrants is duly
authorized and free from all taxes, liens and charges with respect
to the issue thereof. Upon conversion in accordance with the terms
of the Convertible Debentures or exercise in accordance with the
Warrants, as the case may be, the Conversion Shares and Warrant
Shares, respectively, when issued will be validly issued, fully
paid and nonassessable, free from all taxes, liens and charges with
respect to the issue thereof. The Company has reserved from its
duly authorized capital stock the appropriate number of shares of
Common Stock as set forth in this Agreement.
(f)
No Conflicts .
The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Convertible Debentures and the
Warrants, and reservation for issuance and issuance of the
Conversion Shares and the Warrant Shares) will not (i) result in a
violation of any certificate of incorporation, certificate of
formation, any certificate of designations or other constituent
documents of the Company or any of its subsidiaries, any capital
stock of the Company or any of its subsidiaries or bylaws of the
Company or any of its subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of
time or both would become a default) in any respect under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or
decree (including foreign, federal and state securities laws and
regulations and the rules and regulations of the National
Association of Securities Dealers Inc.’s OTC Bulletin Board)
applicable to the Company or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries is
bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. The
business of the Company and its subsidiaries is not being
conducted, and shall not be conducted in violation of any material
law, ordinance, or regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under
the Securities Act and any applicable state securities laws, the
Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by this Agreement or
the Registration Rights Agreement in accordance with the terms
hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant
to the preceding sentence have been obtained or effected on or
prior to the date hereof. The Company and its subsidiaries are
unaware of any facts or circumstance, which might give rise to any
of the foregoing.
(g)
SEC Documents; Financial Statements .
The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”),
for the two (2) years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file
such material) (all of the foregoing filed prior to the date hereof
or amended after the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as
the “
SEC Documents ”)
on timely basis or has received a valid extension of such time of
filing and has filed any such SEC Document prior to the expiration
of any such extension. The Company has delivered to the Buyers or
their representatives, or made available through the SEC’s
website at http://www.sec.gov., true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied
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 the light of the circumstances under which
they were made, not misleading. As of their respective dates, the
financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers
which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(i) of this
Agreement, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which
they are or were made and not misleading.
(h)
10(b)-5 .
The SEC Documents do not include any untrue statements of material
fact, nor do they omit to state any material fact required to be
stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not
misleading.
(i)
Absence of Litigation .
There is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting
the Company, the Common Stock or any of the Company’s
subsidiaries, wherein an unfavorable decision, ruling or finding
would have a Material Adverse Effect.
(j)
Acknowledgment Regarding Buyer’s Purchase of the Convertible
Debentures .
The Company acknowledges and agrees that each Buyer 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 each Buyer is not acting as a
financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by each Buyer or any of
their respective representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely
incidental to such Buyer’s purchase of the Securities. The
Company further represents to each Buyer that the Company’s
decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its
representatives.
(k)
No General Solicitation .
Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer
or sale of the Securities.
(l)
No Integrated Offering .
Neither the Company, nor any of its affiliates, 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 circumstances that would require registration of
the Securities under the Securities Act or cause this offering of
the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act.
(m)
Employee Relations .
Neither the Company nor any of its subsidiaries is involved in any
labor dispute or, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened. None of the
Company’s or its subsidiaries’ employees is a member of
a union and the Company and its subsidiaries believe that their
relations with their employees are good.
(n)
Intellectual Property Rights .
The Company and its subsidiaries own or possess adequate rights or
licenses to use all trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted. The Company and its
subsidiaries do not have any knowledge of any infringement by the
Company or its subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service
names, service marks, service mark registrations, trade secret or
other similar rights of others, and, to the knowledge of the
Company there is no claim, action or proceeding being made or
brought against, or to the Company’s knowledge, being
threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement; and the Company
and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.
(o)
Environmental Laws .
The Company and its subsidiaries are (i) in compliance with any and
all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“
Environmental Laws ”),
(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.
(p)
Title .
All real property and facilities held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by the Company and its
subsidiaries.
(q)
Insurance .
The Company and each of its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and
its subsidiaries are engaged. Neither the Company nor any such
subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(r)
Regulatory Permits .
The Company and its subsidiaries possess all material certificates,
authorizations and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit.
(s)
Internal Accounting Controls .
The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management’s g
|
