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EXHIBIT 10.19
SECURITIES PURCHASE AGREEMENT
This Securities
Purchase Agreement (this "AGREEMENT") is dated as of
December 27, 2005, among INPLAY
TECHNOLOGIES, INC., a Nevada corporation (the
"COMPANY"), and the investors identified on
the signature pages hereto (each, an
"INVESTOR" and collectively, the
"INVESTORS").
WHEREAS, subject
to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the
Securities Act (as defined below) and Rule
506 promulgated thereunder, the Company
desires to issue and sell to each
Investor, and each Investor, severally and
not jointly, desires to purchase from
the Company certain securities of the
Company, as more fully described in this
Agreement.
NOW, THEREFORE,
IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable
consideration the receipt and
adequacy of which are hereby acknowledged,
the Company and the Investors agree
as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this
Agreement, for all purposes of this
Agreement, the following terms shall have
the meanings indicated in this Section
1.1:
"ACTION" means any action, suit, inquiry, notice of violation,
proceeding (including any partial
proceeding such as a deposition) or
investigation pending or threatened in
writing against or affecting the Company,
any Subsidiary or any of their respective
properties before or by any court,
arbitrator, governmental or administrative
agency, regulatory authority
(federal, state, county, local or foreign),
stock market, stock exchange or
trading facility.
"AFFILIATE" means any Person that, directly or indirectly through
one
or more intermediaries, controls or is
controlled by or is under common control
with a Person, as such terms are used in
and construed under Rule 144 (as
defined below).
"BUSINESS DAY" means any day except Saturday, Sunday and any day
which
is a federal legal holiday or a day on
which banking institutions in the State
of New York are authorized or required by
law or other governmental action to
close.
"CLOSING" has the meaning set forth in Section 2.1.
"CLOSING DATE" means the Business Day immediately following the
date
on which all of the conditions set forth in
Sections 5.1 and 5.2 hereof are
satisfied, or such other date as the
parties may agree.
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"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, $0.001 par
value
per share, and any securities into which
such common stock may hereafter be
reclassified.
"COMMON STOCK EQUIVALENTS" means any securities of the Company or
any
Subsidiary which entitle the holder thereof
to acquire Common Stock at any time,
including without limitation, any debt,
preferred stock, rights, options,
warrants or other instrument that is at any
time convertible into or
exchangeable for, or otherwise entitles the
holder thereof to receive, Common
Stock or other securities that entitle the
holder to receive, directly or
indirectly, Common Stock.
"COMPANY COUNSEL" means the law firm of Greenberg Traurig
L.L.P.
"COMPANY DELIVERABLES" has the meaning set forth in Section
2.1(a).
"EFFECTIVE DATE" means the date that the Registration Statement
required by Section 2(a) of the
Registration Rights Agreement is first declared
effective by the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means U.S. generally accepted accounting principles.
"INVESTOR DELIVERABLES" has the meaning set forth in Section
2.1(b).
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
Section
3.1(p).
"INVESTMENT AMOUNT" means, with respect to each Investor, the
Investment Amount indicated on such
Investor's signature page to this Agreement.
"INVESTOR PARTY" has the meaning set forth in Section 4.7.
"LIEN" means any lien, charge, encumbrance, security interest,
right
of first refusal or other restrictions of
any kind.
"MATERIAL ADVERSE EFFECT" means, as applicable, any of (i) a
material
and adverse effect on the legality,
validity or enforceability of any
Transaction Document, (ii) a material and
adverse effect on the results of
operations, assets, prospects, business or
condition (financial or other) of the
Company and the Subsidiaries, taken as a
whole, or (iii) an adverse impairment
to the Company's ability to perform on a
timely basis its obligations under any
Transaction Document.
"PER SHARE PURCHASE PRICE" equals $2.75.
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"PERSON" means an individual or corporation, partnership,
trust,
incorporated or unincorporated association,
joint venture, limited liability
company, joint stock company, government
(or an agency or subdivision thereof)
or other entity of any kind.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding
(including, without limitation, an
investigation or partial proceeding, such as
a deposition), whether commenced or
threatened.
"RCP" means Roth Capital Partners, LLC.
"REGISTRATION STATEMENT" means a registration statement meeting
the
requirements set forth in the Registration
Rights Agreement and covering the
resale by the Investors of the appropriate
Registrable Securities as identified
in Section 2(a) of the Registration Rights
Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this
Agreement, among the Company and the
Investors, in the form of Exhibit A
hereto.
"RELATED JUDGMENT" has the meaning set forth in Section 6.9.
"RELATED PROCEEDINGS" has the meaning set forth in Section 6.9.
"RULE 144" means Rule 144 promulgated by the Commission pursuant
to
the Securities Act, as such Rule may be
amended from time to time, or any
similar rule or regulation hereafter
adopted by the Commission having
substantially the same effect as such
Rule.
"SEC REPORTS" has the meaning set forth in Section 3.1(h).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock issuable to the Investors
at
the Closing in accordance with Section
2.1.
"SHORT SALES" include, without limitation, all "short sales" as
defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and
all types of direct and indirect stock
pledges, forward sale contracts, options,
puts, calls, short sales, swaps and similar
arrangements (including on a total
return basis), and sales and other
transactions through non-US broker dealers or
foreign regulated brokers.
"SPECIFIED COURTS" has the meaning set forth in Section 6.9.
"SUBSIDIARY" means any "significant subsidiary" as defined in
Rule
1-02(w) of the Regulation S-X promulgated
by the Commission under the Exchange
Act.
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"TRADING DAY" means (i) a day on which the Common Stock is traded
on a
Trading Market, or (ii) if the Common Stock
is not quoted on any Trading Market,
a day on which the Common Stock is quoted
in the over-the-counter market as
reported by the Pink Sheets, LLC (or any
similar organization or agency
succeeding to its functions of reporting
prices); provided, that in the event
that the Common Stock is not listed or
quoted as set forth in (i) and (ii)
hereof, then Trading Day shall mean a
Business Day.
"TRADING MARKET" means whichever of the New York Stock Exchange,
the
American Stock Exchange, the NASDAQ
National Market, the NASDAQ SmallCap Market
or OTC Bulletin Board on which the Common
Stock is listed or quoted for trading
on the date in question.
"TRANSACTION DOCUMENTS" means this Agreement, the Registration
Rights
Agreement, and any other documents or
agreements executed in connection with the
transactions contemplated hereunder.
"WARRANTS" means the warrants to purchase the Common Stock in the
form
of Exhibit B hereto.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing;
Closing Deliveries. On the date hereof, subject to the terms
and conditions set forth in this Agreement,
including the applicable Conditions
Precedent to Closing set forth in Article
V, the Company shall issue and sell to
each Investor, and each Investor shall,
severally and not jointly, purchase from
the Company, a number of Shares and a
Warrant for an amount equal to such
Investor's Investment Amount, all such
number of Shares, number of Warrant
Shares underlying such Warrant and such
Investment Amount as set forth on each
such Investor's signature page attached
hereto. The closing of the transactions
contemplated hereby (the "CLOSING") shall
take place at the offices of Company
Counsel on the Closing Date or at such
other location or time as the parties may
agree. In accordance with the foregoing, at
the Closing:
(a) the Company shall deliver or cause to be delivered to each
Investor the following (the "COMPANY
DELIVERABLES"):
(i) duly and validly executed copies of each of the Transaction
Documents;
(ii) a certificate evidencing a number of Shares equal to such
Investor's
Investment Amount divided by the Per Share Purchase Price,
registered in
the name of such Investor;
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(iii) a certificate representing a Warrant to purchase such
number of
Warrant Shares as is set forth on the signature page hereto for
such Investor in
the name of such Investor; and
(iv) the legal opinion of Company Counsel, in the form attached
hereto as
Exhibit C, addressed to RCP and the Investors.
(b) each Investor shall deliver or cause to be delivered to the
Company the following (the "INVESTOR
DELIVERABLES"):
(i) duly and validly executed copies of each of the Transaction
Documents;
(ii) an aggregate amount in cash equal to the number of Shares
being acquired
by such Investor hereunder multiplied by the Per Share
Purchase Price
for such Shares, by wire transfer of immediately available
funds to an
account designated in writing by the Company.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company. The Company hereby
makes
the following representations and
warranties to each Investor as of the date
hereof and as of the Closing Date:
(a) Subsidiaries. The Company has no direct or indirect
Subsidiaries
other than as specified in the SEC Reports.
The Company owns, directly or
indirectly, all of the capital stock of
each Subsidiary free and clear of any
and all 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.
(b) Organization and Qualification. The Company and each
Subsidiary
are duly incorporated, validly existing and
in good standing under the laws of
the jurisdiction of its incorporation, with
the requisite corporate power and
authority to own and use its properties and
assets and to carry on its business
as currently conducted and described in the
SEC Reports. Neither the Company nor
any Subsidiary is in violation of any of
the provisions of its respective
certificate or articles of incorporation,
bylaws or other organizational or
charter documents except where the
violation would not, individually or in the
aggregate, have or reasonably be expected
to result in a Material Adverse
Effect. The Company and each Subsidiary are
duly qualified to conduct its
respective businesses and are in good
standing as a foreign corporation in each
jurisdiction in which the nature of the
business conducted 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, individually or in
the aggregate, have or reasonably be
expected to result in a Material Adverse
Effect.
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(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into
and to consummate the transactions
contemplated by each of the Transaction
Documents and otherwise to carry out its
obligations thereunder. The execution and
delivery of each of the Transaction
Documents by the Company and the
consummation by it of the transactions
contemplated thereby have been duly
authorized by all necessary corporate action
on the part of the Company and no further
action is required by the Company in
connection therewith. Each Transaction
Document has been (or upon delivery will
have been) duly executed by the Company
and, when delivered in accordance with
the terms hereof, will constitute the valid
and binding obligation of the
Company enforceable against the Company in
accordance with its terms, except as
such enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or
similar laws relating to, or
affecting generally the enforcement of,
creditors' rights and remedies or by
other equitable principles of general
application.
(d) No Conflicts. The execution, delivery and performance of
the
Transaction Documents by the Company and
the consummation by the Company of the
transactions contemplated thereby do not
and will not (i) conflict with or
violate any provision of the Company's or
any Subsidiary's certificate or
articles of incorporation, bylaws or other
organizational or charter documents,
or (ii) conflict with, or constitute a
default (or an event that with notice or
lapse of time or both would become a
default) under, or give to others any
rights of termination, amendment,
acceleration or cancellation (with or without
notice, lapse of time or both) of, any
agreement, credit facility, debt or other
instrument (evidencing a Company or
Subsidiary debt or otherwise) or other
understanding to which the Company or any
Subsidiary is a party or by which any
property or asset of the Company or any
Subsidiary is bound or affected, or
(iii) result in a violation of any law,
rule, regulation, order, judgment,
injunction, decree or other restriction of
any court or governmental authority
to which the Company or a Subsidiary is
subject (including federal and state
securities laws and regulations), or by
which any property or asset of the
Company or a Subsidiary is bound or
affected; except in the case of each of
clauses (ii) and (iii), such as would not,
individually or in the aggregate,
have or reasonably be expected to result in
a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization
or order of, give any notice to, or
make any filing or registration with, any
court or other federal, state, local
or other governmental authority or other
Person in connection with the
execution, delivery and performance by the
Company of the Transaction Documents,
other than (i) the filing with the
Commission of one or more Registration
Statements in accordance with the
requirements of the Registration Rights
Agreement, (ii) filings required by state
securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with
the Commission under Regulation D of
the Securities Act, (iv) the filings
required in accordance with Section 4.5 and
(v) those that have been made or obtained
prior to the date of this Agreement.
(f) Issuance of the Shares and the Warrants. The Shares, the
Warrants
and the Warrant Shares issuable under
Section 2.1 have been duly authorized for
issuance and sale.
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The Shares, when issued and paid for in
accordance with the Transaction
Documents, and the Warrant Shares, when
issued against full payment of the
exercise price as provided in the Warrants,
will be duly and validly issued,
fully paid and nonassessable, and free and
clear of all Liens. The Company has
reserved from its duly authorized capital
stock the shares of Common Stock
issuable pursuant to this Agreement in
order to issue the Shares and the Warrant
Shares.
(g) Capitalization. The number of shares and type of all
authorized,
issued and outstanding capital stock of the
Company, and all shares of Common
Stock reserved for issuance under the
Company's various option and incentive
plans, is specified in the SEC Reports.
Except as specified in the SEC Reports,
no Person has any right of first refusal,
preemptive right, right of
participation, or any similar right to
participate in the transactions
contemplated by the Transaction Documents.
Except as specified in the SEC
Reports, there are no outstanding options,
warrants, scrip rights to subscribe
to, calls or commitments of any character
whatsoever relating to, or securities,
rights or obligations convertible into or
exchangeable for, or giving any Person
any right to subscribe for or acquire, any
shares of Common Stock, or contracts,
commitments, understandings or arrangements
by which the Company or any
Subsidiary is or may become bound to issue
additional shares of Common Stock, or
securities or rights convertible or
exchangeable into shares of Common Stock.
Except as specified in the SEC Reports, the
issue and sale of the Shares and
Warrants, or the issuance of the Warrant
Shares upon exercise of the Warrants,
will not, immediately or with the passage
of time, obligate the Company to issue
shares of Common Stock or other securities
to any Person (other than the
Investors) and will not result in a right
of any holder of Company securities to
adjust the exercise, conversion, exchange
or reset price under such securities.
(h) SEC Reports. The Company has filed all reports required to
be
filed by it under the Securities Act and
the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the 12
months preceding the date hereof (the
foregoing reports and all amendments
thereto being collectively referred to
herein as the "SEC Reports") on a timely
basis or has timely filed a valid
extension of such time of filing and has
filed any such SEC Reports prior to the
expiration of any such extension. As of
their respective dates, the SEC Reports
complied as to form in all material
respects with (i) the requirements of the
Securities Act and the Exchange Act and the
rules and regulations of the
Commission promulgated thereunder and (ii)
any SEC comments received or
otherwise conveyed to the Company with
respect to any previously filed SEC
Reports. In addition, none of the SEC
Reports, as of their respective dates,
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 of the
Company included in the SEC Reports
comply in all material respects with
applicable accounting requirements and the
rules and regulations of the Commission
with respect thereto as in effect at the
time of filing. Such financial statements
have been prepared in accordance with
GAAP applied on a consistent basis during
the periods involved, except as may be
otherwise specified in such financial
statements or the notes thereto, and
fairly present in all material respects the
financial position of the Company
and its consolidated Subsidiaries as of and
for the dates thereof and the
results of operations and
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cash flows for the periods then ended,
subject, in the case of unaudited
statements, to normal, immaterial, year-end
audit adjustments.
(i) Press Releases. The press releases disseminated by the
Company
during the 12 months preceding the date of
this Agreement taken as a whole do
not contain any untrue statement of a
material fact regarding the Company or its
business, financial condition or results of
operations or omit to state a
material fact regarding the Company or its
business, financial condition or
results of operations required to be stated
therein or necessary in order to
make the statements therein, in light of
the circumstances under which they were
made and when made, not misleading.
(j) Material Changes. Since the date of the latest audited
financial
statements included within the SEC Reports,
except as specifically disclosed in
the SEC Reports, (i) there has been no
event, occurrence or development that has
had or that would reasonably be expected to
result in a Material Adverse Effect,
(ii) the Company has not incurred any
liabilities (contingent or otherwise)
other than (A) trade payables, accrued
expenses and other liabilities incurred
in the ordinary course of business
consistent with past practice and (B)
liabilities not required to be reflected in
the Company's financial statements
pursuant to GAAP or required to be
disclosed in filings made with the
Commission, (iii) the Company has not
altered its method of accounting or the
identity of its auditors, (iv) the Company
has not declared or made any dividend
or distribution of cash or other property
to its shareholders or purchased,
redeemed or made any agreements to purchase
or redeem any shares of its capital
stock, and (v) the Company has not issued
any equity securities to any officer,
director or Affiliate, except pursuant to
existing Company stock option plans.
(k) Litigation. There is no Action which (i) adversely affects
or
challenges the legality, validity or
enforceability of any of the Transaction
Documents or the Shares, the Warrants or
the Warrant Shares, or (ii) except as
specifically disclosed in the SEC Reports,
would, if there were an unfavorable
decision with respect thereto, individually
or in the aggregate, have or
reasonably be expected to result in a
Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any
director or officer thereof (in his or her
capacity as such), is or has been the
subject of any Action involving a claim of
violation of or liability under federal or
state securities laws or a claim of
breach of fiduciary duty, except as
specifically disclosed in the SEC Reports.
There has not been, and to the knowledge of
the Company, there is not pending
any investigation by the Commission
involving the Company or any current or
former director or officer of the Company
(in his or her capacity as such). The
Commission has not issued any stop order or
other order suspending the
effectiveness of any registration statement
filed by the Company or any
Subsidiary under the Exchange Act or the
Securities Act.
(l) Labor Relations. No material labor dispute exists or, to
the
knowledge of the Company, is imminent with
respect to any of the employees of
the Company.
(m) Compliance. Neither the Company nor any Subsidiary (i) is
in
default under or in violation, in any
material respect, of (and no event has
occurred that has not been
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waived that, with notice or lapse of time
or both, would result in a default by
the Company or any Subsidiary under), nor
has the Company or any Subsidiary
received notice of a claim that it is in
default under or that it is in
violation, in any material respect, of any
indenture, loan or credit agreement
or any other agreement or instrument to
which it is a party or by which it or
any of its properties is bound (whether or
not such default or violation has
been waived), (ii) is or has been in
violation, in any material respect, of any
order of any court, arbitrator or
governmental body applicable to the Company or
such Subsidiary, as appropriate, or (iii)
is in violation, in any material
respect, of any statute, rule or regulation
of any governmental authority,
including without limitation all foreign,
federal, state and local laws relating
to taxes, environmental protection,
occupational health and safety, product
quality and safety and employment and labor
matters applicable to the Company or
such Subsidiary, as appropriate. The
Company is in compliance, in all material
respects, with all effective requirements
of the Sarbanes-Oxley Act of 2002, as
amended, and the rules and regulations
thereunder, that are applicable to it.
(n)
Regulatory Permits. Except as disclosed in the SEC Reports, the
Company and the Subsidiaries possess all
certificates, authorizations and
permits issued by the appropriate federal,
state, local or foreign regulatory
authorities necessary to conduct their
respective businesses as described in the
SEC Reports, except where the failure to
possess such permits would not,
individually or in the aggregate, have or
reasonably be expected to result in a
Material Adverse Effect, and neither the
Company nor any Subsidiary has received
any notice of proceedings relating to the
revocation or material modification of
any such permits.
(o) Title to Assets. The Company and the Subsidiaries have good
and
marketable title in fee simple to all real
property owned by them that is
material to their respective businesses and
good and marketable title in all
personal property owned by them that is
material to their respective businesses,
in each case free and clear of all Liens,
except for Liens as do not materially
affect the value of such property and do
not materially interfere with the use
made and proposed to be made of such
property by the Company and the
Subsidiaries. Any real property and
facilities held under lease by the Company
and the Subsidiaries are held by them under
valid, subsisting and enforceable
leases of which the Company and the
Subsidiaries are in compliance, except as
would not, individually or in the
aggregate, have or reasonably be expected to
result in a Material Adverse Effect.
(p)
Patents and Trademarks. The Company and the Subsidiaries have,
or
have rights to use, all patents, patent
applications, trademarks, trademark
applications, service marks, trade names,
copyrights, licenses and other similar
rights that are necessary or material for
use in connection with their
respective businesses as described in the
SEC Reports (collectively, the
"INTELLECTUAL PROPERTY RIGHTS"). Neither
the Company nor any Subsidiary has
received a written notice that the
Intellectual Property Rights used by the
Company or any Subsidiary violates or
infringes upon the rights of any Person.
Except as set forth in the Sec Reports, to
the knowledge of the Company, all
such Intellectual Property Rights are
enforceable and there is no existing
infringement by another Person of any of
the Intellectual Property Rights.
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(q) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial
responsibility against such losses and risks
and in such amounts as are prudent and
customary in the businesses in which the
Company and the Subsidiaries are engaged.
The Company has no reason to believe
that it will not be able to renew its and
the Subsidiaries' 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 on terms
consistent with market for the Company's
and such Subsidiaries' respective lines
of business.
(r) Transactions With Affiliates and Employees. Except as set forth
in
the SEC Reports, none of the officers or
directors of the Company and, to the
knowledge of the Company, none of the
employees of the Company is presently a
party to any transaction with the Company
or any Subsidiary (other than for
services as employees, officers and
directors), including any contract,
agreement or other arrangement providing
for the furnishing of services to or
by, providing for rental of real or
personal property to or from, or otherwise
requiring payments to or from any officer,
director or such employee or, to the
knowledge of the Company, any entity in
which any officer, director, or any such
employee has a substantial interest or is
an officer, director, trustee or
partner, that is required to be disclosed
in the SEC Reports.
(s) Internal Accounting Controls. The Company and the
Subsidiaries
maintain a system of internal accounting
controls sufficient to provide
reasonable assurance that (i) transactions
are executed in accordance with
management's general or specific
authorizations, (ii) transactions are recorded
as necessary to permit preparation of
financial statements in conformity with
generally accepted accounting principles
and to maintain asset accountability,
(iii) access to assets is permitted only in
accordance with management's general
or specific authorization, and (iv) 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 has established disclosure
controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) for
the Company and designed such disclosure
controls and procedures to ensure that
material information relating to the
Company, including its Subsidiaries, is
made known to the Chief Executive Officer
and Chief Financial Officer by others
within those entities, particularly during
the period in which the Company's
Form 10-KSB or 10-QSB, as the case may be,
is being prepared. The Company's
Chief Executive Officer and Chief Financial
Officer have evaluated the
effectiveness of the Company's controls and
procedures in accordance with Item
307 of Regulation S-K under the Exchange
Act for the Company's most recently
ended fiscal quarter or fiscal year-end
(such date, the "EVALUATION DATE"). The
Company presented in its most recently
filed Form 10-KSB or Form 10-QSB the
conclusions of the Chief Executive Officer
and Chief Financial Officer about the
effectiveness of the disclosure controls
and procedures based on their
evaluations as of the Evaluation Date.
Since the Evaluation Date, there have
been no significant changes in the
Company's internal control over financial
reporting (as such term is defined in Item
308(c) of Regulation S-K under the
Exchange Act) or, to the Company's
knowledge, in other factors that could
significantly affect the Company's internal
control over financial reporting.
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(t) Solvency. Based on the financial condition of the Company as
of
the Closing Date (and assuming that the
Closing shall have occurred), (i) the
Company's fair saleable value of its assets
exceeds the amount that will be
required to be paid on or in respect of the
Company's existing debts and other
liabilities (including known contingent
liabilities) as they mature, (ii) the
Company's assets do not constitute
unreasonably small capital to carry on its
business for the current fiscal year as now
conducted and as proposed to be
conducted including its capital needs
taking into account the particular capital
requirements of the business conducted by
the Company, and projected capital
requirements and capital availability
thereof, and (iii) the current cash flow
of the Company, together with the proceeds
the Company would receive, were it to
liquidate all of its assets, after taking
into account all anticipated uses of
the cash, would be sufficient to pay all
amounts on or in respect of its debt
when such amounts are required to be paid.
The Company does not intend to incur
debts beyond its ability to pay such debts
as they mature (taking into account
the timing and amounts of cash to be
payable on or in respect of its debt).
(u) Certain Fees. Except as disclosed in the SEC Reports, no
brokerage
or finder's fees or commissions are or will
be payable by the Company to any
broker, financial advisor or consultant,
finder, placement agent, investment
banker, bank or other Person with respect
to the transactions contemplated by
this Agreement. The Investors shall have no
obligation with respect to any fees
or with respect to any claims (other than
such fees or commissions owed by an
Investor pursuant to written agreements
executed by such Investor which fees or
commissions shall be the sole
responsibility of such Investor) made by or on
behalf of other Persons for fees of a type
contemplated in this Section that may
be due in connection with the transactions
contemplated by this Agreement.
(v) Certain Registration Matters. Assuming the accuracy of the
Investors' representations and warranties
set forth in Sections 3.2(b)-(e), no
registration under the Securities Act is
required for the offer and sale of the
Shares, the Warrants or the Warrant Shares
by the Company to the Investors under
the Transa
