EXHIBIT 10.2
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
January 30, 2006, by and between BPK RESOURCES, INC., a Nevada corporation (the
"Company"), and TRIDENT GROWTH FUND, L.P., a Delaware limited partnership, (the
"Purchaser").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to an exemption from registration contained in Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act") and Rule 506
promulgated thereunder, the Company desires to issue and sell to Purchaser, and
Purchaser desires to purchase from the Company, 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 Purchaser agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Debenture(s) (as defined herein), and (b)
the following terms have the meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in Section
3.1(i).
"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 under the Securities Act. With respect to Purchaser, any
investment fund or managed account that is managed on a discretionary
basis by the same investment manager as Purchaser will be deemed to be an
Affiliate of Purchaser.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a federal legal holiday in the United States or a day on
which banking institutions in the State of Texas are authorized or
required by law or other government action to close.
"Change of Control Transaction" means the occurrence after the date
hereof of any of (i) an acquisition after the date hereof by an individual
or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated
under the Exchange Act) of effective control (whether through legal or
beneficial ownership (as described in Rule 13d-3 of the Exchange Act) of
capital stock of the Company, by contract or otherwise) of in excess of
40% of the voting securities of the Company, or (ii) a replacement at one
time or within a one year period of more than one-half of the members of
the Company's board of directors which is not approved by a majority of
those individuals who are members of the board of directors on the date
hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was
approved by a majority of the members of the board of directors who are
members on the date hereof), or (iii) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (i) or (ii).
Notwithstanding the foregoing, the proposed merger of Graphite Technology
Group, Inc. with a Subsidiary of the Company under the terms provided by
the Company to the Purchaser in writing on or before the Closing Date (the
"Graphite Transaction"), shall not constitute a "Change of Control
Transaction" for purposes of the Transaction Documents; provided, such
transaction is closed on or prior to May 20, 2006.
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"Closing" means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.
"Closing Date" means the Business Day when all of the Transaction
Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) Purchaser's obligations to
pay the Subscription Amount and (ii) the Company's obligations to deliver
the Securities have been satisfied or waived. There may be multiple
Closing Dates.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value
$.001 per share, and any securities into which such common stock shall
hereinafter have been reclassified into.
"Common Stock Equivalents" means any securities of the Company which
would entitle the holder thereof to acquire at any time Common Stock,
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.
"Debenture" means, the 12% Secured Convertible Debenture, in the
form of Exhibit A.
"Disclosure Schedules" shall have the meaning ascribed to such term
in Section 3.1 hereof.
"Effective Date" means the date that the initial registration
statement filed by the Company for the Registrable Securities or Common
Stock is first declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Exempt Issuance" means the issuance of (a) options or warrants to
employees, officers or directors of the Company pursuant to the 2004 BPK
Stock Incentive Plan currently in place as of the date hereof which has
been duly adopted by the Board of Directors of the Company, provided the
number of shares Common Stock or Common Stock Equivalents into which such
options or warrants are exercisable does not, in the aggregate, exceed
7,500,000 shares, (b) securities upon the exercise of or conversion of any
securities issued hereunder, convertible securities, options or warrants
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to
increase the number of such underlying shares in connection therewith, (c)
securities issued pursuant to acquisitions or strategic transactions,
provided any such issuance shall only involve the acquisition of a Person
which is, itself or through its subsidiaries, an operating company in a
business synergistic with the business of the Company and in which the
Company receives benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities, (d) shares of Common Stock or Common
Stock Equivalents issued in connection with a Qualifying Transaction; and
(e) the Graphite Transaction
"Fully Diluted Basis" shall mean all Common Stock or Common Stock
Equivalents of the Company including the exercise or conversion of all
rights, options, derivative and convertible securities and further
including the conversion (whether convertible or not) of all other common
or preferred stock equivalents outstanding or required to be issued by the
Company.
"Fundamental Transaction" shall mean (A) the Company effects any
merger or consolidation of the Company with or into another Person, (B)
the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects
any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property. Notwithstanding the
foregoing, the proposed merger of Graphite Technology Group, Inc. with a
Subsidiary of the Company under the terms provided by the Company to the
Purchaser in writing on or before the Closing Date, shall not constitute a
"Fundamental Transaction" for purposes of the Transaction Documents;
provided, such transaction is closed on or prior to May 20, 2006.
"Intellectual Property Rights" shall have the meaning ascribed to
such term in Section 3.1(n).
"Legend Removal Date" shall have the meaning ascribed to such term
in Section 4.1(c).
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"Liens" means a lien, charge, security interest, encumbrance, right
of first refusal, preemptive right, or other restriction.
"Material Adverse Effect" shall have the meaning assigned to such
term in Section 3.1(b) hereof.
"Material Permits" shall have the meaning ascribed to such term in
Section 3.1(l).
"Maximum Rate" shall have the meaning ascribed to such term in
Section 6.17.
"Participation Maximum" shall have the meaning ascribed to such term
in Section 4.13.
"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.
"Pre-Notice" shall have the meaning ascribed to such term in Section
4.13.
"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.
"Public Offering Date" the date that the Company first registers the
Common Stock pursuant to Section 12 under the Exchange Act, or merges into
a corporation (by or through one or a series of related transactions)
already registered pursuant to Section 12 or becomes public under the
Exchange Act in any other manner.
"Purchaser Party" shall have the meaning ascribed to such term in
Section 4.11.
"Purchaser's Designee" shall have the meaning ascribed to such term
in Section 4.16.
"Qualifying Transaction" shall mean (i) an equity or debt/equity
financing wherein the Company receives gross proceeds equal to at least
$3,000,000 from the sale of Common Stock or Common Stock Equivalents
issued by the Company to unaffiliated third parties or (ii) a Fundamental
Transaction.
"Registrable Securities" means (i) all Underlying Shares (exercised
and unexercised); (ii) any securities issued or transferred to Purchaser
in connection with or arising out of any Transaction Document; and (iv)
any securities issued or issuable upon any stock split, dividend or other
distribution recapitalization or similar event with respect to the
foregoing.
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"Registration Statement" means a registration statement covering the
sale or resale of the Registrable Securities.
"Required Minimum" means, as of any date, the maximum aggregate
number of shares of Common Stock then issued or potentially issuable in
the future pursuant to the Transaction Documents, including any Underlying
Shares issuable upon exercise of the Warrant or conversion of the
Debenture, ignoring any exercise limits set forth therein.
"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.
"SBA" shall have the meaning ascribed to such term in Section 5.1.
"SBA Documents" shall have the meaning ascribed to such term in
Section 5.1(b).
"SBIC" shall have the meaning ascribed to such term in Section 5.1.
"SBIC Act" shall have the meaning ascribed to such term in Section
5.1(a).
"Securities" means the Debenture, the Warrant, and the Underlying
Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, dated as of the
date hereof, between the Company and Purchaser, in the form of Exhibit B
attached hereto.
"Security Documents" shall mean the Security Agreement and any other
documents and filing required thereunder in order to grant Purchaser a
first priority security interest in all of the assets of the Company,
including all UCC-1 filing receipts.
"Subscription Amount" means, as to Purchaser, the aggregate amount
to be paid for the Debenture and the Warrant purchased hereunder as
specified in Section 2.1 herein, in United States Dollars and in
immediately available funds.
"Subsequent Financing" shall have the meaning ascribed to such term
in Section 4.13.
"Subsequent Financing Notice" shall have the meaning ascribed to
such term in Section 4.13.
"Subsidiary" means any corporation or limited liability company of
which at least 50% of the outstanding securities having ordinary voting
powers for the election of Board of Directors (or similar governing body)
are at the time owned by the Company. As used herein, the term "Company"
shall be deemed to include all of the Company's Subsidiaries, if any.
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"Trading Market" means, as applicable, the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the American Stock Exchange, the New York Stock
Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the OTC
Bulletin Board or the "Pink Sheets" published by the Pink Sheets LLC.
"Transaction Documents" means this Agreement, the Debenture, the
Security Agreement, the Warrant and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
"Underlying Shares" means the shares of Common Stock issuable upon
exercise of the Warrants or conversion of the Debenture, or any other
shares of Common Stock acquired by Purchaser hereby.
"Warrant" means the Common Stock Purchase Warrant, in the form of
Exhibit C delivered to Purchaser at the Closing in accordance with Section
2.2 hereof, which Warrant shall be exercisable immediately and be
exercisable until the close of business on the fifth anniversary following
the Initial Exercise Date (as defined in the Warrant). The Company and
Purchaser agree that the value of the Warrant as of the date hereof is
less than $1,000.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. On the Closing Date, upon the terms and subject to the
conditions set forth herein, concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and Purchaser
agrees to purchase the Debenture and the Warrant for an aggregate amount of SIX
HUNDRED THOUSAND DOLLARS ($600,000) (the "Subscription Amount"). On the Closing
Date, Purchaser shall deliver to the Company via wire transfer of immediately
available funds equal to the Subscription Amount (less all expenses and fees due
hereunder), and the Company shall deliver to Purchaser the Debenture, the
Warrant, and the other items set forth in Section 2.2 issuable at the Closing.
On the Closing Date, contemporaneous with the funding of the purchase made the
basis hereof, the Company shall promptly pay to the order of Purchaser a
commitment fee and origination fee in the aggregate amount of 3% of the
Subscription Amount, such amounts to be offset from the Subscription Amount wire
transfer described above. Upon satisfaction of the conditions set forth in
Section 2.2, the Closing shall occur at the offices of Purchaser, or such other
location as the parties shall mutually agree.
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2.2 Deliveries
a) On the Closing Date, the Company shall execute and deliver or
cause to be delivered to Purchaser the following, each fully executed by
the appropriate authorized officer or officers of the Company:
(i) this Agreement (along with all Disclosure Schedules);
(ii) the Debenture;
(iii) the Warrant;
(iv) the Security Agreement along with all Security Documents;
(v) SBA Form 480 (Size Status Declaration), SBA Form 652
(Assurance of Compliance) and SBA Form 1031 (Portfolio Finance
Report), Parts A and B, in the forms of Exhibit D, Exhibit E and
Exhibit F, respectively, attached hereto;
(vi) Approval by the Board of Directors of the Company, done
in conformance with all applicable law and the bylaws of the
Company, certified by the Secretary of the Company as of the Closing
Date, approving or otherwise ratifying the transactions contemplated
by this Agreement, and approving the form of this Agreement and the
Transaction Documents, and authorizing execution, delivery, and
performance thereof;
(vii) A copy of the Articles of Incorporation of the Company,
certified by an official of the Company's jurisdiction of formation
or incorporation and further certified by the Secretary of Company
not to have been altered or amended since certification by such
official; a Certificate of Good Standing dated within 30 days of the
date first written above from the Secretary of State of the
Company's jurisdiction; and a copy of the Bylaws of the Company,
certified as true and correct by the Secretary of the Company;
(viii) Payment of the origination and commitment fees, if any,
referenced in Section 2.1 hereof; and
(ix) Such other instruments, documents or items as Purchaser
may reasonably request.
b) On the Closing Date, Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) this Agreement duly executed by Purchaser;
(ii) Purchaser's Subscription Amount by wire transfer to the
account as specified in writing by the Company; and
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(iii) the Security Agreement, duly executed by Purchaser.
2.3 Closing Conditions.
a) The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the accuracy in all material respects when made and on the
Closing Date of the representations and warranties of the Purchaser
contained herein;
(ii) all obligations, covenants and agreements of Purchaser
required to be performed at or prior to the Closing Date shall have
been performed; and
(iii) the delivery by Purchaser of the items set forth in
Section 2.2(b) of this Agreement; and
b) The obligations of Purchaser hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the accuracy in all material respects on the Closing Date
of the representations and warranties of the Company contained
herein;
(ii) all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have
been performed;
(iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement; and
(iv) there shall have been no Material Adverse Effect with
respect to the Company since the date hereof;
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
under the corresponding section of the disclosure schedules delivered to
Purchaser concurrently herewith (the "Disclosure Schedules") which Disclosure
Schedules shall be deemed a part hereof, the Company makes the representations
and warranties set forth below to Purchaser.
a) Subsidiaries. The Company does not have any Subsidiaries.
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b) Organization and Qualification. The Company is an entity duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company is not in violation or default of any of
the provisions of its certificate or articles of incorporation, bylaws, or
other organizational or charter documents. The Company is duly qualified
to conduct business and is in good standing as a foreign corporation or
other entity 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, could not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Documents, (ii) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of the
Company, 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 Documents (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. 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 action on the part of the Company. Each
Transaction Documents 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 (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors'
rights generally and (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies.
d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company
of the other transactions contemplated thereby do not and will not: (i)
conflict with or violate any provision of the Company'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,
result in the creation of any Lien upon any of the properties or assets of
the Company, 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 debt or otherwise) or other understanding to which
the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) conflict with or 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 is
subject (including federal and state securities laws and regulations), or
by which any property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.
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e) Filings, Consents and Approvals. Other than as set forth on
Schedule 3.1(e) and except for filing of a Form D and/or state "blue sky"
securities filings, 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.
f) Issuance of the Securities. The Securities are duly authorized
and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents.
The Underlying Shares, when issued in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company or any
third party. The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the Underlying
Shares at least equal to the Required Minimum on the date hereof. The
Company has not, and to the knowledge of the Company, no Affiliate of the
Company has sold, offered for sale or solicited offers to buy or otherwise
negotiated in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to Purchaser.
g) Capitalization. The capitalization of the Company is as described
in Schedule 3.1(g). The Company has not issued any capital stock other
than as set forth on Schedule 3.1(g). 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 a result of the purchase and sale of the Securities or as set
forth on Schedule 3.1(g), there are no outstanding options, warrants,
script 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 the Company's capital stock, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of its capital stock, or
securities or rights convertible or exchangeable into shares of its
capital stock. The issuance and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any
Person (other than Purchaser) 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. 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. 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. Except as disclosed in
Schedule 3.1(g), 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. A complete list of
stockholders of the Company that are officers, directors and individuals
holding 5% or more of the outstanding Common Stock is included in Schedule
3.1(g).
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h) Financial Statements. Other than as set forth on Schedule 3.1(h),
there are no audited financial statements of the Company.
i) Litigation. Other than as set forth on Schedule 3.1(i), there is
no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, or any of its respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an
"Action") which (i) adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor
any director or officer thereof, 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. There has not
been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or
any current or former director or officer of the Company.
j) 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 which could reasonably be expected to result in a Material
Adverse Effect.
k) Compliance. The Company (i) is not in default under or in
violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the
Company), nor has the Company received notice of a claim that it is in
default under or that it is in violation 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 not in violation of any order of
any court, arbitrator or governmental body, or (iii) is not or has not
been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and
local laws applicable to its business except in each case as could not
have a Material Adverse Effect.
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l) Regulatory Permits. The Company possesses 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 Schedule 3.1(l), except where the failure to
possess such permits could not have or reasonably be expected to result in
a Material Adverse Effect ("Material Permits"), and the Company has not
received any notice of proceedings relating to the revocation or
modification of any Material Permit.
m) Title to Assets. Except as set forth on Schedule 3.1(m), the
Company has good and marketable title in (or licenses or rights to use)
all personal property that is material to the business of the Company, in
each case free and clear of all Liens. The Company does not own any real
property. Any real property and facilities held under lease by the Company
are held by it under valid, subsisting and enforceable leases of which the
Company is in compliance. The Company has not granted, and no third party
has obtained in any manner, other than as contemplated by the Transaction
Documents, any security interest in the assets of the Company. Schedule
3.1(m) sets forth and details which, if any, of such assets are owned by
any Subsidiary.
n) Intellectual Property.
(i) Schedule 3.1(n) contains a list of the Company's
Intellectual Property. For purposes hereof, "Intellectual Property"
means any or all of the following and all rights and goodwill,
arising out of or associated therewith: (A) all United States,
international, and foreign patents and applications therefor
(including provisional applications) and all reissues,
reexaminations, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (B) all inventions
(whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know-how, technology,
technical data and customer lists, and all documentation relating to
any of the foregoing throughout the world; (C) all international,
U.S. and foreign registered trademarks, trade names, service marks,
logos, slogans, and designs, applications to register trademarks,
trade names, service marks, logos, slogans, and designs,
intent-to-use applications, or other registrations or applications
related to trademarks, service marks, common law trademarks, trade
names, service marks, logos, slogans, and designs and all associated
goodwill associated with all of the foregoing; (D) all copyrights,
copyright registrations and applications therefor, and all other
rights corresponding thereto throughout the world; (E) all
industrial designs and any registrations and applications therefor
throughout the world; (F) all URL's, domain names, trade names,
logos, slogans, designs, common law trademarks and service marks,
trademark and service xxxx registrations and applications therefor
throughout the world; (G) all databases and data collections and all
rights therein throughout the world; (H) all moral and economic
rights of authors and inventors, however denominated, throughout the
world; and (I) any other intellectual property that is the subject
of an application, certificate, filing, registration or other
document issued, filed with, or recorded with any federal, state,
local or foreign government or other public body; (J) any similar or
equivalent rights to any of the foregoing anywhere in the world. For
purposes hereof, "Company Intellectual Property" means any Company
Intellectual Property owned or licensed by the Company, and "Company
Registered Intellectual Property" means any items of Intellectual
Property described in subsections (A), (C), or (D) of this
paragraph.
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(ii) No Company Intellectual Property or product or service of
the Company's business related to the Company Intellectual Property
is subject to any proceeding or outstanding decree, order, judgment,
agreement or stipulation restricting in any manner the use, transfer
or licensing thereof by the Company, or which may affect the
validity, use or enforceability of such Company Intellectual
Property. Each item of Company Registered Intellectual Property is
valid and subsisting. All necessary registration, maintenance and
renewal fees currently due in connection with the Company Registered
Intellectual Property have been made and all necessary documents,
recordations and certifications in connection with such Company
Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United
States or foreign jurisdictions, as the case may be, for the purpose
of maintaining such Company Registered Intellectual Property.
(iii) The Company owns and has good and exclusive title to, or
has licenses (any Intellectual Property subject to any license to be
identified as such in Schedule 3.1(n)) (sufficient for the conduct
of the Company's business as currently conducted) to use each item
of the Company's Intellectual Property free and clear of any Lien;
and the Company is the exclusive owner or exclusive licensee of all
trademarks and service marks, trade names and domain names used in
connection with and material to the operation or conduct of the
Company's business, including the sale of any products or the
provision of any services by same, free and clear of all Liens. The
Company Intellectual Property, other than future improvements,
derivations, and additions to be made by the Company or on behalf of
the Company, constitutes all of the Intellectual Property used or
contemplated for use in connection with the Company's current
business and in the performance of any contract, proposal or letter
of intent in connection with same.
(iv) To the extent that any Company Intellectual Property has
been developed or created by a third party for the Company, the
Company has a written agreement with such third party with respect
thereto and the Company thereby either (A) has obtained ownership of
and is the exclusive owner of, or (b) has obtained a license
(sufficient for the conduct of the Company's business as currently
conducted) to all of such third party's Intellectual Property in
such work, material or invention by operation of law or by valid
assignment, to the fullest extent it is legally possible to do so,
each such agreement being listed on Schedule 3.1(n).
(v) The operation of the Company's business as it is currently
conducted, including the Company's design, development, marketing
and sale of the products or services of the Company (including with
respect to products currently under development) has not, does not
and will not infringe or misappropriate in any manner the
Intellectual Property of any third party or, to the knowledge of the
Company, constitute unfair competition or trade practices under the
laws of any jurisdiction.
Page 13
(vi) The Company has no knowledge, and has not received
written notice or any other overt threats from any third party, that
the operation of the Company's business as it is currently
conducted, or any act, product or service of the Company's business,
infringes or misappropriates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the
laws of any jurisdiction. The Company's Intellectual Property is not
the subject of any third party communications relating to validity
or enforceability, cease and desist orders, demand letters, warnings
or prior settlement agreements. The Company's Intellectual Property
is not currently the subject of any pending or threatened
re-examinations, oppositions, interferences, or infringement
actions.
(vii) To the knowledge of the Company, no Person has or is
infringing or misappropriating any Company Intellectual Property.
(viii) The Company has taken reasonable steps to protect the
rights of the Company in the confidential information and trade
secrets of the Company used in the Company's business or any trade
secrets or confidential information of third parties used in same,
and, without limiting the foregoing, the Company has enforced a
policy requiring each employee and contractor to execute a
proprietary information/confidentiality agreement, and except under
confidentiality obligations or in the context of the attorney-client
relationship, there has not been any disclosure by the Company of
any such trade secrets or confidential information.
o) Insurance. The Company is 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 is
engaged, including directors and officers insurance at least equal to the
aggregate principal amount of the Debenture. To the best of Company's
knowledge, such insurance contracts and policies are accurate and
complete. The Company has no 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 without a significant increase in cost.
p) Transactions With Affiliates and Employees. 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 (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,
in each case in excess of $60,000 other than (i) for payment of salary or
consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits,
including stock option agreements under any stock option plan of the
Company.
Page 14
q) Internal Accounting Controls. The Company maintains 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.
r) Certain Fees. Other than as set forth on Schedule 3.1(r), 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. Purchaser shall have no
obligation with respect to any fees or with respect to any claims 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.
s) Private Placement. Assuming the accuracy of Purchaser's
representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the
Securities by the Company to Purchaser as contemplated hereby.
t) Investment Company. The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
u) Registration Rights. Other than as set forth on Schedule 3.1(u),
no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company.
v) Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company's Certificate of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to Purchaser as a result
of Purchaser and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation
as a result of the Company's issuance of the Securities and the
Purchaser's ownership of the Securities.
Page 15
w) Disclosure. Other than the information provided to the Purchaser
by the Company with respect to the Graphite Transaction, the Company
confirms that neither it nor any other Person acting on its behalf has
provided Purchaser or its agents or counsel with any information that
constitutes or might constitute material, nonpublic information except for
such information that will be publicly disclosed on or before the Public
Offering Date. The Company understands and confirms that Purchaser will
rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. All written statements provided
to Purchaser regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement,
furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with
respect to such representations and warranties 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 light of the
circumstances under which they were made, not misleading.
x) No Integrated Offering. Assuming the accuracy of Purchaser's
representations and warranties set forth in Section 3.2, 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 cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act or any
applicable shareholder approval provisions.
y) Solvency. Based on the financial condition of the Company as of
the Closing Date after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (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).
z) Tax Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company has filed all necessary federal, state and
foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company.
Page 16
aa) No General Solicitation. Neither the Company nor any person
acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company
has offered the Securities for sale only to Purchaser and certain other
"accredited investors" within the meaning of Rule 501 under the Securities
Act.
bb) Foreign Corrupt Practices. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any corrupt funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company (or
made by any person acting on its behalf of which the Company is aware)
which is in violation of law, or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended
cc) Indebtedness. Other than as set forth on Schedule 3.1(cc), as of
the Closing Date, the Company has no indebtedness.
dd) No Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or reasonably anticipated by
the Company to arise, between the accountants and lawyers formerly or
presently employed by the Company and the Company is current with respect
to any fees owed to its accountants and lawyers.
ee) Acknowledgment Regarding Purchaser's Purchase of Securities. The
Company acknowledges and agrees that Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby as they relate to the
Company. The Company further acknowledges that Purchaser 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 Purchaser or any of its respective
representatives or agents to the Company in connection with this Agreement
and the transactions contemplated hereby is merely incidental to the
Purchaser's purchase of the Securities.
ff) Material Liabilities. The sole outstanding material liabilities
of the Company are set forth on Schedule 3.1(ff) .
gg) Material Agreements. Except for those agreements set forth on
Schedule 3.1(gg) hereof, there are no other material agreements to which
the Company is a party.
Page 17
hh) Board of Directors. The Board of Directors of Company consists
of those persons set forth on Schedule 3.1(hh).
3.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:
(a) Organization; Authority. Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its organization with full right, corporate or partnership power and
authority to enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by Purchaser of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate or similar action on the part of Purchaser. Each
of the Transaction Documents to which it is a party has been duly executed
by Purchaser, and when delivered by Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of
Purchaser, enforceable against it in accordance with its terms, except (i)
as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) Purchaser Representation. Purchaser understands that the
Securities are "restricted securities" and have not been registered under
the Securities Act or any applicable state securities law and is acquiring
the Securities as principal for its own account and not with a view to or
for distributing or reselling such Securities or any part thereof, has no
present intention of distributing any of such Securities and has no
arrangement or understanding with any other persons regarding the
distribution of such Securities (this representation and warranty not
limiting Purchaser's right to sell the Securities pursuant to a
Registration Statement or otherwise in compliance with applicable federal
and state securities laws). Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(c) Purchaser Status. At the time Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on
which it exercises any Warrants it will be either: (i) an "accredited
investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8)
under the Securities Act or (ii) a "qualified institutional buyer" as
defined in Rule 144A(a) under the Securities Act.
(d) Experience of Purchaser. Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.
Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of
such investment.
Page 18
(e) Certain Fees. Purchaser has not entered into an agreement
whereby 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 Company acknowledges and agrees that Purchaser does not make or
has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth
in this Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Securities may only be disposed of in compliance with state
and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to
the Company or to an Affiliate of Purchaser or in connection with a pledge
as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and
substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of
such transferred Securities under the Securities Act or any applicable
state securities laws. As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of Purchaser under this Agreement.
(b) Purchaser agrees to the imprinting, so long as is required by
this Section 4.1(b), of a legend on any of the Securities in substantially
the following form:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Page 19
The Company acknowledges and agrees that Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the
Securities to a financial institution that is an "accredited investor" as
defined in Rule 501(a) under the Securities Act and who agrees to be bound
by the provisions of this Agreement and, if required under the terms of
such arrangement, Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the
Purchaser's expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably
request in connection with a pledge or transfer of the Securities.
(c) Certificates evidencing Underlying Shares shall not contain any
legend (including the legend set forth in Section 4.1(b) hereof): (i)
while a registration statement covering the resale of such security is
effective under the Securities Act, or (ii) following any sale of such
Underlying Shares pursuant to Rule 144, or (iii) if such Underlying Shares
are eligible for sale under Rule 144(k), 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
Commission); provided, however, in connection with the issuance of the
Underlying Shares, Purchaser hereby agrees to adhere to and abide by all
prospectus delivery requirements under the Securities Act and rules and
regulations of the Commission and all applicable state "blue sky"
securities laws. The Company shall cause its counsel to issue a legal
opinion to the Company's transfer agent promptly after the Effective Date
if required by the Company's transfer agent to effect the removal of the
legend hereunder. If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the resale
of the Underlying Shares, or if such shares may be sold under Rule 144(k)
or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations thereof) then
such 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 4.1(c), it will, no later than two Business
Days following the delivery by Purchaser to the Company or the Company's
transfer agent of a certificate representing Underlying Shares, as
applicable, issued with a restrictive legend (such second Business Day,
the "Legend Removal Date"), deliver or cause to be delivered to 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 the
restrictions on transfer set forth in this Section.
Page 20
(d) In addition to Purchaser's other available remedies, the Company
shall pay to Purchaser, in cash, as partial liquidated damages and not as
a penalty, the greater of (i) $500 for each Business Day after the Legend
Removal Date, the Warrant Share Delivery Date, or other such date the
Underlying Shares are to be delivered to the Purchaser, as the case may
be, until such certificate is delivered with an appropriate legend or
without a restrictive legend, as the case may be; and (ii) the difference
in the Market Value of the Underlying Shares (based on the closing bid
price of the Common Stock on the then principal Trading Market on the date
such Securities are submitted to the Company's transfer agent) on the
delivery date and the date such shares are actually received by the Holder
in such form as required herein and in the Transaction Documents. Nothing
herein shall limit Purchaser's right to pursue actual damages for the
Company's failure to deliver certificates representing any Securities as
required by the Transaction Documents, and Purchaser shall have the right
to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief.
(e) Purchaser agrees that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is
predicated upon the Company's reliance that Purchaser will sell any
Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.
4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance
of the Underlying Shares may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction
Documents, including without limitation its obligation to issue the Underlying
Shares pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against Purchaser and regardless of the dilutive effect that such issuance may
have on the ownership of the other stockholders of the Company.
4.3 Furnishing of Information. If after the date hereof the Company
becomes subject to the rules and regulations of the Exchange Act and as long as
Purchaser owns restricted Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to Purchaser and make publicly available in accordance with
Rule 144(c) such information as is required for Purchaser to sell the Underlying
Shares under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Underlying
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144.
Page 21
4.4 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to Purchaser or, if then listed or
quoted on a Trading Market, that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market.
4.5 Exercise Procedures. The form of Notice of Exercise (or Conversion
Notice) included in the Warrant (or Debenture) sets forth the totality of the
procedures required of Purchaser in order to exercise the Warrant or convert the
Debenture. No additional legal opinion or other information or instructions
shall be required of Purchaser to exercise its Warrants or convert the
Debenture. The Company shall honor exercises of the Warrant and conversions of
the Debenture and shall deliver Underlying Shares in accordance with the terms,
conditions and time periods set forth in such Transaction Documents.
4.6 Intentionally Omitted.
4.7 Shareholders Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that Purchaser is
an "Acquiring Person" under any shareholders rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and Purchaser.
4.8 Non-Public Information. If at any time the Company becomes subject to
the reporting provisions of the Exchange Act, the Company covenants and agrees
that neither it nor any other Person acting on its behalf will provide Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.
4.9 Use of Proceeds. Except as set forth in Schedule 4.9, the Company
shall use the net proceeds from the sale of the Securities hereunder for working
capital purposes and not for the satisfaction of any portion of the Company's
debt (other than payment of trade payables in the ordinary course of the
Company's business and prior practices), to redeem any Common Stock or Common
Stock Equivalents or to settle any outstanding litigation. Schedule 4.9 shall
detail the Company's expected use of proceeds received from the sale of the
Securities hereunder.
Page 22
4.10 Reimbursement. If Purchaser becomes involved in any capacity in any
Proceeding by or against any Person who is a stockholder of the Company (except
as a result of sales, pledges, margin sales or any similar transaction(s) by
Purchaser to or with any current stockholder), solely as a result of Purchaser's
acquisition of the Securities under this Agreement, and Purchaser is successful
in the Proceeding the Company will reimburse Purchaser for its reasonable legal
and other expenses (including the cost of any investigation preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of
Purchaser who are actually named in such action, proceeding or investigation,
and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of Purchaser and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, Purchaser and any such Affiliate and any such
Person. The Company also agrees that neither Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf of or in right
of the Company solely as a result of acquiring the Securities under this
Agreement.
4.11 Indemnification of Purchaser. Subject to the provisions of this
Section 4.11, the Company will indemnify and hold the Purchaser and its
directors, officers, managers, shareholders, partners, employees and agents
(each, a "Purchaser Party") harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents or (b) any action instituted
against Purchaser, or any of its Affiliates, by any stockholder of the Company
who is not an Affiliate of Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of Purchaser's representation, warranties or covenants under the
Transaction Documents or any agreements or understandings Purchaser may have
with any such stockholder or any violations by Purchaser of state or federal
securities laws or any conduct by Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing. Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and
the position of such Purchaser Party. The Company will not be liable to any
Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party
effected without the Company's prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party's
breach of any of the representations, warranties, covenants or agreements made
by Purchaser in this Agreement or in the other Transaction Documents.
Page 23
4.12 Reservation and Listing of Securities.
(a) The Company shall maintain a reserve from its duly authorized
shares of Common Stock for issuance pursuant to the Transaction Documents
in such amount as may be required to fulfill its obligations in full under
the Transaction Documents.
(b) If, on any date, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors of the Company shall use
commercially reasonable efforts to amend the Company's certificate or
articles of incorporation to increase the number of authorized but
unissued shares of Common Stock to at least the Required Minimum at such
time, as soon as possible and in any event not later than the 75th day
after such date.
(c) The Company shall, if then applicable: (i) in the time and
manner required by the Trading Market or if the Common Stock is listed on
another Trading Market, promptly prepare and file with such Trading Market
an additional shares listing application covering a number of shares of
Common Stock at least equal to the Required Minimum on the date of such
application, (ii) take all steps necessary to cause such shares of Common
Stock to be approved for listing on the Trading Market as soon as possible
thereafter, (iii) provide to Purchaser evidence of such listing, and (iv)
maintain the listing of such Common Stock on any date at least equal to
the Required Minimum on such date on such Trading Market or another
Trading Market.
4.13 Intentionally Omitted
4.14 Future Priced Securities. From the date hereof until the date that
less than 20% in principal amount of the Debenture initially issued is
outstanding, the Company shall be prohibited from effecting or entering into an
agreement to effect any Subsequent Financing involving a "Variable Rate
Transaction" (as defined below). The term "Variable Rate Transaction" shall mean
a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock, or
(C) whereby the number of underlying shares of Common Stock to be received upon
exercise, conversion, or exchange thereof, is variable in any respect in which
the number of such underlying shares could be increased.
Page 24
4.15 Intentionally Omitted.
4.16 Intentionally Omitted. [Appointment of Board Member] -
4.17 Registration Rights.
(a) Piggyback Registrations. If at any time after the date hereof,
the Company shall file a registration statement relating to any of its
securities, it will notify Purchaser in writing and, upon Purchaser's
request, will include the offer and sale of Registrable Securities in such
registration statement to the extent permitted by the underwriter, if any.
In the event that the Company fails to include the Registrable Securities
in a piggy back statement as required herein, Purchaser shall give notice
demanding a registration, and within 75 days after the notice the Company
shall prepare and file a registration statement with the SEC with respect
to such Registrable Securities. If the Company fails to file within said
time period, then, at the option of Purchaser, for each full calendar
month that the Registrable Securities are not fully registered, Company
shall issue to Purchaser 0.1 % of its common shares then outstanding
computed on a Fully Diluted Basis per day until the shares are registered.
(b) Whenever required to include Registrable Securities in any
registration or to effect the registration of any Registrable Securities
pursuant to this Agreement, the Company shall, as expeditiously as
reasonably possible, prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its absolute
best lawful efforts to cause such registration statement to become
effective, and use its absolute best efforts to keep such registration
statement effective until all such Registrable Securities have been
distributed. In addition, the Company shall use its best lawful efforts to
register and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by Purchaser, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify as a broker-dealer in any states or jurisdictions or to do
business or to file a general consent to service of process in any of such
states or jurisdictions.
(c) All expenses, other than underwriting discounts and commissions
incurred in connection the registrations contemplated herein, including,
without limitation, all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of counsel for the
selling Purchaser, shall be borne by the Company.
(d) Subject to the terms and conditions of this Agreement and the
other Transaction Documents, the right to cause the Company to register
Registrable Securities pursuant to this Agreement may be assigned by
Purchaser to any transferee or assignee of such securities; provided that
said transferee or assignee is a transferee or assignee of at least five
percent (5%) of Purchaser's Registrable Securities.
Page 25
ARTICLE V.
SMALL BUSINESS INVESTMENT COMPANY
5.1 Small Business Investment Company Provisions. The Company acknowledges
that Purchaser, is a small business investment company ("SBIC") licensed by the
United States Small Business Administration (the "SBA"), and makes the following
representations, warranties and covenants to Purchaser for so long as the
Debenture held by Purchaser is outstanding:
(a) Small Business Concern. The Company represents and warrants that
it, taken together with its "affiliates" (as that term is defined in 13
C.F.R. ss.121.103), is a "Small Business Concern" within the meaning of 15
U.S.C. ss.662(5), that is Section 103(5) of the Small Business Investment
Act of 1958, as amended (the "SBIC Act"), and the regulations thereunder,
including 13 C.F.R. ss.107, and meets the applicable size eligibility
criteria set forth in 13 C.F.R. ss.121.301(c)(1) or the industry standard
covering the industry in which the Company is primarily engaged as set
forth in 13 C.F.R. ss.121.301(c)(2). Neither the Company nor any of its
Subsidiaries presently engages in any activities for which a small
business investment company is prohibited from providing funds by the SBIC
Act, including 13 C.F.R. ss.107.
(b) Small Business Administration Documentation. On or before the
Closing Date, Purchaser shall have received SBA Form 480 (Size Status
Declaration) and SBA Form 652 (Assurance of Compliance) which have been
completed and executed by the Company, and SBA Form 1031 (Portfolio
Finance Report), Parts A and B of which have been completed by the Company
(the "SBA Documents").
(c) Inspection. The Company will permit Purchaser or its
representatives, at the Company's expense, and examiners of the SBA to
visit and inspect the properties and assets of the Company, to examine its
books of account and records, and to discuss the Company's affairs,
finances and accounts with the Company's officers, senior management and
accountants, all at such reasonable times as may be requested by Purchaser
or the SBA.
(d) Informational Covenant. Within sixty (60) calendar days after
the end of the Company's fiscal year, the Company will furnish or cause to
be furnished to Purchaser information required by the SBA concerning the
economic impact of Purchaser's investment, for (or as of the end of) each
fiscal year, including but not limited to: (i) board minutes, (ii)
information concerning full-time equivalent employees, (iii) federal,
state and local income taxes paid, (iv) gross revenue, (v) source of
revenue growth, (vi) after-tax profit and loss, and (vii) and federal,
state and local income tax withholding. Such information shall be
forwarded by the Company on a form provided by Purchaser. The Company also
will furnish or cause to be furnished to Purchaser such other information
regarding the business, affairs and condition of the Company as Purchaser
may from time to time reasonably request.
Page 26
(e) Use of Proceeds. The Company will deliver to Purchaser from time
to time promptly following Purchaser's request, a written report,
certified as correct by an officer, verifying the purposes and amounts for
which proceeds from the Debenture have been disbursed. The Company will
supply to Purchaser such additional information and documents as Purchaser
reasonably requests with respect to the Company's use of proceeds, and
will permit Purchaser to have access to any and all the Company's records
and information and personnel as Purchaser deems necessary to verify how
such proceeds have been or are being used, and to assure that the proceeds
have been used for the purposes specified on Schedule 4.9.
(f) Activities and Proceeds.
(i) Neither the Company nor any of its Affiliates will engage
in any activities or use directly or indirectly the proceeds from
the Debenture for any purpose for which a SBIC prohibited from
providing funds by the SBIC Act, including 13 C.F.R. ss.107.
(ii) Without obtaining the prior written approval of
Purchaser, the Company will not change, within one (1) year of the
Closing Date, the Company's business activity from that described on
Schedule 5.1(f) to a business activity which a small business
investment company is prohibited from providing funds by the SBIC
Act. The Company agrees that any such changes in its business
activity without such prior written consent of Purchaser will
constitute a material breach of the obligations of the Company under
the Transaction Documents (an "Activity Event of Default").
ARTICLE VI.
MISCELLANEOUS
6.1 Confidentiality. Purchaser acknowledges that information concerning
the Graphite Transaction and other matters that are the subject matter of this
Agreement and which have been specifically designated as such by the Company may
constitute material non-public information under United States federal
securities laws, and that United States federal securities laws prohibit any
person who has received material non-public information relating to the Company
from purchasing or selling securities of the Company, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company. Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Purchaser shall not directly or
indirectly, make any statements, public announcements or release to trade
publications or the press with respect to the subject matter of this Agreement,
purchase or sell any securities of the Company, or communicate such information
to any other person..
Page 27
6.2 Fees and Expenses. At the closing, the Company shall reimburse
Purchaser for its legal fees and expenses in the amount of $20,000. Except as
expressly set forth above and in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all transfer agent fees, stamp taxes and other
taxes and duties levied in connection with the issuance of any Securities.
6.3 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
6.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 5:30 p.m. (Dallas,
Texas time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Business Day or later than 5:30 p.m. (Dallas, Texas time) on any
Business Day, (c) the second Business Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.
6.5 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Purchaser or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
6.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
Page 28
6.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Purchaser. Purchaser may assign any or all
of its rights under this Agreement to any Person to whom Purchaser assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the Purchaser.
6.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.10.
6.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Texas, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of
Dallas, Texas. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Dallas,
Texas for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or inconvenient venue
for such proceeding. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY. If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
6.10 Survival. The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities until the satisfaction or
complete conversion of the Debenture.
6.11 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
Page 29
6.12 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
6.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever Purchaser exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights; provided, however, in
the case of a rescission of an exercise of a Warrant, Purchaser shall be
required to return any shares of Common Stock subject to any such rescinded
exercise notice.
6.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
6.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, Purchaser and
the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
6.16 Payment Set Aside. To the extent that the Company makes a payment or
payments to Purchaser pursuant to any Transaction Documents or Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Page 30
6.17 Usury. To the extent it may lawfully do so, the Company hereby agrees
not to insist upon or plead or in any manner whatsoever claim, and will resist
any and all efforts to be compelled to take the benefit or advantage of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any claim, action or proceeding that may be brought by Purchaser in order to
enforce any right or remedy under any Transaction Documents. Notwithstanding any
provision to the contrary contained in any Transaction Documents, it is
expressly agreed and provided that the total liability of the Company under the
Transaction Documents for payments in the nature of interest shall not exceed
the maximum lawful rate authorized under applicable law (the "Maximum Rate"),
and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction Documents
from the effective date forward, unless such application is precluded by
applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by
Purchaser to the unpaid principal balance of any such indebtedness or be
refunded to the Company, the manner of handling such excess to be at Purchaser's
election.
6.18 Intentionally Omitted.
6.19 Liquidated Damages. The Company's obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.
(Signature Page Follows)
Page 31
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
COMPANY
BPK RESOURCES, INC. Address for Notice and Delivery:
--------------------------------
000 Xxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx, CEO
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
PURCHASER
TRIDENT GROWTH FUND, L.P. Address for Notice and Delivery:
--------------------------------
700 Gemini
By: TRIDENT MANAGEMENT, LLC, its Xxxxxxx, XX 00000
GENERAL PARTNER Attn: Xxxxx St. Xxxxxx
By: /s/ Xxxxx Xxxx
--------------------------------
Name:Xxxxx Xxxx
Title: Authorized Member
ATTACHMENTS
Exhibit A Form of Debenture
Exhibit B Form of Security Agreement
Exhibit C Form of Warrant
Exhibit D SBA Form 480
Exhibit E SBA Form 652
Exhibit F SBA Form 1031
Schedule 3.1(a) Subsidiaries
Schedule 3.1(e) Filings, Consents and Approvals
Schedule 3.1(g) Capitalization
Schedule 3.1(h) Financial Statements
Schedule 3.1(i) Litigation
Schedule 3.1(l) Regulatory Permits
Schedule 3.1(m) Title to Assets (Outstanding liens)
Schedule 3.1(n) Intellectual Property
Schedule 3.1(r) Certain Fees (Broker Fees)
Schedule 3.1(u) Registration Rights
Schedule 3.1(cc) Indebtedness
Schedule 3.1(ff) Material Liabilities
Schedule 3.1(gg) Material Agreements
Schedule 3.1(hh) Board of Directors
Schedule 4.9 Use of Proceeds
Schedule 5.1(f) Business Activity
DISCLOSURE SCHEDULE
