PRIVATE EQUITY CREDIT AGREEMENT BY AND BETWEEN GLOBAL MATRECHS, INC. AND BRITTANY CAPITAL MANAGEMENT LTD. Dated September 14, 2006
EXHIBIT
10.1
BY
AND
BETWEEN
AND
BRITTANY
CAPITAL MANAGEMENT LTD.
Dated
September
14, 2006
THIS
PRIVATE EQUITY CREDIT AGREEMENT is entered into as of the 15th
day of
September, 2006 (this “AGREEMENT”), by and between BRITTANY CAPITAL MANAGEMENT
LTD., a limited liability company organized and existing under the laws of
The
Bahamas (“INVESTOR”), and GLOBAL MATRECHS, INC., a corporation organized and
existing under the laws of the State of Delaware (the “COMPANY”).
WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to Investor, from time to time as
provided herein, and Investor shall purchase, up to Fifteen Million Dollars
($15,000,000) of the Common Stock (as defined below);
WHEREAS,
such investments will be made in reliance upon the provisions of Section 4(2)
(“SECTION 4(2)”) of the Securities Act of 1933 and Regulation D, and the rules
and regulations promulgated thereunder (the “SECURITIES ACT”), and/or upon such
other exemption from the registration requirements of the Securities Act as
may
be available with respect to any or all of the investments in Common Stock
to be
made hereunder;
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
Section
1.1 DEFINED TERMS as used in this Agreement, the following terms shall have
the
following meanings specified or indicated (such meanings to be equally
applicable to both the singular and plural forms of the terms defined)
“ADDITIONAL
CLOSING DATE” shall mean the date of the closing of the purchase and sale of the
Additional Common Stock.
“AGREEMENT”
shall have the meaning specified in the preamble hereof.
“BID
PRICE” shall mean, for any Trading Day, the closing bid price of the Common
Stock on the Principal Market for such Trading Day.
“BLACKOUT
NOTICE” shall have the meaning specified in the Registration Rights Agreement.
“BLACKOUT
SHARES” shall have the meaning specified in Section 2.6
-
2
-
“BY-LAWS”
shall have the meaning specified in Section 4.8.
“CERTIFICATE”
shall have the meaning specified in Section 4.8
“CLAIM
NOTICE” shall have the meaning specified in Section 9.3(a).
“CLOSING”
shall mean one of the closings of a purchase and sale of shares of Common Stock
pursuant to Section 2.3.
“CLOSING
DATE” shall mean, with respect to a Closing, the twelfth (12th) Trading Day
following the Put Date related to such Closing, or such earlier date as the
Company and Investor shall agree, provided all conditions to such Closing have
been satisfied on or before such Trading Day.
“COMMITMENT
PERIOD” shall mean the period commencing on the Effective Date, and ending on
the earlier of (i) the date on which Investor shall have purchased Put Shares
pursuant to this Agreement for an aggregate Purchase Price of the Maximum
Commitment Amount, (ii) the date this Agreement is terminated pursuant to
Section 2.5, or (iii) the date occurring thirty-six (36) months from the date
of
commencement of the Commitment Period.
“COMMON
STOCK” shall mean the Company’s common stock, $.0001 par value per share, and
any shares of any other class of common stock whether now or hereafter
authorized, having the right to participate in the distribution of dividends
(as
and when declared) and assets (upon liquidation of the Company).
“COMMON
STOCK EQUIVALENTS” shall mean any securities that are convertible into or
exchangeable for Common Stock or any options or other rights to subscribe for
or
purchase Common Stock or any such convertible or exchangeable
securities.
“COMPANY”
shall have the meaning specified in the preamble to this Agreement.
“CONDITION
SATISFACTION DATE” shall have the meaning specified in Section 7.2.
“DAMAGES”
shall mean any loss, claim, damage, liability, costs and expenses (including,
without limitation, reasonable attorneys’ fees and disbursements and costs and
expenses of expert witnesses and investigation).
“DISCOUNT”
shall mean eight (8%) percent.
“DISPUTE
PERIOD” shall have the meaning specified in Section 9.3(a).
-
3
-
“DTC”
shall the meaning specified in Section 2.3.
“DWAC”
shall the meaning specified in Section 2.3.
“EFFECTIVE
DATE” shall mean the date on which the SEC first declares effective a
Registration Statement registering resale of the Registrable Securities as
set
forth in Section 7.2(a).
“EXCHANGE
ACT” shall mean the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
“FAST”
shall the meaning specified in Section 2.3.
“INDEMNIFIED
PARTY” shall have the meaning specified in Section 9.3(a).
“INDEMNIFYING
PARTY” shall have the meaning specified in Section 9.3(a).
“INDEMNITY
NOTICE” shall have the meaning specified in Section 9.3(b).
“INITIAL
REGISTRABLE SECURITIES” shall have the meaning specified in the Registration
Rights Agreement.
“INITIAL
REGISTRATION STATEMENT” shall have the meaning specified in the Registration
Rights Agreement.
“INVESTMENT
AMOUNT” shall mean the dollar amount (within the range specified in Section 2.2)
to be invested by Investor to purchase Put Shares with respect to any Put Date
as notified by the Company to Investor in accordance with Section
2.2.
“INVESTOR”
shall have the meaning specified in the preamble to this Agreement.
“LEGEND”
shall have the meaning specified in Section 8.1.
“MARKET
PRICE” on any given date shall mean the average of the three lowest of the Bid
Prices for the ten (10) Trading Days immediately following the Put
Date.
“MAXIMUM
COMMITMENT AMOUNT” shall mean Fifteen Million Dollars ($
15,000,000).
-
4
-
“MATERIAL
ADVERSE EFFECT” shall mean any effect on the business, operations, properties,
prospects or financial condition of the Company that is material and adverse
to
the Company or to the Company and such other entities controlling or controlled
by the Company, taken as a whole, and/or any condition, circumstance, or
situation that would prohibit or otherwise materially interfere with the ability
of the Company to enter into and perform its obligations under any of (a) this
Agreement and (b) the Registration Rights Agreement.
“MAXIMUM
PUT AMOUNT” shall mean, with respect to any Put, the lesser of (a) Five Hundred
Thousand Dollars ($500,000), or (b)Five Hundred (500%) percent of the Weighted
Average Volume for the twenty (20) Trading Days immediately preceding the Put
Date.
“MINIMUM
COMMITMENT AMOUNT” shall mean One Hundred Thousand Dollars
($100,000).
“MINIMUM
PUT AMOUNT” shall mean, with respect to any Put, Twenty-Five Thousand Dollars
($25,000).
“NASD”
shall mean the National Association of Securities Dealers, Inc.
“NASDAQ”
shall mean The Nasdaq Stock Market, Inc.
“NEW
BID
PRICE” shall have the meaning specified in Section 2.6.
“OLD
BID
PRICE” shall have the meaning specified in Section 2.6.
“OUTSTANDING”
shall mean, with respect to the Common Stock, at any date as of which the number
of shares of Common Stock is to be determined, all issued and outstanding shares
of Common Stock, including all shares of Common Stock issuable in respect of
outstanding convertible securities, scrip or any certificates representing
fractional interests in shares of Common Stock; provided, however, that
Outstanding shall not include any shares of Common Stock then directly or
indirectly owned or held by or for the account of the Company.
“PERSON”
shall mean an individual, a corporation, a partnership, an association, a trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
“PRINCIPAL
MARKET” shall mean the Nasdaq National Market, the Nasdaq SmallCap Market, the
Over the Counter Bulletin Board, the American Stock Exchange or the New York
Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.
“PURCHASE
PRICE” shall mean, with respect to a Put, the Market Price on the applicable Put
Date (or such other date on which the Purchase Price is calculated in accordance
with the terms and conditions of this Agreement) less the product of the
Discount and the Market Price.
-
5
-
“PUT”
shall mean each occasion that the Company elects to exercise its right to tender
a Put Notice requiring Investor to purchase shares of Common Stock, subject
to
the terms and conditions of this Agreement.
“PUT
DATE” shall mean the Trading Day during the Commitment Period that a Put Notice
is deemed delivered pursuant to Section 2.2(b).
“PUT
NOTICE” shall mean a written notice, substantially in the form of Exhibit B
hereto, to Investor setting forth the Investment Amount with respect to which
the Company intends to require Investor to purchase shares of Common Stock
pursuant to the terms of this Agreement.
“PUT
SHARES” shall mean all shares of Common Stock issued or issuable pursuant to a
Put that has been exercised or may be exercised in accordance with the terms
and
conditions of this Agreement.
“REGISTRABLE
SECURITIES” shall mean the (a) Put Shares, (b) the Blackout Shares and (c) any
securities issued or issuable with respect to any of the foregoing by way of
exchange, stock dividend or stock split or in connection with a combination
of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a Registration
Statement has been declared effective by the SEC and such Registrable Securities
have been disposed of pursuant to a Registration Statement, (ii) such
Registrable Securities have been sold under circumstances under which all of
the
applicable conditions of Rule 144 are met, (iii) such time as such Registrable
Securities have been otherwise transferred to holders who may trade such shares
without restriction under the Securities Act, and the Company has delivered
a
new certificate or other evidence of ownership for such securities not bearing
a
restrictive legend or (iv) in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to Investor, such Registrable Securities
may be sold without registration under the Securities Actor the need for an
exemption from any such registration requirements and without any time, volume
or manner limitations pursuant to Rule 144(k) (or any similar provision then
in
effect) under the Securities Act.
“REGISTRATION
RIGHTS AGREEMENT” shall mean the
registration
rights agreement in the form of Exhibit A hereto.
“REGISTRATION
STATEMENT” shall mean a registration statement on Form SB-2 (if use of such form
is then available to the Company pursuant to the rules of the SEC and, if not,
on such other form promulgated by the SEC for which the Company then qualifies
and which counsel for the Company shall deem appropriate and which form shall
be
available for the resale of the Registrable Securities to be
registered
-
6
-
thereunder
in accordance with the provisions of this Agreement and the Registration Rights
Agreement and in accordance with the intended method of distribution of such
securities), for the registration of the resale by Investor of the Registrable
Securities under the Securities Act.
“REGULATION
D” shall have the meaning specified in the recitals of this Agreement.
“REMAINING
PUT SHARES” shall have the meaning specified in Section 2.6.
“RULE
144” shall mean Rule 144 under the Securities Act or any similar provision then
in force under the Securities Act.
“SEC”
shall mean the Securities and Exchange Commission.
“SECTION
4(2)” shall have the meaning specified in the recitals of this Agreement.
“SECURITIES
ACT” shall have the meaning specified in the recitals of this Agreement.
“SEC
DOCUMENTS” shall mean, as of a particular date, all reports and other documents
filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act
since the beginning of the Company’s then most recently completed fiscal year as
of the time in question (provided that if the date in question is within ninety
days of the beginning of the Company’s fiscal year, the term shall include all
documents filed since the beginning of the second preceding fiscal year).
“SUBSCRIPTION
DATE” shall mean the date on which this Agreement is executed and delivered by
the Company and Investor.
“THIRD
PARTY CLAIM” shall have the meaning specified in Section 9.3(a).
“TRADING
DAY” shall mean any day during which the Principal Market shall be open for
business.
“TRANSACTION
DOCUMENTS” means the Private Equity Credit Agreement, the Registration Rights
Agreement, Closing Certificate, and the Transfer Agent
Instructions.
“TRANSFER
AGENT” shall mean the transfer agent for the Common Stock (and to any substitute
or replacement transfer agent for the Common Stock upon the Company’s
appointment of any such substitute or replacement transfer agent).
-
7
-
“TRANSFER
AGENT INSTRUCTIONS” shall
mean the instructions for the Transfer Agent attached hereto as Exhibit
E.
“UNDERWRITER”
shall mean any underwriter participating in any disposition of the Registrable
Securities on behalf of Investor pursuant to a Registration
Statement.
“VALUATION
EVENT” shall mean an event in which the Company at any time during a Valuation
Period takes any of the following actions:
|
(a)
|
subdivides
or combines the Common Stock;
|
|
(b)
|
pays
a dividend in shares of Common Stock or makes any other distribution
of
shares of Common Stock, except for dividends paid with respect to
the
Preferred Stock;
|
|
(c)
|
issues
any options or other rights to subscribe for or purchase shares of
Common
Stock and the price per share for which shares of Common Stock may
at any
time thereafter be issuable pursuant to such options or other rights
shall
be less than the Bid Price in effect immediately prior to such
issuance;
|
|
(d)
|
issues
any securities convertible into or exchangeable for shares of Common
Stock
and the consideration per share for which shares of Common Stock
may at
any time thereafter be issuable pursuant to the terms of such convertible
or exchangeable securities shall be less than the Bid Price in effect
immediately prior to such issuance;
|
|
(e)
|
issues
shares of Common Stock otherwise than as provided in the foregoing
subsections (a) through (d), at a price per share less, or for other
consideration lower, than the Bid Price in effect immediately prior
to
such issuance, or without consideration;
|
|
(f)
|
makes
a distribution of its assets or evidences of indebtedness to the
holders
of Common Stock as a dividend in liquidation or by way of return
of
capital or other than as a dividend payable out of earnings or surplus
legally available for dividends under applicable law or any distribution
to such holders made in respect of the sale of all or substantially
all of
the Company’s assets (other than under the circumstances provided for in
the foregoing subsections (a) through (e); or
|
|
(g)
|
takes
any action affecting the number of Outstanding Common Stock, other
than an
action described in any of the foregoing subsections (a) through
(f)
hereof, inclusive, which in the opinion of the Company’s Board of
Directors, determined in good faith, would have a materially adverse
effect upon the rights of Investor at the time of a Put.
|
-
8
-
“VALUATION
PERIOD” shall mean the period of ten (10) Trading Days immediately following the
date on which the applicable Put Notice is deemed to be delivered and during
which the Purchase Price of the Common Stock is valued; provided, however,
that
if a Valuation Event occurs during any Valuation Period, a new Valuation Period
shall begin on the Trading Day immediately after the occurrence of such
Valuation Event and end on the tenth (10th) Trading Day thereafter.
“WEIGHTED
AVERAGE VOLUME” shall mean the average of the Weighted Volume for the relevant
days.
“WEIGHTED
VOLUME” shall mean the product of (a) the Closing Bid Price times (b) the volume
on the Principal Market.
ARTICLE
II
PURCHASE
AND SALE OF COMMON STOCK
Section
2.1 INVESTMENTS.
(a) PUTS.
Upon the terms and conditions set forth herein (including, without limitation,
the provisions of Article VII), on any Put Date the Company may exercise a
Put
by the delivery of a Put Notice. The number of Put Shares that Investor shall
receive pursuant to such Put shall be determined by dividing the Investment
Amount specified in the Put Notice by the Purchase Price with respect to such
Put Date.
(b)
MINIMUM AMOUNT OF PUTS. The Company shall, in accordance with Section 2.2(a),
deliver to Investor during the Commitment Period, Put Notices with an aggregate
Investment Amount at least equal to the Minimum Commitment Amount. If the
Company for any reason fails to issue and deliver such Put Shares during the
Commitment Period, on the first Trading Day after the expiration of the
Commitment Period, the Company shall wire to Investor a sum in immediately
available funds equal to the product of (i) the Minimum Commitment Amount minus
the aggregate Investment Amounts of the Put Notices delivered to Investor
hereunder, and (ii) the Discount.
(c)
MAXIMUM AMOUNT OF PUTS. No more than 7,334,996 shares of Common Stock
(representing approximately 30% of the shares of Common Stock outstanding on
the
date hereof) may be issued and sold to Investor pursuant to this Agreement.
Section
2.2 MECHANICS.
(a)
PUT
NOTICE. At any time during the Commitment Period, the Company may deliver a
Put
Notice to Investor, subject to the conditions set forth in Section 7.2;
provided, however, the Investment Amount for each Put as designated by the
Company in the applicable Put Notice shall be neither less than the Minimum
Put
Amount nor more than the Maximum Put Amount.
-
9
-
(b)
DATE
OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the
Trading Day it is received by facsimile or otherwise by Investor if such notice
is received on or prior to 12:00 noon New York time, or (ii) the immediately
succeeding Trading Day if it is received by facsimile or otherwise after 12:00
noon New York time on a Trading Day or at anytime on a day which is not a
Trading Day.
Section
2.3 CLOSINGS. On or prior to each Closing Date for a Put, (a) the Company shall
deliver to Investor, one or more certificates, at Investor’s option,
representing the Put Shares to be purchased by Investor pursuant to Section
2.1
herein, registered in the name of Investor and (b) Investor shall deliver to
the
Company the Investment Amount specified in the Put Notice by wire transfer
of
immediately available funds to an account designated by the Company within
24
hours after the Closing Date. In lieu of delivering physical certificates
representing the Common Stock issuable in accordance with clause (a) of this
Section 2.3, and provided that the Transfer Agent then is participating in
the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of Investor, the Company shall use its commercially
reasonable efforts to cause the Transfer Agent to electronically transmit,
prior
to the Closing Date, the Put Shares by crediting the account of the Investor’s
prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”)
system, and provide proof satisfactory to the Investor of such delivery. In
addition, on or prior to such Closing Date, each of the Company and Investor
shall deliver all documents, instruments and writings required to be delivered
or reasonably requested by either of them pursuant to this Agreement in order
to
implement and effect the transactions contemplated herein. Within 24 hours
after
the Closing Date and provided all conditions to Closing have been satisfied
by
the Company, the Investor shall wire transfer to the Company, the Investment
Amount, less any applicable fees and expenses.
Section
2.4 [INTENTIONALLY OMITTED]
Section
2.5 TERMINATION OF INVESTMENT OBLIGATION. The obligation of Investor pursuant
to
this Agreement to purchase shares of Common Stock shall terminate permanently
(including with respect to a Closing Date that has not yet occurred) in the
event that (a) there shall occur any stop order or suspension of the
effectiveness of any Registration Statement for an aggregate of thirty (30)
Trading Days during the Commitment Period, for any reason other than deferrals
or suspension during a Blackout Period in accordance with the Registration
Rights Agreement, as a result of corporate developments subsequent to the
Subscription Date that would require such Registration Statement to be amended
to reflect such event in order to maintain its compliance with the disclosure
requirements of the Securities Act, or (b) the Company shall at any time fail
to
comply with the requirements of Section 6.3, 6.4, or 6.6 and such failure shall
continue for more than thirty (30) days.
-
10
-
Section
2.6 BLACKOUT SHARES. In the event that, (a) within fifteen (15) Trading Days
following any Closing Date, the Company gives a Blackout Notice to Investor
of a
Blackout Period in accordance with the Registration Rights Agreement, and (b)
the Bid Price on the Trading Day immediately preceding such Blackout Period
(“OLD BID PRICE”) is greater than the Bid Price on the first Trading Day
following such Blackout Period that Investor may sell its Registrable Securities
pursuant to an effective Registration Statement (“NEW BID PRICE”), then the
Company shall issue to Investor the number of additional shares of Registrable
Securities (the “BLACKOUT SHARES”) equal to the difference between (i) the
product of the number of Put Shares held by Investor immediately prior to the
Blackout Period that were issued on the most recent Closing Date(the “REMAINING
PUT SHARES”) multiplied by the Old Bid Price, divided by the New Bid Price, and
(ii) the Remaining Put Shares that were issued on the most recent Closing Date.
Section
2.7 [INTENTIONALLY LEFT BLANK]
Section
2.8 LIQUIDATED DAMAGES. Each of the Company and Investor acknowledge and agree
that the requirement to issue Blackout Shares under Section 2.6 shall give
rise
to liquidated damages and not penalties. Each of the Company and Investor
further acknowledge that (a) the amount of loss or damages likely to be incurred
is incapable or is difficult to precisely estimate, (b) the amount specified
in
such Section bears a reasonable proportion and is not plainly or grossly
disproportionate to the probable loss likely to be incurred by Investor in
connection with the failure by the Company to make Puts with aggregate Purchase
Prices totaling at least the Minimum Commitment Amount or in connection with
a
Blackout Period under the Registration Rights Agreement, and (c) each of the
Company and Investor are sophisticated business parties and have been
represented by sophisticated and able legal and financial counsel and negotiated
this Agreement at arm’s length.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF INVESTOR
Investor
represents and warrants to the Company that:
Section
3.1 INTENT.
Investor is entering into this Agreement for its own account and Investor has
no
present arrangement (whether or not legally binding) at any time to sell the
Common Stock to or through any person or entity; provided, however, Investor
reserves the right to dispose of the Common Stock at any time in accordance
with
federal and state securities laws applicable to such disposition.
Section
3.2 SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as
described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor
(as
defined in Rule 501 of Regulation D), and Investor has such experience in
business and financial matters that it is capable of evaluating the merits
and
risks of an investment in
-
11
-
the
Common Stock. Investor acknowledges that an investment in the Common Stock
is
speculative and involves a high degree of risk.
Section
3.3 AUTHORITY. (a) Investor has the requisite power and authority to enter
into
and perform its obligations under this Agreement and the transactions
contemplated hereby in accordance with its terms; (b) the execution and delivery
of this Agreement and the Registration Rights Agreement, and the consummation
by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary action and no further consent or authorization of Investor
or
its partners is required; and (c) this Agreement has been duly authorized and
validly executed and delivered by Investor and is a valid and binding agreement
of Investor enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other
equitable principles of general application.
Section
3.4 NOT AN AFFILIATE. Investor is not an officer, director or “affiliate” (as
that term is defined in Rule 405 of the Securities Act) of the
Company.
Section
3.5 ORGANIZATION AND STANDING. Investor is a limited liability company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands, and has all requisite power and authority to own, lease and operate
its
properties and to carry on its business as now being conducted. Investor is
duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a material adverse effect on
Investor.
Section
3.6 ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and
any
other document or instrument contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, and compliance with the
requirements hereof and thereof, will not (a) violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on Investor, (b)
violate any provision of any indenture, instrument or agreement to which
Investor is a party or is subject, or by which Investor or any of its assets
is
bound, or conflict with or constitute a material default thereunder, (c) result
in the creation or imposition of any lien pursuant to the terms of any such
indenture, instrument or agreement, or constitute a breach of any fiduciary
duty
owed by Investor to any third party, or (d) require the approval of any
third-party (that has not been obtained) pursuant to any material contract,
instrument, agreement, relationship or legal obligation to which Investor is
subject or to which any of its assets, operations or management may be
subject.
Section
3.7 DISCLOSURE; ACCESS TO INFORMATION. Investor has received all documents,
records, books and other information pertaining to Investor’s investment in the
Company that has been requested by Investor. Investor has reviewed or received
copies of the SEC Documents.
-
12
-
Section
3.8 MANNER OF SALE. At no time was Investor presented with or solicited by
or
through any leaflet, public promotional meeting, television advertisement or
any
other form of general solicitation or advertising.
Section
3.9 FINANCIAL CAPABILITY. Investor presently has the financial capacity and
the
necessary capital to perform its obligations hereunder and shall and has
provided to the Company such financial and other information that the Company
has requested to demonstrate such capacity.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to Investor that, except as disclosed in the
SEC
Documents:
Section
4.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly organized
and
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Company
is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a Material Adverse Effect.
Section
4.2 AUTHORITY. (a) The Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and the
Registration Rights Agreement and to issue the Put Shares and the Blackout
Shares, if any; (b) the execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation by it of
the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is required; and (c) each
of
this Agreement and the Registration Rights Agreement has been duly executed
and
delivered by the Company and constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.
Section
4.3 CAPITALIZATION. As of March 31, 2005, the authorized capital stock of the
Company consisted of the following:
Common
stock, $.0001 par value, 300,000,000 shares authorized, 148,274,286 shares
issued and outstanding at December 31, 2005
-
13
-
Redeemable
Preferred stock, Series B, $.01 par value, 125 shares authorized; 0 shares
at
December 31,2005 (Retired).
Preferred
stock, Series C, $.01 par value, 175 shares authorized; 52.97 shares as of
December 31, 2004; 10.99 shares outstanding at December 31, 2005.
Preferred
stock, Series D, $.01 par value, 75 shares authorized; 0 shares issued as of
December 31, 2005 (Retired).
Preferred
stock, Series E, $.01 par value, 106.4 shares authorized, 106.4 shares
outstanding at December 31, 2005.
Preferred
Stock Series G, $.01 par value , 1069 shares authorized; 1069 shares outstanding
at December 31, 2005.
Preferred
stock Series H, $.01 par value, 13,500 shares authorized, 12,582 shares are
outstanding at December 31, 2005.
Preferred
stock Series I, $.01 par value 1000 shares authorized; 490.5 shares issued
and
outstanding as of December 31, 2005.
All
of
the outstanding shares of Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable.
Section
4.4 COMMON STOCK. The Company has registered the Common Stock pursuant to
Section 12(b) or 12(g) of the Exchange Act and is in full compliance with all
reporting requirements of the Exchange Act, and the Company has maintained
all
requirements for the continued listing or quotation of the Common Stock, and
such Common Stock is currently listed or quoted on the Principal Market. As
of
the date of this Agreement, the Principal Market is the OTC Bulletin Board.
Section
4.5 SEC DOCUMENTS. The Company has delivered or made available to Investor
true
and complete copies of the SEC Documents on file as of December 31, 2005. To
the
best of Company’s knowledge, the Company has not provided to Investor any
information that, according to applicable law, rule or regulation, should have
been disclosed publicly prior to the date hereof by the Company, but which
has
not been so disclosed. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and other federal, state and local laws,
rules
and regulations applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply as to form and substance in all material respects with
applicable
-
14
-
accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (a) as may
be
otherwise indicated in such financial statements or the notes thereto or (b)
in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in
all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
Section
4.6 EXEMPTION FROM REGISTRATION; VALID ISSUANCES. To the best of Company’s
knowledge, the sale and issuance of the Put Shares and the Blackout Shares,
if
any, in accordance with the terms and on the bases of the representations and
warranties set forth in this Agreement, may and shall be properly issued by
the
Company to Investor pursuant to an exemption from registration pursuant to
the
Securities Act and/or any applicable state law. When issued and paid for as
herein provided, the Put Shares, and the Blackout Shares, if any, shall be
duly
and validly issued, fully paid, and nonassessable. Neither the sales of the
Put
Shares or the Blackout Shares, if any, pursuant to, nor the Company’s
performance of its obligations under, this Agreement or the Registration Rights
Agreement shall (a) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Put Shares or the Blackout Shares, if
any,
or any of the assets of the Company, or (b) entitle the holders of Outstanding
Common Stock to preemptive or other rights to subscribe to or acquire the Common
Stock or other securities of the Company. The Put Shares and the Blackout
Shares, if any, shall not subject Investor to personal liability by reason
of
the ownership thereof.
Section
4.7 NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS TRANSACTION.
Neither the Company nor any of its affiliates nor any person acting on its
or
their behalf (a) has conducted or will conduct any general solicitation (as
that
term is used in Rule 502(c) of Regulation D) or general advertising with respect
to any of the Put Shares or the Blackout Shares, if any, or (b) made any offers
or sales of any security or solicited any offers to buy any security under
any
circumstances that would require registration of the Common Stock under the
Securities Act.
Section
4.8 CORPORATE DOCUMENTS. The Company has furnished or made available to Investor
true and correct copies of the Company’s Certificate of Incorporation, as
amended and in effect on the date hereof (the “CERTIFICATE”), and the Company’s
By-Laws, as amended and in effect on the date hereof (the “BY-LAWS”).
Section
4.9 NO CONFLICTS. The execution, delivery and performance of this Agreement
by
the Company and the consummation by the Company of the transactions contemplated
hereby, including without limitation the issuance of the Put Shares and the
-
15
-
Blackout
Shares, if any, do not and will not (a) result in a violation of the Certificate
or By-Laws or (b) conflict with, or constitute a material default (or an event
that with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration
or
cancellation of, any material agreement, indenture, instrument or any “lock-up”
or similar provision of any underwriting or similar agreement to which the
Company is a party, or (c) result in a violation of any federal, state, local
or
foreign law, rule, regulation, order, judgment or decree (including federal
and
state securities laws and regulations)applicable to the Company or by which
any
property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations
and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect) nor is the Company otherwise in violation of, conflict with
or
in default under any of the foregoing; provided, however, that for purposes
of
the Company’s representations and warranties as to violations of foreign law,
rule or regulation referenced in clause (c), such representations and warranties
are made only to the best of the Company’s knowledge insofar as the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby are or may be affected
by
the status of Investor under or pursuant to any such foreign law, rule or
regulation. The business of the Company is not being conducted in violation
of
any law, ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have
a
Material Adverse Effect. The Company is not required under federal, state or
local law, rule or regulation to obtain any consent, authorization or order
of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Common Stock in accordance with the terms
hereof(other than any SEC, NASD or state securities filings that may be required
to be made by the Company subsequent to any Closing, any registration statement
that may be filed pursuant hereto, and any shareholder approval required by
the
rules applicable to companies whose common stock trades on the Over The Counter
Bulletin Board); provided that, for purposes of the representation made in
this
sentence, the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of Investor herein.
Section
4.10 NO MATERIAL ADVERSE CHANGE. Since December 31, 2005, no event has occurred
that would have a Material Adverse Effect on the Company, except as disclosed
in
the SEC Documents on file on the date hereof.
Section
4.11 NO
UNDISCLOSED LIABILITIES. The Company has no liabilities or obligations that
are
material, individually or in the aggregate, and that are not disclosed in the
SEC Documents on file on the date hereof or otherwise publicly announced, other
than those incurred in the ordinary course of the Company’s businesses since
September 31, 2005 and which, individually or in the aggregate, do not or would
not have a Material Adverse Effect on the Company.
Section
4.12 NO
UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since
-
16
-
September
31, 2005, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which
has
not been so publicly announced or disclosed in the SEC Documents on file on
the
date hereof.
Section
4.13 NO
INTEGRATED OFFERING. Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
other than pursuant to this Agreement, under circumstances that would require
registration of the Common Stock under the Securities Act.
Section
4.14 LITIGATION AND OTHER PROCEEDINGS. Except as may be set forth in the SEC
Documents on file on the date hereof, there are no lawsuits or proceedings
pending or to the best knowledge of the Company threatened, against the Company,
nor has the Company received any written or oral notice of any such action,
suit, proceeding or investigation, which would have a Material Adverse Effect.
Except as set forth in the SEC Documents on file on the date hereof, no
judgment, order, writ, injunction or decree or award has been issued by or,
so
far as is known by the Company, requested of any court, arbitrator or
governmental agency which would have a Material Adverse Effect.
Section
4.15 NO MISLEADING OR UNTRUE COMMUNICATION. The Company, any Person representing
the Company, and, to the knowledge of the Company, any other Person selling
or
offering to sell the Put Shares or the Blackout Shares, if any, in connection
with the transactions contemplated by this Agreement, have not made, at any
time, any oral communication in connection with the offer or sale of the same
which contained any untrue statement of a material fact or omitted to state
any
material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
ARTICLE
V
COVENANTS
OF INVESTOR
Section
5.1 COMPLIANCE WITH LAW. Investor’s trading activities with respect to shares of
the Common Stock will be in compliance with all applicable state and federal
securities laws, rules and regulations and the rules and regulations of the
NASD
and the Principal Market on which the Common stock is listed.
-
17
-
ARTICLE
VI
COVENANTS
OF THE COMPANY
Section
6.1 REGISTRATION RIGHTS. The Company shall cause the Registration Rights
Agreement to remain in full force and effect and the Company shall comply in
all
respects with the terms thereof.
Section
6.2 RESERVATION OF COMMON STOCK. Not later than January 31, 2006, the Company
shall have available and the Company shall reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Put Shares and
the
Blackout Shares, if any; such amount of shares of Common Stock to be reserved
shall be calculated based upon a minimum Purchase Price of $.05 for the Put
Shares under the terms and conditions of this Agreement and a good faith
estimate by the Company in consultation with Investor of the number of Blackout
Shares, if any, that will need to be issued. The number of shares so reserved
from time to time, as theretofore increased or reduced as hereinafter provided,
may be reduced by the number of shares actually delivered
hereunder.
Section
6.3 LISTING OF COMMON STOCK. The Company shall maintain the listing of the
Common Stock on a Principal Market and, if applicable, will cause the Put Shares
and the Blackout Shares, if any, to be listed on the Principal Market. The
Company further shall, if the Company applies to have the Common Stock traded
on
any other Principal Market, include in such application the Put Shares and
the
Blackout Shares, if any, and shall take such other action as is necessary or
desirable in the reasonable opinion of Investor to cause the Common Stock to
be
listed on such other Principal Market as promptly as possible. The Company
shall
use its commercially reasonable efforts to continue the listing and trading
of
the Common Stock on the Principal Market (including, without limitation,
maintaining sufficient net tangible assets) and will comply in all respects
with
the Company’s reporting, filing and other obligations under the bylaws or rules
of the NASD and the Principal Market.
Section
6.4 EXCHANGE ACT REGISTRATION. The Company shall take all commercially
reasonable steps to cause the Common Stock to continue to be registered under
Section 12(g) or 12(b) of the Exchange Act, will use its commercially reasonable
efforts to comply in all material respects with its reporting and filing
obligations under said Act, and will not take any action or file any document
(whether or not permitted by said Act or the rules thereunder)to terminate
or
suspend such registration or to terminate or suspend its reporting and filing
obligations under said Act.
Section
6.5 LEGENDS. The certificates evidencing the Put Shares and the Blackout Shares,
if any, shall be free of legends, except as provided for in Article
VIII.
Section
6.6 CORPORATE EXISTENCE. The Company shall take all commercially reasonable
steps necessary to preserve and continue the corporate existence of the Company.
Section
6.7 [INTENTIONALLY OMITTED]
-
18
-
Section
6.8 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO
MAKE
A PUT. The Company shall promptly notify Investor upon the occurrence of any
of
the following events in respect of a registration statement or related
prospectus in respect of an offering of Registrable Securities: (a) receipt
of
any request for additional information by the SEC or any other federal or state
governmental authority during the period of effectiveness of the registration
statement for amendments or supplements to the registration statement or related
prospectus; (b) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Registration Statement or the initiation of any proceedings for that purpose;
(c) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any
proceeding for such purpose; (d) the happening of any event that makes any
statement made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
registration statement, related prospectus or documents so that, in the case
of
a Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case
of
the related prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (e) the Company’s reasonable
determination that a post-effective amendment to the registration statement
would be appropriate, and the Company shall promptly make available to Investor
any such supplement or amendment to the related prospectus. The Company shall
not deliver to Investor any Put Notice during the continuation of any of the
foregoing events.
Section
6.9 EXPECTATIONS REGARDING PUT NOTICES. Within fifteen (15) business days after
the commencement of each calendar quarter occurring subsequent to the
commencement of the Commitment Period, the Company undertakes to notify Investor
as to its reasonable expectations as to the dollar amount it intends to raise
during such calendar quarter, if any, through the issuance of Put Notices.
Such
notification shall constitute only the Company’s good faith estimate with
respect to such calendar quarter and shall in no way obligate the Company to
raise such amount during such calendar quarter or otherwise limit its ability
to
deliver Put Notices during such calendar quarter. The failure by the Company
to
comply with this provision can be cured by the Company’s notifying Investor at
any time as to its reasonable expectations with respect to the current calendar
quarter.
Section
6.10 CONSOLIDATION; MERGER. The Company shall not, at any time after the date
hereof, effect any merger or consolidation of the Company with or into, or
a
transfer of all or substantially all of the assets of the Company to, another
entity unless the resulting successor or acquiring entity (if not the Company)
assumes by written instrument the obligation to deliver to Investor such shares
of Common Stock and/or
-
19
-
securities
as Investor is entitled to receive pursuant to this Agreement.
Section
6.11 ISSUANCE OF PUT SHARES AND BLACKOUT SHARES. The sale of the Put Shares
and
the issuance of the Blackout Shares, if any, shall be made in accordance with
the provisions and requirements of Regulation D (or shall otherwise be exempt
from the registration requirements of the Securities Act) and any applicable
state law.
Section
6.12 DILUTION. The number of shares of Common Stock issuable as Put Shares
may
increase substantially in certain circumstances, including, but not necessarily
limited to, the circumstance wherein the trading price of the Common Stock
declines during the period between the Effective Date and the end of the
Commitment Period. The Company’s executive officers and directors have studied
and fully understand the nature of the transactions contemplated by this
Agreement and recognize that they have a potential dilutive effect. The board
of
directors of the Company has concluded, in its good faith business judgment,
that such issuance is in the best interests of the Company. The Company
specifically acknowledges that its obligation to issue the Put Shares is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the
Company.
ARTICLE
VII
CONDITIONS
TO DELIVERY OF
PUT
NOTICES AND CONDITIONS TO CLOSING
Section
7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL
COMMON STOCK. The obligation hereunder of the Company to issue and sell the
Put
Shares to Investor incident to each Closing is subject to the satisfaction,
at
or before each such Closing, of each of the conditions set forth below.
(a)
ACCURACY OF INVESTOR’S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investor shall be true and correct in all material respects as
of
the date of this Agreement and as of the date of each such Closing as though
made at each such time, except for changes which have not had a Material Adverse
Effect.
(b)
PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied
in all respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by Investor at or prior
to
such Closing.
Section
7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT NOTICE
AND
THE OBLIGATION OF INVESTOR TO
-
20
-
PURCHASE
PUT SHARES. The right of the Company to deliver a Put Notice and the obligation
of Investor hereunder to acquire and pay for the Put Shares incident to a
Closing is subject to the satisfaction, on (a) the date of delivery of such
Put
Notice and (b) the applicable Closing Date (each a “CONDITION SATISFACTION
DATE”), of each of the following conditions:
(a)
REGISTRATION OF REGISTRABLE SECURITIES WITH THE SEC. As set forth in the
Registration Rights Agreement, the Company shall have filed with the SEC the
Initial Registration Statement with respect to the resale of the Initial
Registrable Securities by Investor and such Registration Statement shall have
been declared effective by the SEC prior to the first Put Date. For the purposes
of any Put Notice with respect to the Registrable Securities other than the
Initial Registrable Securities, the Company shall have filed with the SEC a
Registration Statement with respect to the resale of such Registrable Securities
by Investor which shall have been declared effective by the SEC prior to the
Put
Date therefore.
(b)
EFFECTIVE REGISTRATION STATEMENT. As set forth in the Registration Rights
Agreement, a Registration Statement shall have previously become effective
for
the resale by Investor of the Registrable Securities subject to such Put Notice
and such Registration Statement shall remain effective on each Condition
Satisfaction Date and (i) neither the Company nor Investor shall have received
notice that the SEC has issued or intends to issue a stop order with respect
to
such Registration Statement or that the SEC otherwise has suspended or withdrawn
the effectiveness of such Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the SEC’s concerns
have been addressed and Investor is reasonably satisfied that the SEC no longer
is considering or intends to take such action),and (ii) no other suspension
of
the use or withdrawal of the effectiveness of such Registration Statement or
related prospectus shall exist.
(c)
ACCURACY OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company shall be true and correct in all material respects
as of each Condition Satisfaction Date as though made at each such time (except
for representations and warranties specifically made as of a particular date)
with respect to all periods, and as to all events and circumstances occurring
or
existing to and including each Condition Satisfaction Date, except for any
conditions which have temporarily caused any representations or warranties
herein to be incorrect and which have been corrected with no continuing material
impairment to the Company or Investor.
(d)
PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement and the Registration Rights Agreement to be
performed, satisfied or complied with by the Company at or prior to each
Condition Satisfaction Date.
-
21
-
(e)
NO
INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or adopted by any
court
or governmental authority of competent jurisdiction that prohibits or directly
and materially adversely affects any of the transactions contemplated by this
Agreement, and no proceeding shall have been commenced that may have the effect
of prohibiting or materially adversely affecting any of the transactions
contemplated by this Agreement.
(f)
[INTENTIONALLY OMITTED]
(g)
NO
SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common
Stock shall not have been suspended by the SEC, the Principal Market or the
NASD
and the Common Stock shall have been approved for listing or quotation on and
shall not have been delisted from the Principal Market.
(h)
LEGAL
OPINION. The Company shall have caused to be delivered to Investor, within
five
(5) Trading Days of the effective date of the Initial Registration Statement
and
each subsequent Registration Statement, an opinion of the Company’s legal
counsel in the form of Exhibit C hereto, addressed to Investor.
(i)
[INTENTIONALLY OMITTED]
(j)
Notwithstanding anything to the contrary contained herein, if, on any Closing
Date, the number of Put Shares then to be purchased pursuant to a Put Notice
by
Investor would, when aggregated with all other shares of Common Stock then
held
by Investor (including, for the purposes of this Section 7.2(j), Common Stock
issuable upon conversion, exercise or exchange, as applicable, of Common Stock
Equivalents then held by Investor), cause Investor to beneficially own in excess
of 9.999% of the total number of issued and outstanding shares of Common Stock
after giving effect to the Put (the “Percentage Cap”), then the number of Put
Shares shall be reduced to the extent necessary for Investor’s beneficial
ownership of Common Stock, after giving effect to the Put, not to exceed the
Percentage Cap. For such purposes, beneficial ownership shall be determined
in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. In the event the number of Put Shares with respect
to
any Put are required to be reduced pursuant to this Section 7.2(j), Investor
shall provide, via facsimile, as soon as possible on the Closing Date, and
in no
event later than 12:00 p.m. EST, a notice to the Company setting forth the
maximum number of shares issuable pursuant to such put which would not result
in
Investor’s beneficial ownership exceeding the Percentage Cap.
(k)
NO
KNOWLEDGE. The Company shall have no knowledge of any event more likely than
not
to have the effect of causing such Registration Statement to be suspended or
otherwise ineffective (which event is more likely than not to occur within
the
fifteen Trading Days following the Trading Day on which such Notice is deemed
delivered.
-
22
-
(l)
SHAREHOLDER VOTE. The issuance of shares of Common Stock with respect to the
applicable Closing, if any, shall not violate the shareholder approval
requirements of the Principal Market.
(m)
OTHER. On each Condition Satisfaction Date, Investor shall have received a
certificate in the form and substance of Exhibit D hereto, executed by an
executive officer of the Company.
Section
7.3 DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.
(a)
The
Company shall make available for inspection and review by Investor, advisors
to
and representatives of Investor (who may or may not be affiliated with Investor
and who are reasonably acceptable to the Company), and any Underwriter, any
Registration Statement or amendment or supplement thereto or any blue sky,
NASD
or other filing, all financial and other records, all SEC Documents and other
filings with the SEC, and all other corporate documents and properties of the
Company as may be reasonably necessary for the purpose of such review, and
cause
the Company’s officers, directors and employees to supply all such information
reasonably requested by Investor or any such representative, advisor or
Underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made
or
submitted by any of them), prior to and from time to time after the filing
and
effectiveness of such Registration.
(b)
Each
of the Company, its officers, directors, employees and agents shall in no event
disclose non-public information to Investor, advisors to or representatives
of
Investor.
(c)
Nothing herein shall require the Company to disclose non-public information
to
Investor or its advisors or representatives, and the Company represents that
it
does not disseminate non-public information to any investors who purchase stock
in the Company in a public offering, to money managers or to securities
analysts; provided, however, that notwithstanding anything herein to the
contrary, the Company shall, as hereinabove provided, immediately notify the
advisors and representatives of Investor and any Underwriters of any event
or
the existence of any circumstance(without any obligation to disclose the
specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically
or
generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in a Registration Statement
would cause such prospectus to include a material misstatement or to omit a
material fact required to be stated therein in order to make the statements
therein, in light of the circumstances in which they were made, not misleading.
Nothing contained in this Section 7.3 shall be construed to mean that such
persons or entities other than Investor (without the written consent of Investor
prior to disclosure of such information) may not
-
23
-
obtain
non-public information in the course of conducting due diligence in accordance
with the terms and conditions of this Agreement and nothing herein shall prevent
any such persons or entities from notifying the Company of their opinion that
based on such due diligence by such persons or entities, any Registration
Statement contains an untrue statement of a material fact or omits a material
fact required to be stated in such Registration Statement or necessary to make
the statements contained therein, in light of the circumstances in which they
were made, not misleading.
ARTICLE
VIII
LEGENDS
Section
8.1 LEGENDS. (a) Except
as
otherwise provided below, each certificate representing Registrable Securities
will bear the following legend (the “LEGEND”):
The
securities represented by this certificate have not been registered under the
Securities Act of 1933 (the “Securities Act”) or qualified under applicable
state securities laws. These securities may not be offered, sold, pledged,
hypothecated, transferred or otherwise disposed of except pursuant to (i) an
effective registration statement and qualification in effect with respect
thereto under the Securities Act and under any applicable state securities
law,
(ii) to the extent applicable, Rule 144 under the Securities Act, or (iii)
an
opinion of counsel reasonably acceptable to the Company that such registration
and qualification is not required under applicable federal and state securities
laws.”
(b) As
soon
as practicable after the execution and delivery hereof, the Company shall issue
to the Transfer Agent the Transfer Agent Instructions. Such instructions shall
be irrevocable by the Company from and after the date thereof or from and after
the issuance thereof except as otherwise expressly provided in the Registration
Rights Agreement. It is the intent and purpose of such instructions, as provided
therein, to require the Transfer Agent to issue to Investor certificates
evidencing shares of Common Stock incident to a Closing, free of the Legend,
without consultation by the transfer agent with the Company or its counsel
and
without the need for any further advice or instruction or documentation to
the
Transfer Agent by or from the Company or its counsel or Investor; provided
that
(a) a Registration Statement shall then be effective, (b) Investor confirms
to
the Transfer Agent and the Company that it has or intends to sell such Common
Stock to a third party which is not an affiliate of Investor or the Company
and
Investor agrees to redeliver the certificate representing such shares of Common
Stock to the Transfer Agent to add the Legend in the event the Common Stock
is
not sold, and (c) Investor confirms to the transfer agent and the Company that
Investor has complied with the prospectus delivery requirement under the
Securities Act. At any time after the
-
24
-
Effective
Date, upon surrender of one or more certificates evidencing Common Stock that
bear the Legend, to the extent accompanied by a notice requesting the issuance
of new certificates free of the Legend to replace those
surrendered.
Section
8.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend other than the
one
specified in Section 8.1 has been or shall be placed on the share certificates
representing the Common Stock and no instructions or “stop transfers orders,” so
called, “stock transfer restrictions,” or other restrictions have been or shall
be given to the Company’s transfer agent with respect thereto other than as
expressly set forth in this Article VIII.
Section
8.3 COVER. If the Company fails for any reason to deliver the Put Shares on
such
Closing Date and the holder of the Put Shares (a “Investor”) purchases, in an
open market transaction or otherwise, shares of Common Stock (the “Covering
Shares”) in order to make delivery in satisfaction of a sale of Common Stock by
such Investor (the “Sold Shares”), which delivery such Investor anticipated to
make using the Put Shares (a “Buy-In”), then the Company shall pay to such
Investor, in addition to all other amounts contemplated in other provisions
of
the Transaction Documents, and not in lieu thereof, the Buy-In Adjustment Amount
(as defined below). The “Buy-In Adjustment Amount” is the amount equal to the
excess, if any, of (x) such Investor’s total purchase price (including brokerage
commissions, if any) for the Covering Shares over (y) the net proceeds (after
brokerage commissions, if any) received by such Investor from the sale of the
Sold Shares. The Company shall pay the Buy-In Adjustment Amount to such Investor
in immediately available funds immediately upon demand by such Investor. By
way
of illustration and not in limitation of the foregoing, if such Investor
purchases Covering Shares having a total purchase price (including brokerage
commissions) of $11,000 to cover a Buy-In with respect to shares of Common
Stock
that it sold for net proceeds of $10,000, the Buy-In Adjustment Amount that
the
Company will be required to pay to such Investor will be $1,000.
Section
8.4 INVESTOR’S COMPLIANCE. Nothing in this Article VIII shall affect in any way
Investor’s obligations under any agreement to comply with all applicable
securities laws upon resale of the Common Stock.
ARTICLE
IX
NOTICES;
INDEMNIFICATION
Section
9.1 NOTICES. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (a) personally served,(b) deposited in
the
mail, registered or certified, return receipt requested, postage prepaid, (c)
delivered by reputable air courier service with charges prepaid, or (d)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice given in accordance herewith. Any
-
25
-
notice
or
other communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address
or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (ii) on the second business day
following the date of mailing by express courier service or on the fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
If
to the
Company: Global
Matrechs, Inc.
00
Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Telephone
No.: (000) 000-0000
Telecopier
No.: (000) 000-0000
if
to
Investor:
Brittany
Capital Management Ltd.
Xxxxxxxxxx
Xxxxx
00
Xxxxxxxxxx Xxxxxx
PO
Box
N-10818
Nassau,
New Providence
Bahamas
Either
party hereto may from time to time change its address or facsimile number for
notices under this Section 9.1 by giving at least ten (10) days’ prior written
notice of such changed address or facsimile number to the other party hereto.
Section
9.2 INDEMNIFICATION.
The
Company agrees to indemnify and hold harmless Investor and its officers,
directors, employees, and agents, and each Person or entity, if any, who
controls Investor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the Controlling Persons (as
defined in the Registration Rights Agreement) from and against any Damages,
joint or several, and any action in respect thereof to which Investor, its
partners, affiliates, officers, directors, employees, and duly authorized
agents, and any such Controlling Person becomes subject to, resulting from,
arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part
of
Company contained in this Agreement, as such Damages are incurred, except to
the
extent such Damages result primarily from Investor’s failure to perform any
covenant or agreement contained in this Agreement or Investor’s or its
officer’s, director’s, employee’s, agent’s or Controlling Person’s negligence,
recklessness or bad faith in performing its obligations under this Agreement.
-
26
-
Section
9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification
by any Indemnified Party (as defined below) under Section 9.2 shall be asserted
and resolved as follows:
(a)
In
the event any claim or demand in respect of which any person claiming
indemnification under any provision of this Article (an “INDEMNIFIED PARTY”)
might seek indemnity under this Article is asserted against or sought to be
collected from such Indemnified Party by a person other than a party hereto
or
an affiliate thereof (a “THIRD PARTY CLAIM”), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party’s claim for indemnification that is being asserted under any
provision of this Article against any person (the “INDEMNIFYING PARTY”),
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim (a “CLAIM NOTICE”)
with reasonable promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party shall not be obligated to indemnify the Indemnified Party with respect
to
such Third Party Claim to the extent that the Indemnifying Party’s ability to
defend has been prejudiced by such failure of the Indemnified Party. The
Indemnifying Party shall notify the Indemnified Party as soon as practicable
within the period ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined
below) (the “DISPUTE PERIOD”) whether the Indemnifying Party disputes its
liability or the amount of its liability to the Indemnified Party under this
Article and whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third Party Claim.(i)If
the Indemnifying Party notifies the Indemnified Party within the Dispute Period
that the Indemnifying Party desires to defend the Indemnified Party with respect
to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying
Party shall have the right to defend, with counsel reasonably satisfactory
to
the Indemnified Party, at the sole cost and expense of the Indemnifying Party,
such Third Party Claim by all appropriate proceedings, which proceedings shall
be vigorously and diligently prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying Party (but
only with the consent of the Indemnified Party in the case of any settlement
that provides for any relief other than the payment of monetary damages or
that
provides for the payment of monetary damages as to which the Indemnified Party
shall not be indemnified in full pursuant to this Article). The Indemnifying
Party shall have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the Indemnified Party
may, at the sole cost and expense of the Indemnified Party, at any time prior
to
the Indemnifying Party’s delivery of the notice referred to in the first
sentence of this clause (i), file any motion, answer or other pleadings or
take
any other action that the Indemnified Party reasonably believes to be necessary
or appropriate to protect its interests; and provided further, that if requested
by the Indemnifying Party, the Indemnified Party will, at the sole cost and
-
27
-
expense
of the Indemnifying Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying Party elects
to
contest. The Indemnified Party may participate in, but not control, any defense
or settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to this clause (i), and except as provided in the preceding sentence,
the Indemnified Party shall bear its own costs and expenses with respect to
such
participation. Notwithstanding the foregoing, the Indemnified Party may takeover
the control of the defense or settlement of a Third Party Claim at any time
if
it irrevocably waives its right to indemnity under this Article with respect
to
such Third Party Claim. (ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the Indemnifying Party desires
to defend the Third Party Claim pursuant to Section 9.3(a), or if the
Indemnifying Party gives such notice but fails to prosecute vigorously and
diligently or settle the Third Party Claim, or if the Indemnifying Party fails
to give any notice whatsoever within the Dispute Period, then the Indemnified
Party shall have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified Party in a reasonable manner
and in good faith or will be settled at the discretion of the Indemnified
Party(with the consent of the Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will have full control of such
defense and proceedings, including any compromise or settlement thereof;
provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnified Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is contesting. Notwithstanding
the foregoing provisions of this clause (ii), if the Indemnifying Party has
notified the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability or the amount of its liability hereunder to the
Indemnified Party with respect to such Third Party Claim and if such dispute
is
resolved in favor of the Indemnifying Party in the manner provided in clause
(iii) below, the Indemnifying Party will not be required to bear the costs
and
expenses of the Indemnified Party’s defense pursuant to this clause (ii) or of
the Indemnifying Party’s participation therein at the Indemnified Party’s
request, and the Indemnified Party shall reimburse the Indemnifying Party in
full for all reasonable costs and expenses incurred by the Indemnifying Party
in
connection with such litigation. The Indemnifying Party may participate in,
but
not control, any defense or settlement controlled by the Indemnified Party
pursuant to this clause (ii), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation. (iii) If the Indemnifying
Party notifies the Indemnified Party that it does not dispute its liability
or
the amount of its liability to the Indemnified Party with respect to the Third
Party Claim under this Article or fails to notify the Indemnified Party within
the Dispute Period whether the Indemnifying Party disputes its liability or
the
amount of its liability to the Indemnified Party with respect to such Third
Party Claim, the amount of Damages specified in the Claim Notice shall be
conclusively deemed a liability of the Indemnifying Party under this Article
and
the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability
or
the amount of its liability with respect to such claim, the Indemnifying Party
and the Indemnified Party shall proceed
-
28
-
in
good
faith to negotiate a resolution of such dispute; provided, however, that if
the
dispute is not resolved within thirty (30) days after the Claim Notice, the
Indemnifying Party shall be entitled to institute such legal action as it deems
appropriate.
(b)
In
the event any Indemnified Party should have a claim under this Article against
the Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver a written notification of a claim for indemnity
under this Article specifying the nature of and basis for such claim, together
with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim (an “INDEMNITY NOTICE”) with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party
to
give the Indemnity Notice shall not impair such party’s rights hereunder except
to the extent that the Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the amount of the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim
or
the amount of the claim described in such Indemnity Notice, the amount of
Damages specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under this Article and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its liability or the amount of
its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days
after the Claim Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.
(c) The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar rights of the Indemnified Party against the Indemnifying
Party
or others, and (ii) any liabilities the Indemnifying Party may be subject
to.
Section
9.4 REIMBURSEMENT. (i) any Investor, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any stockholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if such Investor is impleaded
in
any such action, proceeding or investigation by any Person, or (ii) any
Investor, other than by reason of its gross negligence or willful misconduct
or
by reason of its trading of the Common Stock in a manner that is illegal under
the federal securities laws, becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC against or involving the Company
or in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if such Investor is impleaded
in
any such action, proceeding or investigation by any Person, then in any such
case, the Company will reimburse such Investor for its reasonable legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, as such expenses are incurred. In addition,
other than with respect to any
-
29
-
matter
in
which such Investor is a named party, the Company will pay such Investor the
charges, as reasonably determined by such Investor, for the time of any officers
or employees of such Investor devoted to appearing and preparing to appear
as
witnesses, assisting in preparation for hearings, trials or pretrial matters,
or
otherwise with respect to inquiries, hearing, trials, and other proceedings
relating to the subject matter of this Agreement. 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 the Investor 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 the Investor 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, the Investor and
any
such Affiliate and any such Person. The Company also agrees that neither any
Investor nor any such Affiliate, 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 in connection with
or
as a result of the consummation of the Transaction Agreements except to the
extent that any losses, claims, damages, liabilities or expenses incurred by
the
Company result from the gross negligence or willful misconduct of such
Investor.
ARTICLE
X
MISCELLANEOUS
Section
10.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflicts of law. Each of the Company and Investor hereby
submit to the exclusive jurisdiction of the United States Federal and state
courts located in New York with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.
Section
10.2 JURY
TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in
any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection
with
the Transaction Documents.
Section
10.3 SPECIFIC
ENFORCEMENT. The Company and the Investor acknowledge and agree that irreparable
damage would occur to the Investor in the event that any of the provisions
of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Investor shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.
-
30
-
Section
10.4 ASSIGNMENT. Neither this Agreement nor any rights of Investor or the
Company hereunder may be assigned by either party to any other person.
Section
10.5 THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit
of
the Company and Investor, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
Section
10.6 TERMINATION. This Agreement shall terminate at the end of the Commitment
Period or as otherwise provided herein(unless extended by the agreement of
the
Company and Investor); provided, however, that the provisions of Article VI,
VIII, IX and Sections 10.2, 10.3 and 10.4 shall survive the termination of
this
Agreement.
Section
10.7 ENTIRE AGREEMENT. This Agreement and the instruments referenced herein
contain the entire understanding of the Company and Investor with respect to
the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor Investor makes any representation, warranty,
covenant or undertaking with respect to such matters.
Section
10.8 FEES AND EXPENSES. Except as otherwise provided in this Agreement or any
of
the Exhibits thereto, each of the Company and Investor agrees to pay its own
expenses in connection with the preparation of this Agreement and performance
of
its obligations hereunder. The Company shall pay all stamp or other similar
taxes and duties levied in connection with issuance of the Shares pursuant
hereto.
Section
10.9 NO BROKERS. Each of the Company and Investor represents that it has had
no
dealings in connection with this transaction with any finder or broker who
will
demand payment of any fee or commission from the other party, except that the
company agrees to pay the consultant, Greenfield Capital Partners, LLC., a
fee
in the amount of 1% of any money funded pursuant to a Put Notice. The Company
on
the one hand, and Investor, on the other hand, agree to indemnify the other
against and hold the other harmless from any and all liabilities to any persons
claiming brokerage commissions or finder’s fees on account of services purported
to have been rendered on behalf of the indemnifying party in connection with
this Agreement or the transactions contemplated hereby.
Section
10.10 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which may be executed by less than all of the Company and shall be
deemed to be an original instrument which shall be enforceable against the
parties actually executing such counterparts and all of which together shall
constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission
of
a copy of this Agreement bearing the signature of the parties so delivering
this
Agreement.
Section
10.11 SURVIVAL; SEVERABILITY. The representations, warranties,
-
31
-
covenants
and agreements of the Company hereto shall survive each Closing hereunder for
a
period of one (1) year thereafter. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force
and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement
to
any party.
Section
10.12 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other
party may reasonably request in order to carry out the intent and accomplish
the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
Section
10.13 NO STRICT CONSTRUCTION. 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.
Section
10.14 TITLE AND SUBTITLES. The titles and subtitles used in this Agreement
are
used for the convenience of reference and are not to be considered in construing
or interpreting this Agreement.
Section
10.15 REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied upon
for the determination of the trading price of the Common Stock on any given
Trading Day for the purposes of this Agreement shall be Bloomberg L.P. or any
successor thereto.
Section
10.16 PUBLICITY.
The Company and Investor shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior written consent of the other
parties, which consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is required by law,
in which such case the disclosing party shall provide the other parties with
prior notice of such public statement. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of Investor without the prior
written consent of such Investor, except to the extent required by law. Investor
acknowledges that this Agreement and all or part of the Transaction Documents
may be deemed to be “material contracts” as that term is defined by Item
601(b)(10) of Regulation S-K, and that the Company may therefore be required
to
file such documents as exhibits to reports or registration statements filed
under the Securities Act or the Exchange Act. Investor further agrees that
the
status of such documents and materials as material contracts shall be determined
solely by the Company, in consultation with its counsel.
[REMAINDER
OF PAGE LEFT BLANK]
-
32
-
IN
WITNESS WHEREOF, the parties hereto have caused this Private Equity Credit
Agreement to be executed by the undersigned, thereunto duly authorized, as
of
the date first set forth above.
| GLOBAL MATRECHS, INC. | ||
| |
|
|
| By: | /s/ | |
|
Name: Xxxxxxx Xxxxxxxx |
||
| Title: President | ||
| BRITTANY CAPITAL MANAGEMENT LTD. | ||
| |
|
|
| By: | /s/ | |
|
Name: |
||
| Title: Director | ||
-
33
-
EXHIBIT
10.1
EXHIBITS
EXHIBIT
A Registration
Rights Agreement
EXHIBIT
B Put
Notice
EXHIBIT
C Opinion
EXHIBIT
D Closing
Certificate
EXHIBIT
E Transfer
Agent Instructions