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EXHIBIT 99.3
FORM OF EQUITY PURCHASE AGREEMENT
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITY HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND REGISTRATION IS
THEREFORE NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. ANY
TRANSFEREE OF THIS EQUITY PURCHASE AGREEMENT SHOULD CAREFULLY REVIEW THE TERMS
OF THIS EQUITY PURCHASE AGREEMENT, INCLUDING SECTION 2(E)(VI) HEREOF. THE
AVAILABLE AMOUNT UNDER THIS EQUITY PURCHASE AGREEMENT MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(E)(VI) OF THIS EQUITY
PURCHASE AGREEMENT.
EQUITY PURCHASE AGREEMENT
XXXXXXXX.XXX, INC. EQUITY PURCHASE AGREEMENT NO. __
[ISSUANCE DATE] AVAILABLE AMOUNT $12,000,000
XXXXXXXX.XXX, INC., a Delaware corporation (the "COMPANY"), hereby
grants to FUSION CAPITAL FUND II, LLC or its permitted assigns ("HOLDER")
purchase rights with respect to the aggregate Available Amount (as defined
below) of Twelve Million Dollars ($12,000,000) in accordance with the terms
hereof.
1. Payments. The Holder agrees to make payments to the Company as
described in Section 2(b) hereof. All payments made under this Equity Purchase
Agreement shall be made in lawful money of the United States of America by check
or wire transfer of immediately available funds to such account as the Company
may from time to time designate by written notice in accordance with the
provisions of this Equity Purchase Agreement. Whenever any amount expressed to
be due by the terms of this Equity Purchase Agreement is due on any day which is
not a Trading Day (as defined below), the same shall instead be due on the next
succeeding day which is a Trading Day. For purposes of this Equity Purchase
Agreement, "TRADING DAY" shall mean any day on which the Principal Market (as
defined below) is open for customary trading. Capitalized terms used herein, and
not otherwise defined herein, shall have the meaning ascribed thereto in the
Master Facility Agreement, dated ________, 2000, pursuant to which this Equity
Purchase Agreement was originally entered into (as amended, restated,
supplemented or otherwise modified from time to time, the "MASTER FACILITY
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Agreement"). This Equity Purchase Agreement is entered into by the Company and
the Holder on the date hereof (the "ISSUANCE DATE") pursuant to the Master
Facility Agreement.
2. Purchase of Available Amount. The Holder shall purchase shares
of the Company's common stock, par value $___ per share (the "COMMON STOCK"), on
the terms and conditions set forth in this Section up to the Available Amount.
(a) Certain Defined Terms. For purposes of this Equity
Purchase Agreement, the following terms shall have the following
meanings:
(i) "AVAILABLE AMOUNT" means initially Twelve
Million Dollars ($12,000,000) in the aggregate which amount
shall be reduced by the Purchase Amount as the Holder
purchases shares of Common Stock pursuant to Section 2 hereof.
(ii) "CLOSING BID PRICE" means, for any security
as of any date, the last closing bid price for such security
on the Principal Market as reported by Bloomberg Financial
Markets ("BLOOMBERG"), or, if the Principal Market is not the
principal securities exchange or trading market for such
security, the last closing bid price of such security on the
principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.
(iii) "CLOSING SALE PRICE" means, for any security
as of any date, the last closing trade price for such security
on the Principal Market as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or
trading market for such security, the last closing trade price
of such security on the principal securities exchange or
trading market where such security is listed or traded as
reported by Bloomberg.
(iv) "FIXED PURCHASE PRICE" means the greater of:
(1) $6.00 or (2) 130% of the average of the Closing Bid Prices
of the Common Stock for the ten (10) consecutive Trading Days
prior to the Issuance Date, appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction.
(v) "MAJOR TRANSACTION" means any of the
following: (A) the consolidation, merger or other business
combination of the Company into another Person (other than
pursuant to a migratory merger effected solely for the purpose
of changing the jurisdiction of incorporation of the Company);
(B) any transaction by the Company, including the license,
sale or acquisition by the Company of securities, assets or
property, which involves or which could involve a fair value
of $5,000,000 or more in a single transaction or series of
related transactions; (C) the issuance of debt
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or equity securities in a transaction or a series of related
transactions involving the receipt by the Company of aggregate
proceeds of $5,000,000 (including fees and expenses paid with
respect to the issuance thereof) or more with any entity other
than the Holder or any of its affiliates; or (D) a purchase,
tender or exchange offer made to the holders of more than 50%
of the outstanding shares of Common Stock.
(vi) "MANDATORY PURCHASE RIGHTS" means the
mandatory purchase rights of the Company pursuant to Section
2(d)(iii).
(vii) "MATURITY DATE" means _____________, [INSERT
DATE THAT IS TWELVE MONTHS FROM THE ISSUANCE DATE].
(viii) "MONTHLY BASE AMOUNT" means One Million
Dollars ($1,000,000) per Monthly Period.
(ix) "MONTHLY PURCHASE AMOUNT" means a portion of
the Available Amount equal to the Monthly Base Amount for such
Monthly Period plus the Monthly Base Amount for any prior
Monthly Periods which has not been previously used to purchase
Common Stock pursuant to Section 2 hereof; provided, however,
that to the extent that the Company exercises its Mandatory
Purchase Rights, the Monthly Purchase Amount for any remaining
Monthly Periods shall be reduced by any amount subject to the
Mandatory Purchase Rights in reverse chronological order
(i.e., the Monthly Purchase Amount for the last remaining
Monthly Period shall be reduced first); provided further, on
or after _____________, [INSERT DATE THAT IS TWELVE MONTHS
FROM THE ISSUANCE DATE] or the announcement or consummation of
a Major Transaction, the Monthly Purchase Amount shall
thereafter be the entire remaining Available Amount.
(x) "MONTHLY PERIOD" means each of the following
periods of time:
Issuance Date to __________; ___________ to
__________; ___________ to __________; ___________ to
__________; ___________ to __________; ___________ to
__________; ___________ to __________; ___________ to
__________; ___________ to __________; ___________ to
__________; ___________ to __________; and
___________ to Maturity Date;
[TWELVE PERIODS EACH HAVING APPROXIMATELY 30 CALENDAR
DAYS. SPECIFIC DATES TO BE ENTERED AT CLOSING.]
If this Agreement is not terminated by the Company
or the Holder on or prior to the Maturity Date, after the
Maturity Date, "Monthly Period" shall mean each successive 30
day period.
(xi) "PERSON" means an individual or entity
including any a limited liability company, a partnership, a
joint venture, a corporation, a
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trust, an unincorporated organization and a government or any
department or agency thereof.
(xii) "PRINCIPAL MARKET" means The Nasdaq National
Market.
(xiii) "PURCHASE AMOUNT" means the portion of the
Available Amount submitted in a Purchase Notice to be used to
purchase Common Stock pursuant to Section 2 hereof.
(xiv) "PURCHASE DATE" means the actual date that
the Holder submits a Purchase Notice to the Company to
purchase Common Stock hereunder so long as the Holder shall
transmit by facsimile (or otherwise deliver) to the Company on
or prior to 11:59 p.m., Central Time on such date.
(xv) "PURCHASE PRICE" means, as of any Purchase
Date or other date of determination, the lower of the (A)
Fixed Purchase Price and the (B) Variable Purchase Price, each
in effect as of such date.
(xvi) "SALE PRICE" means, for any security as of
any date, the trade price for such security on the Principal
Market as reported by Bloomberg, or, if the Principal Market
is not the principal securities exchange or trading market for
such security, the trade price of such security on the
principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.
(xvii) "VARIABLE PURCHASE PRICE" means, as of any
Purchase Date or other date of determination, the lower of:
(A) the lowest Sale Price of the Common Stock on the Purchase
Date or such other date of determination and (B) the
arithmetic average of any two (2) Closing Bid Prices for the
Common Stock, selected by the Holder, during the ten (10)
consecutive Trading Days ending on the Trading Day immediately
preceding such Purchase Date or other date of determination
(to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other
similar transaction occurring during such ten (10) Trading
Days).
(b) Holder's Purchase Rights and Obligations. Subject to
the provisions of Sections 2(d) and 7 below, during each Monthly
Period, the Holder shall have the right to purchase shares of Common
Stock up to the Monthly Purchase Amount for such Monthly Period in
accordance with Section 2(e), at the Purchase Rate (as defined below).
Subject to the provisions of Sections 2(d) and 7 below, at any time on
or after the Maturity Date, the Holder shall have the right to purchase
shares of Common Stock up to the entire remaining Available Amount in
accordance with Section 2(e), at the Purchase Rate. Within three (3)
Trading Days of receipt of Purchase Shares, the Holder shall pay to the
Company
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an amount equal to the Purchase Amount with respect to such Purchase
Shares as full payment for the Purchase Shares so received. The Company
shall not issue any fraction of a share of Common Stock upon any
purchase. All shares of Common Stock (including fractions thereof)
issuable upon a purchase under this Equity Purchase Agreement shall be
aggregated for purposes of determining whether the purchase would
result in the issuance of a fraction of a share of Common Stock. If,
after the aforementioned aggregation, the issuance would result in the
issuance of a fraction of a share of Common Stock, the Company shall
round such fraction of a share of Common Stock up or down to the
nearest whole share.
(c) Purchase Rate. The number of shares of Common Stock
issuable upon purchase of a Purchase Amount of this Equity Purchase
Agreement pursuant to Section 2(b) shall be determined according to the
following formula (the "PURCHASE RATE"):
Purchase Amount
---------------
Purchase Price
(d) Limitations on Purchase.
(i) Limitation on Beneficial Ownership. The
Company shall not effect any purchase under this Equity
Purchase Agreement and the Holder shall not have the right to
purchase shares of Common Stock under this Equity Purchase
Agreement pursuant to Section 2(b) to the extent that after
giving effect to such purchase such Person (together with such
Person's affiliates) would beneficially own in excess of 9.99%
of the outstanding shares of the Common Stock following such
purchase. For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by a Person and
its affiliates or acquired by a Person and its affiliates, as
the case may be, shall include the number of shares of Common
Stock issuable upon a purchase under this Equity Purchase
Agreement with respect to which the determination is being
made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) a purchase of the remaining
Available Amount which has not been submitted for purchase,
and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company
(including, without limitation, any warrants) subject to a
limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by such Person
and its affiliates. For purposes of this Section, in
determining the number of outstanding shares of Common Stock
the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent
Form 10-Q or Form 10-K, as the case may be, (2) a more recent
public announcement by the Company or (3) any other written
communication by the Company or its transfer agent setting
forth the
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number of shares of Common Stock outstanding. Upon the
reasonable written or oral request of the Holder, the Company
shall promptly confirm orally and in writing to the Holder the
number of shares Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be
determined after giving effect to any purchases under this
Equity Purchase Agreement by the Holder since the date as of
which such number of outstanding shares of Common Stock was
reported. Except as otherwise set forth herein, for purposes
of this Section 2(d)(i), beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.
(ii) Company's Right to Block Purchases. The
right of the Holder to purchase shares of Common Stock under
this Equity Purchase Agreement pursuant to this Section 2
shall be limited as set forth below. If on any Trading Day the
Closing Sale Price of the Common Stock is below the Fixed
Purchase Price, the Company shall have three (3) Trading Days
to give written notice (a "PURCHASE SUSPENSION NOTICE") to the
Holder suspending any and all purchases. The Purchase
Suspension Notice shall be effective only for purchases which
have a Purchase Date later than three (3) Trading Days after
receipt of the Purchase Suspension Notice by the Holder. Any
purchases submitted by the Holder which have a Purchase Date
not later than three (3) Trading Days after receipt by the
Holder of the Company's Purchase Suspension Notice must be
honored by the Company as otherwise provided herein. Such
purchase suspension shall continue in effect until the earlier
of: (A) revocation in writing by the Company, at its sole
discretion; or (B) such time as the Sale Price of the Common
Stock is above the Fixed Purchase Price.
(iii) Company's Mandatory Purchase Rights. If (A)
the Closing Sale Price of the Common Stock on each of the five
(5) Trading Days immediately prior to the first Trading Day of
any Monthly Period is at least twenty percent (20%) of the
Fixed Purchase Price and (B) no Event of Default has occurred,
then the Company shall have the right, so long as no Event of
Default has occurred and so long as the Sale Price of the
Common Stock remains at least twenty percent (20%) of the
Fixed Purchase Price, on or prior to the first Trading Day of
such Monthly Period, by delivering written notice (a
"MANDATORY PURCHASE NOTICE") to the Holder to require that the
Holder purchase at the Purchase Rate such Available Amount as
specified by the Company in the Mandatory Purchase Notice
during the such Monthly Period on such Trading Days during
such Monthly Period as the Holder shall determine. The Company
acknowledges and agrees that the Company's mandatory purchase
rights represent an agreement by the Holder to extend
financial accommodations to the Company. Accordingly, it shall
be a condition to the exercise of the Company's mandatory
purchase rights that no Event of Default shall have occurred,
and the Company's delivery of a Mandatory Purchase Notice
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shall be deemed a representation to the Holder that no Event
of Default has occurred. The Company may revoke a Mandatory
Purchase Notice, in whole or in part, by delivering written
notice thereof to the Holder (a "REVOCATION OF MANDATORY
PURCHASE NOTICE"). A Revocation of Mandatory Purchase Notice
shall be effective only as to purchases which are in excess of
the Monthly Purchase Amount and which have a Purchase Date
later than three (3) Trading Days after receipt by the Holder
of the Revocation of Mandatory Purchase Notice. Any purchases
submitted by the Holder which have a Purchase Date not later
than three (3) Trading Days after receipt by the Holder of the
Revocation of Mandatory Purchase Notice must be honored by the
Company as otherwise provided herein.
(e) Mechanics of Purchasing. The purchase of shares of
Common Stock under this Equity Purchase Agreement shall be conducted in
the following manner:
(i) Holder's Delivery Requirements. To purchase
shares of Common Stock under this Equity Purchase Agreement on
any date, the Holder hereof shall transmit by facsimile (or
otherwise deliver) on or prior to 11:59 p.m., Central Time on
such date, a copy of a fully executed notice of purchase in
the form attached hereto as Exhibit I (the "PURCHASE NOTICE")
to the Company.
(ii) Company's Response. Upon receipt by the
Company of a copy of a Purchase Notice, the Company shall as
soon as practicable, but in no event later than one (1)
Trading Day after receipt of such Purchase Notice, send via
facsimile (or otherwise deliver), a confirmation of receipt of
such Purchase Notice in the form attached hereto as Exhibit II
(a "COMPANY CONFIRMATION OF PURCHASE NOTICE") to (1) the
Holder and (2) along with a copy of the Purchase Notice, the
Company's designated transfer agent (the "TRANSFER AGENT"),
which confirmation shall constitute an irrevocable instruction
to the Transfer Agent to process such Purchase Notice in
accordance with the terms herein. Upon receipt by the Transfer
Agent of a copy of the executed Purchase Notice and a copy of
the applicable Company Confirmation of Purchase Notice, the
Transfer Agent shall, on the first (1st) Trading Day following
the date of receipt of the Company Confirmation of Purchase
Notice, (A) use its best efforts to issue and surrender to a
common carrier for overnight delivery to the address as
specified in the Purchase Notice, a certificate, registered in
the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder shall be entitled
or (B) provided the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder
shall be entitled to the Holder's or its designee's balance
account with DTC through its Deposit Withdrawal Agent
Commission system.
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(iii) Dispute Resolution. In the case of a dispute
as to the determination of the Purchase Price or the
arithmetic calculation of the Purchase Rate, the Company shall
instruct the Transfer Agent to issue to the Holder the number
of shares of Common Stock that is not disputed and shall
submit the disputed determinations or arithmetic calculations
to the Holder via facsimile within one (1) Trading Day of
receipt of the Holder's Purchase Notice. If the Holder and the
Company are unable to agree upon the determination of the
Purchase Price or arithmetic calculation of the Purchase Rate
within one (1) Trading Day of such disputed determination or
arithmetic calculation being submitted to the Holder, then the
Company shall within one (1) Trading Day submit via facsimile
(A) the disputed determination of the Purchase Price to an
independent, reputable investment bank selected by the Company
and approved by the Holder or (B) the disputed arithmetic
calculation of the Purchase Rate to the Company's independent,
outside accountant. The Company shall cause the investment
bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the
Holder of the results no later than the fifth (5th) day after
the date it receives the disputed determinations or
calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be
binding upon all parties absent manifest error.
(iv) Record Holder. The person or persons
entitled to receive the shares of Common Stock issuable upon a
purchase under this Equity Purchase Agreement shall be
treated for all purposes as the record holder or holders of
such shares of Common Stock on the Purchase Date.
(v) Company's Failure to Timely Deliver Shares.
If within five (5) Trading Days after the Company's receipt of
a copy of the Purchase Notice (subject to extension in
accordance with Section 2(e)(iii) for a good faith dispute
made in accordance with the terms of Section 2(e)(iii)) (the
"SHARE DELIVERY PERIOD") the Transfer Agent shall fail to
issue a certificate to the Holder or credit the Holder's
balance account with DTC for the number of shares of Common
Stock to which such Holder is entitled upon such Holder's
purchase of the Available Amount (a "PURCHASE FAILURE"), in
addition to all other available remedies which such Holder may
pursue hereunder and under the Master Facility Agreement
(including indemnification obligations of the Company
therein), the Company shall pay additional damages to the
Holder on each day after such fifth (5th) Trading Day such
purchase is not timely effected in an amount equal to 1.0% of
the product of (I) the number of shares of Common Stock not
issued to the Holder on a timely basis pursuant to Section
2(e)(ii) and to which such Holder is entitled and (II) the
Closing Sale Price of the Common Stock on the last possible
date which the
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Company could have issued such Common Stock to the Holder
without violating Section 2(e)(ii).
(vi) Book-Entry. Notwithstanding anything to the
contrary set forth herein, upon purchase of any portion of the
Available Amount in accordance with the terms hereof, the
Holder shall not be required to physically surrender this
Equity Purchase Agreement to the Company. The Holder and the
Company shall each maintain records showing the remaining
Available Amount and the dates and Purchase Amounts for each
purchase or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to
require physical surrender of this Equity Purchase Agreement
upon each purchase. The Holder and any assignee, by acceptance
of this Equity Purchase Agreement, acknowledge and agree that,
by reason of the provisions of this paragraph, following
purchase of any portion of the Available Amount, the remaining
Available Amount under this Equity Purchase Agreement shall be
less than the aggregate Available Amount set forth on the face
hereof.
(f) Taxes. The Company shall pay any and all taxes that
may be payable with respect to the issuance and delivery of Common
Stock upon purchases of Common Stock made under of this Equity Purchase
Agreement.
3. Company's Termination Rights. Subject to the terms and
conditions of this Section, at any time after the Issuance Date, and so long as
the Company has provided appropriate notice as described below, if during any
ten (10) consecutive Trading Days the Closing Sale Price of the Common Stock is
below the Fixed Purchase Price for each of such ten (10) Trading Days, the
Company shall have three (3) Trading Days to give written notice (a "COMPANY
TERMINATION NOTICE") to the Holder electing to terminate this Agreement without
any liability or payment to the Holder (a "COMPANY TERMINATION"). Any purchases
submitted by the Holder which have a Purchase Date which is not later than three
(3) Trading Days after receipt by the Holder of the Company Termination Notice,
must be honored by the Company as otherwise provided herein. No such termination
of this Agreement shall affect the Company's or the Holder's obligations under
this Agreement with respect to pending purchases and the Company and the Holder
shall complete their respective obligations with respect to any pending
purchases under this Agreement. The Company may not deliver a Company
Termination Notice or otherwise effect a Company Termination in anticipation of
or in connection with a Major Transaction until such Major Transaction (whether
or not consummated) has been publicly disclosed for a period of at least sixty
(60) Trading Days. In the event that within sixty (60) Trading Days of a Company
Termination, the Company publicly discloses that a Major Transaction has been
consummated or may be consummated, the Holder shall be entitled to the following
payment equal to the Purchase Rate (determined as of the date of the Company
Termination Notice assuming a Purchase amount equal to the remaining Available
Amount) multiplied by the amount, if any that (A) the arithmetic average of the
Closing Sale Price for the Common Stock for the ten (10) Trading Days following
either: (1) the public disclosure of the Major Transaction or (2) the
consummation of the Major Transaction, as selected by the Holder, exceeds (B)
the
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Purchase Price determined as of the date the Company Termination is effected.
Any payments under the previous sentence shall be made either in the form of
cash or registered, freely tradable shares of Common Stock, eleven (11) Trading
Days following either: (1) the public disclosure of the Major Transaction or (2)
the consummation of the Major Transaction, as selected by the Holder. However,
in the case of a Major Transaction in which an acquisition or change of control
of the Company occurs, the such payment shall not be due until the consummation
of the acquisition or change of control. To the extent that such payment has not
been paid by the fifth Trading Date after its due date, the Holder shall be
entitled to interest in an amount equal to one percent (1.0%) of the unpaid
amount per day, payable on demand. If paid in shares of Common Stock, the
"dollar value" per share of Common Stock shall be the average of the Closing Bid
Prices of the Common Stock for the five (5) consecutive Trading Days prior to
the payment date.
4. Defaults and Remedies.
(a) Events of Default. An "EVENT OF DEFAULT" shall be
deemed to have occurred at such time as any of the following events:
(i) while any Registration Statement is required
to be maintained effective pursuant to the terms of the
Registration Rights Agreement entered into by the Company and
the Holder as of the Issuance Date (the "REGISTRATION RIGHTS
AGREEMENT"), the effectiveness of such Registration Statement
lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Holder for
resale of all of the Registrable Securities (as defined in the
Registration Rights Agreement) in accordance with the terms of
the Registration Rights Agreement, and such lapse or
unavailability continues for a period of ten (10) consecutive
Trading Days or for more than an aggregate of thirty (30)
Trading Days in any 365-day period;
(ii) the suspension from trading or failure of
the Common Stock to be listed on the Principal Market for a
period of ten (10) consecutive Trading Days or for more than
an aggregate of thirty (30) Trading Days in any 365-day
period;
(iii) the failure of the Company or the Common
Stock to fully meet the requirements for continued listing on
the Principal Market for a period of ten (10) consecutive
Trading Days or for more than an aggregate of thirty (30)
Trading Days in any 365-day period;
(iv) the Company's or the Transfer Agent's notice
to the Holder, including by way of public announcement, at any
time, of its intention not to comply with a proper request for
purchase of the Available Amount under this Equity Purchase
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Agreement into shares of Common Stock that is tendered in
accordance with the provisions of this Equity Purchase
Agreement, the failure of the Company to deliver a Company
Confirmation of Purchase Notice to the Holder and to the
Transfer Agent in accordance with the provisions of this
Equity Purchase Agreement within two (2) Trading Days after
the receipt by the Company of a Purchase Notice (subject to
extension in accordance with Section 2(e)(iii) for a good
faith dispute made in accordance with the terms of Section
2(e)(iii)); or the failure of the Transfer Agent to comply
with a Company Confirmation of Purchase Notice tendered in
accordance with the provisions of this Equity Purchase
Agreement within five (5) Trading Days after the receipt by
the Company of the Purchase Notice;
(v) if at any time after the Issuance Date, the
Exchange Cap (as defined in Section 7) is reached;
(vi) the Company breaches any representation,
warranty, covenant or other term or condition of the Master
Facility Agreement, the Registration Rights Agreement, this
Equity Purchase Agreement or any other agreement, document,
certificate or other instrument delivered in connection with
the transactions contemplated thereby and hereby if such
breach could have a Material Adverse Effect (as defined in the
Master Facility Agreement) and except, in the case of a breach
of a covenant which is reasonably curable, only if such breach
continues for a period of at least ten (10) Trading Days;
(vii) any payment default under or acceleration
prior to maturity of any mortgage, indenture or instrument
under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by
the Company or for money borrowed the repayment of which is
guaranteed by the Company, whether such indebtedness or
guarantee now exists or shall be created hereafter which is in
excess of $1,000,000;
(viii) if any Person commences a proceeding against
the Company pursuant to or within the meaning of any
Bankruptcy Law (as defined below);
(ix) if the Company pursuant to or within the
meaning of any Bankruptcy Law; (A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property, (D) makes a general assignment for the benefit of
its creditors, (E) becomes insolvent, or (F) is generally
unable to pay its debts as the same become due; or
(x) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that; (A) is for
relief against the Company in an involuntary case, (B)
appoints a Custodian of the Company or for all or
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substantially all of its property, or (C) orders the
liquidation of the Company or any subsidiary.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors. The
term "CUSTODIAN" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
(b) Remedies. If an Event of Default occurs from events
described in clauses (i) through and (ix) of Section 4(a), the Holder may
terminate this Agreement without any liability or payment to the Company. In the
case of an Event of Default arising from events described in clause (x) of
Section 4(a), this Equity Purchase Agreement shall automatically terminate with
out any liability or payment to any party without further action or notice.
However, notwithstanding the forgoing, in case of any such termination, no such
termination of this Agreement shall effect the Company's or the Holder's
obligations under this Agreement with respect to pending purchases and the
Company and the Holder shall complete their respective obligations with respect
to any pending purchases under this Agreement.
5. Holder's Right to Terminate Agreement. If by the Maturity
Date, for any reason or for no reason the full Available Amount under this
Agreement has not been used to purchase shares of Common Stock as provided for
in Section 2 of this Agreement, the Holder shall have the right to terminate
this Agreement without any liability or payment to the Company. No such
termination of this Agreement shall effect the Company's or the Holder's
obligations under this Agreement with respect to pending purchases and the
Company and the Holder shall complete their respective obligations with respect
to any pending purchases under this Agreement.
6. Reservation of Shares. The Company shall, so long as any
Available Amount of the Equity Purchase Agreement is outstanding, reserve and
keep available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the purchase of the Equity Purchase Agreement, such number
of shares of Common Stock as shall from time to time be sufficient to effect the
purchase of the entire remaining Available Amount of the Equity Purchase
Agreement without regard to any restrictions or limitations on purchases.
7. Exchange Cap; Limitation on Number of Purchase Shares. The
"Exchange Cap" shall be deemed to be reached at such time if, upon submission of
a Purchase Notice under this Equity Purchase Agreement, the issuance of such
shares of Common Stock would exceed that number of shares of Common Stock which
the Company may issue under this Equity Purchase Agreement without breaching the
Company's obligations under the rules or regulations of the Principal Market, in
which case, the Company shall not be obligated to issue any such shares of
Common Stock.
8. Changes to the Terms of this Equity Purchase Agreement. This
Equity Purchase Agreement and any provision hereof may only be amended by an
instrument in
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writing signed by the Company and the Holder. The term "Equity Purchase
Agreement" and all reference thereto, as used throughout this instrument, shall
mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented.
9. Enforcement and Other Costs. If: (i) this Equity Purchase
Agreement is placed in the hands of an attorney for enforcement or is enforced
through any legal proceeding; or (ii) an attorney is retained to represent the
Holder in any bankruptcy, reorganization, receivership or other proceedings
affecting creditors' rights and involving a claim under this Equity Purchase
Agreement; or (iii) an attorney is retained to represent the Holder in any other
proceedings whatsoever in connection with this Equity Purchase Agreement, then
the Company shall pay to the Holder all reasonable cost and expenses including
attorneys' fees incurred in connection therewith, in addition to all other
amounts due hereunder.
10. Governing Law; Jurisdiction; Jury Trial. The corporate laws of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Equity Purchase
Agreement and the other Transaction Documents shall be governed by the internal
laws of the State of Illinois, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Illinois or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Illinois. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
Chicago, for the adjudication of any dispute hereunder or under the other
Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS EQUITY PURCHASE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11. Remedies, Other Obligations, Breaches and Injunctive Relief.
The remedies provided in this Equity Purchase Agreement to the Holder shall be
cumulative and in addition to all other remedies available under this Equity
Purchase Agreement, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the
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provisions giving rise to such remedy and nothing herein shall limit the
Holder's right to pursue actual damages for any failure by the Company to comply
with the terms of this Equity Purchase Agreement. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being required.
12. Construction. This Equity Purchase Agreement shall be deemed
to be jointly drafted by the Company and the Holder and shall not be construed
against any person as the drafter hereof.
13. Failure or Indulgence Not Waiver. No failure or delay on the
part of this Equity Purchase Agreement in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
14. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Buyer, including
by merger or consolidation. The Buyer may not assign its rights under this
Agreement without the consent of the Company, other than to an affiliate of the
Buyer controlled by Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxxxxxx.
15. Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Trading Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
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If to the Company:
Xxxxxxxx.xxx, Inc
Two Piedmont Center, Suite 400
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxx
With a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 404-881-7777
Attention: Xxxx X. Xxxxxx
If to the Holder:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
If to the Transfer Agent:
SunTrust Bank
Stock Transfer Department, Room 225
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone:
Facsimile:
Attention: Xxxxxxx Xxxxxxx
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
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* * * *
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IN WITNESS WHEREOF, the Holder and the Company have caused this Equity
Purchase Agreement to be duly executed as of the date first written above.
THE COMPANY:
XXXXXXXX.XXX, INC.
By:
--------------------------------
Name:
Its:
HOLDER:
FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS II, LLC
BY: SGM HOLDINGS CORP.
By:
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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