SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
September 18, 1998, by and among D.H. Marketing & Consulting, Inc.,
a Nevada corporation, with headquarters located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxx 00000 (the "Company"), and the
investors listed on the Schedule of Buyers attached hereto
(individually, a "Buyer" or collectively "Buyers").
WHEREAS:
A. The Company and the Buyers are executing and delivering
this Agreement in reliance upon the exemption from securities
registration pursuant to Section 4(2) and/or Regulation D
("Regulation D") as promulgated by the U.S. Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 Act");
B. The Company has authorized the following new series of
its Preferred Stock, $.001 par value per share (the "Preferred
Stock"): the Company's Series A Convertible Preferred Stock (the
"Series A Preferred Shares"), which shall be convertible into shares
of the Company's Common Stock, $.0003 par value per share (the
"Common Stock") (as converted, the "Conversion Shares"), in
accordance with the terms of the Company Certificate of
Designations, Preferences, and Rights of the Series A Preferred
Shares, substantially in the form attached hereto as Exhibit A (the
"Certificate of Designations");
C. The Buyer wishes to purchase, upon the terms and
conditions stated in this Agreement, an aggregate amount of up to
$3,000,000 or 150 shares of Series A Preferred Stock in the
respective amounts set forth opposite each Buyer's name on the
Schedule of Buyers;
D. Contemporaneously with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement substantially in the form attached
hereto as Exhibit "B" (the "Registration Rights Agreement") pursuant
to which the Company has agreed to provide certain registration
rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws; and
NOW THEREFORE, the Company and the Buyer hereby agree as
follows:
1 . PURCHASE AND SALE OF SERIES A PREFERRED STOCK.
a. Purchase of Series A Preferred Stock. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7
below, the Company shall issue and sell to the Buyers and the Buyers shall
purchase from the Company an aggregate principal amount of thirty (30)
shares of Series A Preferred Stock, in the respective amounts set forth
opposite each Buyer's name on the Schedule of Buyers (the "Closing").
b. Closing Date. The date and time of the Closing
(the "Closing Date") shall be 10:00 a.m. Eastern Standard
Time, within five (5) business days following the date hereof,
subject to notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below
(or such later date as is mutually agreed to by the Company
and the Buyer). The Closing shall occur on the Closing Date
at the offices of Xxxx Moss Kline & Xxxxx LLP, 000 Xxxxxxxxx
Xxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx,
Xxxxxxx 00000.
c. Form of Payment. On the Closing Date, (i) each
Buyer shall pay the Purchase Price to the Company for the
Series A Preferred Shares to be issued and sold to such Buyer
at the Closing, by wire transfer of immediately available
funds in accordance with the Company's written wire
instructions, and (ii) the Company shall deliver to each
Buyer, certificates representing such Series A Preferred Stock
which such Buyer is then purchasing (as indicated opposite
such Buyer's name on the Schedule of Buyers), duly executed
on behalf of the Company and registered in the name of such
Buyer or its designee (the "Certificates").
2. BUYER'S REPRESENTATIONS AND WARRANTEES.
Each Buyer represents and warrants with respect to only
itself that:
a. Investment Purpose. Such Buyer is acquiring the
Series A Preferred Shares and, upon conversion of the Series
A Preferred Shares, will acquire the Conversion Shares then
issuable, for its own account for investment only and not with
a view towards, or for resale in connection with, the public
sale or distribution thereof, except pursuant to sales
registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, such Buyer does not
agree to hold any Series A Preferred Shares or Conversion
Shares for any minimum or other specific term and reserves the
right to dispose of Series A Preferred Shares or Conversion
Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
b. Accredited Investor Status. Such Buyer is an
"accredited investor" as that term is defined in Rule
501(a)(3) of Regulation D.
c. Reliance on Exemptions. Such Buyer understands
that the Series A Preferred Shares and the Conversion Shares
are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States
federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer
set forth herein in order to determine the availability of
such exemptions and the eligibility of such Buyer to acquire
such securities.
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d. Information. Such Buyer and its advisors, if any,
have been furnished with all materials relating to the
business, finances and operations of the Company and materials
relating to the offer and sale of the Series A Preferred
Shares and the Conversion Shares, which have been requested
by such Buyer. Such Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company.
Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and
warranties contained in Section 3 below. Such Buyer
understands that its investment in the Series A Preferred
Shares and the Conversion Shares involves a high degree of
risk. Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the
Series A Preferred Shares and the Conversion Shares.
e. No Governmental Review. Such Buyer understands
that no United States federal or state agency or any other
government or governmental agency has passed on or made any
recommendation or endorsement of the Series A Preferred Shares
and the Conversion Shares, or the fairness or suitability of
the investment in the Series A Preferred Shares and the
Conversion Shares, nor have such authorities passed upon or
endorsed the merits of the offering of the Series A Preferred
Shares and the Conversion Shares.
f. Transfer or Resale. Such Buyer understands that
except as provided in the Registration Rights Agreement: (i)
the Series A Preferred Shares and the Conversion Shares have
not been and are not being registered under the 1933 Act or
any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (a) subsequently
registered thereunder, (b) such Buyer shall have delivered to
the Company an opinion of counsel, in a generally acceptable
form, to the effect that such securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (c) such Buyer
provides the Company with reasonable assurance that such
securities can be sold, assigned or transferred pursuant to
Rule 144 promulgated under the 1933 Act (or a successor rule
thereto), promulgated under the 1933 Act (or a successor rule
thereto); (ii) any sale of such securities made in reliance
on Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) ("Rule 144") may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances
in which the seller (or the person through whom the sale is
made) may be deemed to be an underwriter (as that term is
defined in the 0000 Xxx) may require compliance with some
other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to
register such securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of
any exemption thereunder.
g. Legends. Such Buyer understands that the
certificates or other instruments representing the Series A
Preferred Shares and, until such time as the sale of the
Conversion Shares have been registered under the 1933 Act as
contemplated by the Registration Rights
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Agreement, the stock certificates representing the
Conversion Shares shall bear a restrictive legend in
substantially the following form (and a stoptransfer order may
be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder
of the Series A Preferred Shares and the Conversion Shares,
upon which it is stamped, if, unless otherwise required by
state securities laws, (i) the sale of the Conversion Shares
is registered under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the
effect that a public sale, assignment or transfer of the
Series A Preferred Shares and the Conversion Shares may be
made without registration under the 1933 Act, or (iii) such
holder provides the Company with reasonable assurances that
the Series A Preferred Shares and the Conversion Shares can
be sold pursuant to Rule 144 without any restriction as to the
number of securities acquired as of a particular date that can
then be immediately sold.
h. Authorization, Enforcement. This Agreement has
been duly and validly authorized, executed and delivered on
behalf of such Buyer and is a valid and binding agreement of
such Buyer enforceable in accordance with its terms, subject
as enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and
remedies.
i. Residency. Such Buyer is a resident of that
country specified in its address on the Schedule of Buyers.
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j. No Scheme to Evade Registration. Buyer represents
and warrants to the Company that the acquisition of the Series A
Preferred Stock and the Conversion Shares is not a transaction (or
any element of a series of transactions)that is part of a plan or
scheme by the Buyer to evade the registration provisions of the 1933
Act.
3 . REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers
that:
a. Organization and Qualification. The Company and
its subsidiaries are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction
in which they are incorporated, and have the requisite
corporate power to own their properties and to carry on their
business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in
which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole.
b. Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate power
and authority to enter into and perform this Agreement, the
Registration Rights Agreement and any related agreements, and
to issue the Series A Preferred Shares and the Conversion
Shares in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement, the Registration
Rights Agreement and any related agreements by the Company and
the consummation by it of the transactions contemplated hereby
and thereby, including without limitation the issuance of the
Series A Preferred Shares and the reservation for issuance and
the issuance of the Conversion Shares issuable upon conversion
or exercise thereof, have been duly authorized by the
Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of
Directors or its stockholders, (iii) this Agreement and the
Registration Rights Agreement and any related agreements have
been duly executed and delivered by the Company, (iv) this
Agreement, the Registration Rights Agreement and any related
agreements constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of
creditors' rights and remedies, and (v) prior to the Closing
Date, the Certificate of Designations has been filed with the
Secretary of State of the State of Nevada and will be in full
force and effect, enforceable against the Company in
accordance with its terms.
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c. Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of 75,000,000
shares of Common Stock, of which as of the date hereof
6,845,464 shares were issued and outstanding, and no series
of preferred stock or debentures or notes were issued and
outstanding. All of such outstanding shares have been validly
issued and are fully paid and nonassessable. Except as
disclosed in Schedule 3(c), no shares of Common Stock or
preferred stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or
permitted by the Company. Except as disclosed in Schedule
3(c), as of the effective date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries
is or may become bound to issue additional shares of capital
stock of the Company or any of its subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, (ii) there are no
outstanding debt securities and (iii) there are no agreements
or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their
securities under the 1933 Act (except the Registration Rights
Agreement). There are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by
the issuance of the Series A Preferred Shares or the
Conversion Shares as described in this Agreement. The Company
has furnished to the Buyer true and correct copies of the
Company's Certificate of Incorporation, as amended and as in
effect on the date hereof (the "Certificate of
Incorporation"), and the Company's By-laws, as in effect on
the date hereof (the "By-laws"), and the terms of all
securities convertible into or exercisable for Common Stock
and the material rights of the holders thereof in respect
thereto.
d. Issuance of Securities. The Series A Preferred
Shares are duly authorized and, upon issuance in accordance
with the terms hereof, shall be (i) validly issued, fully paid
and nonassessable, are free from all taxes, liens and charges
with respect to the issue thereof and are entitled to the
rights and preferences set forth in the Series A Preferred
Shares. The Conversion Shares issuable upon conversion of the
Series A Preferred Shares have been duly authorized and
reserved for issuance. Upon conversion or exercise in
accordance with the Series A Preferred Shares, the Conversion
Shares will be validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock.
e. No Conflicts. Except as disclosed in Schedule
3(e), the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not (i) result
in a violation of the Certificate of Incorporation, any
Certificate of Designations, Preferences, and Rights of any
outstanding series of preferred stock of the Company or By-laws or
(ii) conflict with or constitute a default (or an
event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation
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of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in
a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and
regulations and the rules and regulations of the principal
market or exchange on which the Common Stock is traded or
listed) applicable to the Company or any of its subsidiaries
or by which any property or asset of the Company or any of its
subsidiaries is bound or affected. Except as disclosed in
Schedule 3(e), neither the Company nor its subsidiaries is in
violation of any term of or in default under its Certificate
of Incorporation or Bylaws or their organizational charter or
by-laws, respectively, or any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable
to the Company or its subsidiaries. The business of the
Company and its subsidiaries is not being conducted, and shall
not be conducted in violation of any law, ordinance,
regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is
not required to obtain any consent, authorization or order of,
or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by this
Agreement or the Registration Rights Agreement in accordance
with the terms hereof or thereof Except as disclosed in
Schedule 3(e), all consents, authorizations, orders, filings
and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company and its
subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.
f. SEC Documents: Financial Statements. Since
January 1, 1996, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by
it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act")
(all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference
therein, being hereinafter referred to as the "SEC
Documents"). The Company has delivered to the Buyer or its
representative true and complete copies of the SEC Documents.
As of their respective dates, the financial statements of the
Company attached as Schedule 3(f) hereto (the "Financial
Statements") complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto, or (ii) in
the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and
the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). No other information
provided by or on behalf of the Company to the Buyer which is
not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this
Agreement, contains any
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untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are
or were made, not misleading.
g. Absence of Certain Changes. Except as disclosed
in Schedule 3(g), since January 1, 1996, there has been no
material adverse change and no material adverse development
in the business, properties, operations, financial condition,
results of operations or prospects of the Company or its
subsidiaries. The Company has not taken any steps, and does
not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or its
subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy
proceedings.
h. Absence of Litigation. There is no action, suit,
proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the Company or any of
its subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's subsidiaries, wherein
an unfavorable decision, ruling or finding would (i) have a
material adverse effect on the transactions contemplated
hereby (ii) adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the documents
contemplated herein or (iii), except as expressly set forth
in Schedule 3(h), have a material adverse effect on the
business, operations, properties, financial condition or
results of operation of the Company and its subsidiaries taken
as a whole.
i. Acknowledgment Regarding Buyer's Purchase of
Series A Preferred Shares. The Company acknowledges and
agrees that the Buyer is acting solely in the capacity of an
arm's length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further
acknowledges that the Buyer is not acting as a financial
advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Buyer or any
of their respective representatives or agents in connection
with this Agreement and the transactions contemplated hereby
is merely incidental to such Buyer's purchase of the Series
A Preferred Shares or the Conversion Shares. The Company
further represents to the Buyer that the Company's decision
to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives.
j. No Undisclosed Events, Liabilities, Developments
or Circumstances. No event, liability, development or
circumstance has occurred or exists, or is contemplated to
occur, with respect to the Company or its subsidiaries or
their respective business, properties, prospects, operations
or financial condition, which could be material but which has
not been publicly announced or disclosed in writing to the
Buyer.
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k. No General Solicitation. Neither the Company, nor
any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under
the 0000 Xxx) in connection with the offer or sale of the
Series A Preferred Shares or the Conversion Shares. The
Company represents that it has not offered the Series A
Preferred Stock or Conversion Shares to the Buyer in the U.S.
or, to the best knowledge of the Company, to any person in the
United States or any U.S. person.
1. No Integrated Offering. Neither the Company, nor
any of its affiliates, nor any person acting on its or their
behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security,
under circumstances that would require registration of the
Series A Preferred Shares or the Conversion Shares under the
1933 Act or cause this offering of Series A Preferred Shares
or the Conversion Shares to be integrated with prior offerings
by the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions.
m. Employee Relations. Neither the Company nor any
of its subsidiaries is involved in any labor dispute nor, to
the knowledge of the Company or any of its subsidiaries, is
any such dispute threatened. None of the Company's or its
subsidiaries' employees is a member of a union and the Company
and its subsidiaries believe that their relations with their
employees are good.
n. Intellectual Property Rights. The Company and its
subsidiaries own or possess adequate rights or licenses to use
all trademarks, trade names, service marks, service xxxx
registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct
their respective businesses as now conducted. Except as set
forth on Schedule 3(n), none of the Company's trademarks,
trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets,
or other intellectual property rights have expired or
terminated, or are expected to expire or terminate in the near
future. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its
subsidiaries of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names,
service marks, service xxxx registrations, trade secret or
other similar rights of others, or of any such development of
similar or identical trade secrets or technical information
by others and, except as set forth on Schedule 3(n), there is
no claim, action or proceeding being made or brought against,
or to the Company's knowledge, being threatened against, the
Company or its subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service
names, service marks, service xxxx registrations, trade secret
or other infringement; and the Company and its subsidiaries
are unaware of any facts or circumstances which might give
rise to any of the foregoing. The Company and its
subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their
intellectual properties.
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o. Environmental Laws. The Company and its
subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval.
p. Title. The Company and its subsidiaries have good
and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by
them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in
Schedule 3(p) or such as do not materially affect the value
of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries. Any real property and facilities held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
q. Insurance. The Company and each of its
subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent
and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such
subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole.
r. Regulatory Permits. The Company and its
subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the
revocation or modification of any such certificate,
authorization or permit.
s. Internal Accounting Controls. The Company and
each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the
recorded accountability for assets is compared
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with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
t. No Materially Adverse Contracts, Etc. Neither the
Company nor any of its subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in the judgment of the
Company's officers has or is expected in the future to have
a material adverse effect on the business, properties,
operations, financial condition, results of operations or
prospects of the Company or its subsidiaries. Neither the
Company nor any of its subsidiaries is a party to any contract
or agreement which in the judgment of the Company's officers
has or is expected to have a material adverse effect on the
business, properties, operations, financial condition, results
of operations or prospects of the Company or its subsidiaries.
u. Tax Status. Except as set forth on Schedule 3(u),
the Company and each of its subsidiaries has made or filed all
federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is
subject (unless and only to the extent that the Company and
each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
v. Certain Transactions. Except as set forth on
Schedule 3(v) and in the SEC Documents and except for arm's
length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from third parties and
other than the grant of stock options disclosed on Schedule
3(c), none of the officers, directors, or employees of the
Company is presently a party to any transaction with the
Company (other than for services as employees, officers and
directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company,
any corporation, partnership, trust or other entity in which
any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
w. Dilutive Effect. The Company understands and
acknowledges that the number of Conversion Shares issuable
upon conversion of the Series A Preferred Shares will increase
in certain circumstances. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion
of the Series A Preferred Shares in accordance with this
11
Agreement and the Certificate of Designations and the Series
A Preferred Shares is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the
ownership interests of other stockholders of the Company.
x. No Directed Selling Efforts in Regard to this
Transaction. Neither the Company nor, to the best knowledge
of the company, any distributor participating in this
offering, nor any person acting for the Company or any such
distributor, has conducted any "directed selling efforts" in
the United States as the term "directed selling efforts" is
defined in Rule 902 of Regulation S, which in general, means
any activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for any of the securities being
offered herein. Such activity includes, without limitation,
the mailing of printed material to investors residing in the
United States, the holding of promotional seminars in the
United States, and the placement of advertisements with radio
or television stations broadcasting in the United States or
in publications with a general circulation in the United
States, which discuss the offering of the such securities.
y. Fees and Rights of First Refusal. The Company is
not obligated to offer the securities offered hereunder on a
right of first refusal basis or otherwise to any third parties
including, but not limited to, current or former shareholders
of the Company, underwriters, brokers, agents or other third
parties.
z. Shareholder Approval The Company covenants to
submit to its, shareholders at its next shareholder meeting
a proposal for ratification of the issuance of the Series A
Preferred Stock and the Conversion Shares, if and as required
by the rules of the National Association of Securities
Dealers, Inc. (the "NASD") applicable to the transaction.
4. COVENANTS.
a. Best Efforts. Each party shall use its best
efforts timely to satisfy each of the conditions to be
satisfied by it as provided in Sections 6 and 7 of this
Agreement.
b. Form D. The Company agrees to file a Form D with
respect to the Series A Preferred Shares and the Conversion
Shares as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the
Company shall reasonably determine is necessary to qualify the
Series A Preferred Shares and the Conversion Shares for, or
obtain exemption for the Series A Preferred Shares and the
Conversion Shares for, sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or
"Blue Sky" laws of the states of the United States, and shall
provide evidence of any such action so taken to the Buyers on
or prior to the Closing Date.
c. Reporting Status. Until the earlier of (i) the
date as of which the Investors (as that term is defined in the
Registration Rights Agreement) may sell all of the Conversion
12
Shares without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto), or (ii) the date
on which (A) the Investors shall have sold all the Conversion
Shares and (B) none of the Series A Preferred Shares is
outstanding (the "Registration Period"), the Company shall
file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934
Act even if the 1934 Act or the rules and regulations
thereunder would otherwise permit such termination.
d. Use of Proceeds. The Company will use the
proceeds from the sale of the Series A Preferred Shares for
substantially the same purposes and in substantially the same
amounts as indicated in Schedule 4(d).
e. Financial Information. The Company agrees to send
the following to each Buyer during the Registration Period:
(i) within five (5) days after the filing thereof with the
SEC, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any
registration statements or amendments filed pursuant to the
1933 Act; (ii) within one (1) day after release thereof,
copies of all press releases issued by the Company or any of
its subsidiaries and (ii) copies of the same notices and other
information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the
stockholders.
f. Reservation of Shares. The Company shall take all
action necessary to at all times have authorized, and reserved
for the purpose of issuance, no less than 200% of the number
of shares of Common Stock needed to provide for the issuance
of the Conversion Shares; provided that all shares of the
Common Stock authorized and not otherwise reserved for other
purposes as of the date hereof shall be reserved for the
purpose of issuance of the Conversion Shares.
g. Listings. The Company shall promptly secure the
listing of the Conversion Shares upon each national securities
exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official
notice of issuance) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all
Conversion Shares from time to time issuable under the terms
of this Agreement and the Registration Rights Agreement. The
Company shall maintain the Common Stock's authorization for
quotation in the over-the counter market. The Company shall
promptly provide to each Buyer copies of any notices it
receives regarding the continued eligibility of the Common
Stock for trading in the over-the-counter market.
13
h. Expenses. Each of the Company and the Buyer shall
pay all costs and expenses incurred by such party in
connection with the negotiation, investigation, preparation,
execution and delivery of this Agreement and the Registration
Rights Agreement. The costs and expenses of X.X. Xxxxx
Securities, Inc. and its counsel shall be paid for by the
Company at Closing.
i. Authorized Shares of Common Stock, Reservation of
Shares. The Company shall at all times, so long as any of the
Series A Preferred Shares are outstanding, reserve and keep
available out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the
Series A Preferred Shares, such number of shares of Common
Stock equal to or greater than 200% of the number of shares
of Common Stock for which are issuable upon conversion of all
of the then outstanding Series A Preferred Shares which are
then outstanding or which could be issued at any time under
this Agreement or the Series A Preferred Shares.
j. Corporate Existence. So long as any Series A
Preferred Shares remain outstanding, the Company shall not
directly or indirectly consummate any merger, reorganization,
restructuring, consolidation, sale of all or substantially all
of the Company's assets or any similar transaction or related
transactions (each such transaction, a "Sale of the Company")
except if the surviving or successor entity in such
transaction (i) expressly assumes, in writing, the Company's
obligations hereunder and under the Registration Rights
Agreement, the Series A Preferred Shares and any other
agreements and instruments entered into or delivered by the
Company in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the
New York Stock Exchange, Inc., the American Stock Exchange or
the NASDAQ National Market.
k. Transactions With Affiliates. So long as (i) any
Series A Preferred Shares are outstanding or (ii) any Buyer
owns Conversion Shares with a market value equal to or greater
than $200,000, the Company shall not, and shall cause each of
its subsidiaries not to, enter into, amend, modify or
supplement, or permit any subsidiary to enter into, amend,
modify or supplement any agreement, transaction, commitment,
or arrangement with any of its or any subsidiary's officers,
directors, person who were officers or directors at any time
during the previous two years, stockholders who beneficially
own 5% or more of the Common Stock, or affiliates or with any
individual related by blood, marriage, or adoption to any such
individual or with any entity in which any such entity or
individual owns a 5% or more beneficial interest (each
a"Related Party"), except for (a) customary employment
arrangements and benefit programs on reasonable terms, (b) any
agreement, transaction, commitment, or arrangement on an arms-length
basis on terms no less favorable than terms which would
have been obtainable from a person other than such Related
Party, (c) any agreement transaction, commitment, or
arrangement which is approved by a majority of the
disinterested directors of the Company, for purposes hereof,
any director who is also an officer of the Company or any
subsidiary of the Company shall not be disinterested director
with respect to any such agreement, transaction, commitment,
or arrangement. "Affiliate" for
14
purposes hereof means, with respect to any person or entity,
another person or entity that, directly or indirectly, (i) has
a 5% or more equity interest in that person or entity, (ii)
has 5% or more common ownership with that person or entity,
(iii) controls that person or entity, or (iv) share common
control with that person or entity. "Control" or "controls"
for purposes hereof means that a person or entity has the
power, direct or indirect, to conduct or govern the policies
of another person or entity.
l. Shareholder Approval. The Company covenants to
submit to its shareholders at its next shareholder meeting a
proposal for ratification of the issuance of the Series A
Preferred Shares and the Conversion Shares, if and as required
by the rules of the NASD applicable to the transaction.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its
transfer agent to issue certificates, registered in the name of the
Buyer or its respective nominee(s), for the Conversion Shares in
such amounts as specified from time to time by the Buyer to the
Company upon conversion of the Series A Preferred Shares (the
"Irrevocable Transfer Agent Instructions"), except as provided in
Section 4(l) herein. Prior to registration of the Conversion Shares
under the 1933 Act, all such certificates shall bear the restrictive
legend specified in Section 2(g) of this Agreement. The Company
warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5, and stop transfer
instructions to give effect to Section 2(f) hereof (in the case of
the Conversion Shares, prior to registration of such shares under
the 0000 Xxx) will be given by the Company to its transfer agent and
that the Series A Preferred Shares and the Conversion Shares shall
otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way the Buyer's obligations and agreement to comply
with all applicable securities laws upon resale of the Series A
Preferred Shares or Conversion Shares. If the Buyer provides the
Company with an opinion of counsel, reasonably satisfactory in form,
and substance to the Company, that registration of a resale by the
Buyer of any of the Series A Preferred Shares or Conversion Shares
is not required under the 1933 Act, the Company shall permit the
transfer, and, in the case of the Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates in
such name and in such denominations as specified by the Buyer. The
Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5 will be inadequate
and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Buyer shall be
entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
15
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell
the Series A Preferred Shares to the Buyer at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time
in its sole discretion:
a. The Buyer shall have executed this Agreement and
the Registration Rights Agreement and delivered the same to
the Company.
b. The Certificate of Designations shall have been
filed with the Secretary of State of the State of Nevada.
c. The Buyer shall have delivered to the Company the
Purchase Price for the Series A Preferred Shares being
purchased by the Buyer at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions
provided by the Company.
d. The representations and warranties of the Buyer
shall be true and correct in all material respects as of the
date when made and as of the Closing Date as though made at
that time (except for representations and warranties that
speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Buyer at or prior to the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer hereunder to purchase the
Series A Preferred Shares at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the
Buyer's sole benefit and may be waived by the Buyer at any time in
its sole discretion:
a. The Company shall have executed this Agreement and
the Registration Rights Agreement, and delivered the same to
the Buyer.
b. The Common Stock shall be authorized for quotation
on the electronic bulletin board, over-the-counter market,
AMEX the NASDAQ National Market or The New York Stock
Exchange, Inc., trading in the Common Stock shall not have
been suspended for any reason and all of the Conversion Shares
issuable upon conversion of the Series A Preferred Shares
shall be approved for listing on the electronic bulletin
board, over-the-counter market, AMEX, the NASDAQ National
Market or The New York Stock Exchange, Inc.
c. The representations and warranties of the Company
shall be true and correct in all material respects (except to
the extent that any of such representations and warranties
16
is already qualified as to materiality in Section 3 above, in
which case, such representations and warranties shall be true
and correct without further qualification) as of the date when
made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of
a specific date) and the Company shall have performed,
satisfied and complied in all material respects with the
covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date. The Buyer shall have
received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be
reasonably requested by the Buyer including, without
limitation an update as of the Closing Date regarding the
representation contained in Section 3(c) above.
d. The Buyer shall have received the opinion of the
Company's counsel dated as of the Closing Date, in form, scope
and substance reasonably satisfactory to the Buyer and in
substantially the form of Exhibit "D" attached hereto.
e. The Company shall have executed and delivered to
the Buyer the Certificates (in such denominations as the Buyer
shall request) for the Series A Preferred Shares being
purchased by the Buyer at the Closing.
f. The Board of Directors of the Company shall have
adopted the resolutions in substantially the form of Exhibit
"E" attached hereto.
g. As of the Closing Date, the Company shall as of
the Closing Date have reserved out of its authorized and
unissued Common Stock, solely for the purpose of effecting the
conversion of the Series A Preferred Shares, such number of
shares of Common Stock equal to or greater than 200% of the
number of shares of Common Stock for which are issuable upon
conversion of all of the Series A Preferred Shares which could
be issued at any time under this Agreement or the Series A
Preferred Shares.
h. The Irrevocable Transfer Agent Instructions, in
form and substance satisfactory to the Buyer, shall have been
delivered to and acknowledged in writing by the Company's
transfer agent.
8. INDEMNIFICATION.
In consideration of the Buyer's execution and delivery of
this Agreement and acquiring the Series A Preferred Shares and the
Conversion Shares hereunder and in addition to all of the Company's
other obligations under this Agreement, the Company shall defend,
protect, indemnify and hold harmless the Buyer and each other holder
of the Series A Preferred Shares and the Conversion Shares and all
of their officers, directors, employees and agents (including,
without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of
action, suits, claims, losses, costs,
17
penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by the Indemnitees or any of
them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made
by the Company in this Agreement, the Series A Preferred Shares or
the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company
contained in this Agreement, the Certificate of Designations, or the
Registration Rights Agreement or any other certificate, instrument
or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of
the Indemnities, any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the
issuance of the Series A Preferred Shares or the status of the Buyer
or holder of the Series A Preferred Shares or the Conversion Shares,
as an investor in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed
by and interpreted in accordance with the laws of the State
of Nevada without regard to the principles of conflict of
laws. Any dispute or controversy between the parties arising
in connection with this agreement or the subject matter
contemplated by this agreement shall be resolved by
arbitration before a three-member panel of the American
Arbitration Association in accordance with the commercial
arbitration rules of said forum and the Federal Arbitration
Act, 9 U.S.C. 1 et seq., with the resulting award being final
and conclusive. Said arbitrators shall be empowered to award
all forms of relief and damages claimed, including, but not
limited to, attorney's fees, expenses of litigation and
arbitration, exemplary damages, and prejudgment interest.
Notwithstanding the foregoing, Buyer may at any time and at
its option, whether or not an arbitration action is then
pending, initiate a civil action for temporary and permanent
injunctive and other equitable relief against Company.
Company acknowledges that upon any breach of Buyer's
conversion rights hereunder, Buyer's resulting injury may not
be adequately compensated by a remedy at law. Accordingly,
upon such breach, Buyer, at its election and without
limitation of its other remedies, shall be entitled to pursue
a claim for specific performance of this Agreement, and
Company hereby waives the right to assert any defense thereto
that Purchaser has an adequate remedy at law. The parties
further agree that any arbitration action between them shall
be heard in Atlanta, Georgia, and expressly consent to the
jurisdiction and venue of the Superior Court of Xxxxxx County,
Georgia, and the United States District Court for the Northern
District of Georgia, Atlanta Division for the adjudication of
any civil action asserted pursuant to this Paragraph.
18
b. Counterparts. This Agreement may be executed in
two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become
effective when counterparts have been signed by each party and
delivered to the other party. In the event any signature page
is delivered by facsimile transmission, the party using such
means of delivery shall cause four (4) additional original
executed signature pages to be physically delivered to the
other party within five (5) days of the execution and delivery
hereof
c. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
d. Severability. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.
e. Entire Agreement, Amendments. This Agreement
supersedes all other prior oral or written agreements between
the Buyer, the Company, their affiliates and persons acting
on their behalf with respect to the matters discussed herein,
and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company
nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with
enforcement.
f. 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 a copy is mailed by U.S. certified mail, return
receipt requested; (iii) three (3) days after being sent by
U.S. certified mail, return receipt requested, or (iv) one (I)
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:
19
If to the Company:
D.H. Marketing & Consulting, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxx X. Xxxxxx, Esq.
The Law Offices of Xxx X. Xxxxxx
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Transfer Agent:
Interwest Transfer Company
Suite 100
1981 X. Xxxxxx Xxxxxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xx. Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Buyer, to its address and facsimile number on the
Schedule of Buyers, with copies to the Buyer's counsel as set
forth on the Schedule of Buyers. Each party shall provide
five (5) days' prior written notice to the other party of any
change in address or facsimile number.
g. 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. The Buyer may
assign its rights hereunder without the consent of the
Company, provided, however, that any such assignment shall not
release the Buyer from its obligations
20
hereunder unless such obligations are assumed by such assignee
and the Company has consented to such assignment and
assumption.
h. No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by,
any other person.
i. Survival. Unless this Agreement is terminated
under Section 9(l), the representations and warranties of the
Company and the Buyer contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9, the
indemnification provisions set forth in Section 8, shall
survive the Closing. The Buyer shall be responsible only for
its own representations, warranties, agreements and covenants
hereunder.
j. Publicity. The Company and the Buyer shall have
the right to approve before issuance any press releases or any
other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall
be entitled, without the prior approval of the Buyer, to make
any press release or other public disclosure with respect to
such transactions as is required by applicable law and
regulations (although the Buyer shall be consulted by the
Company in connection with any such press release or other
public disclosure prior to its release and shall be provided
with a copy thereof).
k. 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.
1. Termination. In the event that the Closing shall
not have occurred with respect to the Buyer on or before five
(5) business days from the date hereof due to the Company's
or the Buyer's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure
to waive such unsatisfied condition(s)), the nonbreaching
party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on
such date without liability of any party to any other party-
provided, however, that if this Agreement is terminated
pursuant to this Section 9(l), the Company shall remain
obligated to reimburse the Buyer for the expenses described
in Section 4(i) above.
m. Finder. The Company acknowledges that it has
engaged a Finder in connection with the sale of the Series A
Preferred Shares, which placement agent may have formally or
informally engaged other agents on its behalf. The Company
shall be responsible for the payment of any Finder's fees
(which includes cash and warrants to purchase Common Stock)
relating to or arising out of the transactions contemplated
hereby.
21
n. 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.
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date
first written above.
"COMPANY"
D.H. MARKETING & CONSULTING, INC.
By: /s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx, President
"BUYER"
ATLANTIS CAPITAL FUND, LTD
By: /s/ XXXX X. XXXXXXXXX
Xxxx X. Xxxxxxxxx, Agent
"BUYER"
ATLAS CAPITAL FUND, LTD
By: /s/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx
22
