SUBSCRIPTION AGREEMENT
The undersigned Purchaser has (i) had the opportunity to carefully review
the SEC Reports (as defined in the Purchase Agreement attached hereto as Exhibit
A), of ▇▇▇▇▇'▇ Corporation (the "Com any"), (ii) carefully read the Purchase
Agreement and the Registration Rights Agreement, which are attached hereto as
Exhibits A and B, respectively, (iii) completed this Subscription Agreement in
full, I and (iv) wired funds to an account designated by the Company to cover
its total purchase price. The undersigned Purchaser, by signing below, hereby
agrees, subject to the terms and conditions set forth or incorporated herein, to
purchase the number of shares (the "Shares") of the Company's common stock,
$0.01 par value per share (the "Common Stock"), set forth below, for the
aggregate purchase price set forth thereon.
The undersigned Purchaser hereby provides the following information to the
Company:
General Information
1. Please provide the following information regarding the Purchaser;
Name and Address Number/Price per Share Total Purchase Price* (if
Purchaser is an entity, please provide the name of a
contact person)
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*Total Purchase Price (as determined in Section l of the Purchase Agreement
attached hereto as Exhibit A) is being paid as follows:
Amount of Total Purchase Price Paid in
Cash
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2. If different from the information provided in Item I above, please
provide the exact name that the Purchaser's Shares are to be registered in (this
is the name that will appear on the stock certificate(s)) and the Purchaser's
address. The Purchaser may use a nominee name if appropriate:
Registered Holder of the Shares: Name and Address (If the
Registered Holder Is as entity, please provide the name of
a contact person)
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The funds on behalf of which _________________ is making
these purchases together with the number of shares being purchased by each such
fund, are as set forth on Attachment 2-A. The address for each is in care of
(c/o) the Purchaser at the address set forth in Item l.
Telephone: (___)
Facsimile: (___) -
Email address:
3. Please describe the relationship between the Purchaser of the Shares and
the Registered Holder of the Shares listed in response to Item 2 above, if any:
Purchaser is buying on behalf of the funds listed on Attachment 2-A as
investment advisor for each of the funds.
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SUBSTITUTE FORM W-9
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Under the penalties of perjury, I certify that: (1) the Social Security
Number or Taxpayer Identification Number given below is correct; and (2) I am
not subject to backup withholding either because I have not been notified that I
am subject to backup withholding as a result of a failure to report all interest
or dividends, or because the Internal Revenue Service has notified me that I am
no longer subject to backup withholding.
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Instructions: You must cross out clause (2) above if you have been notified
by the Internal Revenue Service that you are subject to backup withholding
because of under reporting interest or dividends on your tax return and if you
have not received a notice from the Internal Revenue Service advising you that
backup withholding due to notified payee under reporting has terminated.
Social Security Number or
Taxpayer Identification Number of Purchaser:
Duly Authorized Signature: Date: July , 2004
INFORMATION RELATING TO REGISTRATION STATEMENT FOR RESALE OF THE SHARES
4. If different from the information provided above, please provide the
number of shares of Common Stock beneficially owned (in accordance with SEC Rule
13d-3 under the Exchange Act) by the Purchaser immediately after and giving
effect to Closing (as defined in the Purchase Agreement attached hereto as
Exhibit A). Explain the nature of such beneficial ownership, including shares of
Common Stock not held of record by the Purchaser. Disclose the details of any
rights to acquire shares other than rights arising under the terms of the
Purchase Agreement and the transactions contemplated thereby.
5. Describe any position, office or other material relationship within the
past three years that the Purchaser or its Affiliates (as such term is defined
in the Purchase Agreement attached hereto as Exhibit A) has, or has had, with
the Company or its Affiliates. If none, please state "Not Applicable."
Not Applicable
6. If the Purchaser above is not a natural person, please identify each of
the natural person(s) who will exercise sole or shared voting and/or dispositive
powers with respect to the Common Stock owned by the Purchaser immediately after
Closing. Please also specify in what capacity such person(s) will exercise their
voting and/or dispositive powers with respect to such Common Stock.
Note: If the Purchaser listed above is a natural person (i.e. not a limited
liability company, limited partnership, corporation, trust or other legal
entity), then you need not provide a response to this Question 6.
Natural Person(s) Relationship to Purchaser
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7. Is the Purchaser listed above a broker-dealer registered with the
Securities and Exchange Commission?
____YES ___ NO
8. Is the Purchaser above affiliated with any registered broker-dealer?
___ YES ____NO
If the Purchaser is affiliated with a registered broker-dealer, then please
identify such, broker-dealer and the relationship that such registered
broker-dealer has with the Purchaser (including details of any such affiliation
or other relationship).
Registered Broker-Dealer Relationship to Purchaser
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9. The Purchaser hereby represents and warrants to the Company that the
Shares are being purchased in the ordinary course of the Purchaser's business
and, as of the date hereof, the Purchaser does not have any agreements or
understandings, directly or indirectly, with any person to distribute the
Shares.
PLEASE NOTE THAT IT IS THE PURCHASER'S OBLIGATION TO ADVISE THE COMPANY
PROMPTLY IF ANY OF THE FOREGOING INFORMATION CHANGES PRIOR TO OR DURING THE
EFFECTIVENESS OF ANY REGISTRATION STATEMENT REGISTERING THE SHARES FOR RESALE
(EXCEPT DUE TO SALES OF SHARES OF COMMON STOCK PURSUANT THERETO).
The undersigned, duly authorized and acting on behalf of the Purchaser
named below, intending, to be legally bound, hereby confirms the accuracy and
completeness of the foregoing and of the Purchaser's representations and
warranties set forth in the Exhibits hereto. By signing this Subscription
Agreement, the undersigned, and the Company, shall also become parties to the
Purchase Agreement attached hereto and incorporated herein as Exhibit A and the
Registration Rights Agreement attached hereto and incorporated herein as Exhibit
B, and shall be legally bound hereby and thereby. This Subscription Agreement
may be executed by facsimile in one or more counterparts.
Name of Purchaser:
Date: July , 2004 By:
Name:
Title:
The Company hereby accepts this Subscription Agreement and agrees to sell
the Shares to the Purchaser upon the terms and condition set forth herein and in
the Exhibits hereto that are incorporated herein.
▇▇▇▇▇'▇ Corporation
Date: By:
Name:
Title:
EXHIBIT A
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is dated as of July __, 2004
by and between ▇▇▇▇▇'▇ Corporation, a Delaware corporation located at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and the
purchaser (the "Purchaser") identified on, and a party to, an executed copy of
the Subscription Agreement to which this Agreement is an Exhibit (the
"Subscription Agreement").
RECITALS
Subject to the terms and conditions of this Agreement, the Purchaser
desires to buy, and the Company desires to issue and sell to the Purchaser,
certain shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"). The Board of Directors of the Company has authorized the
Company to negotiate the sale of and offer a maximum of 48,430,000 shares of
Common Stock in a private placement to the Purchaser and other purchasers at a
purchase price of $1.90 per share and on the other terms and conditions
contained in this Agreement and the agreements between the Company and the other
purchasers (the "Private Placement"); provided, that such offering and the
subsequent sale of Common Stock shall not require approval of the Company's
stockholders and that the Company reserves the right to issue and sell a lesser
or greater number of shares.
TERMS OF AGREEMENT
In consideration of the mutual representations and warranties,
covenants and agreements contained herein, the parties hereto agree as follows:
SECTION 1
Sale of Common Stock
Subject to the terms and conditions hereof, the Company has offered,
and will issue and sell to the Purchaser and other purchasers, and the Purchaser
and the other purchasers will, severally and not jointly, buy from the Company a
total of up to 48,430,000 shares of the Common Stock, at a purchase price of
$1.90 per share, with the Purchaser and each other purchaser, severally and not
jointly, purchasing the number of shares of Common Stock for the aggregate
purchase price indicated in such purchaser's Subscription Agreement (the
"Purchase Price"). The Purchase Price will be paid in cash. The shares of Common
Stock to be issued and sold by the Company and purchased by the Purchaser
pursuant to this Agreement, as set forth in the Purchaser's Subscription
Agreement, are herein referred to as the "Shares." This Agreement and the
Purchaser's obligation hereunder are not conditioned on the sale of any minimum
number of Shares.
The Shares will be offered and sold without registration under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the
exemptions from registration provided by the Securities Act and/or regulations
thereunder, including Section 4(2). The Company has delivered, or made available
on its website or otherwise, to the Purchaser copies of the SEC Reports (as such
term is defined in Section 3.5 below).
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The Purchaser of Shares (and any subsequent permitted transferees) will
be entitled to the benefits of a Registration Rights Agreement, to be dated as
of the date hereof (as attached to the Subscription Agreement as Exhibit B, the
"Registration Rights Agreement"), by and among the Company and the Purchaser.
Pursuant to the Registration Rights Agreement, the Company will file with the
Securities and Exchange Commission (the "SEC" or the "Commission") no later than
30 days after the closing of the Purchaser's commitments hereunder (the
"Closing"), a shelf registration statement, on such SEC form that is available
to the Company, pursuant to SEC Rule 415 (the "Registration Statement") under
the Securities Act relating to the resale of the Shares by the Purchaser. The
Company shall use its commercially reasonable efforts to cause such Registration
Statement to be declared effective as soon as reasonably practicable and within
60 days after the Closing or, in the event of a review of the Registration
Statement by the Commission, within 90 days after the Closing and shall use its
commercially reasonable efforts to keep the Registration Statement continuously
effective from the date such Registration Statement becomes effective until the
earlier of (i) the date on which all the Shares have been sold pursuant to the
Registration Statement or Rule 144 promulgated under the Securities Act ("Rule
144"), and (ii) such time as the Company reasonably determines, based on an
opinion of counsel, that the Purchaser is eligible to sell under Rule 144 all of
the Shares then owned by the Purchaser within the volume limitations imposed by
paragraph (e) of Rule 144 in the three month period immediately following the
termination of the effectiveness of the Registration Statement (the
"Effectiveness Period"). Should the Registration Statement not be declared
effective within 60 days after the Closing, or in the event of a review by the
Commission, within 90 days after the Closing, or should its effectiveness lapse
prior to the end of the Effectiveness Period, then the Company shall pay to the
Purchaser certain liquidated damages, as set forth in the Registration Rights
Agreement.
SECTION 2
Funding; Closing; Delivery
2.1. Funding. The Closing and the Purchaser's delivery of funds (the
"Funding") to purchase the Shares for which it has subscribed in the
Subscription Agreement shall be held at the Charlotte, North Carolina offices of
▇▇▇▇▇▇ & Bird LLP, counsel to the Company, or at such other place upon which the
Company and the Purchaser shall agree. At Funding, the Purchaser shall pay the
Purchase Price for its Shares by wire transfer to an account designated by the
Company. The Funding with respect to the Purchaser shall occur simultaneously
with or immediately after the execution and delivery of this Agreement by the
Purchaser and the Company, or on such later date as the Company and the
Purchaser may agree.
2.2. Closing and Delivery. The Closing with respect to the Purchaser
shall occur simultaneously with or immediately after the execution and delivery
of this Agreement by the Purchaser and the Company and the Funding, or on such
later date as the Company and the Purchaser may agree, subject to satisfaction
of the conditions to Closing set forth in Sections 5 and 6 below. At the
Closing, or as soon as practicable thereafter, the Company will deliver to the
Purchaser a certificate, registered in the name of the Purchaser as shown in the
appropriate Subscription Agreement, for the number of Shares to be purchased by
the Purchaser.
SECTION 3
Representations and Warranties and Covenants of the Company
The Company represents, warrants and covenants to the Purchaser as
follows:
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3.1. Organization and Standing. The Company and each subsidiary of the
Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and each has the
corporate power and authority to carry on its business as now conducted and to
own, lease and operate its properties and assets.
3.2. Corporate Power. The Company has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement,
the Subscription Agreement or the Registration Rights Agreement (collectively,
the "Agreements"), and at Funding to sell, and at Closing to issue, the Shares
as set forth in the Agreements, and to carry out and perform its obligations
under the Agreements.
3.3. Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock and
25,000,000 shares of Preferred Stock, $0.10 par value per share (the "Preferred
Stock"). As of June 30, 2004, there were 41,312,734 shares of Common Stock
issued and outstanding and no shares of Preferred Stock issued and outstanding.
No other shares of capital stock are issued and outstanding. As of June 30,
2004, there were options and warrants outstanding issued by the Company to
purchase an aggregate of 6,724,516 and 3,236,104 shares of Common Stock,
respectively. Except as set forth above and in connection with the several
subscription agreements being entered into with the Company on the date hereof,
there are no options, warrants or other rights (including conversion,
pre-emptive or other rights) or agreements outstanding to purchase any of the
Company's authorized and unissued capital stock.
3.4. Authorization; Valid Issuance. (a) All corporate action on the
part of the Company, its officers, directors and stockholders, if any, necessary
for the authorization, execution, delivery and performance of the Agreements by
the Company, and for the authorization, sale, issuance and delivery of the
Shares has been taken or will be taken prior to the Funding or the Closing, as
appropriate. The Agreements have been duly executed and delivered by the
Company, and represent legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
laws affecting the enforcement of creditors' rights generally, and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought (the "Bankruptcy and Equity Exception")).
(b) The Shares being purchased by the Purchaser hereunder will, upon
issuance pursuant to the terms hereof and upon payment therefor, be duly
authorized and validly issued, fully paid and non-assessable shares of Common
Stock, free of preemptive or similar rights.
(c) Subject to the accuracy of the representations made by the
Purchaser in Section 4 hereof, the Shares will be issued to the Purchaser in
compliance with applicable exemptions from (i) the registration and prospectus
delivery requirements of the Securities Act, and (ii) the registration and
qualification requirements of all applicable securities laws of the states of
the United States.
3.5. Reports and Financial Statements. The Company has timely made all
filings required to be made by it under the Exchange Act (defined below). The
Company has delivered, or made available on its website or otherwise, to the
Purchaser prior to the execution of this Agreement a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2003, the
Company's Quarterly Reports on Form 10-Q that have been filed for all quarters
ended since December 31, 2003, the Company's Current Reports on Form 8-K that
were filed on January 12, 2004, February 20, 2004, April 8, 2004, April 14,
2004, April 21, 2004, April 23, 2004, May 6, 2004 and June 4, 2004, and the
definitive proxy statement for the Company's 2004 annual meeting of
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stockholders, and through the Closing will deliver upon request any other
Current Reports on Form 8-K filed since December 31, 2003 (as such documents
have since the time of their filing been amended or supplemented, and together
with all reports, documents and information filed on or after the date first
written above through the date of Closing with the SEC, including all
information incorporated therein by reference, collectively, the "SEC Reports").
The SEC Reports (a) complied and will comply as to form in all material respects
with the requirements of the Securities Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and (b) did not, at the time of their
filing, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
3.6. Disclosures. (a) The Company has provided to the Purchaser, if the
Purchaser has requested further information concerning the Company and its
subsidiaries, such information requested (to the extent that such information
does not constitute material, non-public information (other than information
relating to the transactions contemplated by the Agreements) and is available or
can be acquired and made available to the prospective Purchaser without
unreasonable effort or expense and to the extent the provision thereof is not
prohibited by applicable law). The Company understands and confirms that the
Purchaser will rely on the foregoing representation in effecting transactions in
securities of the Company.
(b) Subject to Section 7.14, as applicable, the Company shall, promptly
following the Closing (i) issue a press release announcing the sale of the
Shares, (ii) furnish or file such press release and other appropriate
information with the SEC on a Form 8-K, and (iii) include in the Form 8-K or its
next Form 10-Q or Form 10-K, as applicable, appropriate disclosures relating to
the sale of the Shares, including, without limitation, the disclosure required
by Item 701 of Regulation S-K.
3.7. No Conflicts. The execution, delivery and performance of the
Agreements, the issuance and delivery of the Shares, when issued, by the Company
and the consummation by the Company of the transactions contemplated in the
Agreements do not and will not (i) conflict with or violate any provision of the
Restated Certificate of Incorporation or Bylaws of the Company, (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 any other person any rights
of termination, amendment, acceleration or cancellation of, any material
agreement, indenture or instrument (whether evidencing a Company debt or
otherwise) to which the Company or any of its subsidiaries is a party or by
which any property or asset of the Company or any of its subsidiaries is bound
or affected, except for such defaults that would not, individually or in the
aggregate, result in an event, change or occurrence that individually, or
together with any other event, change or occurrence, has a material adverse
impact on the Company or the Company's subsidiaries' financial position,
business or results of operations, taken as a whole, or on the ability of the
Company to execute, deliver and perform its obligations under the Agreements, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or any of its subsidiaries is subject (including federal
and state securities laws and regulations), or by which any material assets of
the Company or any of its subsidiaries are bound or affected.
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3.8. Consents and Approvals. No notice to, filing with, or consent of
any federal, state or other governmental, public or regulatory agencies,
authorities (including self-regulatory authorities), courts or bodies having
jurisdiction over the Company and its subsidiaries ("Governmental Authorities")
or any third party is necessary for the consummation by the Company of the
transactions contemplated by the Agreements, other than (i) the filing of the
Registration Statement with, and declaration of effectiveness by, the Commission
in accordance with the Registration Rights Agreement, (ii) the application(s) or
any letter(s) or other notices required for the Shares to be eligible for the
trading, listing or quoting of the Shares on Nasdaq or with any other national
securities exchange or automated quotation system or market on which the Common
Stock is then traded, listed or quoted, (iii) any filings, notices or
registrations under applicable state securities laws, (iv) the disclosure
requirements of the Exchange Act and the disclosure requirements of Item 701 of
SEC Regulation S-K, and (v) the filing of a Form D and a Form 8-K in respect of
the sale and issuance of the Shares with the Commission (collectively, the
"Required Approvals").
3.9. Proceedings. Except as disclosed in the Company's SEC Reports,
there is no action, suit, hearing, claim, notice of violation, arbitration or
other proceeding, hearing or investigation (each, a "Proceeding") pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
of its subsidiaries or any of their respective assets before or by any
Governmental Authority or any arbitrator, which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Agreements, or
(ii) if adversely decided, could reasonably be expected to have a material
adverse effect on, or delay the issuance of, the Shares or the consummation of
the transactions contemplated by the Agreement. The foregoing includes, without
limitation, any such action, suit, proceeding or investigation that questions
this Agreement or seeks to delay or prevent the consummation of the transactions
contemplated hereunder or the right of the Company to execute, deliver and
perform under same.
3.10. Absence of Certain Changes. Since the date of the financial
statements included in the Company's most recent Quarterly Report on Form 10-Q,
Annual Report on Form 10-K, or latest Current Report on Form 8-K, whichever is
more recently filed prior to the date of this Agreement, except as disclosed
publicly, the Company and its subsidiaries have conducted their business only in
the ordinary course of such business consistent with past practice and there has
not been (i) any event, change or occurrence that individually, or together with
any other event, change or occurrence, has a material adverse impact on the
Company or the Company's subsidiaries' financial position, business or results
of operations, taken as a whole, or on the ability of the Company to execute,
deliver and perform its obligations under the Agreements, (ii) any material
commitment, contractual obligation, borrowing, capital expenditure or
transaction (each, a "Commitment") entered into by the Company or any of its
subsidiaries, other than (a) Commitments in the ordinary course of business and
(b) this Agreement, (iii) any action taken which, if taken after the date
hereof, would constitute a material breach of any provision or covenant herein,
or (iv) any material change in the Company's accounting principles, practices or
methods other than as required by concurrent changes in GAAP.
3.11. Use of Proceeds. Proceeds from the sale of the Shares will be
used directly or indirectly by the Company (i) to repay a portion of amounts
outstanding under the Company's senior secured credit facility, (ii) to tender
for or repurchase a portion of the Company's 12.75% Senior Notes due 2007 and/or
the 11.25% Senior Notes due 2008, (iii) to pay fees and expenses related to the
transactions contemplated by the Agreements or (iv) for general corporate
purposes.
3.12. Rights of Registration, Voting Rights, and Anti-Dilution. Except
as contemplated in this Agreement, the Company has not granted or agreed to
grant any registration rights, including piggyback rights, to any person or
entity and, to the Company's knowledge, no stockholder of the Company has
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entered into any agreements with respect to the voting of capital shares of the
Company. Except as disclosed on Schedule 3.12, the issuance of the Shares does
not constitute an anti-dilution event for any existing security holders of the
Company, pursuant to which such security holders would be entitled to additional
securities or a reduction in the applicable conversion price or exercise price
of any securities.
3.13. Broker's Fees. Except for its arrangement with UBS Securities
LLC, the Company has incurred no liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payments in
connection with the Agreements or the transactions contemplated therein and the
Company shall indemnify and hold harmless the Purchaser from and against any
such claims arising from the Company's actions by parties claiming a
relationship to the Company.
SECTION 4
Representations, Warranties and Covenants of the Purchaser
The Purchaser hereby represents, warrants and covenants to the Company
with respect to the purchase of Shares by the Purchaser as follows:
4.1. Experience. The Purchaser has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company, and the Purchaser is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests.
4.2. Qualified Institutional Buyer; Accredited Investor. The Purchaser
is a "qualified institutional buyer," as defined in Rule 144A of the Securities
Act, and an "accredited investor," as defined in SEC Regulation D promulgated
pursuant to the Securities Act (an "Accredited Investor").
4.3. Purchaser Status. The Purchaser is not acting with any other
purchaser involved in the transactions contemplated by these Agreements as a
partnership, limited partnership, syndicate, or other group for the purpose of
(i) facilitating the purchase of the Shares described herein, or (ii) acquiring,
holding, or disposing of securities of the Company as contemplated in Section
13(d)(3) of the Exchange Act. The purchase is in the ordinary course of
Purchaser's business and not with the purpose or intent of changing or
influencing control of the Company nor in connection with any transaction
involving the Purchaser having such purpose.
4.4. Rule 144. The Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered for resale under the Securities Act
or unless an exemption from such registration is available. The Purchaser is
aware of the provisions of the SEC's Rule 144 promulgated under the Securities
Act, which permit limited resale of securities purchased in a private placement,
subject to the satisfaction of certain conditions, including, among other
things, (i) the existence of a public market for the securities, (ii) the
availability of certain current public information about the Company, (iii) the
resale occurring not less than one year after a party has purchased and fully
paid for the security to be sold, (iv) the sale being effected through a
"broker's transaction" or in a transaction directly with a "market maker," and
(v) the number of securities being sold during any three-month period not
exceeding specified limitations.
4.5. Access to Information. The Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with its
management. It has also had an opportunity to ask questions of officers of the
Company, which questions were answered to its satisfaction. The Purchaser
understands that such discussions, as well as any written information issued by
the Company, were intended to describe certain aspects of the Company's business
and prospects. Neither such inquiries nor any other due diligence investigation
conducted by the Purchaser or any of its advisors or representatives shall
modify, amend or affect the Purchaser's right to rely on the Company's
representations, warranties and covenants contained herein or in the other
Agreements. The Purchaser understands that its investment in the Shares involves
a high degree of risk.
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4.6. Organization; Authorization. The Purchaser is a corporation, a
limited liability company or a partnership duly formed, validly existing and in
good standing under the laws of the jurisdiction of its organization. The
Purchaser shall acquire the Shares in the ordinary course of business, without
any agreement, plan or understanding, directly or indirectly, with any person to
distribute such Shares. The Purchaser has the requisite power and authority, to
enter into and to consummate the transactions contemplated by the Agreements and
otherwise to carry out its obligations under the Agreements. The purchase by the
Purchaser of the Shares hereunder has been duly authorized by all necessary
action on the part of the Purchaser. This Agreement, when executed and delivered
by the Purchaser, will constitute a valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
4.7. Restrictive Legend. The Purchaser understands that the
certificates evidencing the Shares will bear the following legends when issued:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES, OR "BLUE
SKY," LAWS OF ANY STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION AND RESALE AND MAY NOT BE SOLD OR OFFERED FOR SALE
EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT UNDER THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR UNLESS THE TRANSFEROR
DELIVERS TO THE COMPANY A WRITTEN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH
TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS."
In addition, the Purchaser acknowledges that each certificate for
Shares shall bear any additional legend required by any other applicable
domestic or foreign securities or blue sky laws.
The Company will direct its transfer agent and registrar to maintain
stop transfer instructions on record for the Shares until it has been notified
by the Company, upon the advice of counsel, that such instructions may be waived
consistent with the Securities Act and applicable domestic and foreign
securities laws. Such stop transfer instructions will limit the method of sale
or transfer of the Shares, consistent with Rule 144 or other available
exemptions from registration under the Securities Act. Any transfers other than
pursuant to a registration statement under the Securities Act will require an
opinion of counsel reasonably satisfactory to the Company and its counsel prior
to such transfers.
4.8. No Governmental Review. The Purchaser understands that no United
States federal or state agency or any other government or governmental agency or
authority has passed upon or made any recommendation or endorsement of the
Shares or the contents of any of the SEC Reports.
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4.9. Domicile and Principal Executive Office. The Purchaser is
domiciled and has its principal executive office in the jurisdiction set forth
immediately below the Purchaser's name on the Subscription Agreement.
4.10. Investment Intent. The Purchaser is acquiring the Shares for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof; provided,
however, that by making the representations herein, the Purchaser is not
prohibited from selling or otherwise disposing of any of the Purchaser's Shares
in compliance with applicable federal and state securities laws and as otherwise
contemplated by this Agreement. The Purchaser understands and agrees that the
Shares have not been registered under the Securities Act by reason of the
exemption from the registration provisions of the Securities Act contained in
the Securities Act and/or regulations thereunder, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Purchaser's representations, warranties and covenants as
expressed herein, which are being relied upon by the Company.
4.11. No Manipulation. Neither the Purchaser nor, to the Purchaser's
knowledge, any of its directors, officers, managers, subsidiaries, controlling
persons or other affiliates has taken, or presently plans to take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, under the Exchange Act, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale of the Shares. Since the time of becoming aware of the
transactions contemplated hereby until the Closing, such persons have not
engaged in any (i) "short sales" (as such term is defined in Rule 3b-3
promulgated under the Exchange Act) of the Common Stock, including, without
limitation, any such transaction that transfers to another, in whole or in part,
any economic consequences or ownership, or otherwise disposes of, any of the
Shares or (ii) hedging transaction which establishes a net short position with
respect to the Shares.
4.12. Broker's Fees. The Purchaser has incurred no liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payments in connection with the Agreements or the transactions
contemplated therein and the Purchaser shall indemnify and hold harmless the
Company from and against any such claims arising from the Purchaser's actions by
parties claiming a relationship to the Purchaser.
SECTION 5
Conditions to Purchaser's Obligations to Close
The obligation of the Purchaser to close the transactions contemplated
hereby is subject to the fulfillment, as of the date of Closing, of the
following conditions, any of which may be waived by the Purchaser:
5.1. Representations and Warranties Correct. The representations and
warranties by the Company contained herein qualified as to materiality shall be
true and correct (in light of such qualification(s)) and those not so qualified
shall be true and correct in all material respects as of the date hereof and at
and as of the Closing as though such representations and warranties were made at
and as of such date unless limited by their terms to a prior date.
5.2. Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Agreements to be performed, satisfied or complied
with by the Company at or before the Closing.
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5.3. No Injunction. No statute, rule, regulation, order, decree, ruling
or injunction shall have been enacted, entered, promulgated, endorsed or
threatened or is pending by or before any Governmental Authority of competent
jurisdiction which in any material respect restricts, prohibits or threatens to
restrict or prohibit the consummation of any of the transactions contemplated by
the Agreements.
5.4. No Suspensions of Trading in Common Stock. The trading in the
Common Stock shall not have been restricted or suspended by the Commission or
any other market or exchange where such Common Stock is traded (except for any
suspension of trading of limited duration solely to permit dissemination of
material information regarding the Company).
5.5. Compliance Certificate. The Company shall have delivered to the
Purchaser a certificate of the Company executed by either the Chief Executive
Officer or the Chief Financial Officer of the Company, dated as of the Closing,
certifying to the fulfillment of the conditions specified in Section 5 of this
Agreement.
5.6. Secretary's Certificate. The Company shall have delivered to the
Purchaser a certificate of the Company executed by an officer of the Company,
dated as of the Closing, certifying (i) resolutions adopted by the Board of
Directors of the Company authorizing the execution of the Agreements, the
issuance of the Shares, the filing of the Registration Statement, and the
transactions contemplated hereby; (ii) the Restated Certificate of Incorporation
and Bylaws of the Company, each as amended, and copies of the third party
consents, approvals and filings required in connection with the consummation of
the transactions contemplated by the Agreements; and (iii) such other documents
relating to the transactions contemplated by the Agreements as the Purchaser may
reasonably request.
5.7. Other Documents. The Company shall have delivered to the Purchaser
such other documents relating to the transactions contemplated by the Agreements
as the Purchaser or its counsel may reasonably request.
5.8. Registration Rights Agreement. The Company and the Purchaser shall
have executed, entered into and delivered the Registration Rights Agreement to
the Purchaser by their execution of the Subscription Agreement.
5.9. Legal Opinion. The Purchaser shall have received an opinion of the
Company's Assistant General Counsel stating (i) the Company is duly organized
and validly existing in the State of Delaware, (ii) upon issuance in accordance
with the terms hereof, the Shares will be duly authorized, validly issued, fully
paid and non-assessable and (iii) the Agreements have been duly authorized,
executed and delivered by the Company.
SECTION 6
Conditions to the Company's Obligations to Close
The Company's obligation to close the transactions contemplated hereby
is subject to the fulfillment as of the date of Closing, of the following
conditions, any of which may be waived by the Company:
6.1. Representations and Warranties Correct. The representations and
warranties made by the Purchaser herein shall be true and correct in all
material respects on the dates made and on the date of Closing.
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6.2. Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Agreements to be performed, satisfied or complied
with by the Purchaser at or before the Closing.
6.3. No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated,
endorsed or threatened or is pending by or before any Governmental Authority of
competent jurisdiction which prohibits or threatens to prohibit the consummation
of any of the transactions contemplated by the Agreements.
6.4. Receipt of Funds. The Company shall have received the Purchase
Price from the Purchaser.
SECTION 7
Miscellaneous
7.1. Governing Law. This Agreement shall be governed in all respects by
the laws of the State of New York, without giving effect to the conflict of law
rules thereof to the extent that the application of the law of another
jurisdiction would be required thereby. The parties hereto hereby agree that all
actions and proceedings arising in connection with this Agreement or any
agreement, document or instrument executed in connection herewith shall be tried
and litigated in the state and Federal courts located in New York, New York
(other than appeals from those courts that may have to be heard outside of New
York, New York). The parties hereby consent to service of process by certified
or registered mail at their respective addresses as set forth below. Each party
hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any suit, action or other proceeding arising out of or
based on this Agreement and brought in any such court, any claim that such party
is not subject personally to the jurisdiction of the above named courts, that
such party's property is exempt or immune from attachment or execution, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court; and waives any
offsets or counterclaims (other than compulsory counterclaims) in any such
action, suit or proceeding.
7.2. Survival. The representations and warranties made herein shall
survive any investigation made by the Purchaser and the closing of the
transactions contemplated hereby.
7.3. Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided that the rights of the Purchaser to purchase the Shares shall not be
assignable without the consent of the Company other than to affiliates (as such
term is defined in Rule 501(b) of the Securities Act) ("Affiliates") of the
Purchaser.
7.4. Amendment and Waiver. This Agreement may not be amended or waived
except in writing executed by the party against which such amendment or waiver
is sought to be enforced. No course of dealing between or among any persons
having any interest in this Agreement will be deemed effective to modify or
amend any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
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7.5. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
mail, postage prepaid, by reliable overnight delivery service such as UPS or
FedEx, or by facsimile transmission, or otherwise delivered by hand or by
messenger, addressed (a) if to the Purchaser, at the Purchaser's address set
forth on the Subscription Agreement, or at such other address as the Purchaser
shall have furnished to the Company in writing in the manner set forth herein,
with a copy to the Purchaser's Counsel if such address is provided, (b) if to
any other holder of any Shares, at such address as such holder shall have
furnished the Company in writing, or, until any such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Shares who has so furnished an address to the Company, with a copy to the
Purchaser's Counsel if such address is provided, or (c) if to the Company, at
the Company's address listed below, in each case with a copy to the Company's
Counsel at the address also listed below. In the event that any notice or other
communication is sent by facsimile transmission to the Company, such
transmission shall be followed immediately by overnight delivery to the Company
of such notice or other communication.
Company:
▇▇▇▇▇'▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Company Counsel:
▇▇▇▇▇▇ & Bird LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Purchaser's Counsel:
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered, or if by
facsimile transmission, as indicated by the facsimile imprint date.
7.6. Delays or Omissions; Rights Cumulative. Except as expressly
provided herein, no delay or omission to exercise any right, power or remedy
accruing to the Purchaser upon any breach or default of the Company under the
Agreements shall impair any such right, power or remedy of the Purchaser, nor
shall it be construed to be a waiver of any such breach or default, or an
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acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Purchaser of any
breach or default under this Agreement, or any waiver on the part of any party
hereto of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to the
Purchaser, shall be cumulative and not alternative.
7.7. Expenses. All fees, costs and expenses (including attorneys' fees
and expenses) incurred by any party hereto in connection with the preparation,
negotiation and execution of this Agreement and the exhibits and schedules
hereto and the consummation of the transactions contemplated hereby and thereby
(including the costs associated with any filings with, or compliance with any of
the requirements of any governmental authorities), shall be the sole and
exclusive responsibility of such party.
7.8. Subscription Agreement; Counterparts. Persons may become parties
to this Agreement by executing the Subscription Agreement, which may be executed
in two or more identical counterparts and by facsimile, each of which shall be
deemed an original and all of which shall constitute one and the same agreement.
Any signature that is delivered by facsimile transmission shall be valid and
binding, with the same force and effect as if an original, manually signed
counterpart.
7.9. Severability. In the event that any provision of this Agreement is
unenforceable, the remaining provisions shall continue in full force and effect.
7.10. Section Headings, etc. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement. As used herein, any gender shall include all other
genders, and the singular shall include the plural and vice versa. The terms
"include," "including" and similar terms shall mean include without limitation,
whether by enumeration or otherwise.
7.11. No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and no other person is intended to or shall have any rights hereunder
whether as a third party beneficiary or otherwise.
7.12. Independent Nature of Purchaser's Obligations and Rights. The
obligations of the Purchaser hereunder are several and not joint with the
obligations of any other purchasers, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other purchaser. The
obligations of the Purchaser are not conditioned upon the action of any other
purchaser. Nothing contained herein or in any other agreement or document
delivered at the Closing, and no action taken by the Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchaser and the other purchasers
as a partnership, an association, a joint venture or any other kind of person,
or create a presumption that the Purchaser and the other purchasers are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. The Purchaser shall be entitled to protect and
enforce its rights, including, without limitation, the rights arising out of the
Agreements, and it shall not be necessary for any other purchaser to be joined
as an additional party in any proceeding for such purpose.
7.13. Further Assurances; Cooperation. Each party shall do and perform,
and shall cooperate with and assist each other to do or 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 the Agreements and the consummation of the
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transactions contemplated thereby in a timely manner, and further agrees not to
take any actions, or to permit, authorize or direct any of its affiliates to
take any actions, that would have the effect of delaying, threatening the
success of, or preventing in any way the transactions contemplated by each of
the Agreements.
7.14. Public Statements or Releases. Neither the Company nor the
Purchaser shall make any public announcement with respect to the existence or
terms of this Agreement or the transactions provided for herein without the
prior approval of the other party, which shall not be unreasonably withheld or
delayed. Any such public announcement shall not include the name of the
Purchaser without the express approval of the Purchaser. Notwithstanding the
foregoing, nothing in this Section 7.14 shall prevent any party from making any
public announcement it considers necessary in order to satisfy its legal
obligations (under the federal securities laws or otherwise) or applicable rules
of any national securities exchange or other securities market; provided such
party, to the extent practicable, provides the other party or its
representatives with an opportunity to review and comment on any proposed public
announcement before it is made.
7.15. Entire Agreement; Amendment. This Agreement, the Registration
Rights Agreement and the Subscription Agreement constitute the entire
understanding and agreement between the Purchaser and the Company with regard to
the subject matter contained herein and therein. The Agreements supersede all
prior agreements and understandings between the parties in respect of the
subject matter contained herein or therein. Except as expressly provided herein,
this Agreement, any of the other Agreements or any term hereof may be amended,
modified, waived or discharged only by a written instrument signed by the party
waiving any term, condition, or right or remedy that benefits it hereunder.
[The remainder of this page has been intentionally
left blank.]
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<
SCHEDULE 3.12
The exercise price of the Company's Common Stock Warrants expiring January 7,
2005 (the "Warrants"), issued pursuant to the Warrant Agreement dated as of
January 7, 1998 between Advantica Restaurant Group, Inc. and Continental Stock
Transfer and Trust Company as Warrant Agent, may be reduced and the number of
shares underlying the Warrants may be increased in accordance with a formula set
forth in the Warrant Agreement as a result of the Private Placement.
A-14
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of July __, 2004 by and among ▇▇▇▇▇'▇ Corporation, a Delaware
corporation (the "Company"), and the person (the "Purchaser") identified on, and
a party to, an executed copy of the Subscription Agreement to which this
Agreement is an Exhibit (the "Subscription Agreement").
This Agreement is made pursuant to the Subscription Agreement and the
Purchase Agreement that is included as Exhibit A to the Subscription Agreement
(the "Purchase Agreement"), by and between the Company and the Purchaser,
pursuant to which the Company is issuing and selling up to the number of shares
of its common stock, $0.01 par value per share (the "Common Stock"), indicated
in the Subscription Agreement. The shares of Common Stock to be issued and sold
by the Company and purchased by the Purchaser pursuant to the Purchase Agreement
are herein referred to as the "Shares." The Shares are being offered and sold to
the Purchaser without registration under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon the exemption from registration
provided by the Securities Act and/or regulations thereunder. In order to induce
the Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide to the Purchaser (and its direct and indirect permitted transferees, if
any) the registration rights set forth in this Agreement with respect to the
resale of the Shares. The execution and delivery of this Agreement is a
condition to the Closing under the Purchase Agreement. Capitalized terms used
but not defined herein shall have the meaning provided in the Purchase
Agreement.
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
SECTION 1
Registration Rights
1.1. Filing of Resale Registration Statement. As soon as practical and,
within 30 days after the Closing under the Purchase Agreement, the Company shall
file with the Securities and Exchange Commission (the "SEC" or the "Commission")
a registration statement, on such SEC form that is available to the Company,
pursuant to Rule 415 under the Securities Act (together with any exhibits,
amendments or supplements thereto, and any documents incorporated by reference
therein, the "Registration Statement"), with respect to the resale of the
Shares, and any securities of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
Shares. The securities described in the preceding sentence are collectively
referred to herein as the "Registrable Securities"; provided, that the term
"Registrable Securities" shall not include securities transferred to a person
other than a permitted transferee.
1.2. Effectiveness of Registration Statement. The Company shall,
subject to Section 6 hereof, use its commercially reasonable efforts to cause
the Registration Statement to be declared effective as soon as reasonably
practicable and within 60 days after the Closing or, in the event of a review of
the Registration Statement by the Commission, within 90 days after the Closing,
and shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective from the date such Registration Statement
becomes effective until the earlier of (i) the date on which all Registrable
Securities have been sold pursuant to the Registration Statement or Rule 144
promulgated under the Securities Act ("Rule 144"), and (ii) such time as the
Company reasonably determines, based on an opinion of counsel, that the
Purchaser is eligible to sell under Rule 144 all of the Registrable Securities
then owned by the Purchaser within the volume limitations imposed by paragraph
(e) of Rule 144 in the three month period immediately following the termination
of the effectiveness of the Registration Statement (the "Effectiveness Period").
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1.3. Liquidated Damages.
(a) If the Registration Statement is not filed within the
period provided under Section 1.1 of this Agreement, the Company shall pay to
the Purchaser liquidated damages (in addition to the remedy available to the
Purchaser under Sections 1.3(b) or (c) of this Agreement) for the period from
and including the first business day following 30 days after the Closing until
the date on which such Registration Statement is filed, at a rate per week
equal to twenty-five basis points of the total purchase price of the Shares
purchased by the Purchaser pursuant to this Agreement. Such liquidated damages
shall be payable monthly in cash.
(b) If the Registration Statement is not declared effective
within the period provided under Section 1.2 of this Agreement, the Company
shall pay to the Purchaser liquidated damages (in addition to the remedy
available to the Purchaser under Sections 1.3(a) or (c) of this Agreement) for
the period from and including the first business day following 60 days after
the Closing or, in the event of a review of the Registration Statement by the
Commission, the first business day following 90 days after the Closing until,
but excluding the date on which such Registration Statement is declared
effective, at a rate per week equal to twenty-five basis points of the total
purchase price of the Shares purchased by the Purchaser pursuant to this
Agreement. Such liquidated damages shall be payable monthly in cash.
(c) If the effectiveness of the Registration Statement lapses
or sales of the Shares can not be made pursuant to the Registration Statement,
by reason of a stop order from the Commission or any other reason outside of
the control of the Purchaser (in either case, a "Lapse") at any point during
the Effectiveness Period, without such Lapse being cured within ten (10)
business days (the "Cure Period") by a post-effective amendment to the
Registration Statement, a supplement to the prospectus included in the
Registration Statement or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or other action that cures such Lapse, then the
Company shall pay to the Holder, as defined below, at the time such Cure
Period has expired, liquidated damages (in addition to the remedy available to
the Purchaser under Sections 1.3(a) or (b) of this Agreement), for the period
from and including the first business day following such Lapse until, but
excluding, the earlier of (1) the date on which such failure is cured and (2)
the date on which the Effectiveness Period expires, at a rate per week equal
to twenty-five basis points of the total purchase price of the Shares
purchased and still held by the Purchaser pursuant to this Agreement. Such
liquidated damages shall be payable monthly in cash.
1.4. Supplements; Amendments. Subject to Section 6 hereof, the Company
shall supplement or amend the Registration Statement, (i) as required by the SEC
form that the Company uses to register the Registrable Securities, including,
without limitation, the instructions applicable to such SEC form, or by the
Securities Act, the Exchange Act, or the rules and regulations promulgated under
the Securities Act or the Exchange Act, respectively, and (ii) to include in the
Registration Statement any additional securities that become Registrable
Securities by operation of the definition thereof unless such securities are
otherwise registered under the Securities Act. The Company shall furnish to the
Purchaser, or its permitted transferees, as appropriate (collectively, the
"Holders") of the Registrable Securities to which the Registration Statement
B-2
relates copies of any such supplement or amendment sufficiently in advance (but
in no event less than five (5) business days in advance) of its use and/or
filing with the Commission to allow the Holders a meaningful opportunity to
comment thereon with respect to the information contained therein regarding the
Holders. The Holders agree that they will within five (5) business days prior to
the filing of the Registration Statement supply information regarding themselves
and their plan of resale to the Company and hereby waive any notice of the
initial filing of the Registration Statement, and that such Holders and their
successors and assigns will promptly notify the Company of any changes in such
information, other than sales or transfers of Common Stock.
1.5. Blockout Period. From the date hereof until the 30th trading day
following the Effective Date (the "Blockout Period"), the Company will not file
with the SEC any registration statement with respect to the sale or resale of
any of its or any of its subsidiaries' equity or equity equivalent securities,
including without limitation any debt, preferred stock or other instrument or
security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for such equity securities. The
Blockout Period shall be extended for the number of trading days during such
period in which (a) trading in the Common Stock is suspended by the Commission
or any other market or exchange where such Common Stock is traded, (b) the
Registration Statement is not effective, or (c) the prospectus included in the
Registration Statement may not be used by the Holders for the resale of
Registrable Securities thereunder.
SECTION 2
Expenses
The Company shall pay all expenses, fees and costs incurred in
connection with the preparation, filing, distribution and effectiveness of the
Registration Statement and any supplements or amendments thereto, whether or not
the Registration Statement becomes effective, and whether all, none or some of
the Registrable Securities are sold pursuant to the Registration Statement,
including, without limitation, all registration and filing fees, printing
expenses and the expenses, fees and costs incurred in connection with listing
the Registrable Securities on any exchange or qualifying the Registrable
Securities for quotation on any quotation system, if any, and disbursements of
counsel for the Company, and state securities or "blue sky" fees, and the
expense of any special audits incident to or required by, or in connection with
the filing and effectiveness of the Registration Statement. Each Holder shall,
severally and not jointly, pay any underwriting fees and discounts, selling
commissions, brokerage fees and stock transfer taxes applicable to the
Registrable Securities sold by such Holder and the fees and expenses of their
counsel, if any.
SECTION 3
Registration Procedures
The Company will advise the Holders as to the status of the
preparation, filing and effectiveness of the Registration Statement and, at the
Company's expense, will do the following:
(a) make available to each Holder upon request a copy of the
Registration Statement (including all exhibits thereto) and any
prospectus forming a part thereof and any amendments and supplements
thereto (including all documents incorporated or deemed incorporated by
reference therein and including each preliminary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject to the review of the information contained
therein regarding the Holders for a period of at least five (5)
business days from the Holder's receipt of such documents, and the
Company shall not file the Registration Statement or such prospectus or
any amendment or supplement to the Registration Statement or prospectus
if any Holder shall reasonably object within the five (5) business day
period after the receipt thereof unless the Company shall have been
advised by its counsel that the Registration Statement or such
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prospectus or amendment or supplement thereto is required under the
Securities Act or the rules or regulations adopted thereunder in
connection with the distribution of Registrable Securities by the
Holders or the Company. A Holder shall be deemed to have reasonably
objected to such filing only if the Registration Statement, amendment,
prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission with respect to such
Holder or its plan of resale;
(b) make available to each Holder upon request one conformed
copy of the Registration Statement and of each amendment and supplement
thereto (in each case including all exhibits) and such number of copies
of the prospectus forming a part of the Registration Statement
(including each preliminary prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents,
including, without limitation, documents incorporated or deemed to be
incorporated by reference, as each of the Holders, from time to time
may reasonably request;
(c) to the extent practicable, promptly upon the filing of any
document that is to be incorporated by reference into the Registration
Statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than five (5) business
days after such document is filed with the Commission, make available
copies of such document to the Holders upon request, and make
representatives of the Company available for discussion of such
document and other customary due diligence matters; and provide
promptly to the Holders upon request any document filed by the Company
with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act;
(d) make available at reasonable times for inspection by the
Holders, and any attorney, accountant, financial adviser or other
representative (collectively, "Representatives") retained by the
Holders, subject to the recipient's prior written agreement to keep
such information confidential and not use or disclose it, all financial
and other records, pertinent corporate documents and properties of the
Company and cause the officers, directors and employees of the Company
to supply all information reasonably requested by the Holders or their
respective Representatives in connection with the preparation, filing
and effectiveness of the Registration Statement;
(e) use its commercially reasonable efforts (i) to register or
qualify all Registrable Securities covered by the Registration
Statement under state securities or "blue sky" laws of such States of
the United States of America where required and where an exemption is
not available and as the Holders of Registrable Securities covered by
the Registration Statement shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as the Registration
Statement is required to be effective hereunder, and (iii) to take any
other action which may be reasonably necessary or advisable to enable
the Holders to consummate the disposition of the securities to be sold
by the Holders in such jurisdictions, consistent with the plan of
distribution described in the prospectus included in the Registration
Statement, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction where it is not so qualified, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(f) use its commercially reasonable efforts to cause all
Registrable Securities covered by the Registration Statement to be
registered or qualified with or approved by all other applicable
Governmental Authorities as may be necessary, in the opinion of counsel
to the Company and counsel to the Holders of Registrable Securities, to
enable the Holders thereof the consummate the disposition of such
Registrable Securities;
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(g) subject to Section 6 hereof, promptly notify each Holder
of Registrable Securities covered by the Registration Statement (i)
upon discovery that, or upon the occurrence of any event as a result of
which, the prospectus forming a part of the Registration Statement, as
then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
proceedings for that purpose, (iii) of any request by the Commission
for (A) amendments to the Registration Statement or any document
incorporated or deemed to be incorporated by reference in the
Registration Statement, or (B) supplements to the prospectus forming a
part of the Registration Statement, or (C) additional information, or
(iv) of the receipt by the Company of any notification with respect to
the suspension of the registration, qualification or exemption from
registration or qualification of any of the Registrable Securities for
sale in any jurisdiction or the initiation of any proceeding for such
purpose, and at the request of any such Holder promptly prepare and
file an amendment to the Registration Statement or a supplement to the
prospectus as the Company may deem necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and make available to each Holder upon their
request a reasonable number of copies of such supplement to, or
amendment of, such Registration Statement and prospectus, and, in the
event of a stop order, use its commercially reasonable efforts to
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction;
(h) if reasonably requested by any Holder or if required by
law or the SEC or other applicable rule or regulation, promptly
incorporate in the Registration Statement such appropriate information
as the Holder may reasonably request to have included therein by filing
a Form 8-K, or filing a supplement to the prospectus, to reflect any
change in the information regarding the Holder, and make all required
filings with the Commission in respect of any offer or sale of
Registrable Securities or any amendment or supplement to the
Registration Statement or related prospectus;
(i) otherwise use its commercially reasonable best efforts to
comply with all applicable rules and regulations; and
(j) use its commercially reasonable efforts to cause all
Registrable Securities included in the Registration Statement to be
listed on each securities exchange on which securities of the same
class are then listed, or, if not then listed on any securities
exchange, to be eligible for trading in any over-the-counter market or
trading system in which securities of the same class are then traded.
SECTION 4
Indemnification
4.1. Indemnification by the Company. The Company will indemnify:
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(a) each of the Holders, as applicable,
(b) each of the Holder's officers, directors, members and
partners, and
(c) each individual, partnership, joint stock company,
corporation, trust, unincorporated organization, government
agency or political subdivision (each of the foregoing, a
"Person") controlling each of the Holders within the meaning
of SEC Rule 405 under the Securities Act, Section 15 of the
Securities Act or Section 20 of the Exchange Act,
with respect to the Registration Statement, against all expenses, claims,
losses, damages and liabilities (or actions, investigations or proceedings in
respect thereof) (collectively, a "Claim") arising out of or based on any actual
or alleged untrue statement of a material fact, or any omission or alleged
omission of a material fact required to be stated therein or necessary in order
to make the statements included therein not misleading, contained in the
Registration Statement, any prospectus or other offering document, and will
reimburse each of the Holders, each of its officers, directors, members and
partners, and each Person controlling each of the Holders, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending any such Claim; provided, however, that the Company will not be liable
in any such case to a Holder to the extent that any such Claim arises out of or
is based on (i) any untrue statement or omission based upon written information
furnished to the Company by such Holder or its Representatives and stated to be
specifically for use therein, or (ii) any untrue statement or omission of a
material fact required to make such statement not misleading in any prospectus
that is corrected in any subsequent prospectus that was delivered to such Holder
a reasonable period in advance of the pertinent sale or sales by such Holder.
4.2. Indemnification by the Holders. Each of the Holders will, if
Registrable Securities held by it are included in the securities as to which
such Registration Statement is being effected, severally and not jointly,
indemnify the Company, each of its directors and officers, and each Person who
"controls" the Company within the meaning of SEC Rule 405 under the Securities
Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each other Holder, against all Claims arising out of or based on (i) any actual
or alleged untrue statement of a material fact, or any omission or alleged
omission of a material fact required to be stated therein or necessary in order
to make the statement included or incorporated therein not misleading, contained
in the Registration Statement, prospectus, or other offering document based
solely upon written information furnished to the Company by or on behalf of such
Holder and stated to be specifically for use therein, or (ii) any untrue
statement or omission of a material fact required to make such statement not
misleading in any prospectus that is corrected in any subsequent prospectus that
was delivered to such Holder before the pertinent sale or sales by such Holder,
and will reimburse the Company, its directors, officers, partners, members or
control Persons for any legal or any other expenses reasonably incurred in
connection with investigating and defending any such Claim, in the case of
subsection (i) above to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in the Registration Statement, prospectus, offering memorandum or other
document in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder and stated to be specifically for
use therein; provided, however, that, to the extent permitted by law, the
several obligations of each of the Holders hereunder shall be limited to an
amount equal to the net proceeds received by such Holder from the sale of the
Registrable Securities pursuant to the Registration Statement.
4.3. Procedures. Each party entitled to indemnification under this
Agreement (each, an "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any Claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such Claim; provided, that counsel for the Indemnifying Party, who shall conduct
the defense of such Claim, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party may
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participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), and provided further, that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement unless
the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party,
in the investigation or defense of any such Claim shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement or compromise which does not include an unconditional release of the
Indemnified Party from all liability in respect to such Claim. Each Indemnified
Party shall furnish such information regarding itself or the Claim in question
as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the investigation and defense of such
Claim.
4.4. Contribution. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any Claim, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable
considerations; provided, however, that the Company will not be liable in any
such case to the extent that any such Claim (i) arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by the Holders or their Representatives and stated to be specifically
for use therein, or (ii) is finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of any person or
entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of
the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and provided that, to the extent permitted by law, each Holder shall not be
required to contribute, in the aggregate, more than the net proceeds received by
such Holder from the sale of its Registrable Securities pursuant to the
Registration Statement and further provided that the obligations of the Holders
under this Section 4.4 shall be several and not joint.
SECTION 5
Provision of Information by the Holders
Each of the Holders whose Registrable Securities are included in the
Registration Statement shall furnish to the Company such information regarding
such Holder as the Company may reasonably request in writing and as shall be
reasonably required or advisable in connection with any registration,
qualification or compliance referred to in this Agreement, and shall promptly
notify the Company if such information becomes incorrect or misleading, or
requires amendment or updating. Each of the Holders, severally and not jointly,
agrees that the plan of distribution included in any prospectus relating to the
Registrable Securities shall be substantially as set forth on Schedule B-1
hereto and that such Holder will not resell any Registrable Securities pursuant
to the Registration Statement in any manner other than as provided therein or
herein. The other information regarding the Holders required for the initial
filing of the Registration Statement has been provided by each Holder on the
Subscription Agreement. Each Holder, severally and not jointly, represents,
warrants and covenants to the Company that the information regarding such Holder
that appears in the Subscription Agreement and/or Schedule B-2 is accurate and
complete in all material respects consistent with SEC Regulation S-K, Items 507
and 508. The Holder will confirm promptly by delivery of a signed copy of
B-7
Schedule B-2, the sale of any Shares pursuant to Rule 144 or the Registration
Statement.
SECTION 6
Holdback; Postponement
Notwithstanding the other provisions of this Agreement, if at any time
after the 30th consecutive trading day the Registration Statement has been
maintained effective (a) there is material non-public information regarding the
Company which the Company's Board of Directors reasonably and in good faith
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (b) there is a extraordinary
business opportunity (including but not limited to the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar extraordinary transaction
not in the ordinary course of business) which the Company's Board of Directors
reasonably and in good faith determines not to be in the Company's best interest
to disclose, then the Company may, without incurring liability under Section 1.3
of this Agreement, postpone or suspend filing or effectiveness of a registration
statement for a period not to exceed thirty (30) days, provided that the Company
may not postpone or suspend filing or effectiveness of a registration statement
for more than sixty (60) days in the aggregate during any 365-day period and
there shall be an aggregate of not more than two (2) suspensions during any
365-day period; provided, however that no postponement or suspension shall be
permitted for consecutive thirty (30) day periods arising out of the same set of
facts, circumstances or transactions.
SECTION 7
Rule 144 Reporting, Etc.
7.1. SEC Reporting Compliance.
(a) With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without
registration, through the second anniversary of this Agreement, the
Company will:
(i) make and keep "current public information"
regarding the Company available, as defined in SEC Rule 144(c)
under the Securities Act, and cooperate with the Holders and
take such further reasonable action as the Holders may
reasonably request in writing (including, without limitation,
making such reasonable representations as the Holders may
reasonably request) consistent with the requirements of SEC
Rule 144;
(ii) use its commercially reasonable efforts to file
with the Commission in a timely manner all SEC Reports and
other filings and documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as a Holder owns any Registrable
Securities, furnish the Holder forthwith upon request a
written statement by the Company as to its compliance with the
reporting requirements under the Securities Act and the
Exchange Act, including compliance with SEC Rule 144(c), a
copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company
and other information in the possession of, or reasonably
obtainable by, the Company as a Holder may reasonably request
in availing itself of any rule or regulation of the Commission
allowing a Holder to sell any such securities without
registration.
B-8
Notwithstanding the foregoing, nothing in this Section 7.1(a) shall be
deemed to require the Company to register any of its securities (other
than the Common Stock) under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements
set forth in the instructions to the SEC form that the Company uses to
register the Registrable Securities in order to allow the Company to be
eligible to file registration statements on such SEC form.
SECTION 8
Miscellaneous
8.1. Assignment. The registration rights set forth herein may be
assigned, in whole or in part, to any transferee of Registrable Securities
permitted in accordance with the Purchase Agreement, which transferee, upon
registration on the Company's or its transfer agent's books and records as a
holder of record of Registrable Securities, shall be considered thereafter to be
a Holder (provided that any transferee who is not an affiliate of the Purchaser
shall be a Holder only with respect to such Registrable Securities so acquired
and any stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Registrable
Securities) and shall be bound by all obligations and limitations of this
Agreement and the Purchase Agreement.
8.2. Section Headings. The titles and headings used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement. As used herein, any gender shall include all other
genders, the singular shall include the plural and vice versa and any reference
to a stature or law shall include all rules and regulations promulgated
thereunder. The terms "include," "including" and similar terms shall mean
include without limitation, whether by enumeration or otherwise.
8.3. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the conflict of law rules thereof to the extent that the application of the law
of another jurisdiction would be required thereby. The parties hereto hereby
agree that all actions and proceedings arising in connection with this Agreement
or any agreement, document or instrument executed in connection herewith shall
be tried and litigated in the state and Federal courts located in New York, New
York (other than appeals from those courts that may have to be heard outside of
New York, New York). The parties hereby consent to service of process by
certified or registered mail at their respective addresses as set forth below.
Each party hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any suit, action or other proceeding
arising out of or based on this Agreement and brought in any such court, any
claim that such party is not subject personally to the jurisdiction of the above
named courts, that such party's property is exempt or immune from attachment or
execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such court;
and waives any offsets or counterclaims (other than compulsory counterclaims) in
any such action, suit or proceeding.
B-9
8.4. Notices.
(a) All communications under this Agreement shall be in
writing and shall be delivered by facsimile, by hand, by reliable
overnight delivery service such as UPS or FedEx or by registered or
certified mail, postage prepaid:
(i) if to the Company, to the address listed in the
Purchase Agreement, or at such other address as it may have
furnished in writing to the Holders;
(ii) if to the Holders, at the addresses listed on
Subscription Agreement, or at such other addresses as may have
been furnished the Company in writing.
(b) Any notice so addressed shall be deemed to be given (i) if
delivered by hand, on the date of such delivery, (ii) if sent by
reliable overnight delivery service such as UPS or FedEx, on the first
business day following the date of delivery to such service for
overnight delivery, (iii) if delivered by facsimile, on the date of
such facsimile, or (iv) if mailed by registered or certified mail, on
the third business day after the date of such mailing. In the event
that any notice is sent by facsimile transmission to the Company, such
transmission shall be followed immediately by overnight delivery to the
Company of such notice.
8.5. Successors and Assigns; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties. No other person is intended to or
shall have any rights or remedies hereunder, whether as a third party
beneficiary or otherwise.
8.6. Counterparts. Persons may become parties to this Agreement by
entering into the Subscription Agreement, which may be executed in one or more
identical counterparts, each of which shall be deemed an original and all of
which shall be one and the same agreement. Any signature that is delivered by
facsimile signature page shall be valid and binding, with the same force and
effect as if an original, manually signed counterpart.
8.7. Severability. In the event that any provision contained herein is
unenforceable, the remaining provisions shall continue in full force and effect.
8.8. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to the Holders, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any provision hereof, or
of any similar breach or default thereafter occurring; nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character by a Holder of any breach
or default under this Agreement, or any waiver by a Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in the writing, and that all remedies, either
under this Agreement, or by law or otherwise afforded to a Holder, shall be
cumulative and not alternative.
8.9. Attorney's Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
8.10. Entire Agreement; Amendment. This Agreement, the Purchase
Agreement and the Subscription Agreement constitute the entire understanding and
agreement between the Purchaser and the Company with regard to the subject
B-10
matter hereof contained herein and therein. The Agreements supersede all prior
agreements and understandings between the parties in respect of the subject
matter contained herein or therein. Except as expressly provided herein, this
Agreement, any of the other Agreements or any term hereof may be amended,
modified, waived or discharged only by a written instrument signed by the party
waiving any term, condition, or right or remedy that benefits it hereunder.
[The remainder of this page has been intentionally
left blank.]
B-11
SCHEDULE B-1
Plan of Distribution
Each of the Selling Stockholders is acting independently of us in
making decisions with respect to the timing, manner and size of each sale of
shares and have not advised us of any specific plan for distribution of the
shares offered by this prospectus. The Selling Stockholders and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of their shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions, subject to
applicable law. These sales may be public or private at prices prevailing in
such market, fixed prices or prices negotiated at the time of sale. The shares
may be sold by the Selling Stockholders directly to one or more purchasers,
through agents designated from time to time or to or through broker-dealers
designated from time to time. In the event the shares are publicly offered
through broker-dealers or agents, the Selling Stockholders may enter into
agreements with respect thereto. The Selling Stockholders may, subject to
applicable law, also use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o sales by broker-dealers of a specified number of such shares at a
stipulated price per share;
o a combination of any such methods of sale; or
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. The Selling
Stockholders may also engage in short sales against the box, puts and calls and
other transactions in our securities or derivatives of our securities and may
sell or deliver shares in connection with these trades.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Discounts, concessions, commissions and similar selling expenses, if any,
attributable to the sale of shares will be borne by a Selling Stockholder. The
Selling Stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares if liabilities
are imposed on that person under the Securities Act.
The Selling Stockholder may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3), or other applicable provision of the Securities Act of
1933, amending the list of Selling Stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.
The Selling Stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees, donees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus and may sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of Selling
Stockholders to include the pledgee, transferee, donee or other successors in
interest as Selling Stockholders under this prospectus. The Selling Stockholders
and the broker-dealers or agents that participate in the distribution of the
shares may be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales. In such event, any discounts and any
commissions received by such broker-dealers or agents and any profit on the sale
of the shares purchased by them and any discounts or commissions might be deemed
to be underwriting discounts or commissions under the Securities Act. Any such
Selling Stockholders, broker-dealers and agents may engage in transactions with,
and perform services for, the Company. At the time a particular offer of shares
is made by the Selling Stockholders, to the extent required, a prospectus will
be distributed which will set forth the aggregate number of shares being
offered, and the terms of the offering, including the public offering price
thereof, the name or names of any broker-dealers or agents, any discounts,
commissions and other items constituting compensation from, and the resulting
net proceeds to, the Selling Stockholders. Each Selling Stockholder has
purchased the shares of our common stock in the ordinary course of business.
In order to comply with the securities laws of certain states, sales of
shares offered hereby to the public in such states may be made only through
broker-dealers who are registered or licensed in such states. Sales of shares
offered hereby must also be made by the Selling Stockholders in compliance with
other applicable state securities laws and regulations. The Company is required
to pay all fees and expenses incident to the registration of the shares;
provided, that the Selling Stockholders are required, severally and not jointly,
to pay any legal or other fees incurred by such Selling Stockholders and all
underwriting fees and discounts, selling commissions, brokerage fees and stock
transfer taxes applicable to shares sold by such Selling Stockholders hereby.
The Company has agreed to indemnify the Selling Stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
The Selling Stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of shares of common stock, nor is there an
underwriter or coordinating broker acting in connection with a proposed sale of
shares of common stock by any Selling Stockholder. If we are notified by any
Selling Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such shares were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus
and (vi) other facts material to the transaction. In addition, if we are
notified by a Selling Stockholder that a donee or pledgee intends to sell more
than 500 shares, a supplement to this prospectus will be filed.
Each Selling Stockholder and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act, and
the rules and regulations thereunder, including, without limitation, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any
of the shares of common stock by the Selling Stockholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the
foregoing may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.
We may suspend the use of this prospectus for one or more reasonable
periods of time if we reasonably determine that sales of shares under this
prospectus would require premature disclosure of information we determine not to
be in our best interest to disclose and which we are not otherwise required to
disclose. If such a suspension occurs, we will file a prospectus supplement or
post-effective amendment, if required.
SCHEDULE B-2
Holder's Certificate of Subsequent Sale1
The undersigned, an officer of, or other person duly authorized by the
Holder named below hereby certifies to the Company, as defined in the
Registration Rights Agreement, dated as of __________, 2004 (the "Agreement")
that the undersigned is the Holder of the shares evidenced by the attached
certificate, and as such, sold or otherwise transferred such shares on
___________________, 200__ in accordance with:
(i) Registration Statement number ______________________________,
in the manner indicated under "Plan of Distribution" in the
current prospectus and has delivered a current prospectus, or
(ii) Pursuant to the applicable requirements of Rule 144 of the
Securities Act of 1933, as amended, in which case, a copy of
Form 144 as filed with the Securities and Exchange Commission,
together with the representation letter of the undersigned and
the broker's representation letter are enclosed.
Print or Type:
Name of Holder (Individual or Institution): _________________________
Name of Individual Representing Holder (if an Institution):
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Title:
Confirmed by the undersigned thereunto duly authorized:
Holder Name
By:
Name:
Title:
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1All capitalized terms used but not defined herein shall have the meanings
provided in the Agreement.