EXHIBIT 99.1
SECURITIES PURCHASE AGREEMENT (DEBENTURES)
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of the
date of acceptance set forth below, is entered into by and among UniverCell
Holdings, Inc., a Florida corporation, with headquarters located at ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), and each entity named on the
signature page hereto as a buyer and the permitted assigns of such entity (each,
a "Buyer") (each agreement with a Buyer being deemed a separate and independent
agreement between the Company and such Buyer, except that each Buyer
acknowledges and consents to the rights granted to each other Buyer under this
Agreement and the Transaction Agreements (as defined below)).
W I T N E S S E T H:
WHEREAS, the Company and the Buyers are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration afforded, INTER ALIA, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and
WHEREAS, the Buyers wish to purchase, upon the terms and subject to the
conditions of this Agreement, a minimum of $500,000 and a maximum aggregate
amount of $1,000,000 of debentures of the Company (the "Debentures"), which will
be convertible into shares of the Company's Common Stock, par value $0.001 per
share (the "Common Stock"), upon the terms and subject to the conditions of the
Debentures, and subject to acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. PURCHASE.
(i) The undersigned hereby agrees to purchase the Debentures
from the Company.
(ii) Subject to the terms and conditions of this Agreement and
the other Transaction Agreements (as defined below), the Buyers will purchase
the Debentures at one or more closings (each, a "Closing") to be held on the
respective Closing Dates (as defined below).
(iii) The purchase price to be paid by each Buyer shall equal
the face amount of the Debentures, as the case may be, being purchased on the
Closing Date (as defined below)
(i) by such Buyer as set forth on the signature page to this
Agreement, and shall be payable in United States Dollars.
b. CERTAIN DEFINITIONS. As used herein, each of the following
terms has the meaning set forth below, unless the context otherwise requires:
(i) "Affiliate" means, with respect to a specific Person
referred to in the relevant provision, another Person who or which controls or
is controlled by or is under common control with such specified Person.
(ii) "Certificates" means the relevant Debentures duly
executed on behalf of the Company and issued in the name of the respective
Buyer.
(iii) "Closing Date" means the respective dates on which the
Closings referred to in this Agreement are held.
(iv) "Conversion Shares" means the shares of Common Stock
issuable upon conversion of the Debentures.
(v) "Effective Date" means the effective date of the
Registration Statement covering the Registrable Securities (as those terms are
defined in the Registration Rights Agreement defined below) for the Debentures
issued on the Closing Date.
(vi) "Person" means any living person or any entity, such as,
but not necessarily limited to, a corporation, partnership or trust.
(vii) "Purchase Price" means the purchase price for the
Debentures.
(viii) "Securities" means the Debentures and Conversion
Shares.
(ix) "Shares" means the Conversion Shares and the shares
issuable upon conversion of the Warrants issued to Hornblower & Weeks, Inc. or
any of its designees.
c. FORM OF PAYMENT; DELIVERY OF CERTIFICATES.
(i) Each of the Buyers shall pay the Purchase Price for the
Debentures to be purchased by such Buyer by delivering immediately available
good funds in United States Dollars to the Company at the respective Closing on
the applicable Closing Date, determined as provided in Section 6, subject to the
payment of fees and expenses as provided in Section 12(a) and 12(b).
(ii) No later than the applicable Closing Date, but in any
event promptly following payment by the Buyers to the Company of the Purchase
Price to be paid by such Buyer, the Company shall deliver to the Buyers the
Certificates purchased at such Closing.
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d. METHOD OF PAYMENT. All payments to the Company of all or
any part of the Purchase Price shall be made at the Closing by wire transfer of
funds to:
Beneficiary Account Name: UniverCell Holdings, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Beneficiary Account No.: 5000000016439
ABA/Transit No: 053 000 219
Beneficiary Bank: First Union National Bank
2. BUYERS REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
Each Buyer represents and warrants to, and covenants and agrees with,
the Company as follows:
a. Without limiting any Buyer's right to sell the Common Stock
pursuant to the Registration Statement, each Buyer is purchasing the Debentures
and will be acquiring the Conversion Shares for its own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.
b. Each Buyer is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the Securities.
c. All subsequent offers and sales of the Securities by each
Buyer shall be made pursuant to registration of the Shares under the 1933 Act or
pursuant to an exemption from registration and compliance with applicable
states' securities laws.
d. Each Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and the Buyer's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of the Buyers set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyers to acquire the
Securities.
e. Each Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Securities which
have been requested by the Buyer. Each Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries. Without limiting the
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generality of the foregoing, each Buyer has also had the opportunity to obtain
and to review the Company's (1) Annual Report on Form 10-K for the fiscal year
ended December 31, 2001 and (2) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2001, June 30, 2001 and September 30, 2001 (the
"Company's SEC Documents").
f. Each Buyer understands that its investment in the
Securities involves a high degree of risk.
g. Each Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities.
h. Each Buyer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. This Agreement
and the Transaction Agreements have been duly and validly authorized, executed
and delivered on behalf of the Buyer and create a valid and binding agreement of
the Buyer enforceable in accordance with its terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights generally.
i. Such Buyer has not employed any broker or finder in
connection with the transactions contemplated by this Agreement.
j. The state in which any offer to purchase shares hereunder
was made to or accepted by such Buyer is the state shown as the Buyer's address
on Schedule I hereto.
k. Each Buyer was not formed for the purpose of investing
solely in the Securities which may be acquired hereunder.
l. Each Buyer is able to bear the complete loss of such
Buyer's investment in the Securities.
m. Each Buyer's execution, delivery and performance under this
Agreement will not breach the provisions of any agreement to which such Buyer is
a party.
3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants
to the Buyers that:
a. CONCERNING THE DEBENTURES AND THE SHARES. There are no
preemptive rights of any stockholder of the Company to acquire the Debentures or
the Shares.
b. REPORTING COMPANY STATUS. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has the requisite corporate power to own its properties and to carry
on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the business, operations
or condition (financial or otherwise) or results of operation of the Company and
its subsidiaries taken as a
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whole (a "Material Adverse Effect"). The Company has registered its Common Stock
pursuant to Section 12 of the 1934 Act, and the Common Stock is listed and
traded on the OTC Bulletin Board Market of the National Association of
Securities Dealers, Inc. The Company has received no notice, either oral or
written, with respect to the continued eligibility of the Common Stock for such
listing, and the Company has maintained all requirements for the continuation of
such listing.
c. AUTHORIZED SHARES. The authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock, par value $0.001 per
share, of which 40,067,096 shares are issued and outstanding as of the date of
this Agreement. All issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. The Company
has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Shares. The Shares have been duly
authorized and, when issued upon conversion of, or as interest on, the
Debentures will be duly and validly issued, fully paid and non-assessable and
will not subject the holder thereof to personal liability by reason of being
such holder. At all times, the Issuer shall keep available Common Stock duly
authorized for issuance against the Debentures.
d. SECURITIES PURCHASE AGREEMENT; REGISTRATION RIGHTS
AGREEMENT. This Agreement and the Registration Rights Agreement, between the
Company and the Buyers, substantially in the form of Exhibit C annexed hereto
(the "Registration Rights Agreement"), and the transactions contemplated
thereby, have been duly and validly authorized by the Company, this Agreement
has been duly executed and delivered by the Company. Each of this Agreement, the
Debentures and the Registration Rights Agreement, when executed and delivered by
the Company, are and will be, valid, legal and binding agreements of the Company
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
e. NON-CONTRAVENTION. The execution and delivery of this
Agreement, the Debentures and the Registration Rights Agreement by the Company,
the issuance of the Securities, and the consummation by the Company of the other
transactions contemplated by this Agreement, the Registration Rights Agreement,
and the Debentures do not and will not conflict with or result in a breach by
the Company of any of the terms or provisions of, or constitute a default under
(i) the articles of incorporation or by-laws of the Company, each as currently
in effect, (ii) any indenture, mortgage, deed of trust, or other material
agreement or instrument to which the Company is a party or by which it or any of
its properties or assets are bound, including any listing agreement for the
Common Stock, except as herein set forth or an event which results in the
creation of any lien, charge or encumbrance upon any assets of the Company or of
any of its subsidiaries or the triggering of any preemptive or anti-dilution
rights or rights of first refusal or first offer on the part of holders of the
Company's securities, (iii) to its knowledge, any existing applicable law, rule,
or regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of its properties
or assets, or (iv) the Company's listing agreement for its Common Stock, except
such conflict, breach or default which would not have a Material Adverse Effect.
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f. APPROVALS. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the stockholders of the Company is required to be
obtained by the Company for the issuance and sale of the Securities to the
Buyers as contemplated by this Agreement, except such authorizations, approvals
and consents that have been obtained, or such authorizations, approvals and
consents, the failure of which to obtain would not have a Material Adverse
Affect.
g. SEC FILINGS. None of the Company's SEC Documents contained,
at the time they were filed, any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements made therein in light of the circumstances under which they were
made, not misleading. The Company has since December 31, 2001 timely filed all
requisite forms, reports and exhibits thereto with the SEC. The Company is not
aware of any event occurring on or prior to a Closing Date or the Delivery Date
(other than the transactions effected hereby) that would require the filing of,
or with respect to which the Company intends to file, a Form 8-K after such
date.
h. ABSENCE OF CERTAIN CHANGES. Since December 31, 2001, there
has been no material adverse change and no material adverse development in the
business, properties, operations, condition (financial or otherwise), or results
of operations of the Company or any of its subsidiaries, except as disclosed in
the Company's SEC Documents. Since December 31, 2001, except as provided in the
Company's SEC Documents, neither the Company nor any of its subsidiaries has (i)
incurred or become subject to any material liabilities (absolute or contingent)
except liabilities incurred in the ordinary course of business consistent with
past practices; (ii) discharged or satisfied any material lien or encumbrance or
paid any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to stockholders with respect to its capital stock, or purchased or
redeemed, or made any agreements to purchase or redeem, any shares of its
capital stock; (iv) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business
consistent with past practices; (v) suffered any substantial losses or waived
any rights of material value, whether or not in the ordinary course of business,
or suffered the loss of any material amount of existing business; (vi) made any
changes in employee compensation, except in the ordinary course of business
consistent with past practices; or (vii) experienced any material problems with
labor or management in connection with the terms and conditions of their
employment.
i. FULL DISCLOSURE. There is no fact known to the Company
(other than general economic conditions known to the public generally or as
disclosed in the Company's SEC Documents) that has not been disclosed in writing
to the Buyers that (i) would reasonably be expected to have a Material Adverse
Effect, (ii) would reasonably be expected to materially and adversely affect the
ability of the Company to perform its obligations pursuant to this Agreement or
any of the agreements contemplated hereby (collectively, including this
Agreement, the "Transaction Agreements"), or (iii) would reasonably be expected
to materially and adversely affect the value of the rights granted to the Buyers
in the Transaction Agreements.
j. ABSENCE OF LITIGATION. Except as set forth in the Company's
SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court,
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public board or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries, wherein an
unfavorable decision, ruling or finding would have a Material Adverse Effect or
which would adversely affect the validity or enforceability of, or the authority
or ability of the Company and its subsidiaries taken as a whole to perform its
obligations under, any of the Transaction Agreements. Neither the Company nor
any of its subsidiaries is a party to or subject to the provisions of, any
order, writ, injunction, judgement or decree of any court or government agency
or instrumentality which could reasonably be expected to have a Material Adverse
Effect.
k. ABSENCE OF EVENTS OF DEFAULT. Except as disclosed in the
Company's SEC Documents, no Event of Default (or its equivalent term), as
defined in the respective agreement to which the Company or any of its
subsidiaries is a party, and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default (or its equivalent
term) (as so defined in such agreement), has occurred and is continuing, which
would have a Material Adverse Effect.
l. PRIOR ISSUES. Except as set forth in the Company's SEC
Documents, during the twelve (12) months preceding the date hereof, the Company
has not issued any convertible securities or any shares of the Common Stock.
m. NO UNDISCLOSED LIABILITIES OR EVENTS. The Company has no
liabilities or obligations other than those disclosed in the Company's SEC
Documents or those incurred in the ordinary course of the Company's business
since December 31, 2001, and which individually or in the aggregate, do not or
would not have a Material Adverse Effect. No event or circumstances has occurred
or exists with respect to the Company or its properties, business, condition
(financial or otherwise), or results of operations, which, under applicable law,
rule or regulation, requires public disclosure or announcement prior to the date
hereof by the Company but which has not been so publicly announced or disclosed.
There are no proposals currently under consideration or currently anticipated to
be under consideration by the Board of Directors or the executive officers of
the Company which proposal would (x) change the articles of incorporation,
by-laws or any other charter document of the Company, each as currently in
effect, with or without shareholder approval, which change would reduce or
otherwise adversely affect the rights and powers of the shareholders of the
Common Stock or (y) materially or substantially change the business, assets or
capital of the Company, including its interests in subsidiaries.
n. NO DEFAULT. Neither the Company nor any of its subsidiaries
is in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material indenture, mortgage,
deed of trust or other material instrument or agreement to which it is a party
or by which it or its property is bound.
o. NO INTEGRATED OFFERING. Neither the Company nor any of its
affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since December 31, 2001, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under Rule
506 of Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.
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p. DILUTION. The number of Shares issuable upon conversion of
the Debentures may increase substantially in certain circumstances, including,
but not necessarily limited to, the circumstance wherein the market price of the
Common Stock declines prior to the conversion of the Debentures. The Company's
executive officers and directors have studied and fully understand the nature of
the securities being sold hereby and recognize that they have a potential
dilutive effect and further that the conversion of the Debentures and/or sale of
the Conversion Shares may have an adverse effect on the market price of the
Common Stock. The board of directors of the Company has concluded, in its good
faith business judgment, that such issuance is in the best interests of the
Company. The Company specifically acknowledges that its obligation to issue the
Conversion Shares upon conversion of the Debentures is binding upon the Company
and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company.
q. REGULATORY PERMITS. The Company has all such permits,
easements, consents, licenses, franchises and other governmental and regulatory
authorizations from all appropriate federal, state, local or other public
authorities ("Permits") as are necessary to own and lease its properties and
conduct its businesses in all material respects in the manner described in the
Registration Statement and as currently being conducted. All such Permits are in
full force and effect and the Company has fulfilled and performed all of its
material obligations with respect to such Permits, and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material impairment of the
rights of the holder of any such Permit, subject in each case to such
qualification as may be disclosed in the Prospectus. Such Permits contain no
restrictions that would materially impair the ability of the Company to conduct
businesses in the manner consistent with its past practices. The Company has not
received notice or otherwise has knowledge of any proceeding or action relating
to the revocation or modification of any such Permit.
r. INDEPENDENT PUBLIC ACCOUNTANTS. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, who
have certified the consolidated financial statements of the Company, including
the notes thereto, included in the Registration Statement, are independent
public accountants with respect to the Company, as required by the 1933 Act and
the 1933 Act Regulations.
s. INTERNAL ACCOUNTING CONTROLS. The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (1) transactions are executed in accordance with management's
general or specific authorization; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (3) access to
assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. TRANSFER RESTRICTIONS. The Buyers acknowledge that (1) the
Debentures have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyers shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; (3) the Buyers may not sell or transfer the Debentures unless the
amount sold or transferred exceeds 20% of the Debentures; and (4) neither the
Company nor any other person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
b. RESTRICTIVE LEGEND. The Buyers acknowledge and agree that
the Debentures , and, until such time as the Shares have been registered under
the 1933 Act as contemplated by the Registration Rights Agreement and sold in
accordance with an effective Registration Statement, certificates and other
instruments representing any of the Securities shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of any such Securities):
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
c. REGISTRATION RIGHTS AGREEMENT. The parties hereto agree to
enter into the Registration Rights Agreement on or before the Closing Date.
d. FILINGS. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Securities to the Buyers
required under any United States laws and regulations applicable to the Company,
or by any domestic securities exchange or trading market, and to provide a copy
thereof to the Buyers promptly after such filing.
e. REPORTING STATUS. So long as the any of the Buyers
beneficially own any of the Securities, the Company shall file all reports
required to be filed with the SEC pursuant to Section 13 or 15(d) of the 1934
Act, and the Company shall not terminate its status as an issuer
9
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. Except as otherwise
set forth in this Agreement and the Transaction Agreements, the Company will
take all reasonable action under its control to obtain and to continue the
listing and trading of its Common Stock (including, without limitation, all
Registrable Securities) on the OTC Bulletin Board Market of the National
Association of Securities Dealers, Inc. and will comply in all material respects
with the Company's reporting, filing and other obligations under the by-laws or
rules of the National Association of Securities Dealers, Inc. ("NASD").
f. USE OF PROCEEDS. The Company will use the proceeds from the
sale of the Debentures (excluding amounts paid by the Company for legal fees in
connection with the sale of the Debentures) for internal working capital
purposes.
g. AVAILABLE SHARES. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, 9,932,904
shares of Common Stock issuable at conversion as may be required to satisfy the
conversion rights of the Buyers pursuant to the terms and conditions of the
Debentures which have been issued and not yet converted. If at any time, the
Company does not have available an amount of authorized and non-issued Shares
necessary to satisfy full Conversion of the then outstanding amount of the
Debentures, the Company shall call and hold a special meeting within 30 days of
such occurrence, for the sole purpose of increasing the number of shares
authorized. Management of the Company shall recommend to shareholders to vote in
favor of increasing the number of Common Stock authorized. Management shall also
vote all of its shares in favor of increasing the number of Common Stock
authorized.
h. REIMBURSEMENT. If (i) any Buyer, other than by reason of
its gross negligence, willful misconduct or breach of law, becomes a party
defendant in any capacity in any action or proceeding brought by any stockholder
of the Company, in connection with or as a result of the consummation of the
transactions contemplated by the Transaction Agreements, or if such Buyer is
impleaded in any such action, proceeding or investigation by any Person, or (ii)
any Buyer, other than by reason of its gross negligence, willful misconduct or
breach of law, becomes a party defendant in any capacity in any action or
proceeding brought by the SEC against or involving the Company or in connection
with or as a result of the consummation of the transactions contemplated by the
Transaction Agreements, or if such Buyer is impleaded in any such action,
proceeding or investigation by any Person, then in any such case, the Company
will reimburse such Buyer for its reasonable legal and other expenses (including
the cost of any investigation and preparation) incurred in connection therewith.
The reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any affiliates of the Buyers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Buyers and any such Affiliate, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Buyers and any such Affiliate and any such Person. Except as
otherwise set forth in the Transaction Agreements, the Company also agrees that
neither any Buyer nor any such Affiliate, partners, directors, agents, employees
or controlling persons shall have any liability to the Company or any person
asserting claims on behalf of or in right of the Company in connection with or
as a result of the consummation of the
10
Transaction Agreements except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Company result from the gross negligence
or willful misconduct of such Buyer or from a breach of the representations,
covenants and conditions contained herein or from a breach of law.
5 TRANSFER AGENT INSTRUCTIONS.
a. Promptly following the purchase by the Buyers of the
Debentures in accordance with Section 1(c) hereof, the Company will irrevocably
instruct its transfer agent to issue Common Stock from time to time upon
conversion of the Debentures in such amounts as specified from time to time by
the Company to the transfer agent, bearing the restrictive legend specified in
Section 4(b) of this Agreement prior to registration of the Shares under the
1933 Act, registered in the name of the respective Buyer or its permitted
assigns and in such denominations to be specified by such Buyer in connection
with each conversion of the Debentures. The Company warrants that if the Buyer
is not in breach of the representations and warranties contained in this
Agreement, no instruction other than such instructions referred to in this
Section 5 and stop transfer instructions to give effect to Section 4(a) hereof
prior to registration and sale of the Converted Shares under the 1933 Act will
be given by the Company to the transfer agent and that the Converted Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement, the Registration Rights
Agreement, and applicable law. Nothing in this Section shall affect in any way
the Buyers' obligations and agreement to comply with all applicable securities
laws upon resale of the Securities. If any Buyer provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by such Buyer of any of the Securities in accordance with clause (1)(B)
of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this
Agreement) permit the transfer of the Securities and, in the case of the
Converted Shares, instruct the Company's transfer agent to issue one or more
certificates for Common Stock without legend in such name and in such
denominations as specified by the Buyer.
b. (i) The Company will permit the Buyers to exercise their
rights to convert the Debentures by telecopying or delivering an executed and
completed Notice of Conversion to the Company. The Company will within two (2)
Business Days respond with its endorsement so as to confirm the outstanding
principal amount of any Debenture submitted for conversion or shall reconcile
any difference with the Buyer promptly after receiving such Notice of
Conversion.
(ii) The term "Conversion Date" means, with respect to any
conversion elected by the holder of the Debentures, the date specified in the
Notice of Conversion, provided the copy of the Notice of Conversion is given
either via mail or facsimile to or otherwise delivered to the Company in
accordance with the provisions hereof so that it is received by the Company on
or before such specified date.
(iii) The Company will transmit the certificates representing
the Converted Shares issuable upon conversion of any Debentures (together,
unless otherwise instructed by the Buyer, with Debentures not being so
converted) to the Buyer at the address specified in the Notice of Conversion
(which may be the Buyer's address for notices as contemplated by Section
11
11 hereof or a different address) via express courier, by electronic transfer or
otherwise, within five (5) business days if the address for delivery is in the
United States and within seven (7) business days if the address for delivery is
outside the United States (such fifth business day or seventh business day, as
the case may be, the "Delivery Date") after (A) the business day on which the
Company has received both of the Notice of Conversion (by facsimile or other
delivery) and the original Debentures being converted (and if the same are not
delivered to the Company on the same date, the date of delivery of the second of
such items) or (B) the date an interest payment on the Debentures, which the
Company has elected to pay by the issuance of Common Stock, as contemplated by
the Debentures, was due.
c. From and after the date on which the Shares have been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement, the failure to issue unrestricted, freely tradable Conversion Shares
to the Buyers upon Conversion shall be considered an Event of Default, which if
not cured after ten (10) days prior written notice, shall entitle the Buyers (or
any of them) to demand that the Debentures held by them be immediately redeemed
by a cash payment equal to the liquidation value of such shall entitle the
Buyers (or any of them) to demand that the Debentures held by them be
immediately redeemed by a cash payment equal to the liquidation value of such
Debentures, together with any unpaid dividends thereon (whether or not the terms
of such Debentures expressly permit the redemption thereof). The Company
acknowledges that the failure to honor a Notice of Conversion shall cause
definable financial hardship on the Buyers.
d. The Company will authorize its transfer agent to give
information to a Buyer or such Buyer's representative relating to the transfer
of the Company's shares of Common Stock to the Buyer, upon the reasonable
request of the Buyer or any such representative. The Company will provide such
Buyer with a copy of the authorization so given to the transfer agent.
e. Each Buyer shall be entitled to exercise its conversion
privilege with respect to the Debentures notwithstanding the commencement of any
case under 11 U.S.C.ss.101 ET SEQ. (the "Bankruptcy Code"). In the event the
Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the
fullest extent permitted, any rights to relief it may have under 11 U.S.C.ss.362
in respect of such Buyer's conversion privilege. The Company hereby waives, to
the fullest extent permitted, any rights to relief it may have under 11
U.S.C.ss.362 in respect of the conversion of the Debentures. The Company agrees,
without cost or expense to such Buyer, to take or to consent to any and all
action necessary to effectuate relief under 11 U.S.C.ss.362.
6. CLOSING DATE.
a. The purchases and sales of Debentures will occur at one or
more closings under this Agreement, the first of which will occur when Buyers
have deposited not less than $250,000 of the Purchase Price in an escrow account
to be opened with First Union National Bank for the transactions contemplated
under this Agreement (the "First Union Escrow"). The next Closing under this
Agreement will occur on the earlier of (x) the date on which the Buyers who will
purchase the balance of the Debentures to be purchased and sold under this
Agreement have deposited the full amount of their purchase prices in the First
Union Escrow and (y) such
12
earlier date as the Company and the Buyers who purchasing at such Closing shall
agree. If a Closing occurs under (y) of the preceding sentence, then the next or
final Closing shall occur on the date on which the Buyers who will purchase the
balance of the Debentures to be purchased and sold under this Agreement have
deposited the full amount of their purchase prices in the First Union Escrow.
b. In the case of each Closing, the Closing Date shall occur
on the date which is the first trading day after each of the conditions
contemplated by Sections 7 and 8 hereof shall have either been satisfied or been
waived by the party in whose favor such conditions run.
c. In the case of each Closing, the Closing of the purchase
and issuance of Debentures shall occur on the Closing Date at the offices of
McGuireWoods LLP, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ and shall take
place no later than 3:00 P.M., New York time, on such day or such other time as
is mutually agreed upon by the Company and the Buyers.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Company's obligation to sell the Debentures to the Buyer pursuant
to this Agreement on each Closing Date is conditioned upon:
a. Delivery by the Buyers to the Company of good funds as
payment in full of an amount equal to the Purchase Price for the Debentures in
accordance with this Agreement;
b. The accuracy on the Closing Date of the representations and
warranties of the Buyers contained in this Agreement, each as if made on such
date, and the performance by the Buyers on or before such date of all covenants
and agreements of the Buyers required to be performed on or before such date;
and
c. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
8 CONDITIONS TO THE BUYERS' OBLIGATION TO PURCHASE.
The Buyer's obligation of those Buyers who are purchasing Debentures at
a particular closing to purchase the Debentures on the applicable Closing Date
is conditioned upon:
a. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company;
b. Delivery by the Company to the Buyers of the Debentures to
be purchased in accordance with this Agreement;
c. The accuracy in all material respects on the Closing Date
of the representations and warranties of the Company contained in this
Agreement, each as if made on such date, and the performance by the Company on
or before such date of all covenants and agreements of the Company required to
be performed on or before such date;
13
d. On the Closing Date, the Buyers shall have received an
opinion of counsel for the Company, dated as of the Closing Date, in form, scope
and substance reasonably satisfactory to the Buyers, substantially to the effect
set forth in Exhibit D annexed hereto;
e. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained; and
f. From and after the date hereof to and including the Closing
Date, the trading of the Common Stock shall not have been suspended by the SEC
or the NASD and trading in securities generally on the New York Stock Exchange
or The NASDAQ/National Market System shall not have been suspended or limited,
nor shall minimum prices been established for securities traded on The
NASDAQ/National Market System, nor shall there be any outbreak or escalation of
hostilities involving the United States or any material adverse change in any
financial market that in either case in the reasonable judgment of the Buyers
makes it impracticable or inadvisable to purchase the Debentures.
9. GOVERNING LAW: MISCELLANEOUS.
a. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on FORUM NON CONVENIENS, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Buyers for any reasonable legal fees and disbursements incurred by
the Buyers in enforcement of or protection of any of its rights under any of the
Transaction Agreements.
b. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
c. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto.
d. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
e. A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto.
f. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original.
14
g. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
h. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
i. This Agreement may be amended only by the written consent
of a majority in interest of the holders of the Debentures and an instrument in
writing signed by the Company.
j. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
10. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of:
a. the date delivered, if delivered by personal delivery as
against written receipt therefor or by confirmed facsimile transmission,
b. the seventh business day after deposit, postage prepaid, in
the United States Postal Service by registered or certified mail, or
c. the third business day after mailing by next-day express
courier, with delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):
COMPANY: UniverCell Holdings, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇
With a copy to:
McGuireWoods LLP
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq,
15
BUYERS: At the address set forth on the signature page of this Agreement.
With copies to:
Hornblower & Weeks, Inc.
▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Buyers' representations and warranties herein shall survive for a period of
fifteen (15) months after the execution and delivery of this Agreement and shall
inure to the benefit of the Buyers and the Company and their respective
successors and assigns.
12. FEES; EXPENSES.
a. At each Closing, Hornblower & Weeks, Inc. shall receive
cash compensation equal to thirteen percent (13%) of the gross proceeds of the
Debentures and the Company shall issue one or more warrants (the "Warrants") to
purchase shares of the Common Stock to such persons as Hornblower & Weeks, Inc.
shall designate on the following basis: For every $1,000 funded to the Company,
the Company shall issue Warrants to purchase 2,000 shares of the Company's
Common Stock. The cash fees shall be deducted from the proceeds of the sale of
the Debentures.
16
IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyers
and the Company as of the date set forth below.
Date: as of ______, 2002
COMPANY:
UNIVERCELL HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name and Title: ▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
BUYER: [COMPLETED AND EXECUTED BY THE
BUYERS INDICATED ON SCHEDULE I]
Name:______________________________________________
By:________________________________________________
(Signature of Authorized Person)
Printed Name and Title:
Address:___________________________________________
___________________________________________
Telephone:_________________________________________
Facsimile:_________________________________________
Jurisdiction of Incorporation:_____________________
Value of Debentures to be Purchased:
$_________________
17
Schedule I SCHEDULE OF BUYERS
Exhibit A FORM OF DEBENTURE
Exhibit B REGISTRATION RIGHTS AGREEMENT
Exhibit C OPINION OF COUNSEL
18
SCHEDULE I
SCHEDULE OF BUYERS
UNIVERCELL HOLDINGS, INC. - PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES DUE 2004
FIRST CLOSING - CLOSING DATE 3/27/02
▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $20,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Living Trust $25,000
▇▇▇▇▇▇▇ ▇▇▇▇ $50,000
Crusoe Capital $20,000
▇▇▇▇ ▇▇▇▇▇▇ $100,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $100,000
TOTAL FIRST CLOSING: $315,000
SECOND CLOSING - CLOSING DATE 4/30/02
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇
Trustees for Kees Family
Living Trust $30,000
▇▇▇▇▇ Card $20,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $10,000
▇▇▇▇ ▇▇▇▇▇ $20,000
▇▇▇▇▇▇ ▇▇▇▇ $20,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ $50,000
▇▇▇▇▇ ▇▇▇▇▇ $20,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Irrevocable Trust $15,000
▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $25,000
▇▇▇▇▇▇▇ ▇▇▇ $50,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $25,000
TOTAL SECOND CLOSING: $285,000
THIRD CLOSING - CLOSING DATE 5/7/02
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ $25,000
▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ttees for the ▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Living Revocable Trust
Dtd: 11/5/96 $25,000
TOTAL THIRD CLOSING: $50,000
TOTAL FOR THE ENTIRE PRIVATE PLACEMENT: $650,000
19
EXHIBIT A
DEBENTURE
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD,
PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE
ACT PURSUANT TO REGISTRATION REQUIREMENTS THEREOF OR
EXEMPTION THEREFROM.
No. __ $___________
UNIVERCELL HOLDINGS, INC.
CONVERTIBLE DEBENTURE DUE ________ __, 2004
FOR VALUE RECEIVED, UNIVERCELL HOLDINGS, INC., a corporation organized
and existing under the laws of the State of Florida (the "Company"), hereby
promises to pay to ___________________, a __________________, having its address
at ______________________ or its assigns (the "Holder"), the principal sum of
________ and 00/100 Dollars ($____________) on ______ ___, 2004 (the "Maturity
Date") and to pay simple interest on the principal sum outstanding from time to
time in arrears (i) upon conversion as provided herein or (ii) on the Maturity
Date, at the rate of 6% per annum. Interest shall commence to accrue on this
Debenture on the first such business day to occur after the date hereof and
shall continue on a daily basis until payment in full of the principal sum has
been made or duly provided for or until the full outstanding amount of this
Debenture has been converted in accordance with the provisions hereof.
This Debenture is the Debenture referred to in the Securities Purchase
Agreement (the "Securities Purchase Agreement") dated _______ __, 2002, between
the Company and the Holder, is subject to the provisions of the Securities
Purchase Agreement and further is subject to the following additional
provisions:
1. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act and other applicable state and foreign
securities laws. In the event of any proposed transfer of this Debenture, the
Company may require, prior to issuance of a new Debenture in the name of such
other person, that it receive reasonable transfer documentation including legal
opinions that the issuance of the Debenture in such other name does not and will
not cause a violation of the Securities Act or any applicable state or foreign
securities laws. Prior to due presentment for transfer of this Debenture, the
Company and any agent of the Company
20
may treat the person in whose name this Debenture is duly registered on the
Company's Debenture Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
2. The Holder is entitled to, at any time or from time to time, convert
the Conversion Amount into shares of Common Stock of the Company, par value
$.001 per share ("Common Stock"), at a conversion price for each share of Common
Stock (the "Conversion Price") equal to the lower of (x) 200% of the closing bid
price per share (as reported by Bloomberg, LP) on the Closing Date, and (y) 70%
of the lowest closing bid price per share (as reported by Bloomberg, LP) of the
Company's Common Stock for the twenty (20) Trading Days immediately preceding
the date of conversion. The Conversion Price will be adjusted as provided in
Section 6.
a. For purposes of this Debenture, the following terms have
the meanings indicated below:
(i) "Conversion Amount" shall mean the sum of (A) all or any
portion of the outstanding principal amount of this Debenture, as designated by
the Holder upon exercise of its right of conversion and (B) all interest that
has accrued on the portion of the principal amount that has been designated for
payment pursuant to (A).
(ii) "Market Price of the Common Stock" means (x) the closing
bid price of the Common Stock for the period indicated in the relevant provision
hereof (unless a different relevant period is specified in the relevant
provision), as reported by Bloomberg, LP or, if not so reported, as reported on
the over-the-counter market or (y) if the Common Stock is listed on a stock
exchange, the closing price on such exchange, as reported in The Wall Street
Journal.
(iii) "Trading Day" shall mean any day on which the New York
Stock Exchange is open for business.
b. Conversion shall be effectuated by surrendering the
Debentures to be converted to the Company's transfer agent, Corporate Stock
Transfer, accompanied by or preceded by facsimile or other delivery to the
Company of the form of conversion notice attached hereto as Exhibit A, executed
by the Holder of the Debenture evidencing such Holder's intention to convert
this Debenture or a specified portion hereof, and accompanied, if required by
the Company, by proper assignment hereof in blank. No fractional shares of
Common Stock or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share. The date on which notice of conversion is given (the "Conversion
Date") shall be deemed to be the date on which the Company receives by fax or by
mail the conversion notice ("Notice of Conversion"), substantially in the form
annexed hereto as Exhibit A, duly executed, to the Company; PROVIDED that the
Holder shall deliver to the Company's transfer agent or the Company the original
Debentures being converted within five (5) business days thereafter (and if not
so delivered within such time, the Conversion Date shall be the date on which
the later of the Notice of Conversion and the original Debentures being
converted is received by the Company). Facsimile delivery of the Notice of
Conversion shall be accepted by the Company at facsimile number (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: Corporate Secretary.
A-2
Except as otherwise provided, certificates representing Common Stock upon
conversion will be delivered within five (5) business days from the date of
delivery of the Notice of Conversion.
3. Unless demand has otherwise been made in writing for payment in cash
by the Holder, any Debentures not previously received for conversion as of the
Maturity Date shall be deemed to have been surrendered for conversion, without
further action of any kind by the Company or any of its agents, employees or
representatives, as of the Maturity Date at the Conversion Price applicable on
the Maturity Date ("Mandatory Conversion").
4. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to Convert this Debenture
into Common Stock, at the time, place, and rate herein prescribed. This
Debenture is a direct obligation of the Company.
5. If the Company (a) merges or consolidates with another corporation
or after business entity and the Company is not the surviving entity or (b)
sells or transfers all or substantially all of its assets to another person and
the holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee will agree that this Debenture may thereafter
be converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any (i) proposed
merger or consolidation where the Company is not the surviving entity or (ii)
sale or transfer of all or substantially all of the assets of the Company (in
either such case, a "Sale"), the Holder shall have the right to convert by
delivering a Notice of Conversion to the Company within fifteen (15) days of
receipt of notice of such Sale from the Company.
6. If, at any time while any portion of this Debenture remains
outstanding, the Company effectuates a stock split or reverse stock split of its
Common Stock or issues a dividend on its Common Stock consisting of shares of
Common Stock or otherwise recapitalizes its Common Stock, the Conversion Price
shall be equitably adjusted to reflect such action. By way of illustration, and
not in limitation, of the foregoing (i) if the Company effectuates a 2:1 split
of its Common Stock, thereafter, with respect to any conversion for which the
Company issues the shares after the record date of such split, the Conversion
Price shall be deemed to be one-half of what it had been calculated to be
immediately prior to such split; (ii) if the Company effectuates a 1:10 reverse
split of its Common Stock, thereafter, with respect to any conversion for which
the Company issues the shares after the record date of such reverse split, the
Conversion Price shall be deemed to be the amount of such Conversion Price
calculated immediately prior to the record date multiplied by 10; and (iii) if
the Company declares a stock dividend of one share of Common Stock for every 10
shares outstanding, thereafter, with respect to any conversion for which the
Company issues the shares after the record date of such dividend, the Conversion
Price shall be deemed to be the amount of such Conversion Price calculated
immediately prior to such record date multiplied by a fraction, of which the
numerator is the number of shares (10) for
A-3
which a dividend share will be issued and the denominator is such number of
shares plus the dividend share(s) issuable or issued thereon (11).
7. All payments contemplated hereby to be made "in cash" shall be made
by wire transfer of immediately available funds in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. All payments of cash and each delivery of shares of
Common Stock issuable to the Holder as contemplated hereby shall be made to the
Holder to an account designated by the Holder to the Company and if the Holder
has not designated any such accounts at the address last appearing on the
Debenture Register of the Company as designated in writing by the Holder from
time to time; except that the Holder may designate, by notice to the Company, a
different delivery address for any one or more specific payments or deliveries.
8. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon conversion thereof except in compliance with the terms of the
Securities Purchase Agreement and the Registration Rights Agreement and under
circumstances which will not result in a violation of the Securities Act or any
applicable state Blue Sky or foreign laws or similar laws relating to the sale
of securities.
9. This Debenture shall be governed by and construed in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON COVENIENS, to the bringing of any such
proceeding in such jurisdictions. To the extent determined by such court, the
Company shall reimburse the Holder for any reasonable legal fees and
disbursements incurred by the Holder in enforcement of or protection of any of
its rights under this Debenture or the Securities Purchase Agreement.
10. The following shall constitute an "Event of Default":
a. The Company fails in the payment of principal or interest
on this Debenture as required hereunder and the same shall continue for a period
of three (3) days; or
b. Any of the representations or warranties made by the
Company herein, in the Securities Purchase Agreement, the Registration Rights
Agreement, dated ______ __, 2002 between the Company and the Investors therein
(the "Registration Rights Agreement"), or in any certificate or financial or
other written statements heretofore or hereafter furnished by the Company in
connection with the execution and delivery of this Debenture or the Securities
Purchase Agreement shall be false or misleading in any material respect at the
time made; or
c. The Company fails to issue shares of Common Stock to the
Holder or to cause its Transfer Agent to issue shares of Common Stock upon
exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Debenture, fails to transfer or to cause its Transfer Agent to
transfer any certificate for shares of Common Stock issued to the Holder upon
conversion of this Debenture and when required by this Debenture or the
A-4
Registration Rights Agreement, and such transfer is otherwise lawful, or fails
to remove any restrictive legend or to cause its Transfer Agent to transfer any
certificate or any shares of Common Stock issued to the Holder upon conversion
of this Debenture as and when required by this Debenture, the Agreement or the
Registration Rights Agreement and such legend removal is otherwise lawful, and
any such failure shall continue uncured for five (5) business days after written
notice from the Holder of such failure; or
d. The Company shall fail to perform or observe, in any
material respect, any other covenant, term, provision, condition, agreement or
obligation of the Debenture and, except the case of Section 5, such failure
shall continue uncured for a period of thirty (30) days after written notice
from the holder of such failure. The Company shall fail to perform or observe,
in any material respect, any covenant, term, provision, condition, agreement or
obligation of the Company under the Securities Purchase Agreement or the
Registration Rights Agreement and such failure shall continue uncured for a
period of thirty (30) days after written notice from the Holder of such failure;
or
e. The Company shall (1) admit in writing its inability to pay
its debts generally as they mature; (2) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (3) apply for or
consent to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; or
f. A trustee, liquidator or receiver shall be appointed for
the Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of
the Company and shall not be dismissed within sixty (60) days thereafter; or
h. Any final money judgment, writ or warrant of attachment, or
similar process, not subject to appeal, in excess of One-Hundred Thousand
($100,000) Dollars in the aggregate shall be entered or filed against the
Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of sixty (60) days or in any event
later than five (5) days prior to the date of any proposed sale thereunder; or
i. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such institution or the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding;
or
j. The Company shall have its Common Stock suspended or
delisted from an exchange for a period in excess of five (5) trading days.
A-5
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by a majority in interest of
the Holders of the Debentures (which waiver shall not be deemed to be a waiver
of any subsequent default) at the option of a majority in interest of the
Holders and in the discretion of a majority in interest of the Holders, the
Holder may at its option and discretion declare this Debenture, together with
all accrued and unpaid interest herein, to be immediately due and payable,
without presentment, demand, protest or notice of any kinds, all of which are
hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and a majority in interest of the
Holders may immediately enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law.
11. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
12. This Debenture may be amended only by the written consent of the
parties hereto. Notwithstanding the foregoing, the principal amount of this
Debenture shall automatically be reduced by any and all Conversion Amounts (to
the extent that the same relate to principal hereof). In the absence of manifest
error, the outstanding principal amount of the Debenture on the Company's book
and records shall be the correct amount.
13. No waivers or consents in regard to any provision of this Debenture
may be given other than by an instrument in writing signed by the Holder.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by an officer thereunto duly authorized.
Dated: _______ ___, 2002
UNIVERCELL HOLDINGS, INC.
By:___________________________________
______________________________________
(Print Name)
______________________________________
(Title)
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________ of
the principal amount of the above Debenture No. ___ into Shares of Common Stock
of UNIVERCELL HOLDINGS, INC. (the "Company") according to the conditions hereof,
as of the date written below. After giving effect to the conversion requested
hereby, the outstanding principal amount of such debenture is $ _______________
subject to confirmation by the Company endorsed below.
Conversion Date*
--------------------------------------------------------------------------------
Applicable Conversion Price
--------------------------------------------------------------------------------
Signature
--------------------------------------------------------------------------------
[Name]
Address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* This original Debenture must be received by the Company or its transfer agent
by the fifth business date following the Conversion Date.
The Company hereby confirms that $ ___________ in principal amount is
outstanding under the above Debenture after giving effect to the conversion
requested hereby.
UNIVERCELL HOLDINGS, INC.
By:
--------------------------------------
-----------------------------------------
(Print Name)
-----------------------------------------
(Title)
A-8
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
(CONVERTIBLE DEBENTURES)
THIS REGISTRATION RIGHTS AGREEMENT, dated as of _____ __, 2002 (this
"Agreement"), is made by and between UNIVERCELL HOLDINGS, INC., a Florida
corporation, with headquarters located at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(the "Company"), and each entity named on the signature page hereto as
"Investors" (each, an "Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of _____ __, 2002, between the Buyers listed
therein and the Company (the "Securities Purchase Agreement"; terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Investors one or more debentures of the Company, in a minimum aggregate
principal amount of $500,000 and a maximum aggregate amount of $1,000,000 (the
"Debentures"); and
WHEREAS, the Debentures are convertible into shares of Common Stock (the
"Conversion Shares"; which term, for purposes of this Agreement, shall include,
without limitation, shares of Common Stock of the Company issuable in lieu of
accrued interest on conversion as contemplated by the Debentures) upon the terms
and subject to the conditions contained in the Debentures.
WHEREAS, to induce the Investors to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
a. "Investor" means an Investor and any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Debentures or Registrable
Securities.
B-1
b. "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the registration statement would be detrimental to the business and affairs of
the Company; or (ii) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a registration statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the registration statement would be
materially misleading absent the inclusion of such information.
c. "Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.
d. "Registrable Securities" means the Conversion Shares.
e. "Registration Statement" means a registration statement of the
Company under the Securities Act.
f. "SEC" means the United States Securities and Exchange Commission.
2. REGISTRATION.
(a) Mandatory Registration.
(i) The Company shall prepare and file with the SEC, as soon as
possible after the Closing Date and no later than ten (10) days
following the Closing Date (the "Required Filing Date"), either a
Registration Statement or an amendment to an existing Registration
Statement, in either event registering for resale by the Investors
9,932,904 shares of Common Stock in order that the Investors may sell
the Registrable Securities. The Registration Statement (W) shall
include only the Registrable Securities and shares to be issued upon
the exercise of warrants to purchase Common Stock issued in connection
with the sale of the Debentures and (X) shall also state that, in
accordance with Rule 416 and 457 under the Securities Act, it also
covers such indeterminate number of additional shares of Common Stock
as may become issuable upon conversion of the Debentures to prevent
dilution resulting from stock splits or stock dividends. The Company
will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date no later than sixty (60)
days after the Closing Date.
(ii) If at any time (an "Increased Registered Shares Date"), the
number of shares of Common Stock represented by the Registrable
Securities, issued or to be issued as contemplated by the Transaction
Agreements, exceeds the aggregate number of shares of Common Stock then
registered, the Company shall, within
B-2
ten (10) business days after receipt of a written notice from any
Investor, either (X) amend the relevant Registration Statement filed by
the Company pursuant to the preceding provisions of this Section 2, if
such Registration Statement has not been declared effective by the SEC
at that time, to register two hundred percent (200%) of such
Registrable Shares, computed as contemplated by the immediately
preceding subparagraph (i), or (Y) if such Registration Statement has
been declared effective by the SEC at that time, file with the SEC an
additional Registration Statement (an "Additional Registration
Statement") to register two hundred percent (200%) of the shares of
Common Stock represented by the Registrable Shares, computed as
contemplated by the immediately preceding subparagraph (i), that exceed
the aggregate number of shares of Common Stock already registered. If
the Company has insufficient authorized but unissued shares to satisfy
the foregoing commitment, the Company will use its reasonable best
efforts to first solicit the consent of the holders of a majority of
its outstanding shares entitled to vote thereon to increase the number
of shares of the Company's common stock to the amount required to be
registered under this Section 2(a)(ii), then promptly to file an
information statement with respect to such increase in authorized
shares with the SEC and as promptly as permitted thereafter to send the
information statement to all of the stockholders of the Company who did
not so consent. The Company will thereafter use its reasonable best
efforts to include the additional shares of Common Stock so authorized
to be included in the amended Registration Statement or the Additional
Registration Statement, as the case may be, and to cause the amended
Registration Statement or the Additional Registration Statement, as the
case may be, to be declared effective as promptly as possible and in no
event later than (90) days after the Increased Registered Shares Date.
(b) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the Registrable
Securities is not filed with the SEC by the Required Filing Date, the
Company will make payment to the Investors in such amounts and at such
times as shall be determined pursuant to this Section 2(b).
(ii) If the Company does not respond to comments issued by the SEC
within two (2) business days of first receipt thereof by the Company or
its counsel, then the Company will make payments to the Investors in
such amounts and at such times as shall be determined pursuant to this
Section 2(b).
(iii) If either the conditions set forth in Sections 2(b)(i) or
2(b)(ii) are not satisfied as required thereby, then within three (3)
days after the end of the time periods referenced in Sections 2(b)(i)
or 2(b)(ii) (the third such date being referred to as the "Set Date"),
as the case may be, the Company shall immediately pay to the Investors
without demand therefore a cash amount equal to 2% per month of the
outstanding principal amount of the Debentures and, until such time as
the actions required by Sections 2(b)(i) or 2(b)(ii), as the case may
be, shall have been taken, the same amount shall accrue and become
payable to the
B-3
Investors within three days on the same day as the Set Date of each
subsequent month until such Sections shall have been complied with. In
light of the difficulty of ascertaining the amount of damage that the
Investors will suffer as a result of the Company's failure to comply
therewith, all amounts payable under this Section shall be payable as
liquidated damages, and not as a penalty. The Company shall keep the
registration statement effective throughout the period during which the
life of the Registrable Securities are issued and outstanding.
(iv) The parties acknowledge that the damages which may be
incurred by the Investors if the Registration Statement is not filed by
the Required Filing Date or if the Registration Statement has not been
declared effective as promptly as possible may be difficult to
ascertain. The parties agree that the Periodic Amounts represent a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages, and shall be the exclusive
remedy.
(v) Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent
any delay in the effectiveness of the Registration Statement occurs
because of an act of, or a failure to act or to act timely by the
Investors or its counsel, or in the event all of the Registrable
Securities may be sold pursuant to Rule 144 or another available
exemption under the Act.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC by the Required Filing Date
a Registration Statement with respect to not less than the number of Registrable
Securities provided in Section 2(a) above, and thereafter use its reasonable
efforts to cause such Registration Statement relating to Registrable Securities
to become effective as promptly as possible and keep the Registration Statement
effective at all times during the period (the "Registration Period") continuing
until the earliest of (i) the date that is five (5) years after the last day of
the calendar month following the month in which the Effective Date occurs, (ii)
the date when the Investors may sell all Registrable Securities under Rule 144,
or (iii) the date the Investors no longer own any of the Registrable Securities,
which Registration Statement (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any 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 light of the circumstances in which
they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as
B-4
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
the Registration Statement;
(c) The Company shall permit a single firm of counsel designated by the
Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time (but not less than three (3)
business days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects. If such counsel objects, the
Required Filing Date shall be extended by the number of days from the date the
Registration Statement was delivered to such counsel to the date such counsel no
longer objects;
(d) Notify each Investor, such Investor's legal counsel identified to
the Company (the "Investor's Counsel"), and any managing underwriters
immediately (and, in the case of (i)(A) below, not less than five (5) days prior
to such filing) and (if requested by any such Person) confirm such notice in
writing no later than one (1) business day following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) whenever the SEC notifies
the Company whether there will be a "review" of Registration Statement; (C)
whenever the Company receives (or a representative of the Company receives on
its behalf) any oral or written comments from the SEC relating to a Registration
Statement (copies or, in the case of oral comments, summaries of such comments
shall be promptly furnished by the Company to the Investors); and (D) with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the SEC or any other Federal
or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) if at any time any of the
representations or warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. In
addition, the Company shall furnish the Investors with copies of all intended
written responses to the comments contemplated in clause (C) of this Section
3(d) not later than one (1) business day in advance of the filing of such
responses with the SEC so that the Investors shall have the opportunity to
comment thereon;
(e) Furnish to each Investor and such Investor's Counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement, each
preliminary prospectus and prospectus, and each
B-5
amendment or supplement thereto, and (ii) such number of copies of a prospectus,
and all amendments and supplements thereto and such other documents, as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(f) As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has actual
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(g) As promptly as practicable after becoming aware thereof, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the SEC
of a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;
(h) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; PROVIDED, HOWEVER, that the
Company may not so suspend the right to such holders of Registrable Securities
for more than two twenty (20) business day periods in the aggregate during any
12-month period ("Suspension Period") with at least a ten (10) business day
interval between such periods, during the periods the Registration Statement is
required to be in effect;
(i) Use its reasonable efforts to secure and maintain the designation
of all the Registrable Securities covered by the Registration Statement on the
NASDAQ/National Market System or the "OTC Bulletin Board Market" of the National
Association of Securities Dealers Automated Quotations System ("NASDAQ") within
the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the quotation of the Registrable
Securities on The NASDAQ National Market System; and further use its efforts to
arrange for at least two market makers to register with the National Association
of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities;
(j) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than three (3) business days
after the effective date of the Registration Statement;
B-6
(k) Cooperate with the Investors to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts as the case may
be, as the Investors may reasonably request, and, within three (3) business days
after a Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel;
(l) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement;
(m) Not take, or omit to take, any actions that would preclude the
filing or effectiveness of the Registration Statement or require the withdrawal
of the Registration Statement;
(n) Not complete any acquisitions or business combinations until the
SEC has declared effective the registration statement that registers the shares
of Common Stock underlying the Debentures.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least ten (10) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of such Investor's Registrable Securities included in the Registration
Statement. If at least two (2) business days prior to the filing date the
Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or
3(f), above, such Investor
B-7
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or 3(f) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
(d) Each holder of Registrable Securities that sells Registrable
Securities pursuant to a registration under this Agreement agrees that in
connection with registration as follows:
(i) Such seller shall cooperate as reasonably requested by the
Company with the Company in connection with the preparation of the
registration statement, and for as long as the Company is obligated to
file and keep effective the registration statement, shall provide to
the Company, in writing, for use in the registration statement, all
such information regarding such seller and its plan of distribution of
the Registrable Securities as may reasonably be necessary to enable the
Company to prepare the registration statement and prospectus covering
the Registrable Securities, to maintain the currency and effectiveness
thereof and otherwise to comply with all applicable requirements of law
in connection therewith; and
(ii) During such time as such seller may be engaged in a
distribution of the Registrable Securities, such seller shall comply
with Rules 10b-6 and 10b-7 promulgated under the Securities Exchange
Act and pursuant thereto it shall, among other things; (x) not engage
in any stabilization activity in connection with the securities of the
Company in contravention of such rules; (y) distribute the Registrable
Securities under the registration statement solely in the manner
described in the registration statement; and (z) cease distribution of
such Registrable Securities pursuant to such registration statement
upon written notice from the Company that the prospectus covering the
Registrable Securities contains any untrue statement of a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
5. EXPENSES OF REGISTRATION.
(a) All reasonable expenses (other than underwriting discounts and
commissions of the Investors) incurred in connection with registrations, filings
or qualifications pursuant to Sections 2 and 3, but including, without
limitation, all registration, listing, and qualifications fees, printers, legal
and accounting fees, the fees and disbursements of counsel for the Company and a
fee for a single counsel for the Investors (as a group and not individually) not
exceeding $80,000 for the Registration Statement covering the Registrable
Securities applicable to the Debentures issued on the Closing Date shall be
borne by the Company.
(b) Neither the Company nor any of its subsidiaries has, as of the date
hereof, nor shall the Company nor any of its subsidiaries, on or after the date
of this Agreement, entered
B-8
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Investors in this Agreement or otherwise conflicts with
the provisions hereof. Except as disclosed in the Securities Purchase Agreement
or the other documents entered into simultaneously therewith, neither the
Company nor any of its subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person. Without limiting the generality of the foregoing, without the written
consent of the Investors holding a majority of the Registrable Securities, the
Company shall not grant to any person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full of the
Investors set forth herein, and are not otherwise in conflict or inconsistent
with the provisions of this Agreement and the other Transaction Agreements.
6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors,
managers and members, if any, of such Investor, the officers, if any, of such
Investor, and each person, if any, who controls any Investor within the meaning
of the Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(c) hereof; (II) be available to the extent such Claim is based on a failure of
the Investor to deliver or cause to be delivered the prospectus made available
by the Company; (III) apply to amounts
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0paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld; or (IV) apply to any violation or alleged violation by an Indemnified
Person of the Securities Act, the Exchange Act, any state securities laws or any
rule or regulation under the Securities Act, the Exchange Act, or any state
securities laws. Each Investor will indemnify the Company and its officers,
directors and agents (each, an "Indemnified Person" or "Indemnified Party")
against any claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company, by or on behalf of such Investor, expressly for use in connection with
the preparation of the Registration Statement, subject to such limitations and
conditions as are applicable to the Indemnification provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.
(b) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest
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extent permitted by law; PROVIDED, HOWEVER, that (a) no contribution shall be
made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6; (b) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation; and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investors 0the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act;
c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration; and
d. cause its counsel to deliver to its transfer agent such opinions of
law as shall be required to remove restrictive legends on the shares to be sold.
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9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debenture) only if: (a) the
Investor agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such transferee or assignee and (ii) the securities with
respect to which such registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws, and (d) at or before the time the
Company received the written notice contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(c) hereof arising from such delay.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a fifty (50%) percent
interest of the Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and the
Company.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
b. Notices required or permitted to be given hereunder shall be given
in the manner contemplated by the Securities Purchase Agreement, (i) if to the
Company or to the Investors, to their respective address contemplated by the
Securities Purchase Agreement, and (iii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 11(b).
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
d. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of New
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York or the state courts of the State of New York sitting in the City of New
York in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on FORUM NON COVENIENS, to the bringing of any such proceeding
in such jurisdictions. To the extent determined by such court, the Company shall
reimburse the Buyer for any reasonable legal fees and disbursements incurred by
the Buyer in enforcement of or protection of any of its rights under this
Agreement.
e. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
f. Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
g. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
h. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.
i. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
j. The Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a) hereof, or any delay in such performance
could result in loss to the Investors, and the Company agrees that, in addition
to any other liability the Company may have by reason of such failure or delay,
the Company shall be liable for all direct damages caused by any such failure or
delay, unless the same is the result of force majeure. Neither party shall be
liable for consequential damages.
k. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
UNIVERCELL HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
INVESTOR: [AS COMPLETED AND EXECUTED BY THE
BUYERS INDICATED ON SCHEDULE I TO THE
SECURITIES PURCHASE AGREEMENT]
-----------------------------------------------
Name of Investor
By:
-------------------------------------------
Name:
Title:
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Exhibit C
to the
SECURITIES PURCHASE AGREEMENT
[date]
TO THE BUYERS
NAMED ON SCHEDULE I
Re: Securities Purchase Agreement
Ladies and Gentlemen:
We have acted as counsel for UniverCell Holdings, Inc. (the "Company"), a
Florida corporation, in connection with the transactions under (i) the
Securities Purchase Agreement by and among each entity named therein as a
"Buyer" (each, a "Buyer") and the Company, dated as of ________ ___, 2002 (the
"Securities Purchase Agreement"), (ii) the Registration Rights Agreement between
the Investors and the Company, dated as of ________ ___, 2002 (the "Registration
Rights Agreement") and (iii) the Company's Convertible Debenture due 2004 (the
"Debentures", and together with the Securities Purchase Agreement, the
Registration Rights Agreement, the "Transaction Documents"). This opinion is
furnished to you pursuant to Section 8 of the Securities Purchase Agreement. All
capitalized terms used herein have the meanings defined for them in the
Securities Purchase Agreement unless otherwise defined herein.
As counsel to the Company, we have examined originals or copies of such
corporate records of the Company, certificates of public officials and such
other documents as we have deemed necessary for the purpose of rendering this
opinion letter.
In rendering the opinions expressed below, we have assumed (i) the valid
existence in the jurisdiction of its organization of each party to the
Transaction Documents other than the Company, (ii) the due authorization,
execution and delivery of the Transaction Documents by the parties thereto other
than the Company, (iii) the power and authority of each party to the Transaction
Documents, other than the Company, to execute, deliver and perform the same
without violating its certificate of incorporation or bylaws or any other
organizational or governing documents or any law or governmental rule or
regulation applicable to it, (iv) that the execution, delivery and performance
of the Transaction Documents by each party thereto, other than the Company, will
not conflict with, constitute a default under or result in a breach of any
requirement of law or any contractual obligation of any such party, (v) the
genuineness of all signatures and the authority of all persons signing each of
the Transaction Documents on behalf of the parties thereto other than the
Company, and (iv) the authenticity of all documents
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submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies.
As to certain factual matters, we have, to the extent deemed appropriate by
us, relied upon certificates of officers of the Company and the Buyers
(including, without limitation, all certificates delivered by them in connection
with the Securities Purchase Agreement) and the representations and warranties
of the Company and the Buyers contained in the Transaction Agreements (including
the Schedules and Exhibits thereto), and we have not independently verified the
information contained in such certificates or the Transaction Agreements.
As used herein, "to our knowledge" means the conscious awareness (without
any independent investigation) of facts or other information by any lawyer in
our Firm actively involved in the negotiation of the transactions described
herein. The term "to our knowledge" specifically excludes all factual matters
that would be known to us by constructive, implied or imputed knowledge.
Based upon the foregoing and subject to the qualifications hereinafter set
forth, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida (having been initially
incorporated in California and subsequently becoming domesticated in
Florida by filing a Certificate of Domestication with the Secretary of
State of the State of Florida on August 24, 2001) and has all requisite
power and authority to carry on its business and to own, lease and operate
its properties and assets. To our knowledge, the Company is duly qualified
as a foreign corporation to do business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
Material Adverse Effect.
2. The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Transaction Documents and to
sell, issue and deliver the Debentures. The execution and delivery of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all
necessary corporate action. Each of the Transaction Documents has been duly
executed and delivered by the Company, and each of the Transaction
Documents constitutes valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms.
3. The execution, delivery and performance of the Transaction
Agreements by the Company and the consummation by the Company of the
transactions contemplated thereby, including, without limitation, the sale,
issuance and delivery of the Debentures, do not and will not, to our
knowledge (i) result in a violation of the Company's Articles of
Incorporation, as amended (the "Articles") or By-Laws; (ii) conflict with,
or constitute a material default (or an event that with notice or lapse of
time or both would become a material default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
material agreement, indenture, instrument or any "lock-up" or similar
provision of any
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underwriting or similar agreement to which the Company is a party; or (iii)
result in a violation of any federal or state law, rule or regulation
applicable to the Company or by which any property or asset of the Company
is bound or affected, except for such violations as would not, individually
or in the aggregate, have a Material Adverse Effect. To our knowledge, the
Company is not in violation of any terms of its Articles or By-Laws.
4. To our knowledge, there are no claims, actions, suits, proceedings
or investigations that are pending against the Company or its properties,
or against any officer or director of the Company in his or her capacity as
such which could reasonably be expected to have a Material Adverse Effect.
5. Upon conversion of the Debenture in accordance with the terms
therein, the Common Stock to be issued thereunder will be validly
authorized, duly issued and fully paid in non-assessable shares of the
Company.
6. The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, par value $.0001, of which 40,067,096 shares are
issued and outstanding.
Our opinions expressed herein are qualified as follows:
A. The opinions expressed herein are qualified to the extent that
the validity, binding nature and enforceability against the Company of
its obligations under the Transaction Documents may be limited or
otherwise afforded by the unenforceability, under certain
circumstances, of provisions indemnifying, or prospectively releasing,
a party against liability for its own wrongful or negligent acts or
where a release or indemnification provision is contrary to public
policy.
B. Our opinions herein on the enforceability of the Company's
obligations under the Transaction Documents are qualified to the extent
that: (i) the availability of any specific remedy provided therein and
any other equitable remedies, including without limitation specific
performance, is subject to the exercise of judicial discretion in
accordance with general principles of equity and public policy
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (ii) the enforceability of any
agreement or obligation of the Company may be limited by (x)
bankruptcy, rehabilitation, liquidation, conservation, dissolution,
insolvency, reorganization, moratorium, fraudulent conveyance,
receivership or other similar laws now or hereafter in effect relating
to creditors' rights generally and (y) the effect of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), including without limitation, (1) the
possible unavailability of specific performance, injunctive relief or
any other equitable remedy and (2) concepts of materiality,
reasonableness, good faith and fair dealing.
C. We express no opinion herein as to (i) the applicability to the
obligations of the Company (or the enforceability thereof) of Section
548 of the U.S. Bankruptcy Code or any other provision of law relating
to fraudulent transfers, conveyances and obligations, and (ii) the
"blue sky" laws of any State.
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We express no opinion herein as to laws of any jurisdiction other than the
laws of the State of Florida and the Federal laws of the United States of
America.
The opinions contained herein are limited to those matters expressly
covered by numbered paragraphs (1) through (6) above; no opinion is to be
implied in respect of any other matter. The opinions set forth in numbered
paragraphs (1) through (6) are as of the date hereof and we disclaim any
undertaking to update this letter or otherwise advise you as to any changes of
law or fact which may hereafter be brought to our attention.
This letter and the opinions contained herein are furnished by us as
counsel to the Company in connection with the transactions described above and
are solely for your benefit and are not to be made available to or relied upon
in any manner by any other person, firm, or entity or for any other purpose
without our prior written consent.
Very truly yours,
/s/ McGuireWoods LLP
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