UNI-PIXEL, INC. SECURITIES PURCHASE AGREEMENT
EXHIBIT
1
UNI-PIXEL,
INC.
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”)
is
dated as of February 13, 2007, and is by and among UNI-PIXEL, INC., a Delaware
corporation, with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the “Company”),
and
each investor listed in Schedule
1
hereto
(each such investor individually, a “Purchaser”
and,
collectively, the “Purchasers”).
WHEREAS
the Company desires to issue and sell to the Purchasers, and the Purchasers
desire to purchase from the Company, in aggregate, (a) 3,200,000 authorized
but
unissued shares of the Company’s Series B Preferred Stock, par value $0.001 per
share (the “Series
B Preferred Stock”),
and
(b) Warrants (as defined below) to purchase, in aggregate, up to 6,839,279
shares of the Company’s common stock, par value $0.001 (the “Common
Stock”),
for
an aggregate purchase price of $12,000,000, all upon the terms and subject
to
the conditions set forth in this Agreement; and
WHEREAS,
at the Closing (as defined below), the Company and the Purchasers shall enter
into that certain Investors’ Rights Agreement, dated as of the Closing, in the
form attached hereto as Exhibit
A
(the
“Investors’
Rights Agreement”).
NOW
THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as
follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“Affiliate”
of
any
Person means any other Person that, directly or indirectly, through one or
more
intermediaries, controls, is controlled by, or is under common control with,
such Person, as such terms are used and construed under Rule 144 (as defined
below), and with respect to Tudor (as defined below), in addition to the
foregoing, the term “Affiliate”
shall
also include the Related Entities.
“Board”
means
the Board of Directors of the Company.
“Bridge
Loans”
means
the Company’s 12% Senior Secured Convertible Debentures and 10% Senior Unsecured
Convertible Promissory Note.
“Business
Day”
means
any day except Saturday, Sunday and any day which is a federal legal holiday
or
a day on which banking institutions in the State of New York or Texas are
authorized or required by law or other governmental action to
close.
“Certificate
of Designations”
means
the Certificate of Designations of the Series B Preferred Stock adopted by
the
Board and filed on or before the Closing (as defined below) by the Company
with
the Secretary of State of the State of Delaware in accordance with Delaware
law,
establishing the rights, preferences and privileges of the Series B Preferred
Stock, in the form attached hereto as Exhibit
B.
“Conversion
Shares”
means
the shares of Common Stock issuable upon conversion of the Shares pursuant
to
the terms of the Certificate of Designations.
“Disclosure
Schedule”
has
the
meaning set forth in Section
3.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.
“Financial
Statements”
has
the
meaning set forth in Section
3.7.
“Financial
Statement Date”
means
the date of the most recent audited financial statements of the Company, which
date is December 31, 2005.
“Intellectual
Property”
means
all rights and interests in and to all inventions, invention disclosures,
patents, patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, confidential or proprietary information, trade secrets,
licenses, domain names, mask works, information and proprietary rights and
processes as are material to the conduct of the business of the Company and
the
Subsidiaries, taken as a whole, whether now conducted or proposed to be
conducted.
“Knowledge” (whether
or not capitalized) including the phrase “to
the Company’s knowledge” includes
(a) actual knowledge of the Person, including the actual knowledge of any of
the
officers or directors of the Company or any of the Subsidiaries, and (b) that
knowledge which a prudent businessperson could have obtained in the management
of his business after making due inquiry, and after exercising due diligence,
with respect thereto.
“Material
Adverse Effect”
means
any event, occurrence or development that has had, or that could reasonably
be
expected to have, individually or in the aggregate with other events,
occurrences or developments, a material adverse effect on the assets,
liabilities (contingent or otherwise), business, affairs, operations, prospects
or condition (financial or otherwise) of the Company and its Subsidiaries,
taken
as a whole; provided, however, that any change resulting from (a) general
economic conditions or industry conditions that do not disproportionately affect
the Company or its Subsidiaries, (b) the announcement of the transactions
contemplated by this Agreement and the performance by the parties of their
obligations under this Agreement, (c) any change in law, or (d) any action
permitted by this Agreement, shall not constitute a Material Adverse
Effect.
“Person”
(whether or not capitalized) means an individual, entity, partnership, limited
liability company, corporation, association, trust, joint venture,
unincorporated organization, and any government, governmental department or
agency or political subdivision thereof.
“Related
Entities”
includes, with respect to Tudor, any entities for which any of the Tudor
Entities or its Affiliates serve as a general partner and/or investment advisor
or in a similar capacity, and all mutual funds or other pooled investment
vehicles or entities under the control or management of any of the Tudor
Entities or its Affiliates. For purposes of this Agreement, (a) “Tudor
Entities”
means
each of the following: Tudor Investment Corporation, Tudor Group Holdings LLC,
their respective Affiliates, and any Affiliate or Affiliated Group of Tudor
Investment Corporation and/or Tudor Group Holdings LLC, and (b) with respect
to
the Tudor Entities, “Affiliated
Group”
has
the
meaning given to it in Section 1504 of the Internal Revenue Code of 1986, as
amended, and in addition includes any analogous combined, consolidated, or
unitary group, as defined under any applicable state, local or foreign income
tax law.
“Rule
144”
means
Rule 144 promulgated under the Securities Act and any successor or substitute
rule, law or provision.
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and all of the rules and regulations
promulgated thereunder.
“Shares”
means
the shares of Series B Preferred Stock issued and sold by the Company to the
Purchasers hereunder.
“Share
Price”
means
$3.75 per Share.
“Subsidiaries”
means
the subsidiaries of the Company listed in Schedule
2-3.17
to the
Disclosure Schedule.
“Transaction
Documents”
means,
collectively, the Investors’ Rights Agreement, the Certificate of Designations
and the Warrant, including all Schedules and Exhibits thereto and all
certificates, opinions and other documents delivered in connection
therewith.
“Tudor”
means,
collectively, The Raptor Global Portfolio Ltd., The Tudor BVI Global Portfolio
Ltd., Tudor Proprietary Trading, L.L.C., and The Altar Rock Fund
L.P.
“Warrants”
means
the warrants to purchase up to in aggregate 6,839,279 shares of Common Stock
for
a purchase price of $1.24 per share, dated as of the Closing Date, issued by
the
Company to the Purchasers pursuant hereto, in substantially the form attached
hereto as Exhibit
C.
“Warrant
Amendments”
means,
collectively, the amendments to certain outstanding warrants to purchase shares
of Common Stock of the Company in substantially the forms attached hereto as
Exhibit
D.
“Warrant
Shares”
means
the shares of Common Stock issued or issuable upon the exercise of the
Warrants.
2. Purchase
and Sale of Shares and Warrants.
2.1 Filing
of Certificate of Designations.
The
Company shall adopt and file with the Secretary of State of the State of
Delaware, on or before the Closing, the Certificate of
Designations.
2.2 Purchase
and Sale of Shares.
Subject
to and upon the terms and conditions set forth in this Agreement, the Company
agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees,
severally and not jointly, to purchase from the Company, at the Closing, the
number of Shares set forth opposite such Purchaser’s name in Schedule
1
hereto,
at the Share Price.
2.3 Issuance
of Warrants.
Subject
to and upon the terms and conditions set forth in this Agreement, the Company
agrees to issue to each Purchaser at the Closing, for no further cash
consideration, a Warrant to purchase the number of Warrant Shares set forth
opposite such Purchaser’s name in Schedule
1
hereto.
2.4 Closing.
The
closing of the purchase and sale of the Shares and Warrants (the “Closing”)
shall
take place at 10:00 am (Eastern Time) at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Flexner LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, on February 13, 2007,
the
date hereof, or on such other date and at such time as may be agreed upon
between the Purchasers, on the one hand, and the Company, on the other hand
(the
“Closing
Date”).
At
the Closing, the Company shall deliver to each Purchaser (i) a single stock
certificate (or more, if reasonably requested by the Purchaser), registered
in
the name of such Purchaser, representing the number of Shares purchased by
such
Purchaser as described in Section
2.2
hereof
and (ii) a Warrant in the name of such Purchaser for the number of Warrant
Shares as described in Section
2.3
hereof,
against payment by or on behalf of such Purchaser of the aggregate purchase
price, as set forth opposite such Purchaser’s name in Schedule
1
hereto,
by wire transfer of immediately available funds to such account as the Company
shall designate in writing.
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to each Purchaser, as of the date hereof
and except as set forth on the disclosure schedule attached hereto as
Schedule
2
(the
“Disclosure
Schedule”),
as
follows:
3.1 Incorporation.
Each of
the Company and the Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the State
of
Delaware (or such other applicable jurisdiction of incorporation or formation
as
is indicated in Schedule
2-3.1
to the
Disclosure Schedule), and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
the
character of the property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not result in a Material Adverse Effect. Each of the Company and the
Subsidiaries has all requisite corporate power and authority to carry on its
business as now conducted and to carry out the transactions contemplated hereby.
Neither the Company nor any of the Subsidiaries is in violation of any of the
provisions of its Certificate of Incorporation or By-laws (or other charter
or
governing document).
3.2 Capitalization.
After
giving effect to the Closing, the authorized capital stock of the Company shall
consist of:
(a) Common
Stock.
100,000,000 shares of Common Stock, of which (i) 16,311,973 shares are duly
issued and outstanding as of the Closing Date, (ii) 2,661,667 shares are
reserved for issuance upon exercise of outstanding options as of the Closing
Date, (iii) 6,282,635 shares are reserved for issuance upon conversion of the
Corporation’s Series A Preferred Stock, par value $0.001 (the “Series
A Preferred Stock”),
(iv)
3,792,900 shares are reserved for issuance upon exercise of currently
outstanding warrants to purchase shares of the Common Stock, and (v) 22,839,279
shares are reserved for issuance upon conversion of the Shares and the Warrant
Shares.
(b) Preferred
Stock.
10,000,000 shares of preferred stock, par value $0.001 per share (the
“Preferred
Stock”),
of
which (i) 4,500,000 shares are duly authorized and designated as Series A
Preferred Stock as of the Closing Date, (ii) 3,200,000 shares have been
designated as Series B Preferred Stock to be issued pursuant to this Agreement,
and (iii) no other shares are outstanding or authorized and reserved for
issuance as of the Closing Date. The rights, preferences and privileges of
the
Series B Preferred Stock are as stated in the Certificate of Designations and
as
otherwise provided by the Delaware General Corporation Law. The rights,
preferences and privileges of the Series A Preferred Stock are as stated in
the
Certificate of Designations of the Series A Preferred Stock adopted by the
Board
and filed by the Company with the Secretary of State of the State of Delaware
on
December 9, 2004, in accordance with Delaware law, and as otherwise provided
by
the Delaware General Corporation Law.
(c) All
shares of the Company’s issued and outstanding capital stock have been duly
authorized, are validly issued and outstanding, and are fully paid and
nonassessable.
(d) Except
for (i) the conversion privileges of the Series B Preferred Stock to be issued
pursuant to this Agreement, (ii) the Warrants and (iii) as set forth in
Schedule
2-3.2(d)
to the
Disclosure Schedule, there are no existing options, warrants, calls, preemptive
(or similar) rights, subscriptions or other rights, agreements, arrangements
or
commitments of any character obligating the Company to issue, transfer or sell,
or cause to be issued, transferred or sold, any shares of the capital stock
of
the Company or other equity interests in the Company or any securities or
instruments convertible into or exchangeable or exercisable for such shares
of
capital stock or other equity interests, and there are no outstanding rights,
agreements, arrangements or commitments of any character obligating the Company
to repurchase, redeem or otherwise acquire any shares of its capital stock
or
other equity interests. The issuance and sale of the Shares and the Warrants
and
the issuance of Conversion Shares and Warrant Shares pursuant to the terms
of
the Series B Preferred Stock and the Warrants, respectively, will not obligate
the Company to issue or sell, pursuant to any preemptive right or otherwise,
shares of Common Stock or other securities to any Person (other than pursuant
to
the terms of the Series B Preferred Stock and the Warrants) and, except as
set
forth in Schedule
2-3.2(d),
will
not result in a right of any holder of capital stock or other securities of
the
Company to adjust the exercise, conversion, exchange or reset price under such
securities.
3.3 Registration
Rights.
Except
as set forth in Schedule
2-3.3
to the
Disclosure Schedule and in the Investors’ Rights Agreement, the Company has not
granted or agreed to grant to any Person any right (including shelf,
“piggy-back” and demand registration rights) to have any capital stock or other
securities of the Company registered with the SEC or any other government
authority.
3.4 Authorization.
All
corporate action on the part of the Company, its officers and its directors
necessary for the authorization, execution, delivery and performance of this
Agreement and the Transaction Documents and the consummation of the transactions
contemplated herein and therein, has been taken. When executed and delivered
by
the Company, each of this Agreement and the Transaction Documents shall
constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors’
rights generally and by general equitable principles. The Company has all
requisite corporate power and authority to enter into this Agreement and the
Transaction Documents and to carry out and perform its obligations under their
respective terms.
3.5 Valid
Issuance of the Shares.
The
Shares, the Conversion Shares, the Warrants and the Warrant Shares have been
duly authorized, and the Shares, the Conversion Shares and the Warrant Shares,
upon issuance pursuant to the terms hereof, of the Series B Preferred Stock
and
of the Warrants, respectively, will be validly issued, fully paid and
nonassessable and not subject to any encumbrances, preemptive rights or any
other similar contractual rights of the stockholders of the Company or any
other
Person (other than pursuant to the Transaction Documents). Assuming the accuracy
of the representations of the Purchasers in Section
4
hereof,
and subject to the filings described in Section
3.8
hereof,
the Shares, Conversion Shares, Warrants, and Warrant Shares will be issued
in
compliance with all applicable federal and state securities laws. The Company
has reserved from its duly authorized capital stock the number of shares of
Common Stock issuable upon conversion in full of the Shares and exercise in
full
of the Warrants.
3.6 SEC
Documents.
The
Company has furnished to the Purchasers true and complete copies of the
Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005, the
Company’s quarterly Reports on Form 10-QSB for the quarterly periods ended March
31, 2006, June 30, 2006, and September 30, 2006 (the “SEC
Documents”).
As of
their respective filing dates, each of the SEC Documents complied in all
material respects with the requirements of the Exchange Act, and none of the
SEC
Documents contained any untrue statement of a material fact or omitted to state
material fact required to be stated therein or necessary in order to make the
statement made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto
in
effect at the time of filing. All material agreements to which the Company
is a
party or to which the property or assets of the Company are subject are included
as part of or specifically identified in the SEC Documents to the extent
required by the rules and regulations of the SEC as in effect at the time of
filing. The Company has prepared and filed, on a timely basis, with the SEC
all
filings and reports required by the Securities Act and the Exchange
Act.
3.7 Financial
Statements.
Except
as set forth in Schedule
2-3.7
to the
Disclosure Schedule, the financial statements and supporting schedules included
in the SEC Documents and in any of the Company’s registration statements filed
with the SEC or other of the Company’s reports filed with the SEC pursuant to
Section 13 of the Exchange Act (collectively, the “Financial
Statements”),
are
complete and correct in all material respects and present fairly the
consolidated financial position of the Company and its Subsidiaries as of the
dates specified and the consolidated results of their operations and cash flows
for the periods specified, in each case, in conformity with generally accepted
accounting principles and applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto.
3.8 Consents.
Except
for (a) the filing and effectiveness of any registration statement required
to
be filed by the Company under the Securities Act pursuant to the terms of the
Investors’ Rights Agreement and (b) a Form D filing and any required state “blue
sky” law filings in connection with the transactions contemplated hereunder or
under the Transaction Documents, all consents, approvals, orders and
authorizations required on the part of the Company in connection with the
execution or delivery of, or the performance of the obligations under, this
Agreement and the Transaction Documents, and the consummation of the
transactions contemplated herein and therein, have been obtained and will be
effective as of the date hereof. Except as set forth in Schedule
2-3.8
to the
Disclosure Schedule, the execution and delivery by the Company of this Agreement
and the Transaction Documents, the consummation of the transactions contemplated
herein and therein, and the issuance of the Shares, the Conversion Shares,
the
Warrants and the Warrant Shares, do not require the consent or approval of
the
stockholders of, or any lender to, the Company, or any other Person.
3.9 No
Conflict; Compliance with Laws.
(a) The
execution, delivery and performance by the Company of this Agreement and the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby, including the issuance of the Shares, the Conversion Shares,
the Warrants and the Warrant Shares, do not and will not (i) conflict with
or
violate any provision of the Certificate of Incorporation (or other charter
documents) or By-laws of the Company or any of the Subsidiaries, (ii) breach,
conflict with or result in any violation of or default (or an event that with
notice or lapse of time or both would become a default) under, or give rise
to a
right of termination, amendment, acceleration or cancellation (with or without
notice or lapse of time, or both) of any obligation, contract, commitment,
lease, agreement, mortgage, note, bond, indenture or other instrument or
obligation to which the Company or any of the Subsidiaries is a party or by
which they or any of their properties or assets are bound, except such as does
not constitute a Material Adverse Effect, or (iii) result in a violation of
any
statute, law, rule, regulation, order, ordinance or restriction applicable
to
the Company, the Subsidiaries or any of their properties or assets, or any
judgment, writ, injunction or decree of any court, judicial or quasi-judicial
tribunal applicable to the Company, the Subsidiaries or any of their properties
or assets, except such as does not constitute a Material Adverse
Effect.
(b) None
of
the Company and the Subsidiaries (i) is in default under or in violation of
(and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any of the
Subsidiaries), nor has the Company or any of the Subsidiaries received written
notice of a claim that it is in default under or that it is in violation of,
any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties or assets is bound
(whether or not such default or violation has been waived) or (ii) is in
violation of any statute, rule or regulation of any governmental authority,
including, without limitation, all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety,
product quality and safety, communications and employment and labor matters,
except in each case such as does not constitute a Material Adverse
Effect.
3.10 Brokers
or Finders.
Neither
the Company nor any of the Subsidiaries has dealt with any broker or finder
in
connection with the transactions contemplated by this Agreement or the
Transaction Documents, and except as set forth in Schedule
2-3.10
to the
Disclosure Schedule, none of the Company and the Subsidiaries has incurred,
or
shall incur, directly or indirectly, any liability for any brokerage or finders’
fees or agents’ commissions or any similar charges in connection with this
Agreement or the Transaction Documents, or any transaction contemplated hereby
or thereby.
3.11 Absence
of Litigation.
Except
as set forth in Schedule
2-3.11
to the
Disclosure Schedule, there are no pending or, to the Company’s knowledge,
threatened actions, suits, claims, proceedings or investigations against or
involving the Company or any of the Subsidiaries, which if adversely decided,
would cause a Material Adverse Effect.
3.12 No
Undisclosed Liabilities; Indebtedness.
Except
as set forth in Schedule
2-3.12,
since
the
Financial Statement Date, the Company and the Subsidiaries have incurred no
liabilities or obligations, whether known or unknown, asserted or unasserted,
fixed or contingent, accrued or unaccrued, matured or unmatured, liquidated
or
unliquidated, or otherwise, other than liabilities and obligations that arose
in
the ordinary course of business and do not constitute a Material Adverse Effect.
Except for indebtedness reflected in the Company’s Financial Statements and as
set forth in Schedule
2-3.12
to the
Disclosure Schedule, the Company has no indebtedness outstanding, fixed or
contingent, as of the date hereof. The Company is not in default with respect
to
any outstanding indebtedness or any instrument relating thereto.
3.13 Contracts.
Except
as set forth in Schedule
2-3.13,
none of
the Company and the Subsidiaries are a party to any written or oral executory
contract or commitment not made in the ordinary course of business and, whether
or not made in the ordinary course of business, none of the Company and the
Subsidiaries are a party to any written or oral executory (i) contract or
commitment with any labor union, (ii) contract or commitment for the future
purchase of fixed assets, materials, supplies, or equipment involving an amount
in excess of $25,000, (iii) contract of commitment for the employment of any
executive officer or any contract with any other individual for employment,
consulting or other services involving an amount in excess of $75,000 per year,
(iv) bonus, pension, profit-sharing, retirement, stock purchase, stock option,
or extraordinary hospitalization, medical insurance or similar plan, contract
or
understanding in effect with respect to employees or any of them or the
employees of others, (v) agreements, indentures or commitments relating to
the
borrowing of money or to the mortgaging, pledging or otherwise placing of a
lien
on any assets of the Company or a Subsidiary, (vi) guaranty of any obligation
for borrowed money or otherwise, (vii) lease or agreement under which the
Company or a Subsidiary is the lessee of any material property, real or
personal, or is the lessor of or permits any third party to hold or operate,
any
material property, real or personal, owned or controlled by the Company or
a
Subsidiary, (viii) agreement or other commitment for capital expenditures in
excess of $25,000 in the aggregate, (ix) contract or agreement under which
the
Company or a Subsidiary is obligated to pay any broker’s fees, finder’s fees or
any such similar fees to any third party, (x) contract, agreement or commitment
under which the Company or a Subsidiary has issued, or may become obligated
to
issue, any shares of capital stock of the Company or a Subsidiary, or any
warrants, options, convertible securities or other commitments pursuant to
which
the Company or a Subsidiary is or may become obligated to issue any shares
of
its capital stock, or (xi) any other contract, agreement, arrangement or
understanding which is material to the business of the Company and the
Subsidiaries, taken as a whole (collectively (i) through (xi), “Material
Contracts”).
The
Company has furnished to counsel for the Purchasers true and correct copies
of
the Material Contracts. All
Material Contracts are legal, valid, binding and in full force and effect and
are enforceable by the Company and the relevant Subsidiaries in accordance
with
their respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors’ rights generally and by
general
equitable principles.
3.14 Title
to Assets.
Each of
the Company and the Subsidiaries has good and marketable title to all real
and
personal property owned by it that is material to the business of the Company
and the Subsidiaries, in each case, free and clear of all liens and
encumbrances, except those, if any, incurred in the ordinary course of business
consistent with past practice.
3.15 Labor
Relations.
No
labor or employment dispute exists or, to the knowledge of the Company, is
imminent or threatened, with respect to any of the employees or consultants
of
the Company or a Subsidiary that constitutes or will constitute a Material
Adverse Effect.
3.16 Intellectual
Property.
(a)
The
Company or a Subsidiary is the sole and exclusive owner of, or has the exclusive
right to use, all Intellectual Property used or contemplated for use in the
conduct of the Company’s business, including without limitation, the
Intellectual Property identified in Schedule
2-3.16(a)(1).
All
Intellectual Property identified in Schedule
2-3.16(a)(1)
was
conceived, developed, reduced to practice or otherwise made by or for the
Company or a Subsidiary by the current or former employees, consultants or
independent contractors of the Company or a Subsidiary, or its
predecessors-in-interest (each of whom has validly assigned or is obligated
to
assign all of his or her right, title and interest therein in writing to the
Company or a Subsidiary) or was purchased and is owned or licensed by the
Company or a Subsidiary, or its predecessors-in-interest, free and clear of
claims and rights of any other Person. Except as set forth in Schedule
2-3.16(a)(2)
to the
Disclosure Schedule, there are no outstanding options, licenses, agreements,
claims, encumbrances or shared ownership of interests of any kind relating
to
any Intellectual Property owned, licensed, conceived, developed, reduced to
practice or otherwise made by or for the Company or its Subsidiaries, including
without limitation the Intellectual Property identified in Schedule
2-3.16(a)(1).
Each of
the Company and the Subsidiaries has taken all commercially reasonable steps
to
establish and preserve its ownership, and all rights in, any Intellectual
Property owned, licensed, conceived, developed, reduced to practice or otherwise
made by or for the Company or its Subsidiaries, including without limitation
the
Intellectual Property listed in Schedule
2-3.16(a)(1).
All
necessary registration, maintenance and renewal fees for the Intellectual
Property listed in Schedule
2-3.16(a)(1)
are
currently satisfied. All assignments, security agreements, certifications or
other relevant documents and/or agreements that may affect any rights or
interests of the Intellectual Property identified in Schedule
2-3.16(a)(1)
have
been properly filed with the relevant patent, copyright, trademark or other
authority in the United States or relevant foreign jurisdiction.
(b) To
the
Company’s knowledge, there
have been no claims made against the Company or any of the Subsidiaries
asserting the invalidity, abuse, misuse, or unenforceability of any of the
Company’s Intellectual Property or interference of the Company’s Intellectual
Property with the rights of others and, to the Company’s knowledge, there are no
reasonable grounds for any such claims. To the Company’s knowledge,
no
Person affiliated with the Company or the Subsidiaries has wrongfully acquired,
exploited, employed, disclosed, converted, misappropriated or used any trade
secrets or any confidential information or documentation proprietary to any
former employer or any other person, and no person affiliated with the Company
or the Subsidiaries has violated any confidential relationship which such person
may have had with any third party. To the Company’s knowledge, there have been
no claims made against the Company or its Subsidiaries, or against any activity,
product, service or offering of the Company or its Subsidiaries, for any
infringement, misuse, misappropriation, conversion or violation of any
Intellectual Property rights of any third party, and, to the Company’s
knowledge, there are no reasonable grounds for any such claims. To the Company’s
knowledge, none of its planned activities, products, services or offerings
will
infringe, misuse, misappropriate, convert or in any way violate any Intellectual
Property rights of any third party, and, to the Company’s knowledge, there would
be no reasonable grounds for any such claim.
(c) Except
as
set forth in Schedule
2-3.16(c),
to the
Company’s knowledge, no third party has infringed, misused, misappropriated,
converted or violated any of the Company’s Intellectual Property.
(d) Except
as
set forth in Schedule
2-3.16(d)
to the
Disclosure Schedule, no royalties, honorariums or fees are or will be payable
by
the Company or any of the Subsidiaries to other Persons by reason of the
ownership or use by the Company (or by reason of any other relationship with
other Persons, contractual or otherwise) of the Intellectual Property or by
reason of the conduct of its normal business activities or marketing or sale
of
any of its existing or planned products, services or activities.
3.17 Subsidiaries;
Joint Ventures.
Except
for the Subsidiaries listed in Schedule
2-3.17
to the
Disclosure Schedule, the Company has no subsidiaries and (i) does not hold
equity interests, directly or indirectly, in any other Person or have any
obligations to acquire equity interests in any other Person, and (ii) is not
a
participant in any joint venture, partnership, or similar arrangement material
to the business of the Company and the Subsidiaries.
3.18 Taxes.
The
Company and each of the Subsidiaries has filed (or has had filed on its behalf),
will timely file or will cause to be timely filed, or has timely filed for
an
extension of the time to file, all material Tax Returns (as defined below)
required by applicable law to be filed by it or them prior to or as of the
date
hereof, and such Tax Returns are, or will be at the time of filing, true,
correct and complete in all material respects. Each of the Company and the
Subsidiaries has paid (or has had paid on its behalf) or, where payment is
not
yet due, has established (or has had established on its behalf and for its
sole
benefit and recourse) or will establish or cause to be established in accordance
with United States generally accepted accounting principles on or before the
date hereof an adequate accrual for the payment of, all material Taxes (as
defined below) due with respect to any period ending prior to or as of the
date
hereof. “Taxes”
shall
mean any and all taxes, charges, fees, levies or other assessments, including
income, gross receipts, excise, real or personal property, sales, withholding,
social security, retirement, unemployment, occupation, use, goods and services,
license, value added, capital, net worth, payroll, profits, franchise, transfer
and recording taxes, fees and charges, and any other taxes, assessment or
similar charges imposed by the Internal Revenue Service or any taxing authority
(whether state, county, local or foreign) (each, a “Taxing
Authority”),
including any interest, fines, penalties or additional amounts attributable
to
or imposed upon any such taxes or other assessments. “Tax
Return”
shall
mean any report, return, document, declaration or other information or filing
required to be supplied to any Taxing Authority, including information returns,
any documents with respect to accompanying payments of estimated Taxes, or
with
respect to or accompanying requests for extensions of time in which to file
any
such return, report, document, declaration or other information. There are
no
claims or assessments pending against the Company or any of the Subsidiaries
for
any material alleged deficiency in any Tax, and neither the Company nor any
of
the Subsidiaries has been notified in writing of any material proposed Tax
claims or assessments against the Company or any of the Subsidiaries. No Tax
Return of the Company or any of the Subsidiaries is or has been the subject
of
an examination by a Taxing Authority. Each of the Company and the Subsidiaries
has withheld from each payment made to any of its past or present employees,
officers and directors, and any other person, the amount of all material Taxes
and other deductions required to be withheld therefrom and paid the same to
the
proper Taxing Authority within the time required by law.
3.19 Pensions
and Benefits.
(a) None
of
(i) any current or former directors, officers, employees or consultants of
the
Company has any present or future right to benefits and which are contributed
to, sponsored by or maintained by the Company or any of the Subsidiaries, or
(ii) the Company or any of the Subsidiaries has any present or future liability
under any “employee benefit plan” within the meaning of Section 3(3) of the
United States Employee Retirement Income Security Act of 1974 (“ERISA”),
including without limitation, multiemployer plans within the meaning of Section
3(37) of ERISA, and all retirement, profit sharing, stock option, stock bonus,
stock purchase, severance, fringe benefit, deferred compensation, and other
employee benefit programs, plans, or arrangements, whether or not subject to
ERISA.
(b) No
stock
options, stock appreciation rights or other equity-based awards issued or
granted by the Company are subject to the requirements of Section 409A of the
Code. Each “nonqualified deferred compensation plan” (as such term
is defined under Section 409A(d)(1) of the Code and the guidance thereunder)
under which the Company makes, is obligated to make or promises to
make, payments (each, a “409A
Plan”)
complies in all material respects, in both form and operation, with the
requirements of Section 409A of the Code and the guidance thereunder. No
payment to be made under any 409A Plan is, or to the knowledge of the
Company will be, subject to the penalties of Section 409A(a)(1) of the
Code.
3.20 Private
Placement; Communications with Purchasers.
Neither
the Company nor any person acting on the Company’s behalf has sold or offered to
sell or solicited any offer to buy the Shares, Warrants, Warrant Shares or
Conversion Shares by means of any form of general solicitation or advertising.
None of the Company, its Affiliates and any person acting on the Company’s
behalf has, directly or indirectly, at any time within the past six (6) months,
made any offer or sale of any security or solicitation of any offer to buy
any
security under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D, or other exemption, under the
Securities Act in connection with the offer, sale or issuance of the Shares,
Conversion Shares, Warrants or Warrant Shares as contemplated hereby or by
the
terms of the Transaction Documents or (ii) cause the offering or issuance of
the
Shares, Conversion Shares, Warrants or Warrant Shares pursuant to this Agreement
or any of the Transaction Documents to be integrated with prior offerings by
the
Company for purposes of any applicable law, regulation or stockholder approval
provisions in a manner that would eliminate the availability of the exemption
described in the immediately preceding clause (i) or require any stockholder
approval, except as has been obtained pursuant to the Exchange Act.
3.21 Regulatory
Matters.
None of
the Company and the Subsidiaries is, or is an Affiliate of, or following the
receipt of the proceeds of this offering will be, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended. None of the
Company and the Subsidiaries is a United States real property holding
corporation within the meaning of the Foreign Investment in Real Property Tax
Act of 1980.
3.22 Material
Changes.
Except
as set forth in Schedule
2-3.22
to the
Disclosure Schedule, since the Financial Statement Date, the Company and the
Subsidiaries, taken as a whole, have conducted their business only in the
ordinary course, consistent with past practice, and since such date there has
not occurred a Material Adverse Effect. Since the Financial Statement Date
and
except as disclosed in Schedule
2-3.22 or
pursuant hereto or any Transaction Document, there has not occurred: (i) any
amendment or change in the charter documents or By-laws of the Company or the
Subsidiaries; (ii) any (A) incurrence, assumption or guarantee by the Company
or
the Subsidiaries of any debt for borrowed money other than (x) equipment leases
made in the ordinary course of business, consistent with past practice and
(y)
any such incurrence, assumption or guarantee with respect to an amount of
$25,000
or
more;
(B) issuance or sale of any securities convertible into or exchangeable for
securities of the Company or any Subsidiary other than to directors, employees
and consultants pursuant to existing equity compensation or stock purchase
plans
of the Company and its Subsidiaries; (C) issuance or sale of options or other
rights to acquire from the Company or any of the Subsidiaries, directly or
indirectly, securities of the Company or any Subsidiary or any securities
convertible into or exchangeable for any such securities, other than options
issued to directors, employees and consultants in the ordinary course of
business, consistent with past practice; (D) issuance or sale of any stock,
bond
or other corporate security other than to directors, employees and consultants
pursuant to existing equity compensation or stock purchase plans of the Company
and its Subsidiaries; (E) declaration or making of any payment or distribution
to stockholders or purchase or redemption of any share of its capital stock
or
other security other than to or from directors, officers and employees of the
Company or the Subsidiaries as compensation for or in connection with services
rendered to the Company or the Subsidiaries (as applicable) or for reimbursement
of expenses incurred on behalf of the Company or the Subsidiaries (as
applicable); (F) sale, assignment or transfer of any of its intangible assets
except in the ordinary course of business, consistent with past practice, or
cancellation of any debt or claim except in the ordinary course of business,
consistent with past practice; (G) waiver of any right of substantial value
whether or not in the ordinary course of business; (H) material change in
officer compensation, except in the ordinary course of business and consistent
with past practice; or (I) other commitment (contingent or otherwise) to do
any
of the foregoing; (iii) any creation, sufferance or assumption by the Company
or
any of the Subsidiaries of any lien on any asset or any making of any loan,
advance or capital contribution to or investment in any Person, in an aggregate
amount which exceeds $25,000
outstanding at any time; (iv) any entry into, amendment of, relinquishment,
termination or non-renewal by the Company or the Subsidiaries of any Material
Contract, other than in the ordinary course of business, consistent with past
practice; or (v) any transfer or grant of a right with respect to the
Intellectual Property owned or licensed by the Company or the Subsidiaries,
except as among the Company and the Subsidiaries.
3.23 Regulatory
Permits.
The
Company and the Subsidiaries possess all certificates, approvals,
authorizations, licenses, permits and other rights issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their businesses, now conducted or proposed to be conducted, except where the
failure to possess such permits does not constitute a Material Adverse Effect
(the “Material
Permits”),
and
the Company has not received any written notice of proceedings relating to,
or
any basis for the denial, revocation
or
modification of any Material Permits. All such Material Permits are in full
force and effect and are not the subject of any pending or, to the knowledge
of
the Company, threatened challenge or other attack by appeal or direct proceeding
or otherwise.
3.24 Insurance.
The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary for the business in which the Company and the Subsidiaries are
engaged. The Company has no reason to believe that it will not be able to renew
existing insurance coverage for itself and the Subsidiaries as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be
necessary or appropriate to continue business.
3.25 Disclosure.
All
disclosure provided to the Purchasers regarding the Company and the
Subsidiaries, their business and the transactions contemplated hereby, including
the Schedules to this Agreement furnished by or on behalf of the Company, are
true and correct in all material respects. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section
4
hereof.
3.26 Investigation.
It
shall be no defense to an action for breach of this Agreement that the
Purchasers or their agents have (or have not) made investigations into the
affairs of the Company and the Subsidiaries or that the Company did not or
could
not have known of the misrepresentation or breach of warranty (unless expressly
qualified by knowledge). Damages for breach of a representation or warranty
or
other provision of this Agreement shall not be diminished by any alleged tax
savings as a result thereof.
3.27 Affiliate
Transactions.
(a) Other
than (i) standard employee benefits generally made available to all employees,
(ii) standard director and officer indemnification agreements approved by the
Board, (iii) agreements contemplated in Section
3.28
below,
and (iv) as set forth in Schedule
2-3.27(a)
to the
Disclosure Schedule, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors,
consultants, employees, shareholders or Affiliates.
(b) Except
as
set forth in Schedule
2-3.27(b)
to the
Disclosure Schedule, the Company is not indebted, directly or indirectly, for
deferred salary or other compensation, money borrowed or otherwise, to any
of
the directors, officers, employees or shareholders of the Company or a
Subsidiary or to their respective spouses or children or to any Affiliate of
any
of the foregoing, other than in connection with expenses or advances of expenses
incurred in the ordinary course of business or employee relocation expenses
and
for other customary employee benefits made generally available to all employees.
Except as set forth in Schedule
2-3.27(b)
to the
Disclosure Schedule, none of the Company’s directors, officers, employees,
shareholders or any members of their immediate families, or any Affiliate of
the
foregoing (i) is, directly or indirectly, indebted to the Company or a
Subsidiary, (ii) to the Company’s knowledge, has any direct or indirect
ownership interest in any firm or corporation with which the Company or a
Subsidiary has any business relationship or dealings, or any firm or corporation
which competes with the Company or a Subsidiary (except ownership interests
not
exceeding two percent (2%) of the outstanding capital stock of publicly traded
companies), or (iii) has any material commercial, industrial, banking,
consulting, legal, accounting, charitable or familial relationship with any
of
the Company’s customers, suppliers, service providers, joint venture partners,
licensees and competitors.
3.28 Confidential
Information and Invention Assignment Agreements.
Except
as set forth in Schedule
2-3.28
to the
Disclosure Schedule, each
current and former director, officer, employee, and, to the extent reasonably
deemed necessary to protect the Company’s interests, consultant of the Company
or a Subsidiary has executed an agreement with the Company or a Subsidiary
regarding confidentiality and proprietary information substantially in the
form
or forms delivered to the counsel for the Purchasers (the “Confidential
Information Agreements”).
No
current or former director, officer, employee, or consultant has excluded works
or inventions from his or her assignment of inventions pursuant to such
employee’s or consultant’s Confidential Information Agreement. The Company is
not aware that any director, officer, employee, or consultant is in violation
thereof. All employees of the Company and its Subsidiaries actively and directly
involved in any research and development activities are required to and have
executed employment agreements that obligate them to assign to the Company
and
its Subsidiaries all rights in any Intellectual Property conceived, developed,
reduced to practice or in any way made in the course of their employment or
work
and to assist and fully cooperate in all activities, and execute any documents,
necessary to secure, preserve and perfect the Company’s rights and interests in
any such Intellectual Property. All employees, and, to the extent reasonably
deemed necessary to protect the Company’s interests, consultants and advisors,
are and have been required to execute a confidentiality agreement upon the
commencement of an employment or consulting relationship, which agreement
provides that all trade secrets and inventions conceived by the individual
and
all confidential information developed or made known to the individual during
the term of his or her relationship with the Company or its subsidiaries shall
be the exclusive property of the Company or its Subsidiaries and shall be kept
confidential and not disclosed to third parties, except in specified
circumstances.
3.29 Nondisclosure.
Except
as set forth in Schedule
2-3.29
or
pursuant to a binding non-disclosure agreement, the Company has not disclosed
to
any third party any Company trade secret or other confidential or proprietary
information.
3.30 Collaboration.
Except
as set forth in Schedule
2-3.30,
the
Company has not funded any research or development efforts of any third party
or
engaged in any joint research or development efforts with any third
party.
3.31 Government
Funding.
Except
for the agreements set forth in Schedule
2-3.31,
the
Company is not a party to any agreement that provided or provides government
funding for any Company research, development or marketing efforts, joint or
otherwise. The Company has complied with all provisions of the agreements set
forth in Schedule
2-3.31
necessary to preserve its rights in any of the Company’s Intellectual Property.
Except for the agreements set forth in Schedule
2-3.31,
the
Company is not a party to any agreement with any government that (a) provides
for any governmental ownership interest, contingent or otherwise, in any Company
Intellectual Property, (b) that imposes on the Company any requirement to
license, contingent or otherwise, any of its Intellectual Property, or (c)
that
imposes any governmental requirement, restriction or encumbrance, contingent
or
otherwise, on the use of the Company’s Intellectual Property or the conduct of
the business of the Company.
4. Representations
and Warranties of the Purchasers.
Each
Purchaser represents and warrants, severally (as to itself) and not jointly,
to
the Company as follows:
4.1 Authorization.
All
action on the part of such Purchaser and, if applicable, its officers,
directors, managers, members, shareholders and/or partners necessary for the
authorization, execution, delivery and performance of this Agreement and the
Investors’ Rights Agreement, and the consummation of the transactions
contemplated herein and therein, has been taken. When executed and delivered,
each of this Agreement and the Investors’ Rights Agreement will constitute the
legal, valid and binding obligation of such Purchaser, enforceable against
such
Purchaser in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
generally and by general equitable principles. Such Purchaser has all requisite
power and authority to enter into each of this Agreement and the Investors’
Rights Agreement, and to carry out and perform its obligations under the terms
hereof and thereof.
4.2 Purchase
Entirely for Own Account.
Such
Purchaser is acquiring the Shares and the Warrants for its own account for
investment and not for resale or with a view to distribution thereof in
violation of the Securities Act.
4.3 Investor
Status; Etc.
Such
Purchaser certifies and represents to the Company that it is an institutional
“Accredited Investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act and was not organized for the purpose
of
acquiring any of the Shares, Conversion Shares, Warrants or Warrant Shares.
Such
Purchaser’s financial condition is such that it is able to bear the risk of
holding the Shares and the Warrants, and any Conversion Shares and Warrant
Shares, for an indefinite period of time and the risk of loss of its entire
investment. Such Purchaser has sufficient knowledge and experience in making
investments such as contemplated under this Agreement so as to be able to
evaluate the risks and merits of its investment in the Company.
4.4 Securities
Not Registered.
Such
Purchaser understands that the Shares, Conversion Shares, Warrants and Warrant
Shares have not been registered under the Securities Act, by reason of their
issuance by the Company in transactions exempt from the registration
requirements of the Securities Act, and that the Shares, Conversion Shares,
Warrants and Warrant Shares must continue to be held by such Purchaser unless
a
subsequent disposition thereof is registered under the Securities Act, including
pursuant to a registration statement under the Investors’ Rights Agreement, or
is exempt from such registration. Such Purchaser understands that the exemptions
from registration afforded by Rule 144 promulgated under the Securities Act
(the
provisions of which are known to it) depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
4.5 No
Conflict.
The
execution and delivery of this Agreement and the Investors’ Rights Agreement by
such Purchaser, and the consummation of the transactions contemplated hereby
and
thereby, do not and will not conflict with or result in any violation of (i)
the
organizational documents of such Purchaser or (ii) any judgment, order, statute,
law, ordinance, rule or regulations, applicable to such Purchaser.
4.6 Brokers.
Such
Purchaser has not retained, utilized or been represented by any broker or finder
in connection with the transactions contemplated by this Agreement or the
Transaction Documents, and such Purchaser has not incurred, and shall not incur,
directly or indirectly, any liability for any brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement or
the Transaction Documents, or any transaction contemplated hereby or
thereby.
4.7 Consents.
All
consents, approvals, orders and authorizations required on the part of such
Purchaser in connection with such Purchaser’s execution, delivery or performance
of this Agreement and the Investors’ Rights Agreement and the consummation of
the transactions contemplated herein and therein have been obtained and are
effective as of the date hereof.
4.8 Regulatory
Permits.
Such
Purchaser possess all certificates, approvals, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities
necessary for Purchaser to enter into this Agreement and the Investors’ Rights
Agreement and the consummate the transactions contemplated herein and
therein.
4.9 Disclosure
of Information.
Such
Purchaser believes it has received adequate information for it to decide whether
or not to purchase the Shares and the Warrants. Such Purchaser further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Shares and the Warrants and the business, properties, prospects and financial
condition of the Company. The foregoing representation is made by such Purchaser
on the basis of and in reliance upon the representations and warranties of
the
Company in Section
3
of this
Agreement being true and correct, and shall not operate to limit or otherwise
modify such representations and warranties or the right of such Purchaser to
rely thereon. Such Purchaser’s decision to invest is based exclusively on the
Company’s representations in this Agreement and the results of such Purchaser’s
independent investigation. Such Purchaser acknowledges that the Company and
its
agents have not provided any legal or tax advice.
5. Conditions
Precedent.
5.1. Conditions
to the Several Obligations of the Purchasers to Consummate the
Closing.
The
obligation of each Purchaser to consummate the Closing and to purchase and
pay
for the Shares and Warrants to be purchased by it is subject to the satisfaction
(or waiver by such Purchaser) of the following conditions precedent:
(a) The
representations and warranties of the Company contained herein shall be true
and
correct on and as of the date hereof, the Closing Date. The Company shall have
performed or complied with all obligations and conditions herein required to
be
performed or complied with by the Company on or prior to the
Closing.
(b) No
proceeding challenging, or seeking to prohibit, alter, prevent or materially
delay, this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, shall have been instituted before any court,
arbitrator or governmental body, agency or official or shall be pending against
or involving the Company.
(c) This
Agreement and the Transaction Documents, and the transactions contemplated
hereby and thereby, shall not be prohibited by any law, rule, governmental
order
or regulation. All necessary consents, approvals, licenses, permits, orders
and
authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby and thereby shall have
been duly obtained or made and shall be in full force and effect.
(d) All
instruments and corporate proceedings of the Company in connection with the
transactions contemplated by this Agreement and the Transaction Documents shall
be satisfactory in form and substance to such Purchaser, and such Purchaser
shall have received copies (executed or certified, as may be appropriate) of
all
documents which any Purchaser may have reasonably requested in connection with
such transactions.
(e) Such
Purchaser shall have received from Jones,
Walker, Waechter, Poitevent, Carrère & ▇▇▇▇▇▇▇, L.L.P.,
outside
counsel to the Company, an opinion addressed to such Purchaser, dated the
Closing Date and substantially in the form of Exhibit
E
hereto.
(f) The
Investors’ Rights Agreement shall have been executed and delivered to such
Purchaser by the Company.
(g) The
Company shall have adopted and filed with the Secretary of State of the State
of
Delaware in accordance with Delaware General Corporation Law on or before the
Closing the Certificate of Designations, which shall continue in full force
and
effect on and as of the Closing Date.
(h) Each
of
the Warrant Amendments shall have been executed and delivered to such Purchaser
by the Company.
(i) Such
Purchaser shall have received evidence satisfactory to it that the lenders
under
the Bridge Loans have waived their right to convert such Bridge Loans into
Common Stock or any other capital stock of the Company.
(j) The
Company shall have delivered, in form and substance satisfactory to such
Purchaser, a certificate dated as of the Closing Date and signed by the
secretary or another appropriate executive officer of the Company, certifying
(i) that attached copies of the Certificate of Incorporation (including the
Certificate of Designations), By-laws and resolutions of the Board approving
this Agreement, the Transaction Documents and the transactions contemplated
hereby and thereby, are all true, complete and correct and remain in full force
and effect as of the date hereof, and (ii) as to the incumbency and specimen
signature of each officer of the Company executing this Agreement, the
Transaction Documents and any other document delivered in connection herewith
on
behalf of the Company.
(k) The
Company shall deliver to such Purchaser a certificate in form and substance
satisfactory to such Purchaser, dated the Closing Date and signed by the
Company’s President, certifying that (i) the representations and warranties of
the Company contained in Section
3
hereof
are true and correct in all respects on the Closing Date and (ii) the Company
has performed and complied with all of the agreements and conditions set forth
or contemplated herein that are required to be performed or complied with by
the
Company on or before the Closing.
5.2. Conditions
to the Obligation of the Company to Consummate the Closing.
The
obligation of the Company to consummate the Closing and to issue and sell the
Shares to each Purchaser at the Closing is subject to the satisfaction (or
waiver by the Company) of the following conditions precedent:
(a) The
representations and warranties of the Purchasers contained herein shall be
true
and correct in all respects on and as of the date hereof and the Closing
Date.
(b) The
Investors’ Rights Agreement shall have been executed and delivered by the
Purchasers.
(c) The
Purchasers shall have performed all obligations and conditions herein required
to be performed or complied with by the Purchasers on or prior to the
Closing.
(d) No
proceeding challenging, or seeking to prohibit, alter, prevent or materially
delay, this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, shall have been instituted before any court,
arbitrator or governmental body, agency or official or shall be pending against
or involving such Purchaser.
(e) This
Agreement and the Transaction Documents, and the transactions contemplated
hereby and thereby, shall not be prohibited by any law, rule, governmental
order
or regulation. All necessary consents, approvals, licenses, permits, orders
and
authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby and thereby shall have
been duly obtained or made and shall be in full force and effect.
6.
Certain
Covenants and Agreements.
6.1. Transfer
of Securities.
Each
Purchaser agrees, severally (as to itself only) and not jointly, that it shall
not sell, assign, pledge, transfer or otherwise dispose of or encumber any
of
the Shares, Conversion Shares, Warrants or Warrant Shares, except (i) pursuant
to an effective registration statement under the Securities Act, including
such
as required under the Investors’ Rights Agreement, or (ii) pursuant to an
available exemption from registration under the Securities Act (including sales
permitted pursuant to Rule 144) and applicable state securities laws. Any
transfer or purported transfer of the Shares in violation of this Section
6.1
shall be
void. The Company shall not be required to register any transfer of the Shares
in violation of this Section
6.1.
The
Company may, and may instruct any transfer agent for the Company, to place
such
stop transfer orders as may be required on the transfer books of the Company
in
order to ensure compliance with the provisions of this Section
6.1.
6.2. Legends.
(a) To
the
extent applicable, each certificate or other document evidencing the Shares,
the
Conversion Shares and the Warrant Shares shall be endorsed with the legend
set
forth below and any other legends that may be required by applicable state
“blue
sky” laws, and each Purchaser covenants that, except to the extent such
restrictions are waived by the Company, it shall not transfer the shares
represented by any such certificate without complying with the restrictions
on
transfer described in this Agreement and the legends endorsed on such
certificate:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO
AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION
UNDER
SAID ACT.
(b) The
legend set forth in Section
6.2(a)
shall be
removed from the certificates evidencing the Shares, the Conversion Shares
and
the Warrant Shares, (i) in connection with any sale of such Shares, Conversion
Shares or Warrant Shares pursuant to Rule 144 or any effective registration
statement, including such as required under the Investors’ Rights Agreement, or
(ii) if such Shares, Conversion Shares or Warrant Shares are eligible for sale
under Rule 144(k) (and the holder of such Shares, Conversion Shares or Warrant
Shares has submitted a written request for removal of the legend indicating
that
the holder is in compliance with the applicable provisions of Rule 144(k))
or
(iii) if such legend is not required under applicable requirements of the
Securities Act (including interpretations and pronouncements issued by the
Staff
of the SEC) (and the holder of such Shares, Conversion Shares or Warrant Shares
has submitted a written request for removal of the legend indicating that such
legend is not required under applicable requirements of the Securities Act
(including such interpretations and pronouncements)) and, if reasonably
requested by the Company, the Company has received from Purchaser’s counsel an
opinion, in such form as is reasonably satisfactory to Company’s counsel, that
such legend is not so required. The Company shall cause its counsel to issue
a
legal opinion to the Company’s transfer agent, if required, promptly upon the
occurrence of any of the events in clauses (i), (ii) or (iii) above to effect
the removal of the legend on certificates evidencing the Shares, the Conversion
Shares or the Warrant Shares and shall also cause its counsel to issue a
“blanket” legal opinion to the Company’s transfer agent, if required, promptly
after the effective date of any registration statement, including such as
required under the Investors’ Rights Agreement, covering the resale of the
Shares, any Conversion Shares or Warrant Shares to allow sales without
restriction pursuant to such registration statement. The Company agrees that
at
such time as such legend is no longer required under this Section
6.2(b),
it
will, promptly following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing the Shares, Conversion
Shares or Warrant Shares issued with such legend, deliver or cause to be
delivered to such Purchaser a certificate representing such Shares, Conversion
Shares or Warrant Shares that is free from such legend; provided,
however,
that in
the case of removal of the legend in connection with a sale pursuant to Rule
144, the holder of such Shares, Conversion Shares or Warrant Shares has
submitted a written request for removal of the legend indicating that the holder
has complied with the applicable provisions of Rule 144, including delivery
of a
broker’s representation letter and a copy of a Form 144 filed in connection with
such sale. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.
6.3 Publicity.
Except
to the extent required by applicable laws, rules, regulations or stock exchange
requirements, the Company shall not, without the prior written consent of each
of the Purchasers, disclose or publish the name of such Purchaser in any press
release, public announcement, website or otherwise. Except to the extent
required by applicable laws, rules, regulations or stock exchange requirements,
each of the Purchasers and their Affiliates shall not, without the written
consent of the Company, make any public announcement or issue any press release
with respect to the transactions contemplated by this Agreement. The parties
agree that the Company shall issue a press release promptly following (and
in no
event more than one Business Day after) the Closing and, on or before 9:30
a.m.,
New York time, on the first trading day following the Closing Date describing
the terms of the transactions contemplated by this Agreement and the Transaction
Documents, the contents of which press release shall have been approved by
the
Purchasers, and shall file such press release under cover of a Current Report
on
Form 8-K, attaching such press release and the material transaction documents
(including, without limitation, this Agreement and the Investors’ Rights
Agreement) as exhibit to such filing (including all attachments, the
“8-K
Filing”).
6.4 Filing
of Information.
The
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the
Company pursuant to all applicable securities laws, including the Exchange
Act.
The Company further covenants that it will take such further action as any
holder of Shares, Conversion Shares and Warrant Shares may reasonably request
to
satisfy the provisions of Rule 144 applicable to the issuer of securities
relating to transactions for the sale of securities pursuant to Rule
144.
6.5 Use
of
Proceeds.
The
Company intends that the proceeds from the sale of the Shares shall be used
by
the Company to (i) repay in full the Bridge Loans, and (ii) fund the Company’s
general corporate and working capital requirements. The Company shall repay
in
full the Bridge Loans within three (3) Business Days of the Closing
Date.
6.6 Integration.
The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale of
the
Shares or the issuance of the Warrants pursuant hereto.
6.7 Reservation
of Common Stock for Issuance; Listing of Shares.
The
Company agrees to reserve from its duly authorized capital stock the total
number of shares of Common Stock issuable upon the conversion in full of the
Conversion Shares and the Warrant Shares. The Company agrees that at any time,
if and when its shares of Common Stock are listed on a national or international
securities exchange or admitted for quotation on any national automated
quotation system, it will use reasonable efforts to promptly list and qualify
the Conversion Shares and Warrant Shares for trading on such exchange or
quotation on such system.
6.8 Required
Approvals.
As
promptly as practicable after the date of this Agreement, the Company shall
make, or cause to be made, all filings with any governmental or administrative
agency or any other Person necessary to consummate the transactions contemplated
hereby.
6.9 Inspection
Rights.
Each
Purchaser, or any officer, employee, agent or representative thereof, shall
have
the right to visit and inspect any of the properties of the Company or any
of
the Subsidiaries, to discuss the affairs, finances, accounts and operations
of
the Company or any of the Subsidiaries with their respective officers,
directors, employees, agents or representatives, and to review and copy such
information as is reasonably requested from time to time.
6.10 No
Commitment for Additional Financing.
The
Company acknowledges and agrees that no Purchaser has made any representation,
undertaking, commitment or agreement to provide or assist the Company in
obtaining any financing, investment or other assistance, other than the purchase
of the Shares and the Warrants as set forth herein and subject to the conditions
set forth herein. In addition, the Company acknowledges and agrees that
(i) no statements, whether written or oral, made by any Purchaser or its
representatives on or after the date of this Agreement shall create an
obligation, commitment or agreement to provide or assist the Company in
obtaining any financing or investment, (ii) the Company shall not rely on
any such statement by any Purchaser or its representatives and (iii) an
obligation, commitment or agreement to provide or assist the Company in
obtaining any financing or investment may only be created by a written agreement
of such Purchaser, setting forth the terms and conditions of such financing
or
investment and stating that the parties intend for such writing to be a binding
obligation or agreement. Each Purchaser shall have the right, in it sole and
absolute discretion, to refuse or decline to participate in any other financing
of or investment in the Company, and shall have no obligation to assist or
cooperate with the Company in obtaining any financing, investment or other
assistance.
6.11 CEO
Search.
The
Company shall commence, promptly after the Closing, a search for a new Chief
Executive Officer to be appointed as soon as reasonably practicable, with the
approval of the Board, including at least one Series B Director (as defined
in
the Certificate of Designations), if any are on the Board at such
time.
6.12 Series
A Preferred.
The
Company shall send, not later than three (3) Business Days after the Closing
Date, a notice to all holders of record of shares of Series A Preferred Stock
relating to the adjustment of the conversion price for the Series A Preferred
Stock that complies with Section 5(j) of the Certificate of Designations of
the
Series A Preferred Stock.
7. Indemnification.
7.1 The
Company agrees to indemnify, defend and hold harmless each Purchaser and its
Affiliates and their respective officers, directors, agents, employees,
subsidiaries, partners, members and controlling persons (collectively, the
“Purchaser
Indemnitees”)
to the
fullest extent permitted by law from and against any and all claims, losses,
liabilities, damages, deficiencies, judgments, assessments, fines, settlements,
costs or expenses (including administrative, judicial or regulatory proceedings,
interest, penalties, costs of investigation and reasonable fees, disbursements
and other charges of counsel) (collectively, “Losses”)
based
upon, arising out of or otherwise in respect of any breach by the Company of
any
representation, warranty, covenant or agreement of the Company contained in
this
Agreement or in the Transaction Documents, or for any Losses claimed by any
broker or placement agent retained by the Company in connection with the
transactions contemplated hereby or thereby.
7.2 As
promptly as possible after receipt by a Purchaser Indemnitee under this
Section
7
of
notice of the threat, assertion or commencement of any claim, action or
proceeding, such Purchaser Indemnitee will, if a claim for indemnification
in
respect thereof is to be made under this Section
7,
notify
the Company in writing of the commencement thereof and the Company shall have
the right to participate in and, to the extent the Company desires, to assume
at
its expense the defense thereof with counsel mutually satisfactory to the
parties; provided,
however,
that
the failure to notify the Company promptly of the threat, assertion or
commencement of any such claim, action or proceeding shall not relieve the
Company of any liability to the Purchaser Indemnitee under this Section
7
except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially adversely
prejudiced the Company.
7.3 If
any
Purchaser Indemnitee shall have reasonably concluded that there may be one
or
more legal defenses available to such Purchaser Indemnitee which are different
from or additional to those available to the Company, or that such claim or
litigation involves or could have an effect upon matters beyond the scope of
the
indemnity agreement provided in this Section
7,
the
Company shall not have the right to assume the defense of such action on behalf
of such Purchaser Indemnitee, and the Company shall reimburse such Purchaser
Indemnitee for the fees and expenses of one separate counsel, for all Purchaser
Indemnitees, which are reasonably related to the matters covered by the
indemnity agreement provided in this Section
7.
Subject
to the foregoing, a Purchaser Indemnitee shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but the
fees and expenses of such counsel shall not be at the expense of the Company.
The Company shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
The Company shall not, without the prior written consent of the relevant
Purchaser Indemnitee, effect any settlement of any pending proceeding in respect
of which such Purchaser Indemnitee is a party, unless such settlement includes
an unconditional release of such Purchaser Indemnitee party from all liability
on claims that are the subject matter of such proceeding.
7.4. Time
Limit for Certain Claims.
(a) The
representations and warranties of the Company under Section
3
of this
Agreement, regardless of any investigation made by the Purchasers or their
independent accounts or legal representatives, or any certificate, document
or
other instrument delivered in connection herewith, shall survive for eighteen
(18) months after the Closing, except for (i) the representations and warranties
in Section
3.18
hereof
(“Taxes”),
which
shall survive until the last date liability connected with the Company’s
previous tax positions may be asserted by federal or state authorities, and
(ii)
the representations and warranties in Sections
3.1,
3.4
and
3.5
hereof,
which shall survive indefinitely. The Company will not be liable for any Losses
hereunder arising out of a breach of representation or warranty unless a written
claim for indemnification is given by the relevant Purchaser Indemnitee to
the
Company on or prior to the expiration of such applicable time
limits.
(b) Maximum
Amount.
The
Company shall not be liable hereunder for any Losses incurred by any Purchaser
on the value of its Shares and Warrant Shares as a result of a breach of
representation or warranty hereunder in excess of purchase price hereunder
actually paid by such Purchaser for such Shares and Warrant Shares.
7.5 Applicability;
Non-Exclusivity.
Notwithstanding any term to the contrary in this Section
7,
the
indemnification and contribution provisions of the Investors’ Rights Agreement
shall govern any claim made with respect to registration statements filed
pursuant thereto or sales made thereunder. The parties hereby acknowledge and
agree that in addition to remedies of the parties hereto in respect of any
and
all claims relating to any breach or purported breach of any representation,
warranty, covenant or agreement that is contained in this Agreement pursuant
to
the indemnification provisions of this Section
7,
all
parties shall always retain the right to pursue and obtain injunctive relief
in
addition to any other rights or remedies hereunder.
8. Miscellaneous
Provisions.
8.1 Rights
Cumulative.
Each
and all of the various rights, powers and remedies of the parties shall be
considered to be cumulative with and in addition to any other rights, powers
and
remedies which such parties may have at law or in equity in the event of the
breach of any of the terms of this Agreement. The exercise or partial exercise
of any right, power or remedy shall neither constitute the exclusive election
thereof nor the waiver of any other right, power or remedy available to such
party.
8.2 Pronouns.
All
pronouns or any variation thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the person, persons,
entity or entities may require.
8.3 Notices.
(a) Any
notices, reports or other correspondence (hereinafter collectively referred
to
as “correspondence”) required or permitted to be given hereunder shall be given
in writing and shall be deemed given if sent by certified or registered mail
(return receipt requested), overnight courier or telecopy (with confirmation
of
receipt), or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. An electronic communication
(“Electronic
Notice”)
shall
be deemed written notice for purposes of this Section
8.3
if sent
with return receipt requested to the electronic mail address specified by the
receiving party either in this Section
8.3
or on
Schedule
1
hereto.
Electronic Notice shall be deemed received at the time the party sending
Electronic Notice receives verification of receipt by the receiving
party.
(b) All
correspondence to the Company shall be addressed as follows:
Uni-Pixel,
Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇
▇▇▇▇▇▇▇, President
Facsimile:
(▇▇▇)
▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with
copies to:
Jones,
Walker, Waechter, Poitevent, Carrère & ▇▇▇▇▇▇▇, L.L.P.
Four
United Plaza
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(c) All
correspondence to the Purchasers shall be addressed pursuant to the contact
information set forth in Schedule
1
attached
hereto.
(d) Any
entity may change the address to which correspondence to it is to be addressed
by notification as provided for herein.
8.4 Captions.
The
captions and paragraph headings of this Agreement are solely for the convenience
of reference and shall not affect its interpretation.
8.5 Expenses.
Each
party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement and the
Transaction Documents; provided,
however,
that
the Company shall, at the Closing, reimburse the reasonable fees and expenses
of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Flexner LLP, counsel to the Purchasers, not to exceed
$62,500.
8.6 Severability.
Should
any part or provision of this Agreement be held unenforceable or in conflict
with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which
accomplishes, to the extent possible, the original business purpose of such
part
or provision in a valid and enforceable manner, and the remainder of this
Agreement shall remain binding upon the parties hereto.
8.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
and
substantive laws of the State of Delaware and without regard to any conflicts
of
laws concepts which would apply the substantive law of some other jurisdiction.
The Company agrees that any action for the breach of this Agreement prosecuted
against it in the courts of the State of New York.
8.8 Waiver.
No
waiver or delay in exercising of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any
such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
8.9 Assignment.
The
rights and obligations of any party hereto shall inure to the benefit of and
shall be binding upon the authorized successors, legal representatives, and
permitted assigns of such party. The Company may not assign this Agreement
or
any rights or obligations hereunder without the prior written consent of the
Purchasers. Subject to the provisions of Section
6
hereof,
each Purchaser may assign or transfer any or all of its rights under this
Agreement to any Person to which it may sell, assign, transfer or otherwise
dispose of any of its Shares, Conversion Shares, Warrants or Warrant Shares;
provided,
however,
that
such assignee or transferee agrees in writing to be bound, with respect to
the
transferred Shares, Conversion Shares, Warrants or Warrant Shares, by the
provisions hereof and of the Transaction Documents that apply to such assigning
or transferring Purchaser; whereupon such assignee or transferee shall be deemed
to be a “Purchaser”
for
all
purposes of this Agreement.
8.10 Survival.
The
respective representations and warranties given by the parties hereto shall
survive the Closing Date and the consummation of the transactions contemplated
herein as provided in Section
7.4
of this
Agreement. The respective covenants and agreements agreed to by a party hereto
shall survive the Closing Date and the consummation of the transactions
contemplated herein in accordance with their respective terms and
conditions.
8.11 Entire
Agreement.
This
Agreement, the exhibits and schedules hereto, the Transaction Documents and
the
other documents delivered pursuant hereto constitutes the entire agreement
between the parties hereto respecting the subject matter hereof and supersedes
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or
oral.
8.12 Amendments.
Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provisions of this Agreement shall be effective only if made
or given in writing and signed by the Company and the Purchasers.
8.13 No
Third Party Rights.
This
Agreement is intended solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
Person (including, without limitation, any stockholder or debt holder of the
Company) other than the parties hereto; provided,
however,
that
each of the Purchaser Indemnitees that are not Purchasers are entitled to all
rights and benefits as third party beneficiaries of Section
7
of this
Agreement.
8.14 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
document. The parties hereto confirm that any facsimile copy of another party’s
executed counterpart of this Agreement (or its signature page thereof) will
be
deemed to be an executed original thereof.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
Agreement under seal as of the day and year first above written.
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UNI-PIXEL,
INC.
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By:
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title:
President
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PURCHASERS:
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TUDOR
INVESTMENT CORP., as investor adviser to each Purchaser listed
on Schedule
1 (other than Tudor Proprietary Trading,
L.L.C.)
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By:
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Name:
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Title:
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TUDOR
PROPRIETARY TRADING, L.L.C.
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By:
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Name:
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Title:
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