EXHIBIT 6
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EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("Agreement") is made as of the 12th
day of February, 2002 by and among Amerigon Incorporated, a California
corporation (the "Company"), and the Investor set forth on the signature pages
affixed hereto.
RECITALS
A. The Company and the Investor are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D ("Regulation D"), as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended; and
B. The Company and the Investor have previously entered into a
Credit Agreement dated as of September 20, 2001 (as amended to the date hereof,
the "Credit Agreement") which provides for a bridge loan facility under which
the Company has borrowed $2,500,000 in principal indebtedness and on which
interest has accrued but not been paid; and
C. The Investor wishes to exchange with the Company, and the
Company exchange with the Investor, upon the terms and conditions stated in this
Agreement, (i) the principal amount of indebtedness outstanding under the Credit
Agreement ($2,500,000) plus accrued interest thereunder (collectively, referred
to herein as the "Indebtedness") for (ii) the number of shares of Common Stock
of the Company, no par value ("Common Stock") equal to the quotient of (x)
$2,500,000 plus accrued but unpaid interest on the Credit Agreement as of the
Closing Date and (y) $1.50, and in addition, the Investor shall receive one
warrant to purchase shares of Common Stock in the form attached hereto as
Exhibit A for each dollar of Indebtedness (the "Warrants"); the Company and the
Investor acknowledge and agree that assuming the Closing (as defined below)
occurs on February 25, 2002, the number of Shares of Common Stock and Warrants
for which the Indebtedness will exchanged is 1,720,602 and 860,301,
respectively; and
D. Contemporaneous with the sale of the Common Stock and
Warrants, the parties hereto will execute and deliver a Registration Rights
Agreement, in the form attached hereto as Exhibit B (the "Registration Rights
Agreement"), pursuant to which the Company will agree to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder, and applicable state securities laws;
and
E. Contemporaneous with the closing of this Agreement, the
Company will issue and sell (i) an aggregate of 4,333,368 shares of Common Stock
and (ii) Warrants to purchase an aggregate of 2,166,684 shares of Common Stock
pursuant to separate Purchase Agreements dated as of the date hereof with the
investors named therein.
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
EXHIBIT 6
1. Definitions. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly Controls, is controlled by, or is under
common control with, such Person.
"Agreements" means this Agreement, the Warrants and the
Registration Rights Agreement.
"Business Day" means a day, other than a Saturday or Sunday,
on which banks in New York City and Los Angeles are open for the general
transaction of business.
"Company's Knowledge" means the actual knowledge of the
"executive officers" (as that term is defined in Rule 405 promulgated under the
▇▇▇▇ ▇▇▇) of the Company, after due inquiry.
"Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Intellectual Property" means all of the following: (i)
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; (v) trade secrets, confidential information
and know-how (including but not limited to ideas, formulae, compositions,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information); and (vi) proprietary
computer software (including but not limited to data, data bases and
documentation).
"Material Adverse Effect" means a material adverse effect on
the assets, liabilities, results of operations, condition (financial or
otherwise), business, or prospects of the Company and its subsidiaries taken as
a whole.
"Nasdaq" means the NASDAQ Stock Market, Inc. SmallCap Market
System.
"Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
"SEC Filings" has the meaning set forth in Section 4.6.
EXHIBIT 6
"Securities" means the Shares, the Warrants and the Warrant
Shares.
"Shares" means the shares of Common Stock being received by
the Investor hereunder in exchange for the Indebtedness.
"Subsidiary" has the meaning set forth in Section 4.1.
"Warrant Shares" means the shares of Common Stock issuable
upon exercise of or otherwise pursuant to the Warrants.
"1933 Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2. Exchange of Indebtedness for Shares and Warrants. Subject to the
terms and conditions of this Agreement, on the Closing Date, the Investor shall
exchange with the Company the Indebtedness for the Shares and the Warrants .
3. Closing. Upon confirmation that the conditions to closing specified
herein have been satisfied, the Company shall deliver to such person as the
Investor shall direct, in trust, a certificate or certificates, registered in
such name or names as the Investor may designate, representing the Shares and
Warrants, with instructions that such certificates are to be held for release to
the Investor upon acknowledgement from the Investor that delivery of such Shares
and Warrants extinguishes the Indebtedness. On the date (the "Closing Date") the
Company receives such acknowledgement, the certificates evidencing the Shares
and Warrants shall be released to the Investor (the "Closing"). The exchange
shall take place at the offices of O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location and on such other date
as the Company and the Investor shall mutually agree. The Investor hereby agrees
that effective upon the Closing, the number of shares of Common Stock of the
Company purchasable by Investor under that certain Amended and Restated Bridge
Loan Warrant at $1.15 per share shall be reduced from 652,174 to 326,087 and the
Company shall deliver to Investor at Closing a revised Amended and Restated
Warrant reflecting such change and the existing Amended and Restated Bridge Loan
Warrant shall be surrendered to the Company at Closing and marked cancelled.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, except as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):
4.1 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is a corporation duly incorporated or a limited
liability company duly formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation and has all requisite
corporate or limited liability company power and authority to carry on its
business as now conducted and to own its properties. Each of the Company and its
EXHIBIT 6
Subsidiaries is duly qualified to do business as a foreign corporation or a
foreign limited liability company and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify
has not and could not reasonably be expected to have a Material Adverse Effect.
The Company's subsidiaries are reflected on Schedule 4.1 hereto (the
"Subsidiaries").
4.2 Authorization. The Company has full power and authority
and has taken all requisite action on the part of the Company, its officers,
directors and shareholders necessary for (i) the authorization, execution and
delivery of the Agreements, (ii) authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Securities. The
Agreements constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
4.3 Capitalization. Schedule 4.3 sets forth (a) the authorized
capital stock of the Company on the date hereof; (b) the number of shares of
capital stock issued and outstanding; (c) the number of shares of capital stock
issuable pursuant to the Company's stock plans; and (d) the number of shares of
capital stock issuable and reserved for issuance pursuant to securities (other
than the Shares and the Warrants) exercisable for, or convertible into or
exchangeable for any shares of capital stock of the Company. All of the issued
and outstanding shares of the Company's capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive
rights and were issued in full compliance with applicable law. All of the issued
and outstanding equity interests of each Subsidiary have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive
rights, were issued in full compliance with applicable law and, except as
described on Schedule 4.3, are owned by the Company, beneficially and of record,
subject to no lien, encumbrance or other adverse claim. No Person is entitled to
pre-emptive or similar statutory or contractual rights with respect to any
securities of the Company. Except as described on Schedule 4.3, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any of
its Subsidiaries is or may be obligated to issue any equity securities of any
kind and except as contemplated by this Agreement, neither the Company nor any
of its Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind. Except as described on Schedule 4.3 and except for the
Registration Rights Agreement, there are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them. Except as described on
Schedule 4.3, the Company has not granted any Person any currently outstanding
or future arising right to require the Company to register any securities of the
Company under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person.
EXHIBIT 6
Schedule 4.3 sets forth a true and complete table setting
forth the pro forma capitalization of the Company on a fully diluted basis
giving effect to (i) the issuance of the Shares and the Warrants, (ii) any
adjustments in other securities resulting from such issuance, and (iii) the
exercise or conversion of all outstanding securities. Except as described on
Schedule 4.3, the issuance of the Securities hereunder will not trigger any
outstanding anti-dilution rights.
4.4 Valid Issuance. The Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable free and clear of all encumbrances
and restrictions, except for restrictions on transfer set forth in this
Agreement or imposed by applicable securities laws. The Warrants have been duly
and validly authorized. Upon the due exercise of the Warrants, the Warrant
Shares issuable upon such exercise will be validly issued, fully paid and
non-assessable free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in this Agreement or imposed by applicable
securities laws. The Company has reserved a sufficient number of shares of
Common Stock for issuance upon the exercise of the Warrants, free and clear of
all encumbrances and restrictions, except for restrictions on transfer set forth
in this Agreement or imposed by applicable securities laws.
4.5 Consents. Except as described on Schedule 4.20, the
execution, delivery and performance by the Company of the Agreements and the
offer, issuance and sale of the Securities require no consent of, action by or
in respect of, or filing with, any Person, governmental body, agency, or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods. The Company has taken all action necessary to exempt (i) the sale of
the Securities, (ii) the issuance of the Warrant Shares upon due exercise of the
Warrants, and (iii) the other transactions contemplated by this Agreement from
the provisions of any anti-takeover or business combination law or statute
binding on the Company or to which the Company or any of its assets and
properties may be subject.
4.6 Delivery of SEC Filings; Business. The Company has
provided the Investor with copies of the Company's most recent Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 (as amended prior to the
date hereof, the "10-K"), and all other reports filed by the Company pursuant to
the 1934 Act since the filing of the 10-K and prior to the date hereof
(collectively, the "SEC Filings"). The SEC Filings are the only filings required
of the Company pursuant to the 1934 Act for such period. The Company and its
Subsidiaries are engaged only in the business described in the SEC Filings and
the SEC Filings contain a complete and accurate description in all material
respects of the business of the Company and its Subsidiaries, taken as a whole
as of the date such SEC Filing was filed with the SEC.
4.7 [Intentionally deleted.]
4.8 No Material Adverse Change. Since September 30, 2001,
except as identified and described in the SEC Filings or as described on
Schedule 4.8, there has not been:
EXHIBIT 6
(i) any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that
reflected in the financial statements included in the 10-K, except for changes
in the ordinary course of business which have not and could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;
(ii) any declaration or payment of any dividend, or
any authorization or payment of any distribution, on any of the capital stock of
the Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss,
whether or not covered by insurance to any assets or properties of the Company
or its Subsidiaries;
(iv) any waiver, not in the ordinary course of
business, by the Company or any Subsidiary of a material right or of a material
debt owed to it;
(v) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by the Company or a Subsidiary,
except in the ordinary course of business and which is not material to the
assets, properties, financial condition, operating results or business of the
Company and its Subsidiaries taken as a whole (as such business is presently
conducted and as it is proposed to be conducted);
(vi) any change or amendment to the Company's
Articles of Incorporation or by-laws, or material change to any material
contract or arrangement by which the Company or any Subsidiary is bound or to
which any of their respective assets or properties is subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company or any
Subsidiary;
(viii) any transaction entered into by the Company or
a Subsidiary other than in the ordinary course of business;
(ix) the loss of the services of any key employee, or
material change in the composition or duties of the senior management of the
Company or any Subsidiary;
(x) the loss or threatened loss of any customer which
has had or could reasonably be expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character
that has had or could reasonably be expected to have a Material Adverse Effect.
4.9 SEC Filings; S-3 Eligibility.
(a) At the time of filing thereof, the SEC Filings
complied as to form in all material respects with the requirements of the 1934
Act and did not contain any untrue statement of a material fact or omit to state
EXHIBIT 6
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(b) During the preceding two years, each registration
statement and any amendment thereto filed by the Company pursuant to the 1933
Act and the rules and regulations thereunder, as of the date such statement or
amendment became effective, complied as to form in all material respects with
the 1933 Act and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each prospectus filed pursuant to Rule
424(b) under the 1933 Act, as of its issue date and as of the closing of any
sale of securities pursuant thereto did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) The Company is eligible to use Form S-3 to
register the Registrable Securities (as such term is defined in the Registration
Rights Agreement) for sale by the Investor as contemplated by the Registration
Rights Agreement.
4.10 No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Agreements by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company's Articles of Incorporation or the Company's Bylaws, both as in effect
on the date hereof (copies of which have been provided to the Investor before
the date hereof), or (ii)(a) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company, any Subsidiary or any of their respective assets
or properties, or (b) any agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or a Subsidiary is bound or to
which any of their respective assets or properties is subject, except, in the
case of clause (ii) only, as would not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate.
4.11 Tax Matters. The Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown thereon or otherwise owed by it, except for those taxes being
contested in good faith and for which the Company or such Subsidiary has
established adequate reserves in accordance with generally accepted accounting
principles. The charges, accruals and reserves on the books of the Company in
respect of taxes for all fiscal periods are adequate in all material respects,
and there are no material unpaid assessments against the Company or any
Subsidiary nor, to the Company's Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any
federal, state or local taxing authority except for any assessment which is not
material to the Company and its Subsidiaries, taken as a whole. All taxes and
other assessments and levies that the Company or any Subsidiary is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper governmental entity or third party when due. There are no tax
EXHIBIT 6
liens or claims pending or, to the Company's Knowledge, threatened against the
Company or any Subsidiary or any of their respective assets or property. Except
as described on Schedule 4.11, there are no outstanding tax sharing agreements
or other such arrangements between the Company and any Subsidiary or other
corporation or entity.
4.12 Title to Properties. Except as disclosed in the SEC
Filings, the Company and each Subsidiary has good and marketable title to all
real properties and all other properties and assets owned by it, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them; and except as disclosed in the SEC Filings, the Company
and each Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or currently planned to be made thereof by them.
4.13 Certificates, Authorities and Permits. The Company and
each Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
4.14 No Labor Disputes. No material labor dispute with the
employees of the Company or any Subsidiary exists or, to the Company's
Knowledge, is imminent.
4.15 Intellectual Property.
(a) All Intellectual Property of the Company and its
Subsidiaries is currently in compliance with all legal requirements (including
timely filings, proofs and payments of fees) and is valid and enforceable. No
Intellectual Property of the Company or its Subsidiaries which is necessary for
the conduct of Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted has been or is now
involved in any cancellation, dispute or litigation, and, to the Company's
Knowledge, no such action is threatened. No patent of the Company or its
Subsidiaries has been or is now involved in any interference, reissue,
re-examination or opposition proceeding.
(b) All of the licenses and sublicenses and consent,
royalty or other agreements concerning Intellectual Property which are necessary
for the conduct of Company's and each of its Subsidiaries' respective businesses
as currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, "License Agreements") are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the
Company's Knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
EXHIBIT 6
there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default by the Company or any of its Subsidiaries under any such License
Agreement.
(c) The Company and its Subsidiaries own or have the
valid right to use all of the Intellectual Property necessary for the conduct of
the Company's and each of its Subsidiaries' businesses substantially as
currently conducted or as currently proposed to be conducted and for the
ownership, maintenance and operation of the Company's and its Subsidiaries'
properties and assets.
(d) The Company and its Subsidiaries own or have the
valid right to use the Intellectual Property that is necessary for the conduct
of Company's and each of its Subsidiaries' respective businesses as currently
conducted or as currently proposed to be conducted, free and clear of all liens,
encumbrances, adverse claims or obligations to license all such owned
Intellectual Property, other than licenses entered into in the ordinary course
of the Company's and its Subsidiaries' businesses. The Company and its
Subsidiaries have a valid and enforceable right to use all other Intellectual
Property used or held for use in the respective businesses of the Company and
its Subsidiaries. The Company and its Subsidiaries have the right to use all of
the owned and licensed Intellectual Property which is necessary for the conduct
of Company's and each of its Subsidiaries' respective businesses as currently
conducted or as currently proposed to be conducted in all jurisdictions in which
they conduct their businesses.
(e) The Company and each of its Subsidiaries have
taken reasonable steps to maintain, police and protect the Intellectual Property
which it owns and which is necessary for the conduct of Company's and each of
its Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted, including the execution of appropriate confidentiality
agreements and intellectual property and work product assignments and releases.
The conduct of the Company's and its Subsidiaries' businesses as currently
conducted does not infringe or otherwise impair or conflict with (collectively,
"Infringe") any Intellectual Property rights of any third party, and, to the
Company's Knowledge, the Intellectual Property rights of the Company and its
Subsidiaries which are necessary for the conduct of Company's and each of its
Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted are not being Infringed by any third party. There is no
litigation or order pending or outstanding or, to the Company's Knowledge,
threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any Intellectual Property of the
Company and its Subsidiaries and the Company's and its Subsidiaries' use of any
Intellectual Property owned by a third party, and, to the Company's Knowledge,
there is no valid basis for the same.
(f) The consummation of the transactions contemplated
hereby will not result in the alteration, loss, impairment of or restriction on
the Company's or any of its Subsidiaries' ownership or right to use any of the
Intellectual Property which is necessary for the conduct of Company's and each
of its Subsidiaries' respective businesses as currently conducted or as
currently proposed to be conducted.
EXHIBIT 6
(g) All software owned by the Company or any of its
Subsidiaries, and, to the Company's Knowledge, all software licensed from third
parties by the Company or any of its Subsidiaries, (i) is free from any material
defect, bug, virus, or programming, design or documentation error; (ii) operates
and runs in a reasonable and efficient business manner; and (iii) conforms in
all material respects to the specifications and purposes thereof, except for
such cases where it could not reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate.
(h) The Company and its Subsidiaries have taken
reasonable steps to protect the Company's and its Subsidiaries' rights in their
confidential information and trade secrets. Each employee, consultant and
contractor who has had access to proprietary Intellectual Property which is
necessary for the conduct of Company's and each of its Subsidiaries' respective
businesses as currently conducted or as currently proposed to be conducted has
executed an agreement to maintain the confidentiality of such Intellectual
Property and has executed appropriate agreements that are substantially
consistent with the Company's standard forms thereof. Except under
confidentiality obligations, there has been no material disclosure of any of the
Company's or its Subsidiaries' confidential information or trade secrets to any
third party.
4.16 Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim has had
or could reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate; and there is no pending or, to the Company's Knowledge,
threatened investigation that might lead to such a claim.
4.17 Litigation. Except as described on Schedule 4.17, there
are no pending actions, suits or proceedings against or affecting the Company,
its Subsidiaries or any of its or their properties; and to the Company's
Knowledge, no such actions, suits or proceedings are threatened or contemplated.
4.18 Financial Statements. The financial statements included
in each SEC Filing present fairly, in all material respects, the consolidated
financial position of the Company as of the dates shown and its consolidated
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis (except as may be
disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof or as described on Schedule 4.18, neither the
Company nor any of its Subsidiaries has incurred any liabilities, contingent or
otherwise, except those incurred in the ordinary course of business, consistent
(as to amount and nature) with past practices since the date of such financial
EXHIBIT 6
statements, none of which, individually or in the aggregate, have had or could
reasonably be expected to have a Material Adverse Effect.
4.19 Insurance Coverage. The Company and each Subsidiary
maintain in full force and effect insurance coverage that is customary for
comparably situated companies for the business being conducted and properties
owned or leased by the Company and each Subsidiary, and the Company reasonably
believes such insurance coverage to be adequate against all liabilities, claims
and risks against which it is customary for comparably situated companies to
insure.
4.20 Compliance with Nasdaq Continued Listing Requirements;
Hardship Exemption. Except as set forth in Schedule 4.20, the Company is in
compliance with applicable Nasdaq SmallCap Market continued listing
requirements. Except as set forth in Schedule 4.20, there are no proceedings
pending or, to the Company's Knowledge, threatened against the Company relating
to the continued listing of the Company's Common Stock on the Nasdaq SmallCap
Market and the Company has not received any notice of, nor to the Company's
Knowledge is there any basis for, the delisting of the Common Stock from the
Nasdaq SmallCap Market. Pursuant to Marketplace Rule 4350(i)(2), Nasdaq has
exempted the sale of the Securities contemplated hereby from the provisions of
Rule 4350 upon compliance by the Company with the shareholder notification
requirements of such Rule (the "Exemption"). Reliance on Rule 4350(i)(2) was
approved by the Audit Committee of the Company's Board of Directors as required
by such Rule. Copies of all applications, correspondence and other materials
relating to the granting of the Exemption have been provided to the Investor.
None of the documents provided by the Company to Nasdaq in connection with the
Exemption contained, as of the date thereof, a misstatement of a material fact
or the omission of a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
4.21 Brokers and Finders. Except as described on Schedule
4.21, no Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim against or upon the Company, any
Subsidiary or an Investor for any commission, fee or other compensation pursuant
to any agreement, arrangement or understanding entered into by or on behalf of
the Company.
4.22 No Directed Selling Efforts or General Solicitation.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.
4.23 No Integrated Offering. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the
Securities under the 1933 Act.
EXHIBIT 6
4.24 Private Placement. The offer and sale of the Securities
to the Investor as contemplated hereby is exempt from the registration
requirements of the 1933 Act.
4.25 Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former shareholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
4.26 Disclosures. The written materials delivered to the
Investor in connection with the transactions contemplated by the Agreements do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
5. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company that:
5.1 Organization and Existence. The Investor is a validly
existing corporation, limited partnership or limited liability company and has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by
the Investor of the Agreements have been duly authorized and the Agreements will
each constitute the valid and legally binding obligation of the Investor,
enforceable against the Investor in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
5.3 Exchange Entirely for Own Account. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the 1933 Act, and the Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the 1933 Act. The Investor is not a
registered broker dealer or an entity engaged in the business of being a broker
dealer.
5.4 Investment Experience. The Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
EXHIBIT 6
is capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of Information. The Investor has had an
opportunity to receive all additional information related to the Company
requested by it and to ask questions of and receive answers from the Company
regarding the Company, its business and the terms and conditions of the offering
of the Securities. The Investor acknowledges receipt of copies of the SEC
Filings. Neither such inquiries nor any other due diligence investigation
conducted by the Investor shall modify, amend or affect the Investor's right to
rely on the Company's representations and warranties contained in this
Agreement.
5.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, until the earlier of (i)
registration for resale pursuant to the Registration Rights Agreement or (ii)
the time when such Securities may be sold pursuant to Rule 144(k), certificates
evidencing such Securities may bear the following or any similar legend:
(a) "The securities represented hereby may not be
transferred unless (i) such securities have been registered for sale pursuant to
the Securities Act of 1933, as amended, (ii) such securities may be sold
pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel
satisfactory to it that such transfer may lawfully be made without registration
under the Securities Act of 1933 or qualification under applicable state
securities laws."
(b) If required by the authorities of any state in
connection with the issuance of sale of the Securities, the legend required by
such state authority.
Upon the earlier of (i) registration for resale pursuant to
the Registration Rights Agreement and receipt by the Company of the Investor's
written confirmation and agreement that such Securities will not be disposed of
except in compliance with the prospectus delivery requirements of the 1933 Act
or (ii) Rule 144(k) becoming available the Company shall, upon an Investor's
written request, use commercially reasonable efforts to cause certificates
evidencing the Securities to be replaced with certificates which do not bear
such restrictive legends within three (3) Business Days and Warrant Shares
subsequently issued in respect of the Warrants shall not bear such restrictive
legends provided the provisions of either clause (i) or clause (ii) above, as
applicable, are satisfied with respect to such Warrant Shares. When the Company
is required to cause unlegended certificates to replace previously issued
legended certificates, if unlegended certificates are not delivered to an
Investor within seven (7) Business Days of submission by that Investor of
legended certificate(s) to the Company's transfer agent together with a
representation letter in customary form (five (5) Business Days if the Investor
notifies the Company in connection with such submission that it intends to
transfer or dispose of some or all of the securities represented by such
EXHIBIT 6
certificate), the Company shall be liable to the Investor for a penalty equal to
1% of the aggregate dollar amount of Indebtedness exchanged for the Securities
evidenced by such certificate(s) for each thirty (30) day period (or portion
thereof) beyond such seven (7) or five (5) Business Day period, as applicable,
that the unlegended certificates have not been so delivered.
5.8 Accredited Investor. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the ▇▇▇▇
▇▇▇.
5.9 No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.
5.10 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by this Agreement, any valid right, interest or
claim against or upon the Company, any Subsidiary or the Investor for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Investor.
6. Conditions to the Closings.
6.1 Conditions to the Investor's Obligations. The obligation
of the Investor to exchange Indebtedness for Shares and Warrants at the Closing
is subject to the fulfillment to the Investor's satisfaction, on or prior to the
Closing Date, of the following conditions, any of which may be waived by the
Investor:
(a) The representations and warranties made by the
Company in Section 4 hereof qualified as to materiality shall be true and
correct at all times prior to the Closing Date, except to the extent any such
representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and correct as of such earlier
date, and, the representations and warranties made by the Company in Section 4
hereof not qualified as to materiality shall be true and correct in all material
respects at all times prior to the Closing Date, except to the extent any such
representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and correct in all material
respects as of such earlier date. The Company shall have performed in all
material respects all obligations and conditions herein required to be performed
or observed by it on or prior to the Closing Date.
(b) The Company shall have obtained in a timely
fashion any and all consents, permits, approvals, registrations and waivers
necessary or appropriate for consummation of the exchange of Indebtedness for
Shares and Warrants all of which shall be in full force and effect.
(c) The Company shall have executed and delivered the
Registration Rights Agreement.
(d) The Company shall have complied in all respects
with the requirements of the Exemption and any waiting periods relating thereto
EXHIBIT 6
shall have expired and the Shares and the Warrant Shares shall have been
approved for inclusion in Nasdaq upon official notice of issuance.
(e) [Intentionally deleted.]
(f) [Intentionally deleted.]
(g) The Company shall have entered into one or more
agreements in form and substance reasonably satisfactory to the Investor (the
"Other Investment Agreements") pursuant to which the Company agrees to sell
shares of Common Stock and warrants to purchase Common Stock to one or more
institutional investors on the same economic terms (including as to price) as
contemplated hereby (the "Other Investments"); provided, however, that an Other
Investment Agreement that contains substantially the same terms and conditions
as set forth herein (other than the other shares and warrants shall be sold for
cash consideration) shall be considered acceptable to the Investor.
(h) The Other Investments shall have been consummated
in accordance with the terms of the Other Investment Agreement and shall result
in gross proceeds to the Company of at least Six Million Five Hundred Thousand
Dollars ($6,500,000).
(i) No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Agreements.
(j) The Company shall have delivered a Certificate,
executed on behalf of the Company by its Chief Executive Officer or its Chief
Financial Officer, dated as of the Closing Date, certifying to the fulfillment
of the conditions specified in subsections (a), (b), (d), and (h) of this
Section 6.1.
(k) The Company shall have delivered a Certificate,
executed on behalf of the Company by its Secretary, dated as of the Closing
Date, certifying the resolutions adopted by the Board of Directors of the
Company approving the transactions contemplated by this Agreement and the other
Agreements and the issuance of the Securities, certifying the current versions
of the Certificate of Incorporation and Bylaws of the Company and certifying as
to the signatures and authority of persons signing the Agreements and related
documents on behalf of the Company.
(l) The Investor shall have received an opinion from
O'Melveny & ▇▇▇▇▇ LLP, the Company's counsel, dated as of the Closing Date, in
form and substance reasonably acceptable to the Investor and addressing such
legal matters as the Investor may reasonably request.
EXHIBIT 6
(m) No stop order or suspension of trading shall have
been imposed by Nasdaq, the SEC or any other governmental regulatory body with
respect to public trading in the Common Stock.
6.2 Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Securities at the Closing is subject to the
fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following conditions, any of which may be waived by the Company:
(a) The representations and warranties made by the
Investor in Section 5 hereof, other than the representations and warranties
contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The
Investment Representations shall be true and correct in all respects when made,
and shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The Investor
shall have performed in all material respects all obligations and conditions
herein required to be performed or observed by them on or prior to the Closing
Date.
(b) The Investor shall have executed and delivered
the Registration Rights Agreement.
(c) The Investor shall have delivered written
documentation confirming that the Indebtedness has been extinguished..
(d) The Shares and the Warrant Shares shall have been
approved for inclusion in Nasdaq upon official notice of issuance.
(e) No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Agreements.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand,
and the Investor, on the other hand, to effect the Closing shall terminate as
follows:
(i) Upon the mutual written consent of the
Company and the Investor;
(ii) By the Company if any of the conditions
set forth in Section 6.2 shall have become incapable of fulfillment, and shall
not have been waived by the Company;
EXHIBIT 6
(iii) By the Investor if any of the
conditions set forth in Section 6.1 shall have become incapable of fulfillment,
and shall not have been waived by the Investor; or
(iv) By either the Company or the Investor
if the Closing has not occurred on or prior to March 31, 2002;
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Agreements if such breach has resulted
in the circumstances giving rise to such party's seeking to terminate its
obligation to effect the Closing.
(b) In the event of termination by the Company or the Investor
of their obligations to effect the Closing pursuant to this Section 6.3, written
notice thereof shall forthwith be given to the other parties hereto and the
obligation of all parties to effect the Closing shall be terminated, without
further action by any party. Nothing in this Section 6.3 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Agreements or to impair the right
of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Agreements.
7. Covenants and Agreements of the Company.
7.1 Covenants and Agreements of the Company. Commencing on the
date hereof and continuing until such time as the Investor no longer owns in the
aggregate at least 25% of the Shares acquired hereunder (appropriately adjusted
for any stock split, reverse stock split, stock dividend or other
reclassification or combination of the Common Stock occurring after the date
hereof), the Investor shall have the right to participate in future capital
raising transactions on the terms and conditions set forth in this Section 7.1.
During such period, the Company shall give ten (10) Business Days advance
written notice to such Investor prior to any non-public offer or sale of any of
the Company's securities by providing to the Investor a term sheet containing
all material business terms of the proposed transaction. The Investor and its
respective assignees shall have the right (pro rata in accordance with such
Investor's participation in this offering) to purchase such Investor's Pro Rata
Share (as defined below) of such securities which are the subject of the
proposed transaction for the same consideration and on the same terms and
conditions as contemplated for such third-party sale. The Investor's rights
hereunder must be exercised in writing by the Investor within five (5) Business
Days following receipt of the notice from the Company. If, subsequent to the
Company giving notice to an Investor hereunder but prior to the Investor
exercising its right to participate (or the expiration of the five-Business Day
period without response from the Investor), the terms and conditions of the
proposed third-party sale are changed in any material respect from that
disclosed in the term sheet provided to such Investor, the Company shall be
required to provide a new notice to the Investor hereunder and the Investor
shall have the right, which must be exercised within five (5) Business Days of
such new notice, to exercise their rights to purchase the securities on such
changed terms and conditions as provided hereunder. In the event the Investor
does not exercise their rights hereunder, or affirmatively decline to engage in
EXHIBIT 6
the proposed transaction with the Company, then the Company may proceed with
such proposed transaction on the same terms and conditions as noticed to the
Investor. An Investor's "Pro Rata Share" for purposes of this Section 7.1 is the
ratio of (a) the sum of (i) the number of Shares the Investor holds plus (ii)
the number of Warrant Shares which the Investor has the right to acquire to (b)
a number of shares of Common Stock equal to the sum of (x) the total number of
shares of Common Stock then outstanding plus (y) the total number of shares of
Common Stock into which all then outstanding shares of preferred stock and other
convertible securities of the Company are then convertible plus (z) the total
number of shares of Common Stock underlying all then outstanding and presently
exercisable options, warrants and other rights to purchase shares of Common
Stock.
7.2 Limitation on Certain Actions.
(a) For a period of one year from the Closing, the
Company shall not offer or sell any Equity Securities (as defined below) at a
price per share lower than $1.50 or otherwise on terms more favorable to the
purchaser thereof than those contained in the Agreements without the consent of
the Investor, which consent shall not be unreasonably withheld; provided,
however, that the restrictions in this sentence shall not apply to the issuance
of an Equity Security to an officer, director, employee or consultant to the
Company or any Subsidiary pursuant to any incentive or stock option plan of the
Company approved by the Board of Directors or the shareholders of the Company.
The term "Equity Securities" means the Company's capital stock, warrants,
rights, and options giving the holder thereof the right to acquire shares of
capital stock, and any security directly or indirectly convertible into or
exercisable for or exchangeable into shares of the Company's capital stock.
(b) Commencing on the date hereof and continuing
until such time as the Investor no longer owns in the aggregate at least 10% of
the Shares acquired hereunder (appropriately adjusted for any stock split,
reverse stock split, stock dividend or other reclassification or combination of
the Common Stock occurring after the date hereof), the Company shall not offer
or sell or enter into any agreement, arrangement or understanding to offer or
sell any Equity Security if the Equity Security (or any agreement, arrangement
or understanding entered into in connection therewith) provides for the future
adjustment of (i) the purchase price therefor, (ii) the number of Equity
Securities to be issued, or (iii) the conversion, exercise or exchange rate
applicable thereto (other than customary anti-dilution provisions no more
favorable to the holder than those contained in the Warrants) without the prior
written consent of the Investor, which consent shall not be unreasonably
withheld or delayed.
7.3 Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of providing for the exercise of the
Warrants, such number of shares of Common Stock as shall from time to time equal
the number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with their respective terms.
7.4 Reports. The Company will furnish to such Investor and/or
its assignees such information relating to the Company and its Subsidiaries as
from time to time may reasonably be requested by such Investor and/or its
assignees; provided, however, that such Investor and/or assignees shall hold in
EXHIBIT 6
confidence any confidential or proprietary information received from the Company
and identified as such at the time of disclosure such information and shall use
any such confidential or proprietary information solely for the purpose of
monitoring and evaluating their investment in the Company and; provided,
further, that the Company shall not be required to provide any information to
the Investor which, if disclosed to such Investor and/or its assignees pursuant
to the terms of this Section 7.4, would, in the good faith judgment of the
Company, cause the Company or any Subsidiary to violate the terms of a
confidentiality undertaking binding on the Company or such Subsidiary. The
Investor and/or assignee acknowledges that it is aware, and that it will advise
its representatives who are given access to such information, that the United
States securities laws may prohibit a person who has material, non-public
information concerning matters that may be disclosed to it pursuant to this
Section 7.4 from purchasing or selling securities of the Company or a company
which may be, or may be affiliated with, a party to a business arrangement or
proposed business arrangement with the Company or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities. The
Company shall not disclose material nonpublic information to the Investor, or to
advisors to or representatives of the Investor, unless prior to disclosure of
such information the Company identifies such information as being material
nonpublic information and provides the Investor, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review.
7.5 No Conflicting Agreements. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Investor under the
Agreements.
7.6 Insurance. The Company shall not materially reduce the
insurance coverages described in Section 4.19.
7.7 Compliance with Laws. The Company will comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
7.8 Nasdaq Listing and Related Matters; Compliance with Nasdaq
Exemption Requirements.
(a) Promptly following the execution and delivery of
this Agreement, the Company shall take all action necessary to cause the Shares
and the Warrant Shares to be listed on Nasdaq no later than the Closing Date and
to comply with the terms and conditions of the Exemption, including, but not
limited to, (i) issuing a press release in a form reasonably satisfactory to
Nasdaq, and (ii) mailing to all shareholders a notification (the "Notification")
to the effect that the Audit Committee of the Board of Directors of the Company
has expressly approved the determination not to seek shareholder approval in
connection with the offer and sale of the Securities in reliance on the
exception provided in Nasdaq Marketplace Rule 4350(i)(2), Nasdaq has approved
the Exemption, and describing the basis for the Exemption. The Notification
shall not at any time prior to the Closing Date contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
EXHIBIT 6
the statements made therein, in light of the circumstances under which they were
made, not misleading.
(b) Further, if the Company applies to have its
Common Stock or other securities traded on any other principal stock exchange or
market, it shall include in such application the Shares and the Warrant Shares
and will take such other action as is necessary to cause such Common Stock to be
so listed. The Company will use commercially reasonable efforts to continue the
listing and trading of its Common Stock on Nasdaq and, in accordance, therewith,
will use commercially reasonable efforts to comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
such exchange, as applicable.
7.9 Termination of Covenants. The provisions of Sections 7.4
through 7.7 shall terminate and be of no further force and effect upon the
earliest of (i) the mutual consent of the Company and the Investor, (ii) the
date on which the Company's obligations to maintain an effective registration
statement under the Registration Rights Agreement terminate, or (iii) the
occurrence of a "Change of Control" of the Company. As used herein, "Change of
Control" means the consolidation or merger of the Company with or into any other
entity or entities which results in the holders of Common Stock of the Company
immediately prior to such transaction owning less than 50% of the voting power
of the successor entity and pursuant to which such holders receive either (i)
cash, (ii) freely tradable securities, or (iii) a combination of cash and freely
tradable securities, the sale, conveyance or other disposition by the Company of
all or substantially all of its assets, or the consummation of a tender or
exchange offer pursuant to which a Person (including any group) becomes the
beneficial owner of 80% or more of the outstanding voting power of the Company.
8. Survival and Indemnification.
8.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this Agreement for a period of eighteen (18) months
from the Closing Date; provided, however, that the provisions contained in
Section 7 hereof shall survive in accordance therewith.
8.2 Indemnification. The Company agrees to indemnify and hold
harmless, on an after-tax and after insurance recovery basis, the Investor and
its Affiliates and their respective directors, officers, employees and agents
from and against any and all losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any action, claim or proceeding, pending or threatened and the costs of
enforcement hereof) (collectively, "Losses") to which such Person may become
subject as a result of any breach of representation, warranty, covenant or
agreement made by or to be performed on the part of the Company under the
Agreements, and will reimburse any such Person for all such amounts as they are
incurred by such Person.
8.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any Person (the "Indemnified Person") of notice of any demand, claim
or circumstances which would or might give rise to a claim or the commencement
EXHIBIT 6
of any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 8.2, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the Company or the
Investor, as applicable, provided, however, (i) an Investor may assign its
rights and delegate its duties hereunder in whole or in part to an Affiliate or
to a third party acquiring some portion or all of its Securities in a private
transaction without the prior written consent of the Company, after notice duly
given by the Investor to the Company, provided, that no such assignment or
obligation shall affect the obligations of the Investor hereunder, and (ii) the
Company may assign its rights and delegate its duties hereunder to any surviving
or successor corporation in connection with a merger or consolidation of the
Company with another corporation, or a sale, transfer or other disposition of
all or substantially all of the Company's assets to another corporation, without
the prior written consent of the Investor, after notice duly given by the
Company to the Investor. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective permitted successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
EXHIBIT 6
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
9.3 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one day after delivery to
such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
days' advance written notice to the other party:
If to the Company:
Amerigon Incorporated
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Attention: Chief Executive Officer
Fax: ▇▇▇.▇▇▇.▇▇▇▇
With a copy to:
O'Melveny & ▇▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
If to the Investor, to the addresses set forth on the
signature pages hereto.
9.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that the Company shall pay the
reasonable fees and expenses of counsel to the Investors at the Closing. The
Company shall reimburse the Investor upon demand for all reasonable
out-of-pocket expenses incurred by the Investor, including without limitation
reimbursement of attorneys' fees and disbursements, in connection with any
amendment, modification or waiver of this Agreement or the other Agreements. In
the event that legal proceedings are commenced by any party to this Agreement
against another party to this Agreement in connection with this Agreement or the
other Agreements, the party or parties which do not prevail in such proceedings
shall severally, but not jointly, pay their pro rata share of the reasonable
EXHIBIT 6
attorneys' fees and other reasonable out-of-pocket costs and expenses incurred
by the prevailing party in such proceedings.
9.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities received under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.
9.7 Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by the Company or the
Investor without the prior consent of the Company (in the case of a release or
announcement by the Investor) or Big Beaver Investments LLC ("Big Beaver") (in
the case of a release or announcement by the Company) (which consents shall not
be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities market, in which case the Company or the Investor, as the
case may be, shall allow Big Beaver or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance.
9.8 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the Exhibits
and the Disclosure Schedules, and the other Agreements constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof; provided, however, this Agreement does not supersede or modify that
certain Investors Rights Agreement dated as of June 8, 1999, by and among the
Company, the Investor and Westar Capital II LLC, a Delaware limited liability
company ("Westar"), as amended.
9.10 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
9.11 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof. Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
EXHIBIT 6
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
[signature page follows]
EXHIBIT 6
IN WITNESS WHEREOF, the parties have executed this Agreement
or caused their duly authorized officers to execute this Agreement as of the
date first above written.
The Company: AMERIGON INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
The Investor: BIG BEAVER INVESTMENTS LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
Address for Notice:
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: 248.362.3033
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: 949.851.9348
EXHIBIT 6