SECURITIES PURCHASE AND EXCHANGE AGREEMENT By and Between THE AMACORE GROUP, INC. and VICIS CAPITAL MASTER FUND December 31, 2008
Exhibit
10.1
-27-
|
By
and Between
and
VICIS
CAPITAL MASTER FUND
December
31, 2008
|
This
SECURITIES PURCHASE AND EXCHANGE AGREEMENT (the “Agreement”), effective as of
this 31st day of December, 2008, is made by and between THE AMACORE GROUP, INC.,
a Delaware corporation (the “Company”), and VICIS CAPITAL MASTER FUND (the
“Purchaser”), a series of the Vicis Capital Master Trust, a trust formed under
the laws of the Cayman Islands.
R E C I T A L
S
WHEREAS,
the Purchaser is the holder of 694.6 shares of Series D Convertible Preferred
Stock, par value $.001 per share (the “Series D Preferred Stock”) with an
aggregate stated value of $6,946,000; and 139 shares of Series E Convertible
Preferred Stock, par value $.001 per share (the “Series E Preferred Stock”) with
a stated value of $1,390,000.
WHEREAS,
as of the date hereof, the Company has not paid any dividends that have accrued
heretofore with respect to the shares of Series D Preferred Stock and the shares
of Series E Preferred Stock held by the Purchaser, which dividends are equal to
$807,376 with
respect to the shares of Series D Preferred Stock (the “Series D Unpaid
Dividends”) held by the Purchaser, and are equal to $168,209 with respect to the
shares of Series E Preferred Stock held by the Purchaser (the “Series E Unpaid
Dividends” and together with the Series D Unpaid Dividends, the “Unpaid
Dividends”).
WHEREAS,
as partial consideration for the Purchase Price and the other agreements set
forth herein, the Company wishes to exchange all of the shares of Series D
Preferred Stock held by the Purchaser and the Series D Unpaid Dividends for
775.34 shares of
the Company’s newly designated Series J Convertible Preferred Stock, par
value $.001 per share (the “Series J Preferred Stock”); and all of the shares of
Series E Preferred Stock held by the Purchaser and the Series E Unpaid Dividends
for 155.82 shares of the Company’s newly designated Series K Convertible
Preferred Stock, par value $.001 per share (the “Series K Preferred Stock”) (the
shares of Series J Preferred Stock and Series K Preferred Stock being acquired
hereunder are collectively referred to as the “Exchange Shares”).
WHEREAS,
pursuant to the terms and conditions of this Agreement, the Company wishes to
issue and sell to the Purchaser the following securities (collectively, the
“Securities”): (a) 250 shares (the “Acquired Shares”) of the Company’s
Series I Convertible Preferred Stock, par value $.001 per share (the “Series I
Preferred Stock”); and (b) a warrant to purchase an aggregate of 28,125,000
shares of the Company’s Class A Common Stock, par value $.001 per share (the
“Class A Common Stock”), initially at an exercise price of $0.375 per share in
the form attached hereto as Exhibit A (the
“Warrant”).
WHEREAS,
pursuant to a Securities Purchase and Exchange Agreement by and between the
Company and the Purchaser dated as of December 21, 2007, the Company and the
Purchaser agreed to enter into a first amendment to certain registration rights
agreements (the “Amended Registration Rights Agreement”), which Amended
Registration Rights Agreement has not yet been executed, and the parties wish to
enter into such agreement at this time.
WHEREAS,
pursuant to warrants issued by the Company to the Purchaser each dated March 13,
2008, April 30, 2008, June 2, 2008, September 30, 2008 and October 6, 2008, the
Purchaser is the holder of warrants to purchase an aggregate of 180,000,000
shares of Class A Common Stock at a per share exercise price of $0.375, subject
to certain adjustments, and, pursuant to a warrant dated August 10, 2004, the
Purchaser is the holder of warrant to purchase 400,000 shares of Class A Common
Stock at a per share exercise price of $1.25 (collectively, the
“Warrant Agreements”).
WHEREAS,
as partial consideration of for conversion of the Series D Preferred Stock,
Series E Preferred Stock and the Unpaid Dividends, the Company and the Purchaser
desire to amend each Warrants Agreement upon the terms and conditions and
substantially in the form as set forth in Exhibit G hereto (the “Amended Warrant
Agreement”).
NOW,
THEREFORE, the
Company and the Purchaser hereby agree as follows:
ARTICLE
I
PURCHASE
AND SALE OF THE ACQUIRED SHARES
1.1 Purchase and Sale of the
Acquired Shares and Exchange of the Exchange Shares. On the
Closing Date, at the closing of the transactions contemplated hereby (the
“Closing”), subject to the terms and conditions hereof and in reliance on the
representations and warranties contained herein, the following actions shall be
taken:
(a) The
Company, against delivery of payment of the Purchase Price in accordance with
Section 1.1(b), will deliver to the Purchaser the documents set forth in Section
4.4 hereof.
(b) The
Purchaser shall deliver to the Company the documents set forth in Section 5.2
hereof and Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Purchase
Price”) in immediately available funds by wire transfer of immediately available
funds in accordance with the instructions of the Company and will deliver to the
Company the documents set forth in Section 5.2 hereof. The Company
hereby confirms that the Purchase Price was previously paid by the
Purchaser.
1.2 Closing. The
Closing shall be deemed to have occurred at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ at 5:00 p.m. CDT on
December 31, 2008 (the “Closing Date).
-2-
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to the Purchaser as of the date of this
Agreement as follows:
2.1 Organization and
Qualification. The Company is a corporation duly organized and
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated, and has all requisite corporate power and authority to
carry on its business as now conducted. The Company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties, assets,
operations, results of operations, condition (financial or otherwise) or
prospects of the Company or its Subsidiaries (as defined below) or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Transaction Documents (as
hereinafter defined).
2.2 Subsidiaries. The
Company has seven subsidiaries: LBI Brokerage, Inc., JRM Benefits Consulting,
LLC, US Health Benefits Group, Inc., US Health Plans, Inc., On The Phone, Inc.,
Zurvita, Inc. and Lifeguard Benefit Services, Inc. (each a
“Subsidiary” and collectively, the “Subsidiaries”).
2.3 No
Violation. Neither the Company nor any Subsidiary is in
violation of: (a) any of the provisions of its certificate of
incorporation, bylaws or other organizational or charter documents; or
(b) any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse
Effect.
2.4 Capitalization.
(a) As
of the date hereof, the Company is currently authorized to issue up to (i)
1,480,000,000 shares of Common Stock, par value $.001 per share, of which
155,758,869 shares
are currently outstanding and 982,127,717 shares have been reserved for issuance
upon the exercise of all of the outstanding options, warrants and other
securities issued by the Company that are convertible into Common Stock. All of
such outstanding shares have been, or upon issuance will be, validly issued, are
fully paid and nonassessable; and (ii) 20,000,000 shares of Preferred Stock, par
value $.001 per share, of which 3,188.6 shares are currently
outstanding.
-3-
(b) Except
as disclosed herein or in the Company’s reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and Exchange
Commission (the “SEC”) pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), prior to the date hereof
(the “SEC Documents”):
(i) no
holder of shares of the Company’s capital stock has any preemptive rights or any
other similar rights or has been granted or holds any liens or encumbrances
suffered or permitted by the Company;
(ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or its Subsidiary, or contracts, commitments,
understandings or arrangements by which the Company or its Subsidiary are or may
become bound to issue additional shares of capital stock of the Company or its
Subsidiary or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or its Subsidiary;
(iii) there
are no outstanding debt securities, notes, credit agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness (as
defined in Section 2.14 hereof) of the Company or its Subsidiary or by which the
Company or its Subsidiary are or may become bound;
(iv) there
are no agreements or arrangements under which the Company is obligated to
register the sale of any of its securities under the Securities Act of 1933, as
amended, (the “Securities Act”);
(v) there
are no outstanding securities or instruments of the Company that contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company;
(vi) there
are no securities or instruments containing antidilution or similar provisions
that will be triggered by the issuance of the Securities; and
(vii) the
Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement.
2.5 Issuance of the
Securities.
(a) The
Securities and Exchange Shares to be issued hereunder are duly authorized and,
upon payment and issuance in accordance with the terms hereof and thereof, shall
be free from all Liens and charges with respect to the issuance thereof. As of
the Closing Date, the Company has authorized and has reserved free of preemptive
rights and other similar contractual rights of stockholders, a number of its
authorized but unissued shares of Class A Common Stock equal to one hundred
percent (100%) of the aggregate number of shares of Class A Common Stock to
effect the conversion of the Acquired Shares and the Exchange Shares (together,
the “Conversion Shares”) and one hundred percent (100%) of the aggregate number
of shares of Class A Common Stock to effect the exercise of the Warrant (the
“Warrant Shares”). All actions by the Board, the Company and its
stockholders necessary for the valid issuance of the Acquired Shares, the
Exchange Shares and the Warrant, and the Conversion Shares and the Warrant
Shares pursuant to the terms of the Series I Preferred Stock, Series J Preferred
Stock, Series K Preferred Stock and the Warrant, respectively, have been
taken.
-4-
(b) The
Conversion Shares and Warrant Shares, when issued and paid for upon conversion
of the Acquired Shares and Exchange Shares and of the Warrant, respectively,
will be validly issued, fully paid and nonassessable and free from all Liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Class A Common Stock. Assuming the accuracy
of each of the representations and warranties set forth in Article III hereof,
the issuance by the Company to the Purchaser of the Securities and Exchange
Shares is exempt from registration under the Securities Act.
2.6 Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement, the Registration
Rights Agreement delivered pursuant to Section 4.4(b) hereof, the Amended
Registration Rights Agreement, the Warrant, the Amended Warrant Agreement and
each of the other agreements or instruments entered into by the parties hereto
in connection with the transactions contemplated by this Agreement
(collectively, the “Transaction Documents”) and to issue the Securities and, the
Exchange Shares , the Conversion Shares and the Warrant Shares in accordance
with the terms hereof. The execution and delivery of the Transaction Documents
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, and the issuance
of the Securities and Exchange Shares, have been duly authorized by the board of
directors of the Company (the “Board”), and no further consent or authorization
is required by the Company, the Board or its stockholders or from any Person
other than the Purchaser. This Agreement and the other Transaction Documents of
even date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except
(i) as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies, or (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities laws and
public policy consideration.
2.7 Dilutive Effect. The
Company understands and acknowledges that its obligation to issue the Conversion
Shares and Warrant Shares upon conversion of the Acquired Shares or Exchange
Shares, or the exercise of the Warrant, as the case may be, in accordance
therewith is absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the
Company.
2.8 No Conflicts. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance of the
Conversion Shares and Warrant Shares) will not (i) result in a violation of
any articles or certificate of incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock or bylaws of
the Company or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected, except in the case of clauses (ii)
and (iii), for such breaches or defaults as would not be reasonably expected to
have a Material Adverse Effect.
-5-
2.9 Governmental
Consents. Except for the filing of a Form D with the SEC and the the
registration of Conversion Shares and Warrant Shares under the Securities Act
for resale by the Purchaser, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person (as hereinafter defined) in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents, in
each case, in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain at or prior to the Closing pursuant to the preceding sentence have
been obtained or effected. The Company is unaware of any facts or circumstances
which might prevent the Company from obtaining or effecting any of the
foregoing.
2.10 No General
Solicitation. Neither the Company, nor any of its
Subsidiaries, nor any of their affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Securities.
2.11 No Integrated
Offering. None of the Company, its Subsidiaries, their affiliates, or any
Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of the Securities under the
Securities Act or cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act or any
applicable stockholder approval provisions.
2.12 Placement Agent’s
Fees. No brokerage or finder’s fee or commission are or will
be payable to any Person with respect to the transactions contemplated by this
Agreement based upon arrangements made by the Company or any of its
affiliates. The Company agrees that it shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than for persons engaged by Purchaser) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold the
Purchaser harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any claim for any such fees or commissions.
2.13 Litigation. There
is no material action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company or its Subsidiaries, the transactions contemplated by the Transaction
Documents, the Class A Common Stock or any of the Company’s respective current
or former officers or directors in their capacities as such. To the knowledge of
the Company, there has not been within the past two (2) years, and there is not
pending, any investigation by the SEC involving the Company or any current or
former director or officer of the Company (in his or her capacity as such). The
SEC has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Securities Act within
the past two (2) years.
-6-
2.14 Indebtedness and Other
Contracts. Except as disclosed in the SEC Documents, the Company (a) does
not have any outstanding Indebtedness (as defined below), (b) is not a
party to any contract, agreement or instrument, the violation of which, or
default under, by any other party to such contract, agreement or instrument
would result in a Material Adverse Effect, (c) is not in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (d) is
not a party to any contract, agreement or instrument relating to any
Indebtedness, the performance of which, in the judgment of the Company’s
officers, has or is expected to have a Material Adverse Effect. For
purposes of this Agreement: (x) ”Indebtedness” of any Person means, without
duplication (i) all indebtedness for borrowed money, (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business), (iii) all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments,
(iv) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (v) all indebtedness created
or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (vi) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (vii) all indebtedness
referred to in clauses (i) through (vi) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any mortgage, lien, pledge, change, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness,
and (viii) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (i) through
(vii) above; (y) “Contingent Obligation” means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; and
(z) ”Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof.
-7-
2.15 Financial Information; SEC
Documents. Except as set forth in Schedule 2.15 hereto,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of such SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Except as set forth in Schedule 2.15 hereto,
as of their respective dates, the financial statements of the Company included
in such SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Except as set forth in Schedule 2.15 hereto,
such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
2.16 Absence of Certain
Changes. Except as disclosed in the SEC Documents or on Schedule 2.16,
since December 31, 2007, there has been no material adverse change and no
material adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiary. Since December 31, 2007, the Company has not (i) declared
or paid any dividends, (ii) sold any assets, individually or in the
aggregate, in excess of $50,000 outside of the ordinary course of business or
(iii) had capital expenditures, individually or in the aggregate, in excess
of $100,000. The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings. After giving effect to the transactions contemplated
hereby to occur at the Closing, the Company will not be Insolvent (as
hereinafter defined). For purposes of this Agreement, “Insolvent” means
(i) the present fair saleable value of the Company’s assets is less than
the amount required to pay the Company’s total indebtedness, contingent or
otherwise, (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that
it will incur debts that would be beyond its ability to pay as such debts mature
or (iv) the Company has unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted.
2.17 Foreign Corrupt
Practices. Neither the Company nor any Subsidiary, nor any
director, officer, agent, employee or other Person acting on behalf of the
Company or a Subsidiary has, in the course of its actions (a) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended or
(d) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
-8-
2.18 Transactions With
Affiliates. Except as set forth in the SEC Documents or on
Schedule 2.18,
none of the officers, directors or employees of the Company or any Subsidiary is
presently a party to any transaction with the Company (other than for ordinary
course services as employees, officers or directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any such officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner.
2.19 Insurance. The
Company and each Subsidiary is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which
the Company and each such Subsidiary is engaged. The Company has not
been refused any insurance coverage sought or applied for and the Company has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
2.20 Employee
Relations. Neither the Company nor any Subsidiary is a party
to any collective bargaining agreement or employs any member of a union. No
Executive Officer of the Company (as defined in Rule 501(f) of the Securities
Act) has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer’s employment with the Company. No Executive
Officer of the Company, to the knowledge of the Company, is, or is now, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company to any
liability with respect to any of the foregoing matters. The Company is in
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
2.21 Title. Each
of the Company and its Subsidiaries has good and marketable title to all
personal property owned by it which is material to their respective business, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the SEC Documents or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company.
2.22 Intellectual Property
Rights. The Company’s and its Subsidiaries’ patents,
trademarks, trade names, service marks copyrights, and registrations and
applications therefor, trade secrets and any other intellectual property right
(collectively, “Intellectual Property Rights”), are, to the best of the
Company’s knowledge, fully valid and are in full force and
effect. The Company does not have any knowledge of any infringement
by the Company or any Subsidiary of Intellectual Property Rights of others.
There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company, being threatened, against the Company or a Subsidiary
regarding its Intellectual Property Rights that could have a Material Adverse
Effect. The Company is unaware of any facts or circumstances which might give
rise to any of the foregoing infringements or claims, actions or proceedings.
The Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of its Intellectual Property Rights.
-9-
2.23 Environmental
Laws. Each of Company and its Subsidiaries (a) is in
compliance with any and all Environmental Laws (as hereinafter defined),
(b) has received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(c) is in compliance with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (a), (b) and (c),
the failure to so comply could be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved
thereunder.
2.24 Tax
Matters. Each of Company and its Subsidiaries (a) has
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject,
(b) has paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (c) has
set aside on its books reasonably adequate provision for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply, except where such failure would not have a Material Adverse
Effect. There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the Company know
of no basis for any such claim.
2.25 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
Except as set forth in Schedule 2.25, the Company is in compliance with any and
all requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 that are effective as of the
date hereof and applicable to it, and any and all rules and regulations
promulgated by the SEC thereunder that are effective and applicable to it as of
the date hereof, except where such noncompliance would not have a Material
Adverse Effect.
2.26 Investment Company
Status. The Company is not, and immediately after receipt of
payment for the Acquired Shares will not be, an “investment company,” an
“affiliated person” of, “promoter” for or “principal underwriter” for, or an
entity “controlled” by an “investment company,” within the meaning of the
Investment Company Act.
-10-
2.27 Material
Contracts. Each contract of the Company that involves
expenditures or receipts in excess of $100,000 (each an “Applicable Contract”)
is in full force and effect and is valid and enforceable in accordance with its
terms. The Company is and has been in full compliance with all applicable terms
and requirements of each Applicable Contract and, to the Company’s knowledge, no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with or result in a violation or breach of, or
give the Company or any other entity the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify any Applicable Contract. The Company has not given or
received from any other entity any notice or other communication (whether oral
or written) regarding any actual, alleged, possible or potential violation or
breach of, or default under, any Applicable Contract.
2.28 Inventory. All
inventory of the Company consists of a quality and quantity usable and salable
in the ordinary course of business, except for obsolete items and items of
below-standard quality, all of which have been or will be written off or written
down to net realizable value on the audited consolidated balance sheet of the
Company as of December 31, 2007. The quantities of each type of
inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable and warranted in the present circumstances of the
Company.
2.29 Disclosure. All
disclosure provided to the Purchaser regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and
warrants to the Company as of the date of this Agreement as
follows:
3.1 Organization. The
Purchaser is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.
3.2 Authorization. Purchaser
has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents. The
execution and delivery of the Transaction Documents by the Purchaser and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by the trustee of the Purchaser, which
delegated authority to enter into the Transaction Documents to the investment
advisor to the Purchaser pursuant to an investment management agreement, and no
further consent or authorization is required by the Purchaser, its trustee or
its beneficiaries. This
Agreement and the other Transaction Documents have been duly executed and
delivered by the Purchaser, and constitute the legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their respective terms, except (i) as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies, or (ii) as any rights to indemnity or contribution hereunder may
be limited by federal and state securities laws and public policy
consideration.
-11-
3.3 Investment
Investigation. The Purchaser understands that no Federal,
state, local or foreign governmental body or regulatory authority has made any
finding or determination relating to the fairness of an investment in the
Securities and that no Federal, state, local or foreign governmental body or
regulatory authority has recommended or endorsed, or will recommend or endorse,
any investment in the Securities. The Purchaser, in making the decision to
acquire the Securities, has relied upon independent investigation made by it and
has not relied on any information or representations made by third
parties.
3.4 Accredited
Investor. The Purchaser is an “accredited investor” as defined
under Rule 501 of Regulation D promulgated under the Securities
Act.
3.5 No
Distribution. The Purchaser is and will be acquiring the
Securities for its own account, and not with a view to any resale or
distribution of any of the Securities in whole or in part, in violation of the
Securities Act or any applicable securities laws.
3.6 Resale. The
parties intend that the offer and sale of the Securities be exempt from
registration under the Securities Act, by virtue of Section 4(2) and/or Rule 506
of Regulation D promulgated under the Securities Act. The Purchaser
understands that the Securities purchased hereunder have not been, and may never
be, registered under the Securities Act and that the Securities cannot be sold
or transferred unless first registered under the Securities Act and such state
and other securities laws as may be applicable or in the opinion of counsel for
the Company an exemption from registration under the Securities Act is available
(and then the Securities and any securities issued upon exercise or conversion
thereof may be sold or transferred only in compliance with such exemption and
all applicable state and other securities laws).
3.7 Reliance. The
Purchaser understands that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act, and applicable state securities laws.
ARTICLE
IV
CONDITIONS
TO CLOSING OF THE PURCHASERS
The obligation of the Purchaser to
purchase the Securities at the Closing is subject to the fulfillment to the
Purchaser’s satisfaction on or prior to the Closing Date of each of the
following conditions, any of which may be waived by the Purchaser:
4.1 Representations and
Warranties Correct. The representations and warranties in
Article II hereof shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.
-12-
4.2 Performance. All
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by the Company on or prior to the Closing Date shall have been
performed or complied with by the Company in all material respects.
4.3 No
Impediments. Neither the Company nor any Purchaser shall be
subject to any order, decree or injunction of a court or administrative agency
of competent jurisdiction that prohibits the transactions contemplated hereby or
would impose any material limitation on the ability of such Purchaser to
exercise full rights of ownership of the Securities and Exchange
Shares. At the time of the Closing, the purchase of the Acquired
Shares and the Warrant to be purchased by the Purchaser and the exchange of the
shares of Series D Preferred Stock and Series E Preferred Stock for the Exchange
Shares by the Purchaser hereunder shall be legally permitted by all laws and
regulations to which the Purchaser and the Company are subject.
4.4 Other Agreements and
Documents. Company shall have executed and delivered the
following agreements and documents:
|
(a)
|
Certificates,
registered in the name of the Purchaser, representing the Acquired Shares,
the Exchange Shares and the Warrant in the form of Exhibit A attached
hereto.
|
|
|
(b)
|
The
Registration Rights Agreement in the form of Exhibit B attached hereto (the
“Registration Rights Agreement”);
|
|
|
(c)
|
The
Amended Registration Rights Agreement in the form of Exhibit F attached
hereto;
|
|
|
(d)
|
The
Amended Warrant Agreement, each substantially in the form of Exhibit G attached
hereto;
|
|
|
(e)
|
A
certificate of good standing with respect to the Company from the
Secretary of State of Delaware;
|
|
|
(f)
|
A
certificate of the Company’s Secretary, dated the Closing Date, certifying
(i) the fulfillment of the conditions specified in Sections 4.1 and
4.2 of this Agreement, (ii) the Board resolutions approving this
Agreement and the transactions contemplated hereby, (iii) the Company’s
certificate of incorporation, and (iv) other matters as the Purchaser
shall reasonably request;
|
|
|
(g)
|
A
written waiver, in form and substance satisfactory to the Purchaser, from
each person other than the Purchaser who has any of the following
rights:
|
|
(i)
|
any
currently effective right of first refusal to acquire the Acquired Shares
or the Exchange Shares; or
|
|
|
(ii)
|
any
right to an anti-dilution adjustment of securities issued by the Company
that are held by such person that will be triggered as a result of the
issuance of the Acquired Shares or the Exchange Shares;
and
|
-13-
(h) All
necessary consents or waivers, if any, from all parties to any other material
agreements to which the Company is a party or by which it is bound immediately
prior to the Closing in order that the transactions contemplated hereby may be
consummated and the business of the Company may be conducted by the Company
after the Closing without adversely affecting the Company.
4.5 Due Diligence
Investigation. No fact shall have been discovered, whether or
not reflected in the Schedules hereto, which in the Purchaser’s determination
would make the consummation of the transactions contemplated by this Agreement
not in the Purchaser’s best interests.
4.6 Certificates of
Designations. The Company shall have filed a Certificate of
Designations for each of the Series J Preferred Stock and the Series K Preferred
Stock in the form attached hereto as Exhibit D and Exhibit E,
respectively, with the Secretary of State of Delaware.
ARTICLE
V
CONDITIONS
TO CLOSING OF THE COMPANY
The Company’s obligation to sell the
Securities at the Closing is subject to the fulfillment to its satisfaction on
or prior to the Closing Date of each of the following conditions:
5.1 Representations. The
representations made by the Purchaser pursuant to Article III hereof shall
be true and correct when made and shall be true and correct on the Closing
Date.
5.2 Performance. All
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by the Purchaser on or prior to the Closing Date shall have
been performed or complied with by the Purchaser in all material
respects.
5.3 Other Agreements and
Documents. Purchaser shall have executed and delivered the
following agreements and documents:
(a) The
Registration Rights Agreement;
(b) The
Amended Registration Rights Agreement;
(c) The
Amended Warrant Agreement, each substantially in the form of Exhibit G attached
hereto;
(d) The
Waiver of Anti-Dilution Rights in the form of Exhibit C attached
hereto; and
(e) The
Purchaser shall have surrendered to the Company certificates representing the
shares of Series D Preferred Stock and Series E Preferred Stock held by the
Purchaser.
-14-
5.4 No
Impediments. Neither the Company nor any Purchaser shall be
subject to any order, decree or injunction of a court or administrative agency
of competent jurisdiction that prohibits the transactions contemplated hereby or
would impose any material limitation on the ability of such Purchaser to
exercise full rights of ownership of the Acquired Shares, the Exchange Shares or
the Warrant. At the time of the Closing, the purchase of the Acquired
Shares and the Warrant to be purchased by the Purchaser and the exchange of the
shares of Series D Preferred Stock and Series E Preferred Stock for the Exchange
Shares hereunder shall be legally permitted by all laws and regulations to which
the Purchaser and the Company are subject.
5.5 Payment of Purchase
Price. The Company shall have received the Purchase
Price.
ARTICLE
VI
INDEMNIFICATION
6.1 Indemnification by the
Company. The Company agrees to defend, indemnify and hold
harmless the Purchaser and shall reimburse the Purchaser for, from and against
each claim, loss, liability, cost and expense (including without limitation,
interest, penalties, costs of preparation and investigation, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, “Losses”) directly or indirectly relating
to, resulting from or arising out of any untrue representation,
misrepresentation, breach of warranty or non-fulfillment of any covenant,
agreement or other obligation by or of the Company contained herein or in any
certificate, document, or instrument delivered to the Purchaser pursuant
hereto.
6.2 Indemnification by the
Purchaser. The Purchaser agrees to defend, indemnify and hold
harmless the Company and shall reimburse the Company for, from and against all
Losses directly or indirectly relating to, resulting from or arising out of any
untrue representation, misrepresentation, breach of warranty or non-fulfillment
of any covenant, agreement or other obligation of the Purchaser contained herein
or in any certificate, document or instrument delivered to the Company pursuant
hereto.
6.3 Procedure. The
indemnified party shall promptly notify the indemnifying party of any claim,
demand, action or proceeding for which indemnification will be sought under
Sections 6.1 or 6.2 of this Agreement, and, if such claim, demand, action or
proceeding is a third-party claim, demand, action or proceeding, the
indemnifying party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the indemnified
party. The indemnified party shall have the right to participate, at
its own expense, with respect to any such third-party claim, demand, action or
proceeding. In connection with any such third-party claim, demand,
action or proceeding, the Purchaser and the Company shall cooperate with each
other and provide each other with access to relevant books and records in their
possession. No such third-party claim, demand, action or proceeding
shall be settled without the prior written consent of the indemnified party,
which shall not be unreasonably withheld. If a firm written offer is
made to settle any such third-party claim, demand, action or proceeding and the
indemnifying party proposes to accept such settlement and the indemnified party
refuses to consent to such settlement, then: (i) the indemnifying party
shall be excused from, and the indemnified party shall be solely responsible
for, all further defense of such third-party claim, demand, action or
proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party-claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third-party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.
-15-
ARTICLE
VII
MISCELLANEOUS
7.1 Governing
Law. This Agreement and the rights of the parties hereunder
shall be governed in all respects by the laws of the State of New York wherein
the terms of this Agreement were negotiated, without regard to the conflicts of
laws thereof.
7.2 Survival. Except
as specifically provided herein, the representations, warranties, covenants and
agreements made herein shall survive the Closing.
7.3 Amendment. This
Agreement may not be amended, discharged or terminated (or any provision hereof
waived) without the written consent of the Company and the
Purchaser.
7.4 Successors and
Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon and
enforceable by and against, the successors, assigns, heirs, executors and
administrators of the parties hereto. The Purchaser may assign its
rights hereunder, and the Company may not assign its rights or obligations
hereunder without the consent of the Purchaser or any of its successors,
assigns, heirs, executors and administrators.
7.5 Entire
Agreement. This Agreement, the Transaction Documents and the
other documents delivered pursuant hereto and simultaneously herewith constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof.
7.6 Notices,
etc. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered
either personally or by a nationally recognized courier service marked for next
business day delivery or sent in a sealed envelope by first class mail, postage
prepaid and either registered or certified, addressed as follows:
(a) if
to the Company:
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Chief Executive Officer
(b) if
to a Purchaser:
Vicis
Capital Master Fund
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇
-16-
with a
copy to:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
7.7 Delays or
Omissions. No delay or omission to exercise any right, power
or remedy accruing to any holder of any Acquired Shares upon any breach or
default of the Company under this Agreement shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence, therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement must be, made in writing and shall be effective
only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
7.8 Severability. The
invalidity of any provision or portion of a provision of this Agreement shall
not affect the validity of any other provision of this Agreement or the
remaining portion of the applicable provision. It is the desire and
intent of the parties hereto that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this Agreement
shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is
made.
7.9 Expenses. The
Company and, except as set forth in this Section 7.9, the Purchaser shall each
bear its own expenses and legal fees incurred on its behalf with respect to the
negotiation, execution and consummation of the transactions contemplated by this
Agreement and shall pay all documentary stamp or similar taxes imposed by any
authority upon the transactions contemplated by this Agreement or any
Transaction Document. The Company shall pay all reasonable, documented
third-party fees and expenses incurred by the Purchaser in connection with the
enforcement of this Agreement or any of the other Transaction Documents,
including, without limitation, all actual reasonable attorneys’ fees and
expenses.
-17-
7.10 Consent to Jurisdiction;
Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED THE STATE AND COUNTY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE TRANSACTION DOCUMENTS. EACH OF THE PARTIES TO THIS AGREEMENT
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO
SERVICE OF PROCESS BY NOTICE IN THE MANNER SPECIFIED IN SECTION 7.6 AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION SUCH
PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN SUCH
MANNER.
7.11 Titles and
Subtitles. The titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.12 Further
Assurances. The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.
7.13 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.
[SIGNATURE
PAGE FOLLOWS]
-18-
IN
WITNESS WHEREOF, the parties hereto have duly executed this Securities Purchase
and Exchange Agreement, as of the day and year first above written.
|
COMPANY:
|
|
|
|
|
| /s/ ▇▇▇ ▇▇▇▇▇▇ | |
|
▇▇▇
▇▇▇▇▇▇
|
|
|
Chief
Executive Officer
|
|
|
PURCHASER:
|
|
|
VICIS
CAPITAL MASTER FUND
|
|
|
By:
Vicis Capital LLC
|
|
| /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
|
Managing
Director
|
|
-19-
EXHIBIT
A
FORM
OF WARRANT
-20-
EXHIBIT
B
FORM
OF REGISTRATION RIGHTS AGREEMENT
-21-
EXHIBIT
C
FORM
OF WAIVER OF ANTI-DILUTION RIGHTS
-22-
EXHIBIT
D
FORM
OF CERTIFICATE OF DESIGNATION FOR
THE
SERIES J CONVERTIBLE PREFERRED STOCK
-23-
EXHIBIT
E
FORM
OF CERTIFICATE OF DESIGNATION FOR
THE
SERIES K CONVERTIBLE PREFERRED STOCK
-24-
EXHIBIT
F
FORM
OF FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENTS
-25-
EXHIBIT
F
FORM
OF FIRST AMENDMENT TO WARRANT AGREEMENTS
-26-
SCHEDULES
Schedule
2.15 – At various times the Company has failed to comply with its obligations
under Section 14 of the Securities Exchange Act of 1934, as
amended. On December 18, 2008 the Company filed a Current Report on
Form 8-K stating that its financial statements for the quarterly periods ended
March 31, 2008 and June 30, 2008 must be restated (the “Restatement
8-K”). See the Restatement 8-K for additional
information.
Schedule
2.16 – Prior to an infusion of capital from Purchaser, the Company was
experiencing severe liquidity issues.
Schedule
2.18 – ▇▇▇ ▇▇▇▇▇▇, President and Chief Executive Officer loaned the Company
$800,000.
Schedule
2.25 – Due to recent resignations of certain directors, the Company may not be
full compliance with respect to requirements relating to having an audit
committee comprised of independent directors.
-27-