the 2004 Registration Rights
Agreement and the Warrant.
"Warrants" means Common Stock Purchase Warrants, in the form of Exhibit A,
issuable to the Purchaser at Closing, which warrants shall be exercisable
immediately and have an exercise price equal to $0.98 per share of Common Stock
and a term of exercise of four (4) years.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of the
Warrants.
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ARTICLE II.
PURCHASE AND SALE
2.1
CLOSING.
(A)
CLOSING.
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS
AGREEMENT, AT THE CLOSING, THE PURCHASER SHALL PURCHASE, AND THE COMPANY SHALL
ISSUE AND SELL, TO THE PURCHASER 4,162,042 UNITS AT THE PER UNIT PURCHASE
PRICE.
THE CLOSING SHALL OCCUR AT THE OFFICES OF LATHAM & WATKINS LLP, 633 WEST
FIFTH STREET, SUITE 4000, LOS ANGELES, CALIFORNIA, 90071 ON SEPTEMBER 22, 2006,
OR ON SUCH OTHER DATE AND AT SUCH OTHER LOCATION AS THE COMPANY AND THE
PURCHASER SHALL MUTUALLY AGREE.
2.2
CLOSING DELIVERIES.
(A)
AT THE CLOSING THE COMPANY SHALL DELIVER OR CAUSE TO BE DELIVERED
TO THE PURCHASER THE FOLLOWING:
(I)
THIS AGREEMENT DULY EXECUTED BY THE COMPANY;
(II)
A CERTIFICATE EVIDENCING A NUMBER OF SHARES EQUAL TO THE
SUBSCRIPTION AMOUNT DIVIDED BY THE PER UNIT PURCHASE PRICE, REGISTERED IN THE
NAME OF PURCHASER;
(III)
A WARRANT, REGISTERED IN THE NAME OF THE PURCHASER, PURSUANT TO
WHICH PURCHASER SHALL HAVE THE RIGHT TO ACQUIRE UP TO THE NUMBER OF SHARES OF
COMMON STOCK EQUAL TO 15% OF THE NUMBER OF SHARES PURCHASED AT THE CLOSING;
(B)
AT THE CLOSING, THE PURCHASER SHALL DELIVER OR CAUSE TO BE
DELIVERED TO THE COMPANY THE FOLLOWING:
(I)
THIS AGREEMENT DULY EXECUTED BY PURCHASER; AND
(II)
THE SUBSCRIPTION AMOUNT BY WIRE TRANSFER TO THE ACCOUNT
DESIGNATED IN WRITING BY THE COMPANY.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
EXCEPT AS SET
FORTH IN THE SEC REPORTS OR UNDER THE CORRESPONDING SECTION OF THE DISCLOSURE
SCHEDULES DELIVERED CONCURRENTLY HEREWITH, THE COMPANY HEREBY MAKES THE
FOLLOWING REPRESENTATIONS AND WARRANTIES AS OF THE DATE HEREOF AND AS OF THE
CLOSING DATE TO THE PURCHASER:
(A)
SUBSIDIARIES.
THE COMPANY OWNS, DIRECTLY OR INDIRECTLY, ALL OF
THE CAPITAL STOCK OF EACH SUBSIDIARY FREE AND CLEAR OF ANY LIEN, CHARGE,
SECURITY INTEREST, ENCUMBRANCE, RIGHT OF FIRST REFUSAL OR OTHER RESTRICTION
(COLLECTIVELY, "LIENS"), AND ALL THE ISSUED AND OUTSTANDING SHARES OF CAPITAL
STOCK OF EACH SUBSIDIARY ARE VALIDLY ISSUED AND ARE FULLY PAID, NON-ASSESSABLE
AND FREE OF PREEMPTIVE AND SIMILAR RIGHTS.
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(B)
ORGANIZATION AND QUALIFICATION.
EACH OF THE COMPANY AND EACH
SUBSIDIARY IS AN ENTITY DULY INCORPORATED OR OTHERWISE ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
INCORPORATION OR ORGANIZATION (AS APPLICABLE), WITH THE REQUISITE POWER AND
AUTHORITY TO OWN AND USE ITS PROPERTIES AND ASSETS AND TO CARRY ON ITS BUSINESS
AS DESCRIBED IN THE DISCLOSURE MATERIALS.
EACH SUBSIDIARY IS A DIRECT OR
INDIRECT WHOLLY OWNED SUBSIDIARY OF THE COMPANY.
NEITHER THE COMPANY NOR ANY