EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of December
20, 2004, by and among Viewpoint Corporation, a Delaware corporation, with
headquarters located at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, (the "COMPANY"), and EagleRock Master Fund, LP, a Cayman Islands limited
partnership (the "BUYER").
WHEREAS:
A. The Company and the Buyer is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "1933 ACT"), and
Rule 506 of Regulation D ("REGULATION D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the 1933 Act;
B. The Buyer wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, 1,886,792 shares of the
Common Stock, par value $.001 per share, of the Company (the "COMMON STOCK") at
a purchase price per share of $2.65 (such shares sold pursuant to this Agreement
shall be referred to herein as the "COMMON SHARES");
C. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed to
provide certain registration rights with respect to the Common Shares under the
1933 Act and the rules and regulations promulgated thereunder, and applicable
state securities laws.
NOW, THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES.
(a) Purchase of Securities.
Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6(a) and 7(a) below, the Company shall issue
and sell to the Buyer, and the Buyer agrees to purchase from the Company on the
Closing Date (as defined below), the Common Shares (the "CLOSING"). The Closing
shall occur on the Closing Date at the offices of Akin Gump Xxxxxxx Xxxxx & Xxxx
LLP, 000 Xxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(ii) Purchase Price. The purchase price for the
Common Shares to be purchased by the Buyer at the Closing shall be $4,999,998.80
(the "PURCHASE PRICE").
(b) Closing Date. The date and time of the Closing (the
"CLOSING DATE") shall be 10:00 a.m., New York Time, on the date hereof, subject
to notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6(a) and 7(a) below (or such later date as is mutually agreed
to by the Company and the Buyer).
(c) Form of Payment. On the Closing Date, (i) the Buyer
shall pay the Purchase Price to the Company for the Common Shares to be issued
and sold to the Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the Company's written wire instructions, and (ii) the
Company shall deliver to the Buyer one or more stock certificates, free and
clear of all restrictive and other legends (except as expressly provided in
Section 2(g) hereof), evidencing the Common Shares, duly executed on behalf of
the Company and registered in the name of the Buyer.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
The Buyer represents and warrants that:
(a) No Public Sale or Distribution. The Buyer is
acquiring the Common Shares for its own account and not with a view towards, or
for resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any
of the Common Shares for any minimum or other specific term and reserves the
right to dispose of the Common Shares at any time in accordance with or pursuant
to a registration statement or an exemption under the 1933 Act.
(b) Accredited Investor Status. The Buyer is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D.
(c) Reliance on Exemptions. The Buyer understands that
the Common Shares are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and the Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
the Buyer to acquire the Common Shares.
(d) Information. The Buyer and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Common Shares which have been requested by the Buyer. The Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigations
conducted by the Buyer or its advisors, if any, or its representatives shall
modify, amend or affect the Buyer's right to rely on the Company's
representations and warranties contained herein. The Buyer understands that its
investment in the Common Shares involves a high degree of risk. The Buyer has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Common Shares.
(e) No Governmental Review. The Buyer understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Common
Shares or the fairness or suitability of the investment in the Common Shares nor
have such authorities passed upon or endorsed the merits of the offering of the
Common Shares.
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(f) Transfer or Resale. The Buyer understands that except
as provided in the Registration Rights Agreement: (i) the Common Shares have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, or (B) the Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Common Shares to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, (ii)
any sale of the Common Shares made in reliance on Rule 144 or Rule 144A
promulgated under the 1933 Act, as amended, (or a successor rule thereto)
(collectively, "RULE 144") may be made only in accordance with the terms of Rule
144 and further, if Rule 144 is not applicable, any resale of the Common Shares
under circumstances in which the seller (or the Person (as defined in Section
3(r)) through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 0000 Xxx) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other Person is under any obligation to
register the Common Shares under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. The Common
Shares may be pledged in connection with a bona fide margin account or other
loan secured by the Common Shares and such pledge of Common Shares shall not be
deemed to be a transfer, sale or assignment of the Common Shares hereunder, and
the Buyer effecting a pledge of Common Shares shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document, including, without
limitation, this Section 2(g); provided, that in order to make any sale,
transfer or assignment of Common Shares, the Buyer and its pledgee makes such
disposition in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
(g) Legends. The Buyer understands that the certificates
representing the Common Shares, except as set forth below, shall bear any legend
as required by the "blue sky" laws of any state and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF
COUNSEL ADDRESSED TO THE COMPANY, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Common Shares upon which it
is stamped, if, unless otherwise
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required by state securities laws, (i) such Common Shares are registered for
resale under the 1933 Act, (ii) in connection with a sale, assignment or other
transfer, such holder provides the Company with an opinion of counsel, in a
generally acceptable form, to the effect that such sale, assignment or transfer
of the Common Shares may be made without registration under the 1933 Act, or
(iii) such holder provides the Company with reasonable assurance that the Common
Shares can be sold, assigned or transferred pursuant to Rule 144.
(h) Validity; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of the Buyer and shall constitute the legal, valid and
binding obligations of the Buyer enforceable against the Buyer in accordance
with their respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(i) No Conflicts. The execution, delivery and performance
by the Buyer of the Transaction Documents to which it is a party and the
consummation by the Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of the Buyer
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
agreement, indenture or instrument to which the Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to the Buyer, except in
the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights
or violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Buyer to
perform its obligations hereunder.
(j) Residency. The Buyer is a resident of the Cayman
Islands.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
(a) Organization and Qualification. The Company and its
"SUBSIDIARIES" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns capital stock or holds an equity or
similar interest) are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated, to
the extent such qualification is required by law, and have the requisite
corporate power and authorization to own their properties and to carry on their
business as now being conducted. Each of the Company and its Subsidiaries 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
reasonably be expected to 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 or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
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
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obligations under the Transaction Documents (as defined below). The Company has
no Subsidiaries except as set forth on Schedule 3(a). None of the Subsidiaries
have material operations.
(b) 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, the
Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), and each
of the other agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the "TRANSACTION
DOCUMENTS") and to issue the Common Shares in accordance with the terms hereof
and thereof. 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, the issuance of the Common
Shares, have been duly authorized by the Company's board of directors (the
"BOARD OF DIRECTORS") and no further consent or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents 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 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.
(c) Issuance of Securities. The Common Shares are duly
authorized, and, upon issuance in accordance with the terms hereof, shall be
validly issued, fully paid, non-assessable, free from all taxes, liens and
charges with respect to the issue thereof. Assuming the accuracy of each of the
representations and warranties of the Buyer contained in Section 2, the issuance
by the Company of the Common Shares is exempt from registration under the 1933
Act.
(d) 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 will not (i) result in a
violation of the certificate of incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock or bylaws of
the Company or any Subsidiary 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 agreement, indenture or instrument to which the Company or
any of its Subsidiaries 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 and the rules and regulations of the Principal
Market) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(e) Consents. Except as disclosed in Schedule 3(e), 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 in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
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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 pursuant to the preceding sentence have been
obtained or effected on or prior to the Closing Date. The Company and its
Subsidiaries are unaware of any facts or circumstances which might reasonably be
expected to prevent the Company from obtaining or effecting any of the
foregoing. The Company is not in violation of the listing requirements of the
Principal Market and has no knowledge of any facts which would reasonably lead
to delisting or suspension of the Common Stock in the foreseeable future.
(f) Acknowledgment Regarding Buyer's Purchase of
Securities. The Company acknowledges and agrees that the Buyer is acting solely
in the capacity of arm's length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and
any advice given by the Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Buyer's purchase of the Common
Shares. The Company further represents to the Buyer that the Company's decision
to enter into the Transaction Documents has been based solely on (i) the
independent evaluation by the Company and its representatives and (ii) the
Buyer's representations and warranties contained in Section 2.
(g) No General Solicitation; Placement Agent's Fees.
Neither the Company, nor any of its 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) in connection with the offer or
sale of the Common Shares. The Company has not engaged any placement agent or
other agent in connection with the sale of the Common Shares.
(h) No Integrated Offering. None of the Company, its
Subsidiaries, any of their affiliates, and 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 sale of any of the Common Shares to the Buyer under the 1933
Act or cause this offering of the Common Shares to be integrated with prior
offerings by the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated. None of the Company, its
Subsidiaries, their affiliates and any Person acting on their behalf will take
any action or steps referred to in the preceding sentence that would require
registration of any of the Common Shares under the 1933 Act or cause the
offering of the Common Shares to be integrated with other offerings.
(i) Application of Takeover Protections; Rights
Agreement. The Company and its Board of Directors have taken all necessary
action in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
(as defined in Section 3(p)) or the laws of the state of its incorporation which
is or could become applicable to the Buyer as a result of the transactions
contemplated by this Agreement, including,
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without limitation, the Company's issuance of the Common Shares and the Buyer's
ownership of the Common Shares being purchased by it hereunder. The Company
specifically represents, warrants and agrees that, in accordance with Section 1
of the rights agreement, dated as of June 24, 1999, between the Company and
BankBoston, N.A., as amended (the "RIGHTS PLAN"), the Buyer is not intended to
be or will not be deemed to be an Acquiring Person within the meaning of the
Rights Plan solely because of the acquisition of the Common Shares pursuant to
this Agreement, and the acquisition of the Common Shares pursuant to this
Agreement shall not, under any circumstances, trigger a Distribution Date within
the meaning of the Rights Plan.
(j) SEC Documents; Financial Statements.
(i) Since December 31, 2001, 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
Securities Exchange Act of 1934, as amended (the "1934 ACT") (all of the
foregoing filed prior to the date hereof, or in connection with any Closing
subsequent to the date hereof, filed prior to the date of such Closing, and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
"SEC DOCUMENTS"). The Company has delivered to the Buyer or its representatives
true, correct and complete copies of the SEC Documents not available on the
XXXXX system. Except as disclosed in Schedule 3(j), as of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the 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 disclosed in Schedule 3(j), as
of their respective dates, the financial statements of the Company included in
the 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 disclosed in Schedule 3(j), 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).
(ii) The Chief Executive Officer and the Chief
Financial Officer of the Company have signed, and the Company has furnished to
the SEC, all certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002. Such certifications contain no qualifications or
exceptions to the matters certified therein and have not been modified or
withdrawn; and neither the Company nor any of its officers has received notice
from any governmental entity questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications.
(k) Absence of Certain Changes. Except as disclosed in
Schedule 3(l), since June 30, 2004, there has been no material adverse change in
the business, properties, operations,
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condition (financial or otherwise), or results of operations of the Company or
its Subsidiaries. Since December 31, 2003, the Company has not (i) declared or
paid any dividends, (ii) sold any assets, individually or in the aggregate, in
excess of $100,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of $1,300,000.
The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge that its creditors intend
to initiate involuntary bankruptcy proceedings or any actual knowledge of any
fact which would reasonably lead a creditor to do so. The Company is not as of
the date hereof, and after giving effect to the transactions contemplated hereby
to occur at the Closing, will not be insolvent.
(l) No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws on a
registration statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly
announced.
(m) Conduct of Business; Regulatory Permits. Neither the
Company nor its Subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation, any Certificate of Designations, Preferences
and Rights of any outstanding series of preferred stock of the Company or Bylaws
or their organizational charter or bylaws, respectively. Except as disclosed in
Schedule 3(m), neither the Company nor any of its Subsidiaries is in violation
of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or its Subsidiaries, and neither the Company nor any
of its Subsidiaries will conduct its business in violation of any of the
foregoing, except for possible violations which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any
of the rules, regulations or requirements of the Nasdaq National Market (or in
the event that the Company is no longer listed with the Nasdaq National Market,
the market or exchange on which the Common Stock is then listed and traded,
which only may be The New York Stock Exchange, Inc., the American Stock Exchange
or The Nasdaq SmallCap Market) (any such market being the "PRINCIPAL MARKET")
and has no knowledge of any facts or circumstances which would reasonably lead
to delisting or suspension of the Common Stock by the Principal Market in the
foreseeable future. Except as disclosed on Schedule 3(m), since December 31,
2002, (i) the Common Stock has been designated for quotation or listed on the
Principal Market, (ii) trading in the Common Stock has not been suspended by the
SEC or the Principal Market and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension
or delisting of the Common Stock from the Principal Market. The issuance and
sale of the Common Shares under this Agreement does not contravene the rules and
regulations of the Nasdaq National Market. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such certificates,
authorizations or permits would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.
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(n) Foreign Corrupt Practices. Neither the Company, nor
any of its Subsidiaries, nor any director, officer, agent, employee or other
Person acting on behalf of the Company or any of its Subsidiaries has, in the
course of its actions for, or on behalf of, the Company (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.
(o) Transactions With Affiliates. Except as set forth on
Schedule 3(o) and in the SEC Documents filed at least ten days prior to the date
hereof and other than the grant of stock options disclosed on Schedule 3(p),
none of the officers, directors or employees of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries (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.
(p) Equity Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of (x) 75,000,000 shares of
Common Stock, of which as of the date hereof, 54,785,067 are issued, and
54,625,067 are outstanding and 160,000 of which are treasury shares, 11,356,910
shares are reserved for issuance pursuant to the Company's stock option and
purchase plans and 783,830 shares are reserved for issuance pursuant to
securities exercisable or exchangeable for, or convertible into, shares of
Common Stock, and (y) 5,000,000 shares of preferred stock, of which as of the
date hereof, none are issued and outstanding. All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(q): (i) no shares of the
Company's capital stock are subject to preemptive rights or any other similar
rights or 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 any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries 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 any of its Subsidiaries; (iii) there
are no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company; (iv) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except the Registration Rights Agreement); (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of
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its Subsidiaries; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Common Shares; (vii) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement; and
(viii) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents (as defined herein) but not so
disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company's or its Subsidiaries' respective businesses and which,
individually or in the aggregate, do not or would not reasonably be expected to
have a Material Adverse Effect. The Company has furnished to the Buyer true,
correct and complete copies of the Company's Certificate of Incorporation, as
amended and as in effect on the date hereof (the "CERTIFICATE OF
INCORPORATION"), and the Company's Bylaws, as amended and as in effect on the
date hereof (the "BYLAWS"), and the terms of all securities convertible into, or
exercisable or exchangeable for, Common Stock.
(q) Indebtedness and Other Contracts. Except as disclosed
in Schedule 3(q), neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), or (ii) is 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 reasonably be
expected to result, individually or in the aggregate, in a Material Adverse
Effect. Schedule 3(q) provides a detailed description of the material terms of
any such outstanding Indebtedness. For purposes of this Agreement: (x)
"INDEBTEDNESS" of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) 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), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) 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, (E) 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), (F) 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, (G) all
indebtedness referred to in clauses (A) through (F) 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 (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
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
10
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(r) Absence of Litigation. There is no action, suit,
proceeding, inquiry or investigation before or by the Principal Market, 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 (other than industry-wide actions or suits that are not directed against
the Company and that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect), the Common Stock or any of the
Company's Subsidiaries or any of the Company's or the Company's Subsidiaries'
officers or directors in their capacities as such, except as set forth in
Schedule 3(r).
(s) Insurance. The Company and each of its Subsidiaries
are 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 its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such Subsidiary has any 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.
(t) Employee Relations. (i) Neither the Company nor any
of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. The Company and its Subsidiaries believe that their
relations with their employees are good. No executive officer of the Company (as
defined in Rule 501(f) of the 0000 Xxx) 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 expected to be, 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 or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.
(ii) The Company and its Subsidiaries are 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.
(u) Title. The Company and its Subsidiaries have good and
marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in Schedule 3(v) 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 and
any of its Subsidiaries. Neither the Company nor any of its Subsidiaries owns
any real property. Any real property and facilities held under lease by the
Company and any of its Subsidiaries are
11
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 and its Subsidiaries.
(v) Intellectual Property Rights. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights
("INTELLECTUAL PROPERTY RIGHTS") necessary to conduct their respective
businesses as now conducted, other than those the absence of which would not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 3(v), none of the Company's Intellectual Property Rights have expired
or terminated, or are expected to expire or terminate within three years from
the date of this Agreement. The Company does not have any knowledge of any
infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others. Except as set forth in Schedule 3(v), there is no claim, action or
proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or its Subsidiaries regarding its Intellectual
Property Rights. 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 and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties.
(w) Environmental Laws. The Company and its Subsidiaries
(i) are in compliance with any and all Environmental Laws (as hereinafter
defined), (ii) have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval where, in each of the foregoing clauses (i), (ii)
and (iii), 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.
(x) Subsidiary Rights. The Company or one of its
Subsidiaries has the unrestricted right to vote, and (subject to limitations
imposed by applicable law) to receive dividends and distributions on, all
capital securities of its material Subsidiaries as owned by the Company or such
Subsidiary.
(y) Tax Status. The Company and each of its Subsidiaries
(i) has made or filed all federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such
12
returns, reports and declarations, except those being contested in good faith or
that are not material and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. 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.
(z) Internal Accounting Controls. The Company and each of
its Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference.
(aa) Material Non-Public Information. The Company has not
provided, and will not provide, to the Buyer any material non-public information
other than information related to the transactions contemplated by this
Agreement and the Registration Rights Agreement, all of which information
related to the transactions contemplated hereby shall be disclosed by the
Company pursuant to Section 4(i) hereof.
(bb) Pending Transaction. The Company intends to
consummate a transaction with Unicast Communications Corp. ("Unicast") on or
about January 3, 2005, pursuant to which the Company will acquire all of the
outstanding capital stock of Unicast (the "Unicast Transaction"). It is the
Company's intention and, to the Company's knowledge, Unicast's intention, to
consummate the Unicast Transaction in a timely manner. Nothing has come to the
Company's attention that could either delay the Unicast Transaction or cause the
Unicast Transaction not to be consummated.
4. COVENANTS.
(a) Reasonable Best Efforts. Each party shall use its
reasonable best efforts timely to satisfy each of the conditions to be satisfied
by it as provided in Sections 6 and 7 of this Agreement.
(b) Form D and Blue Sky. The Company agrees to file a
Form D with respect to the Common Shares as required under Regulation D and to
provide a copy thereof to the Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Common Shares for sale to the Buyer at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Buyer on or prior to the
Closing Date. The Company shall make all filings and reports relating to the
offer and sale of the Common Shares required under applicable securities
13
or "Blue Sky" laws of the states of the United States following the Closing
Date.
(c) Reporting Status. Until the date on which the
Investors (as defined in the Registration Rights Agreement) shall have sold all
the Common Shares, or, if earlier, until such time as the Common Shares can be
sold without restriction pursuant to Rule 144(k) promulgated under the 1933 Act
(the "REPORTING PERIOD"), the Company shall file all reports required to be
filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate
its status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would otherwise permit such
termination.
(d) Use of Proceeds. The Company will use the proceeds
from the sale of the Common Shares for working capital purposes and not for the
repayment of any outstanding Indebtedness of the Company.
(e) Financial Information. The Company agrees to send the
following to each Investor during the Reporting Period (i) unless the following
are filed with the SEC through XXXXX and are available to the public through the
XXXXX system, within three (3) Business Days after the filing thereof with the
SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form
10-Q, any Current Reports on Form 8-K and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same
day as the release thereof, facsimile copies of all press releases issued by the
Company or any of its Subsidiaries, and (iii) copies of any notices and other
information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders.
(f) Listing. The Company shall promptly secure the
listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) upon each national securities exchange and automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all Registrable Securities from
time to time issuable under the terms of the Transaction Documents. The Company
shall maintain the Common Stock's authorization for quotation on the Nasdaq
National Market or obtain a listing on The New York Stock Exchange, Inc. (the
"NYSE") or the American Stock Exchange (the "AMEX"). If the Company obtains a
listing of the Common Stock on the NYSE or the AMEX and terminates its listing
on the Nasdaq National Market, references in the Transaction Documents to the
"Principal Market" shall mean, from and after the date of the NYSE or AMEX
listing, the NYSE or AMEX, as applicable. Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).
(g) Fees. Subject to Section 8 below, at the Closing, the
Company shall pay a nonaccountable expense allowance of $15,000 to the Buyer or
its designee(s), which amount shall be withheld by the Buyer from its Purchase
Price at the Closing. The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or broker's commissions (other
than for Persons engaged by the Buyer) relating to or arising out of the
transactions contemplated hereby, including, without limitation, any fees or
commissions
14
payable to any agent. The Company shall pay, and hold the Buyer harmless
against, any liability, loss or reasonable expense (including, without
limitation, reasonable attorney's fees and out-of-pocket expenses) arising in
connection with claims relating to any such payment. Except as otherwise set
forth in this Agreement or in the Registration Rights Agreement, each party to
this Agreement shall bear its own expenses in connection with the sale of the
Common Shares to the Buyer.
(h) Pledge of Securities. The Company acknowledges and
agrees that the Common Shares may be pledged by an Investor (as defined in the
Registration Rights Agreement) in connection with a bona fide margin agreement
or other loan or financing arrangement that is secured by the Common Shares. The
pledge of Common Shares shall not be deemed to be a transfer, sale or assignment
of the Common Shares hereunder, and no Investor effecting a pledge of Common
Shares shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document, including, without limitation, Section 2(f) of this
Agreement; provided that an Investor and its pledgee shall be required to comply
with the provisions of Section 2(f) hereof in order to effect a sale, transfer
or assignment of Common Shares to such pledgee. The Company hereby agrees to
execute and deliver such documentation as a pledgee of the Common Shares may
reasonably request in connection with a pledge of the Common Shares to such
pledgee by an Investor.
(i) Disclosure of Transactions and Other Material
Information. On or before 8:30 a.m., New York Time, on the first Trading Day
following the Closing Date, the Company shall issue a press release describing
the terms of the transactions contemplated by the Transaction Documents, and on
or before noon, New York Time, on the first Trading Day following the Closing
Date, the Company shall file a Current Report on Form 8-K describing the terms
of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act, and attaching the material Transaction Documents
(including, without limitation, this Agreement and the Registration Rights
Agreement) as exhibits to such filing (including all attachments, the "8-K
FILING", and the description and attachments, the "8-K MATERIALS"). From and
after the filing of the 8-K Filing with the SEC, the Buyer shall not be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of its respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide the Buyer with any
material nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the SEC without the express
written consent of the Buyer. In the event of a breach of the foregoing covenant
by the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees and agents, in addition to any other remedy
provided herein or in the Transaction Documents, the Buyer shall have the right
to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of the 8-K Materials without the prior approval by
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, shareholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor the Buyer shall issue any press releases
or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Buyer,
15
to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal
Market (provided that in the case of clause (i) the Buyer shall be consulted by
the Company (although the consent of the Buyer shall not be required) in
connection with any such press release or other public disclosure prior to its
release).
(j) Certificate of Qualification as a Foreign
Corporation. The Company shall, within five (5) Business Days following the
Closing Date, deliver to the Buyer a certificate evidencing the Company's
qualification as a foreign corporation and good standing issued by the Secretary
of State of the State of New York as of a date within 10 days of the Closing
Date.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name
of the Buyer or its respective nominee(s), upon transfer or resale of the Common
Shares in the form of Exhibit B attached hereto (the "IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS"). The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop
transfer instructions to give effect to Section 2(g) hereof, will be given by
the Company to its transfer agent, and that the Common Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents. If the Buyer
effects a sale, assignment or transfer of the Common Shares in accordance with
Section 2(g), the Company shall permit the transfer and shall promptly instruct
its transfer agent to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by the Buyer to effect such sale, transfer or assignment. In the event
that such sale, assignment or transfer involves Common Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to Rule
144, the transfer agent shall issue such Common Shares to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend (subject, in the
case of a sale under Rule 144, to the Company's receipt of the opinion of
Buyer's counsel referred to in Section 2(f)(i)(B)). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Buyer. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5 will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Section 5, that the Buyer shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
(a) Closing Date. The obligation of the Company hereunder
to issue and sell the Common Shares to the Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the
16
Company's sole benefit and may be waived by the Company at any time in its sole
discretion by providing the Buyer with prior written notice thereof:
(i) The Buyer shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Company.
(ii) The Buyer shall have delivered to the
Company the Purchase Price (less, in the the amounts withheld pursuant to
Section 4(g)) for the Common Shares being purchased by the Buyer at the Closing
by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
(iii) The representations and warranties of the
Buyer shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and the Buyer
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Buyer at or prior to the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
(a) Closing Date. The obligation of the Buyer hereunder
to purchase the Common Shares at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Buyer's sole benefit and may be waived by the Buyer
at any time in its sole discretion by providing the Company with prior written
notice thereof:
(i) The Company shall have executed and
delivered to the Buyer (i) each of the Transaction Documents and (ii) the Common
Shares (in such amounts as the Buyer shall request) being purchased by the Buyer
at the Closing pursuant to this Agreement.
(ii) The Buyer shall have received the opinion of
Xxxxx X'Xxxxxxxx, the Company's General Counsel, dated as of the Closing Date,
in substantially the form of Exhibit C attached hereto.
(iii) The Company shall have delivered to the
Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of
Exhibit B attached hereto, which instructions shall have been delivered to and
acknowledged in writing by the Company's transfer agent.
(iv) The Company shall have delivered to the
Buyer a certificate evidencing the incorporation and good standing of the
Company issued by the Secretary of State of the State of Delaware as of a date
within 10 days of the Closing Date.
(v) The Company shall have delivered to the
Buyer a letter to the Company issued by the New York State Department of
Taxation and Finance evidencing the absence of tax liens against the Company as
of a date within 10 days of the Closing Date.
(vi) The Company shall have delivered to the
Buyer a certified copy of
17
the Certificate of Incorporation as certified by the Secretary of State of the
State of Delaware within 10 days of the Closing Date.
(vii) The Company shall have delivered to the
Buyer a certificate, executed by the Secretary of the Company and dated as of
the Closing Date, as to (i) the resolutions consistent with Section 3(b) as
adopted by the Company's Board of Directors in a form reasonably acceptable to
the Buyer (the "RESOLUTIONS"), (ii) the Certificate of Incorporation and (iii)
the Bylaws, each as in effect at the Closing, in the form attached hereto as
Exhibit D.
(viii) The representations and warranties of the
Company shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date. The Buyer shall have received a certificate, executed by the Chief
Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by the Buyer
in the form attached hereto as Exhibit E.
(ix) The Company shall have delivered to the
Buyer a letter from the Company's transfer agent certifying the number of shares
of Common Stock outstanding as of a date within five days of the Closing Date.
(x) The Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from
trading on the Principal Market nor shall suspension by the SEC or the Principal
Market have been threatened, as of the Closing Date, either (A) in writing by
the SEC or the Principal Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Market.
(xi) The Company shall have obtained all
governmental, regulatory or third party consents and approvals, if any,
necessary for the sale of the Common Shares.
(xii) The Company shall have delivered to the
Buyer such other documents relating to the transactions contemplated by this
Agreement as the Buyer or its counsel may reasonably request.
8. TERMINATION. In the event that the Closing shall not have
occurred with respect to a Buyer on or before five (5) Business Days from the
date hereof due to the Company's or the Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, this if this Agreement is terminated pursuant to
this Section 8, the Company shall remain obligated to reimburse the
non-breaching Buyer for the expenses described in Section
18
4(g) above.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts. This Agreement may be executed in two
or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement
supersedes all other prior oral or written agreements between the Buyer, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with
19
respect to such matters. No provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the Buyer. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Common Shares then outstanding. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents, holders of Common Shares. The
Company has not, directly or indirectly, made any agreements with the Buyer
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents.
(f) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with an overnight courier service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Viewpoint Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
With a copy to the Chief Financial Officer
If to the Transfer Agent:
Equiserve Trust Company
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
If to the Buyer, to its address and facsimile number set forth on the Schedule
of Buyer, with copies to the Buyer's representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by
20
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Common Shares. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the holders of Common Shares representing
at least two-thirds of the Common Shares then outstanding, including by merger
or consolidation, except pursuant to a change of control. The Buyer may assign
some or all of its rights hereunder without the consent of the Company, in which
event such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights.
(h) No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
(i) Survival. Unless this Agreement is terminated under
Section 8, the representations and warranties of the Company and the Buyer
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9 shall survive the Closing.
(j) Further Assurances. Each party shall do and perform,
or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) Indemnification. In consideration of the Buyer's
execution and delivery of the Transaction Documents and acquiring the Common
Shares thereunder and in addition to all of the Company's other obligations
under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless the Buyer and each other holder of the Common Shares who is a
successor or assignee pursuant to Section 9(g) and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "INDEMNITEES")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and reasonable expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action
21
brought on behalf of the Company) and arising out of or resulting from (i) the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(ii) any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Common Shares, (iii) any
disclosure made by the Buyer pursuant to Section 4(i), or (iv) the status of the
Buyer or holder of the Common Shares as an investor in the Company. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 9(k)
shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.
(l) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
(m) Remedies. The Buyer and each holder of the Common
Shares shall have all rights and remedies set forth in the Transaction Documents
and all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders
have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
Furthermore, the Company recognizes that in the event that it fails to perform,
observe, or discharge any or all of its obligations under this Agreement, any
remedy at law may prove to be inadequate relief to the Buyer. The Company
therefore agrees that the Buyer shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Payment Set Aside. To the extent that the Company
makes a payment or payments to the Buyer hereunder or pursuant to any of the
other Transaction Documents or the Buyer enforces or exercises its rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
[SIGNATURE PAGE FOLLOWS]
22
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
COMPANY: BUYER:
VIEWPOINT CORPORATION EAGLEROCK MASTER FUND, LP
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer Title: Authorized Signatory
SCHEDULE OF BUYERS
(1) (2) (3) (4)
COMMON LEGAL REPRESENTATIVE'S
BUYER ADDRESS AND FACSIMILE NUMBER SHARES ADDRESS AND FACSIMILE NUMBER
--------------------------------------------------------------------------------------------------------------
EagleRock Master Fund, c/o EagleRock Capital Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
LP, a Cayman Islands Management LLC 000 Xxxxxxx Xxxxxx
limited partnership 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000 Attention: Xxxxxxx Older, Esq.
Attention: Xxxxx Xxxxxxxx 1,886,792 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000
EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Irrevocable Transfer Agent Instructions
Exhibit C Form of Company General Counsel Opinion
Exhibit D Form of Secretary's Certificate
Exhibit E Form of Officer's Certificate
SCHEDULES
Schedule 3(a) Subsidiaries
Schedule 3(e) Consents
Schedule 3(j) SEC Documents; Financial Statements
Schedule 3(k) Absence of Certain Changes
Schedule 3(m) Conduct of Business; Regulatory Permits
Schedule 3(o) Transactions with Affiliates
Schedule 3(p) Capitalization
Schedule 3(q) Indebtedness and Other Contracts
Schedule 3(r) Litigation
Schedule 3(u) Title
Schedule 3(v) Intellectual Property
