EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
Securities Purchase Agreement (the "Agreement"), dated as of January 27,
2000, by and among Instant Video Technologies, Inc., a Delaware corporation (the
"Company"), and each of the purchasers set forth on the signature pages hereto
(individually, a "Purchaser" and, collectively, the "Purchasers").
WHEREAS, the Company proposes to issue and sell to the Purchasers for cash,
or in exchange for cancellation or conversion of outstanding indebtedness, an
aggregate of 5,940,125 shares (individually, a "Share" and, collectively, the
"Shares") of common stock, par value $0.00001 per share, of the Company (the
"Common Stock") and warrants to purchase shares of Common Stock (as further
described below); and
WHEREAS, the Company, among other things, has agreed to provide certain
registration rights under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Shares and the warrants that are being
issued to the Purchasers pursuant to this Agreement.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants set forth herein, the parties hereto agree as follows:
1. Sale of Stock and Delivery of Warrants; Closing.
(a) Purchase and Sale. Subject to the terms and conditions hereof, the
Company shall issue and sell to each of the Purchasers, and each Purchaser,
severally, shall purchase from the Company, the number of Shares set forth
opposite such Purchaser's name on Schedule 1 hereto at a purchase price of $4.00
per Share for an aggregate purchase price set forth on such Schedule 1. The
Company shall deliver to each Purchaser warrants to purchase, at an exercise
price of $5.00 per share, such number of shares of Common Stock set forth
opposite such Purchaser's name on Schedule 1 hereto (the "Warrants"). The shares
of Common Stock issued or issuable upon exercise of the Warrants are hereinafter
referred to as the "Warrant Shares." The Warrants shall be in the form of
Exhibit A hereto.
(b) First Closing. The first closing of the purchase and sale of the
Shares and Warrants (the "First Closing") shall take place at the offices of
Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M. on January
27, 2000, or such later date on which the conditions set forth in Sections 7(a)
and 8(a) hereof shall have been satisfied or waived; provided, however, that the
First Closing, in no event, shall occur later than January 31, 2000. The date of
the First Closing shall be hereinafter referred to as the "First Closing Date".
(c) Second Closing. The Second Closing of the purchase and sale of the
Shares and Warrants (the "Second Closing") shall take place at the offices of
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Securities Purchase Agreement
Company, on or before January 31, 2000, or such earlier date on which the
conditions set forth in Section 7(b) and 8(b) hereof shall have been satisfied
or waived, provided that:
(i) Purchasers participating in the Second Closing shall only
include (A) Xxxxx-Xxxx ("Xxxxx-Xxxx"), (B) Ravinia Capital Ventures, LLC (which
may only participate in the Second Closing in its corporate capacity)
("Ravinia"); (C) those note holders listed on Schedule 3(y) attached hereto (the
"Second Closing Note Holders"), and (D) those Purchaser listed on Schedule 1
attached hereto who did not participate in the First Closing; notwithstanding
the foregoing, Purchasers listed on Schedule 1 may only participate in the
Second Closing in the amount set forth next to each such Purchaser's names on
Schedule 1;
(ii) the aggregate investment made by the Purchasers
participating in the Second Closing shall not exceed, in the case of (A)
Xxxxx-Xxxx, $4,000,000, (B) Ravinia, $3,000,000, (C) the Second Closing Note
Holders, $765,000 and (D) any other Purchaser listed on Schedule 1 attached
hereto who did not participate in the First Closing, $1,025,500; provided,
however, Xxxxx-Xxxx may only participate in the Second Closing if its aggregate
investment is at least $2,000,000, and provided, further, Ravinia may only
participate in the Second Closing if its aggregate investment is at least
$2,000,000; and
(iii) Purchasers participating in the Second Closing shall become
a party to and agree to be bound by the provisions of this Agreement and each
other Transaction Documents (as defined below).
The date of the Second Closing shall be hereinafter referred to
as the "Second Closing Date", the First Closing Date and the Second Closing Date
are each referred to individually as a "Closing Date" and, collectively as the
"Closing Dates".
(d) Delivery. At each Closing, the Company shall deliver to each
Purchaser a stock certificate representing the Shares purchased by such
Purchaser and the Warrants to be delivered to such Purchaser, against payment of
the purchase price therefor by check, payable to the order of the Company, by
wire transfer of immediately available funds to the Company in accordance with
the Company's wiring instructions, or by cancellation or conversion of
indebtedness, or some combination thereof. In addition, the Company shall
deliver to each Purchaser such other agreements, documents, certificates and
opinions as specified in this Agreement or as may reasonably be requested by
such Purchaser.
2. Representations and Warranties of Purchasers. Each of the Purchasers
represents and warrants, severally, to the Company as follows:
(a) Authorization. The Purchaser has the full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of, and the performance under, this Agreement by the
Purchaser
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will not conflict with any rule, regulation, judgment or agreement applicable to
the Purchaser.
(b) Investment Purpose. The Purchaser is purchasing the Shares and
acquiring the Warrants, and will purchase the Warrant Shares (together with the
Shares and the Warrants, the "Securities"), for investment purposes and not with
a present view to, or for sale in connection with, a distribution thereof within
the meaning of the Securities Act. The Purchaser understands that it must bear
the economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities or
blue sky laws or an exemption from such registration is available.
Notwithstanding anything in this Section 2(b) to the contrary, the Purchaser, by
making the representations herein, does not agree to hold the Securities for any
minimum or other specific term and reserves the right to dispose of such
Securities at any time in accordance with or pursuant to registration or an
exemption therefrom under the Securities Act and any applicable state securities
or blue sky laws.
(c) Reliance On Exemptions. The Purchaser understands that the
Securities are being offered and sold in reliance upon specific exemptions from
the registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Securities.
(d) Information. The Purchaser has been furnished all documents
relating to the business, finances and operations of the Company which the
Purchaser requested from the Company. The Purchaser has been afforded the
opportunity to ask questions of the Company's representatives concerning the
Company in making the decision to purchase the Shares and acquire the Warrants,
and such questions have been answered to its satisfaction. However, neither the
foregoing nor any other due diligence investigation conducted by the Purchaser
or on its behalf shall limit, modify or affect the representations and
warranties of the Company in Section 3 of this Agreement or the right of the
Purchaser to rely thereon.
(e) Governmental Review. The Purchaser understands that no Federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Securities.
(f) Purchaser's Qualifications. The Purchaser is an "accredited
investor" as defined in Rule 501 under Regulation D of the Securities Act
("Regulation D"). The Purchaser is capable of evaluating the merits and risks of
an investment in the Securities.
(g) Restrictions on Transfer. The Purchaser understands that it may
not transfer any of the Securities unless such Securities are registered under
the Securities Act or unless an exemption from registration and qualification
requirements are available under the Securities Act and applicable state
securities laws. The Purchaser understands
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that certificates representing the Shares, the Warrants, the Warrant Shares and
shares of Common Stock issued pursuant to Section 4 of this Agreement shall bear
the following, or a substantially similar, legend until such time as they have
been registered under the Securities Act or otherwise may be sold under Rule 144
under the Securities Act:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.
(h) Residence. The Purchaser is a resident of the jurisdiction set
forth under its name on the signature pages hereto.
(i) Investment Experience. The Purchaser has experience as an investor
in securities of Internet - related and technology companies and acknowledges
that it is able to fend for itself, can bear the economic risk of its
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. If other than an individual, the Purchaser also represents it
has not been organized for the purpose of acquiring the Securities.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Purchaser that, except as set forth on a Schedule of
Exceptions attached hereto as follows:
(a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all necessary corporate power and authority to own or lease
its assets and to carry on its business as now being conducted and presently
proposed to be conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which its
ownership or leasing of assets, or the conduct of its business, makes such
qualification necessary, except where the failure to be so qualified would not
result in a Material Adverse Change (as defined in Section 3(h) hereof). Except
for any subsidiaries listed on Schedule 3(b) hereto, the Company has no
subsidiaries and no equity interests in any corporation, partnership, joint
venture or other entity.
(b) Subsidiaries. Schedule 3(b) hereto sets forth each subsidiary of
the Company, showing the jurisdiction of its incorporation or organization. Each
subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of its incorporation and has the requisite
corporate power to own, lease and operate its properties and assets and to
conduct its business as it is now being conducted. Each subsidiary is duly
qualified to do business as a foreign corporation
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and is in good standing in each jurisdiction in which its ownership or leasing
of assets, or the conduct of its business, makes such qualification necessary,
except where the failure to be so qualified would not result in a Material
Adverse Change. All of the outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned by the Company.
(c) Requisite Power and Authorization. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, the
Registration Rights Agreement attached hereto as Exhibit B (the "Registration
Rights Agreement") and the Warrants (collectively, the "Transaction Documents")
and to perform its obligations under each of the Transaction Documents,
including without limitation the issuance of the Securities hereunder. All
corporate action of the Company required for the execution and delivery of the
Transaction Documents and the issuance and delivery of the Securities has been
duly and effectively taken, and, except as set forth on Schedule 3(g), no
further actions, authorizations or consents, including, without limitation, any
consents of the stockholders of the Company, are required. Each of the
Transaction Documents constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditor's rights,
(ii) as limited by general principles of equity that restrict the availability
of equitable remedies and (iii) as the indemnity provisions of the Registration
Rights Agreement may be limited by law. The Shares, when issued, delivered and
paid for in compliance with the provisions of this Agreement, will be validly
issued, fully paid and non-assessable, free and clear of any and all liens,
charges, claims or encumbrances. The Warrant Shares, if and when issued,
delivered and paid for in compliance with the provisions of this Agreement and
the Warrants will be validly issued, fully paid and non-assessable, free and
clear of any and all liens, charges, claims or encumbrances. The Company has
reserved a sufficient number of shares of Common Stock necessary for issuance of
the Shares and the Warrant Shares.
(d) SEC Documents. Prior to the date hereof, the Company, voluntarily
filed with the Securities and Exchange Commission (the "SEC") all reports,
statements, schedules and other documents to its knowledge required to be filed
by reporting companies pursuant to the Securities Act and the Exchange Act.
Since December 31, 1998, all such reports, statements, schedules and other
documents (collectively, the "SEC Documents") required to be filed by reporting
companies were filed by the Company. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, 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 light of the
circumstances under which they were made, not misleading. As of their respective
dates, the financial statements included in the SEC Documents (the "Financial
Statements") 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 (i) as may be indicated
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in the notes to the Financial Statements or (ii) in the case of the unaudited
interim statements, as permitted by Form 10-Q under the Exchange Act, the
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present in all material
respects the financial position of the Company and its subsidiaries 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 recurring
year-end adjustments and footnotes). Except as set forth in the Financial
Statements filed with the SEC prior to the date hereof or as set forth on
Schedule 3(d), neither the Company nor any of its subsidiaries has any
liabilities, whether absolute, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such Financial Statements and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in such Financial
Statements, which liabilities and obligations referred to in clauses (i) and
(ii), individually or in the aggregate, are not material to the financial
condition or operating results of the Company or any of its subsidiaries.
(e) Capitalization. The capitalization of the Company as of the date
hereof is set forth on Schedule 3(e), including (i) the authorized capital
stock, (ii) the number of shares issued and outstanding, (iii) the number of
shares reserved for issuance pursuant to stock option, employee benefit or other
plans, (iv) the number of shares reserved for issuance or issuable pursuant to
securities exercisable for, or convertible into or exchangeable for, any shares
of Common Stock, (v) the number of shares of Common Stock reserved for issuance
with respect to the sale of the Shares, and (vi) the number of shares of Common
Stock reserved for issuance upon exercise of the Warrants. All outstanding
shares of capital stock have been duly authorized and validly issued and are
fully paid and non-assessable. Except as set forth on Schedule 3(e), the Company
has (i) no outstanding securities convertible into or exchangeable for any
shares of capital stock of the Company, (ii) no rights, options, warrants, calls
or other agreements or commitments of any nature whatsoever relating to the
purchase or other acquisition of any shares of its capital stock or securities
convertible into or exchangeable for any shares of its capital stock or (iii) no
shares of its capital stock reserved for issuance. Except as set forth on
Schedule 3(e), the Company is not a party to, and it has no knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of the Company.
(f) No Conflicts. Neither the execution, delivery and performance by
the Company of this Agreement, the other Transaction Documents, and all
instruments and documents to be delivered by the Company, nor the consummation
of the transactions contemplated by any of the foregoing (i) has constituted or
resulted in, or will constitute or result in, a default under or breach or
violation of any term or provision of the organizational documents or bylaws of
the Company or material contracts or instruments to which the Company or any of
its subsidiaries is a party or Federal, state or local laws, rules or
regulations, writs, orders, judgments or decrees which are applicable to the
Company, any of its subsidiaries or their assets, (ii) will result in the
acceleration or termination of any rights under any material contract or
instrument to which the
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Company or any of its subsidiaries is a party or (iii) will result in the
creation or imposition of any liens, charges or encumbrances upon any assets of
the Company or any of its subsidiaries.
(g) Consents. Except as set forth on Schedule 3(g), no approval,
consent, order, authorization or other action by, or notice to or filing with,
any governmental authority or regulatory agency or any other person or entity,
and no lapse of a waiting period, is required in connection with the execution,
delivery or performance by the Company of this Agreement, any other Transaction
Document, the issuance and delivery of any of the Securities or any other
transactions contemplated by any of the Transaction Documents except for (i) the
filing of a Form D with the SEC, (ii) filings required under applicable state
"blue sky" laws (which shall be duly filed) and (iii) the filing of a
registration statement or statements pursuant to the Registration Rights
Agreement.
(h) No Material Adverse Change. Since December 31, 1998, the business
of the Company and each subsidiary has been operated in the ordinary course and
substantially consistent with past practice and there has not been any material
adverse change in the business, assets, financial condition, results of
operations, affairs or prospects of the Company or any of its subsidiaries (a
"Material Adverse Change"). Since December 31, 1998, neither the Company nor its
subsidiaries has (i) paid any obligation or liability or discharged or satisfied
any liens or encumbrances other than in the ordinary course of business; (ii)
declared or made any payment or distribution to its stockholders or purchased or
redeemed any of its shares of capital stock or other securities; (iii)
mortgaged, pledged or subjected to any lien, charge or other encumbrance any of
its assets, tangible or intangible, except in the ordinary course of business;
(iv) sold, transferred or leased any of its assets except for fair value in the
ordinary course of business; (v) increased the annual compensation payable to
any of its officers or other employees, consultants or representatives by
greater than $25,000; (vi) cancelled or compromised any debt or claim, or waived
or released any right of material value; (vii) entered into any transaction
other than in the ordinary course of business; (viii) issued or sold any shares
of capital stock or other securities or granted any options, warrants or other
purchase rights with respect thereto that are not disclosed on Schedule 3(e); or
(ix) agreed to do any of the foregoing (other than pursuant hereto).
(i) Litigation. Except as set forth on Schedule 3(i), there is no
claim, action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company or any of its subsidiaries,
or any of their respective directors or officers, in their capacities as such,
(i) that questions the validity of this Agreement or any other Transaction
Document or the issuance of the Securities, or the right of the Company to enter
into this Agreement or any other Transaction Document or to consummate the
transactions contemplated by any Transaction Document or (ii) that might result,
either individually or in the aggregate, in any Material Adverse Change or in
any change in the current equity ownership of the Company. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment,
stipulation or decree
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Securities Purchase Agreement
of any court, administrative agency, commission, regulatory authority, other
government agency or instrumentality.
(j) No Default. Neither the Company nor any of its subsidiaries is in
violation of or default under any provision of its organizational documents or
bylaws or other constituent documents or is in default (or, with notice or the
lapse of time, would be in default) under any material agreement, contract,
commitment or instrument to which it is a party or by which it or its properties
or assets is bound or affected. To the Company's knowledge, no third party is in
material default under or in material breach or violation of any material
contract, commitment or instrument to which the Company or any of its
subsidiaries is a party or by which any of their properties or assets are bound
or affected.
(k) Compliance with Laws. The Company and each subsidiary is in
compliance and has conducted its business and operations so as to comply with
all laws (including, without limitation, any environmental laws), ordinances,
rules and regulations, judgments, decrees or orders of any regulatory authority
or other governmental or administrative body or instrumentality, whether
domestic or foreign, except where such failure would not result in a Material
Adverse Change. The Company has not during the past three years received any
notice relating to any violation or potential violation of applicable law or
regulations.
(l) Title. The Company and each subsidiary has good and marketable
title to all real and personal property owned by it which is material to its
business, in each case free and clear of all liens, encumbrances and defects.
Any property, real or personal, held under lease by the Company or any of its
subsidiaries, is held by it under valid and enforceable leases.
(m) Intellectual Property. The Company and each subsidiary owns or
possesses adequate and enforceable rights to use, all patents, patent
applications, trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, permits, domain names, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, the "Intangibles") necessary to conduct its
business as heretofore conducted by it, as now being conducted by it, and as
proposed to be conducted by it. To the Company's knowledge, neither the Company
nor any of its subsidiaries has infringed, is infringing, or is in conflict with
any right of any other person with respect to, any Intangibles. To the knowledge
of the Company, no person is infringing on or violating the Intangibles owned or
used by the Company or any of its subsidiaries. As of the date hereof, each
officer of the Company and its subsidiaries, and each other employee of the
Company and its subsidiaries involved in the development, implementation or
maintenance of the Company's or such subsidiary's technology, has entered into
non-compete, non-solicitation and proprietary information and invention
assignment agreements.
(n) Registration Rights. The only registration rights, including
piggyback rights, granted (or agreed to be granted) to any person or entity
other than the
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Purchasers are set forth on Schedule 3(n). None of the registration rights
disclosed on Schedule 3(n) are senior in priority to the registration rights
provided for in the Registration Rights Agreement.
(o) OTC Bulletin Board. The Common Stock is, as of the date hereof,
traded by means of the National Association of Securities Dealers, Inc. (the
"NASD") OTC Bulletin Board(R) service (the "OTCBB"). The sale of the Securities
as contemplated hereby will not violate any Rule of the NASD applicable to the
Company or the Common Stock. The Company has not received notification, written
or oral, that the Company has failed to satisfy any requirement of the NASD
relating to the trading of the Common Stock in the OTCBB.
(p) Registration Statement. The Company is currently eligible to
register the resale of its Common Stock under the Securities Act pursuant to a
registration statement on Form S-1. To the Company's knowledge, there exist no
facts or circumstances that would inhibit or delay the preparation and filing of
a registration statement on Form S-1 with respect to the Shares and the Warrant
Shares.
(q) No Misrepresentation. No representation or warranty by the Company
in this Agreement (including any Exhibit or Schedule hereto) and no statements
of the Company contained in any document, certificate, schedule or other
information furnished or to be furnished by or on behalf of the Company pursuant
to this Agreement or any other Transaction Document or in connection with the
transactions contemplated by any Transaction Document contains or shall contain
any untrue statement of material fact or omits or shall omit to state a material
fact required to be stated therein or necessary in order to make such
statements, in light of the circumstances under which they were made, not
misleading. There exists no event or circumstances with respect to the Company
or any of its subsidiaries which would result in a Material Adverse Change that
has not been disclosed by the Company to the Purchasers.
(r) Anti-Dilution and Other Shares. Except as set forth on Schedule
3(r), no stockholder of the Company or other person or entity has any preemptive
right of subscription or purchase or contractual right of first refusal or
similar right with respect to any of the Securities. Issuance of the Securities
will not result in the issuance of any additional shares of Common Stock or the
triggering of other anti-dilution or similar rights contained in any options,
warrants, debentures or other securities or agreements of the Company.
(s) No Brokers or Finders. Except as set forth on Schedule 3(s), no
person or entity has or will have, as a result of any act or omission by the
Company, any right, interest or valid claim against any Purchaser for any
commission, fee or other compensation as a finder or broker, or in any similar
capacity, in connection with the transactions contemplated by this Agreement.
(t) Change of Control Payments. Neither the execution, delivery and
performance by the Company of any of the Transaction Documents nor the
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consummation of any of the transactions contemplated thereby shall require any
payment by the Company, in cash or kind, under any agreement, plan, policy,
commitment or other arrangement. There are no agreements, plans, policies,
commitments or other arrangements with respect to any compensation, benefits or
consideration which will be materially increased, or the vesting of benefits of
which will be materially accelerated, as a result of the execution and delivery
of the Transaction Documents or the occurrence of any of the transactions
contemplated thereby. There are no payments or other benefits, the value of
which will be calculated on the basis of any of the transactions contemplated by
this Agreement or any other Transaction Document.
(u) Taxes. The Company and each of its subsidiaries has accurately
prepared and filed all federal, state and other tax returns required by law to
be filed by it, has paid or made provisions for the payment of all taxes shown
to be due and all additional assessments, and adequate provisions have been made
and are reflected in the Financial Statements for all current taxes and other
charges to which the Company or any subsidiary is subject and which are not
currently due and payable. None of the income tax returns of the Company or any
subsidiary is currently being audited by the Internal Revenue Service or any
other governmental entity. Neither the Company nor any subsidiary has filed with
the Internal Revenue Service or any other governmental authority any agreement
or document extending, or having the effect of extending, the period for
assessment or collection of any taxes. The Company has no knowledge of any
additional assessments, adjustments or contingent tax liability (whether Federal
or state) pending or threatened against the Company or any subsidiary for any
period, nor of any basis for any such assessment, adjustment or contingency.
(v) ERISA. All "employee benefit plans", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
any other employee benefit arrangements or payroll practices (the "Plans"),
maintained by the Company and any of its subsidiaries or to which the Company or
any of its subsidiaries contributed or is obligated to contribute thereunder, is
and has been maintained in compliance with applicable law, including but not
limited to ERISA, the Internal Revenue Code of 1986, as amended (the "Code"),
and any applicable law of any other governmental authority and with any other
contractual obligations and their terms. Each Plan that is intended to be a tax
qualified plan under Section 401(a) of the Code has been determined by the
Internal Revenue Service to qualify under Section 401 of the Code, and the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and nothing has occurred, including the
adoption of or failure to adopt any Plan amendment, which would adversely affect
its qualification or tax-exempt status.
(w) Labor Matters. There are no strikes or other labor disputes
against the Company or any of its subsidiaries pending or, to the Company's or
its subsidiaries' knowledge, threatened. There is no organizing activity
involving the Company or any of its subsidiaries pending or, to the Company's or
its subsidiaries' knowledge, threatened by any labor union or group of
employees.
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(x) Year 2000 Compliance. Each system, comprised of software,
hardware, databases or embedded control systems (microprocessor controlled or
controlled by any robotic or other device) (collectively, a "System") that
constitutes any material part of, or is used in connection with the use,
operation or enjoyment of, any material tangible or intangible asset for real
property of the Company or any of its subsidiaries will not be materially
adversely affected by the advent of the year 2000, the advent of the
twenty-first century or the transition from the twentieth century through the
year 2000 and into the twenty-first century. The Company has no reason to
believe that it or any of its subsidiaries may incur material expenses arising
from or relating to the failure of any of their Systems as a result of the
advent of the year 2000, the advent of the twenty-first century or the
transition from the twentieth century through the year 2000 and into the
twenty-first century. Each System of the Company and its subsidiaries is able to
accurately process, provide and/or receive all date/time data, including, but
not limited to, calculating, comparing and sequencing within, from, into and
between the twentieth century (through year 1999), the year 2000 and the
twenty-first century, including leap year calculations; and will, as to
performance and functionality, not be affected by any dates/times prior to, on,
after or spanning January 1, 2000 ("Year 2000 Compliant"). To the knowledge of
the Company and its subsidiaries, each of the Company's vendors will continue to
furnish its products or services to the Company or its subsidiaries, as
applicable, without interruption or material delay, on and after January 1,
2000.
(y) Conversion of Preferred Stock and Notes. Upon filing with the
Secretary of State of the State of Delaware, as of the date hereof, of the
Amended and Restated Certificate of Incorporation of the Company, in the form
attached hereto as Exhibit C, all outstanding shares of the Company's preferred
stock, including, without limitation, the Series A Convertible Preferred Stock,
par value $ .00001 per share (the "Series A Preferred Stock") and the Series B
Convertible Preferred Stock, par value $.00001 per share (the "Series B
Preferred Stock"), will be converted into Common Stock and there will be no
outstanding equity securities of the Company senior to the Securities. Except as
set forth on Schedule 3(y) hereto, concurrent with the First Closing, all
outstanding convertible notes of the Company, as of the date hereof, (the
"Notes") are being converted into Shares of Common Stock at $4.00 per share and
warrants to purchase, at an exercise price of $5.00 per share, Common Stock on
the terms and conditions provided herein.
(z) Lock-Up Agreement. The Company has entered into lock-up
agreements, in the form attached hereto as Exhibit D (each a "Lock-Up Agreement"
and, collectively the "Lock-Up Agreements") with (i) each of the officers and
directors of the Company, (ii) each of the holders of Series A Preferred Stock
and Series B Preferred Stock convertible into Common Stock upon filing of the
Company's Amended and Restated Certificate of Incorporation, and (iii) each
stockholder of the Company owning or having the right to acquire in excess of 1%
of the issued and outstanding Common Stock of the Company (on a fully diluted
basis).
4. Right of First Refusal for New Securities. (a) The Company hereby grants
to each Purchaser, so long as such Purchaser shall own the greater of 500,000
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Securities Purchase Agreement
shares of Common Stock (including shares issuable upon exercise of the Warrants
and adjusted for stock splits, combinations, dividends and the like) or (ii)
fifty percent (50%) of the Shares purchased by such Purchaser pursuant to this
Agreement, a right of first refusal to purchase shares of any New Securities (as
defined below) which the Company may, from time to time, propose to sell and
issue. Such right of first refusal shall allow each Purchaser to purchase its
Proportionate Share (as defined below) of the New Securities proposed to be
issued, determined with reference to the aggregate number of outstanding shares
of Common Stock (taking into account all shares of Common Stock issuable upon
exercise of the Warrants) held by such Purchasers or their permitted transferees
before the proposed issuance of New Securities. In the event that any Purchaser
shall not purchase any or all of its Proportionate Share of New Securities, the
other Purchasers shall have the right to purchase such unpurchased New
Securities, as described below. The right of first refusal granted hereunder
shall terminate if unexercised within 20 Business Days after receipt of the
notice described in Section 5(c) hereof. The Purchasers may reallocate their
right of first refusal among themselves. "Business Day" shall mean any day that
is not a Saturday, a Sunday or a day on which banks are required or permitted to
be closed in the State of New York. For the purposes hereof, any SSF Purchaser
(as hereinafter defined) may exercise rights hereunder so long as all the SSF
Purchasers, in the aggregate, hold the requisite number of Shares referred to in
the first sentence of this Section 4(a).
(b) "New Securities" shall mean any authorized but unissued shares,
and any treasury shares, of capital stock of the Company and all rights, options
or warrants to purchase or exchangeable for capital stock, and securities of any
type whatsoever that are, or may become, convertible into capital stock;
provided, however, that the term "New Securities" does not include (i)
securities issued pursuant to the acquisition of another corporation or entity
by the Company by merger, purchase of all or substantially all of the assets or
other reorganization whereby the Company shall become the owner of more than 50%
of the voting power of such corporation or entity; (ii) shares of Common Stock
issued in connection with any stock split or stock dividend of the Company;
(iii) shares of Common Stock issued pursuant to any public offering and sale of
equity securities of the Company pursuant to an effective registration statement
under the Securities Act; (iv) Warrant Shares delivered to the Purchasers upon
exercise of the Warrants; (v) shares of Common Stock issued pursuant to the
exercise of options granted or to be granted under the current stock option
plans of the Company, provided that the total number of shares of Common Stock
issuable or issued pursuant to such options does not exceed 39% of (A) the
outstanding shares of Common Stock (on a fully diluted basis) as of the date of
this Agreement and (B) any additional outstanding shares of Common Stock (on a
fully diluted basis) issued on or before January 31, 2000 pursuant to this
Agreement, (vi) shares of Common Stock issued upon the exercise or conversion of
any securities outstanding as of the date of this Agreement, (vii) securities
issued by the Company in connection with any credit, financing or leasing
agreements or similar instruments with financial institutions or equipment
lessors; and (viii) securities issued in connection with an offering pursuant to
an engagement letter dated October 5, 1999, as amended January 26, 2000, between
E*Offering and the Company (the "E*Offering Engagement Letter"), whether such
securities are issued to E*Offering or to any investor
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Securities Purchase Agreement
for which E*Offering is entitled is be compensated pursuant to the E*Offering
Engagement Letter. "Proportionate Share" shall be equal to a fraction, the
numerator of which shall equal the total number of shares of Common Stock
(taking into account all shares of Common Stock issuable upon exercise of the
Warrants) then owned by such Purchaser and the denominator of which shall equal
the total number of shares of Common Stock outstanding immediately prior to the
issuance of the New Securities on a fully diluted basis.
(c) If the Company shall propose to issue New Securities, it shall
give each Purchaser written notice thereof, describing the New Securities, the
number thereof to be issued, the purchase price therefor (which shall be payable
solely in cash) and the terms upon which the Company shall propose to issue the
same. Each Purchaser shall have 10 Business Days from the date such notice is
given to determine whether to purchase all or any portion of such Purchaser's
Proportionate Share of such New Securities for the purchase price and upon the
terms specified in the notice by giving written notice to the Company and
stating therein the number of New Securities to be purchased.
(d) If the Purchasers shall not have elected within such 10 Business
Day period to purchase all of the New Securities proposed to be issued, the
Company shall provide to each Purchaser, within five Business Days thereafter, a
schedule setting forth the following information: (i) the amount of New
Securities elected to be purchased; (ii) the purchasers thereof (the
"Participating Purchasers") and the specific amount of New Securities elected to
be purchased by each such Participating Purchaser; and (iii) the amount of New
Securities not elected to be purchased. Each Participating Purchaser shall
thereafter have an additional five Business Days after such five Business Day
period has elapsed to determine whether to purchase all or any portion of such
Participating Purchaser's Residual Proportionate Share (as defined below) of
such remaining New Securities for the purchase price and upon the terms
specified in the notice by giving written notice to the Company and stating
therein the number of New Securities to be purchased. "Residual Proportionate
Share" shall be equal to a fraction, the numerator of which shall equal the
total number of shares of Common Stock (as determined in the definition of
Proportionate Share) then owned by such Participating Purchaser and the
denominator of which shall equal the total number of such shares owned by all
Participating Purchasers.
(e) If the Purchasers shall not have elected to purchase all of the
New Securities proposed to be issued (within the time period for notifying the
Company set forth above), then the Company shall have 60-calendar days in which
to complete the proposed issuance of the portion of the New Securities not
purchased by the Purchasers at a price not less than that contained in the
notice previously given to the Purchasers and on terms and conditions not more
favorable to the third party than those contained in such notice. If, at the end
of such 60-calendar day period, the Company shall not have completed such
issuance of New Securities, the Company shall no longer be permitted to issue
such New Securities pursuant to this Section 4 without again fully complying
with all of the provisions of this Section 4.
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Securities Purchase Agreement
(f) The right of first refusal granted under this Section 4 shall
terminate upon a Termination Event (as defined in the Warrant). This Section 4
may be amended, waived or otherwise terminated by a vote or the written consent
of sixty-six and two-thirds percent (66 2/3%) of the Purchasers having rights
pursuant to this Section 4 (which 66 2/3% must include the SSF Purchasers (as
defined below), Bay Star Capital, L.P. (and its affiliate, BayStar International
Limited (together "BayStar")), and Xxxxxxx Capital ("Xxxxxxx")), for purposes
hereof, SSF Purchasers shall include Special Situations Fund III, L.P., Special
Situations Cayman Fund, L.P., Special Situations Private Equity Fund, L.P., and
Special Situations Technology Fund, L.P.
5. Buy-In Rights.
(a) In the event that (i) the Company shall fail for any reason to
deliver Warrant Shares to a Purchaser upon exercise of any Warrants within the
time period specified in paragraph (a) of such Warrants or the Company shall
fail to remove any restrictive legend on any certificates evidencing Shares,
Warrant Shares or shares of Common Stock issued pursuant to Section 5 of this
Agreement (the "Buy-In Shares") as and when required under Section 6(f) of this
Agreement and (ii) thereafter, such Purchaser shall purchase (in an open market
transaction or otherwise) shares of Common Stock to make delivery in
satisfaction of a sale by such Purchaser of (A) the Warrant Shares which such
Purchaser anticipated receiving upon such exercise or (B) such unlegended Buy-In
Shares, as the case may be (in each case, the "Sold Shares"), then the Company
shall pay to such Purchaser (in addition to any other remedies available to the
Purchaser) the amount by which (x) such Purchaser's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased shall exceed (y) the net proceeds received by such Purchaser from the
sale of the Sold Shares.
(b) The Company shall make any payments required pursuant to this
Section 5 within five (5) Business Days after receipt of written notice from the
Purchaser setting forth the calculation of the amount due hereunder. Nothing
contained herein shall relieve the Company from its continuing obligation to
deliver Warrant Shares upon any such exercise of the Warrants, or the unlegended
Buy-In Shares, as the case may be.
(c) The rights granted under this Section 5 shall be applicable only
to those Purchasers having rights under Section 4 of this Agreement.
6. Covenants of the Company. The Company hereby covenants that:
(a) Exchange Act Filings. The Company shall use its best efforts to
file in a timely manner all reports and other documents required to be filed by
it under the Exchange Act, and deliver copies of such reports not otherwise
available on the SEC's web site to each Purchaser. The Company shall not
terminate its status as an issuer required to file reports under the Exchange
Act even if the Exchange Act or the rules and regulations promulgated thereunder
would permit such termination.
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Securities Purchase Agreement
(b) Authorized Shares. The Company shall, from and at all times after
the Closing, maintain a reserve of authorized shares of Common Stock sufficient
to cover the issuance of the Warrant Shares underlying the Warrants and the
issuance of any Default Shares pursuant to the terms of the Registration Rights
Agreement.
(c) Use of Proceeds. The Company shall use the proceeds from the sale
of the Securities for general working capital purposes; provided, however, the
Company shall not use the proceeds from the sale of the Securities to the SSF
Purchasers, BayStar, Xxxxxxx, Xxxxx-Xxxx and Ravinia to repay or retire any
outstanding indebtedness listed on Schedule 3(y) attached hereto.
(d) Listing. The Company shall, within seven business days of the
Closing Date, file an application for listing on the Nasdaq SmallCap Market
("Nasdaq SmallCap"). The Company will take all action necessary to effect the
listing of the Common Stock on the Nasdaq SmallCap and, if so listed, will use
its best efforts to maintain such listing, or in the event not listed on the
Nasdaq SmallCap then on OTCBB or any relevant market or system, if applicable,
and will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of NASD, the Nasdaq SmallCap system or any
relevant market or system.
(e) Certain Legal Expenses. The Company shall pay to Winston & Xxxxxx,
counsel to certain of the Purchasers, at the Closing, its fees and expenses
relating to the negotiation and documentation of this Agreement and the other
documents and transactions contemplated hereby in an aggregate amount not to
exceed $20,000.
(f) Removal of Legends. Any legend endorsed on a certificate pursuant
to Section 2(g) and any related stop transfer instructions with respect to any
Securities shall be removed, and the Company shall issue promptly a certificate
without such legend to the holder thereof, if (i) such Securities shall be
registered under the Securities Act, (ii) such legend may be properly removed
under the terms of Rule 144 under the Securities Act or (iii) such holder shall
provide the Company with an opinion of counsel, reasonably satisfactory to the
Company, to the effect that a sale, transfer or assignment of such Securities
may be made pursuant to Rule 144(k) under the Securities Act.
(g) Maintenance of Existence and Conduct of Business. The Company
shall, and shall cause each of its subsidiaries to: (i) do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, and its rights and franchises; (ii) at all times use its best efforts
to maintain, preserve and protect all of its material intellectual property
including, but not limited to, licenses, patents, trade secrets, confidential
and proprietary information, domain names, copyrights, trademarks, service marks
and trade names, and preserve all the remainder of its material assets, in use
or useful in the conduct of its business and keep the same in good repair,
working order and condition (taking into consideration ordinary wear and tear)
and from time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements, betterments and improvements thereto consistent with
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Securities Purchase Agreement
industry practices; (iii) ensure that each officer of the Company and its
subsidiaries, and each other employee of the Company and its subsidiaries
involved in the development, implementation or maintenance of the Company's or
such subsidiary's technology, enters into non-compete, non-solicitation and
proprietary information and invention assignment agreements; and (iv) continue
to conduct only the business that the Company or its subsidiaries is engaged in
on the date hereof or businesses related thereto.
(h) Director; Observer. So long as the SSF Purchasers collectively own
at least 25% of the Securities purchased by the SSF Purchasers pursuant to this
Agreement (assuming the exercise of the SSF Purchasers' Warrants and adjusted
for stock splits, combinations, dividends and the like), the SSF Purchasers
shall have the right, but not the obligation, to designate a nominee, reasonably
acceptable to the Board of Directors of the Company, to be elected as a director
of the Company and shall promptly notify the Company of such designee. Upon
receipt of such notice, the Company shall cause the SSF Purchasers' nominee to
be placed on the slate at the next annual or special meeting of stockholders of
the Company for the election of directors and shall use its best efforts to
cause such nominee to be elected at such meeting of stockholders. In the event
the SSF Purchasers elect not to designate a nominee for director, the SSF
Purchasers may designate one individual (the "SSF Observer") to attend all
meetings of the Company's Board of Directors (and any committees thereof) in a
non-voting observer capacity. The SSF Observer shall be entitled to receive all
reports, presentations and materials as if such SSF Observer were a member of
the Company's Board of Directors. The Company shall promptly reimburse, in full,
each director designated by the SSF Purchasers for any reasonable expenses
incurred in connection with meetings of the Company's Board of Directors and
committees thereof, and shall similarly reimburse the SSF Observer.
Notwithstanding the foregoing, (a) in the event the Board of Directors intends
to discuss or vote upon any matter that is subject to attorney-client privilege,
or otherwise involves confidential or proprietary information of the Company,
the SSF Observer may be excluded from the portion of the meeting at which such
matter is discussed by the vote of a majority of the directors present, and (b)
in the event any SSF Purchaser or any of its affiliates or its representatives
becomes a direct competitor of the Company, the Chairman of the Board of
Directors or a majority of the directors present may exclude the SSF Observer
from the meetings of the Board of Directors.
(i) Amendment of Lock-Up Agreement. The Company shall not amend any
Lock-Up Agreement without the consent of those Purchasers owning or having the
right to acquire sixty-six and two-thirds percent (66 2/3%) of the Shares and
the Warrant Shares (which such 66 2/3% must include the Securities held by the
SSF Purchasers).
(j) Subsequent Issuances. In the event the Company proposes to issue
Common Stock, options or rights to acquire Common Stock or securities
convertible into Common Stock to any investor during the twelve month (12)
period following the First Closing Date, the Company shall be required to obtain
the prior written consent of the SSF Purchasers if the proposed investment is
(i) for less than $10,000,000 in the
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Securities Purchase Agreement
aggregate, (ii) for less than $5,000,000 by any one purchaser, or (iii) by a
Qualified Institutional Buyer (as such term is defined in the Securities Act) (a
"QIB"), or any entity controlled by, under common control with, or affiliated
with a QIB, regardless of the investment amount made by such QIB. The Company
shall require any investor specified in clauses (i) through (iii) above, (each
an "Investor"), to execute a lock-up agreement substantially in the form of
Exhibit D attached hereto beginning on the date of such investment by the
Investor and ending 180 days after the effective date of the registration
statement filed pursuant to the Registration Rights Agreement. Notwithstanding
the foregoing, this Section 6(k) shall not apply to any issuance of securities
by the Company specified in (i), (iii), (v) through (viii) of Section 4(b) of
this Agreement. In connection with this Section 6(k), or otherwise, no party
shall be granted registration rights which would adversely impact the ability of
the Purchasers to register all of their Securities in accordance with the
Registration Rights Agreement.
7. Conditions to Obligations of the Purchasers at the Closings.
(a) First Closing. The obligation of each Purchaser purchasing Shares
at the First Closing to purchase such Shares shall be subject to the fulfillment
on or prior to the First Closing Date of the following conditions, any of which
may be waived by such Purchaser:
(i) Certificates. The Company shall have delivered to each such
Purchaser a duly executed certificate representing the Shares and the Warrants
issuable to such Purchaser.
(ii) Trading. The Common Stock shall be trading on the OTCBB.
(iii) Representations and Warranties; Performance of Obligations.
The representations and warranties of the Company set forth in this Agreement
and in any other Transaction Document shall be true and correct when made, and
shall be true and correct on the First Closing Date with the same force and
effect as if they had been made on and as of said date, except for
representations and warranties made as of a specific date which shall be true
and correct as of such date. The Company shall have performed, satisfied and
complied with all obligations and conditions required to be performed or
observed by it under this Agreement or any other Transaction Document on or
prior to the First Closing Date.
(iv) Consents and Waivers. The Company shall have made all
filings and obtained any and all consents (including, without limitation, all
governmental or regulatory consents), approvals or authorizations, permits and
waivers necessary or appropriate for consummation of the transactions
contemplated by this Agreement and any other Transaction Document.
(v) No Litigation or Legislation. No statute, rule, regulation,
decree, ruling or injunction shall have been enacted or entered, and no
litigation,
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Securities Purchase Agreement
proceeding, government inquiry or investigation shall be pending, which
challenges, prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document, or restricts or impairs the ability of the Purchasers to
own an equity interest in the Company.
(vi) Compliance Certificate. The Company shall have delivered to
the Purchasers a certificate, executed by the Chief Executive Officer of the
Company, dated as of the First Closing Date, certifying to the fulfillment of
the conditions set forth in Sections 7(a)(ii), (iii), (iv), (v) and (viii) and
such other matters as the Purchasers shall reasonably request.
(vii) Opinion of Counsel. Certain Purchasers shall have received
from Bay Venture Counsel, LLP, counsel to the Company, an opinion addressed only
to those Purchasers named therein, dated as of the First Closing Date, in
substantially the form attached hereto as Exhibit E.
(viii) No Material Adverse Change. There shall not have occurred
since the execution of any of the Transaction Documents any Material Adverse
Change.
(ix) Registration Rights Agreement. The Company shall have
executed and delivered the Registration Rights Agreement with such Purchasers.
(x) Lock-Up Agreement. Except as otherwise provided on Section
3(z) of the Schedule of Exceptions, the Company and certain of its directors,
officers and stockholders shall have each entered into a lock-up agreement, in
substantially the form attached hereto as Exhibit D.
(xi) Amended and Restated Certificate of Incorporation. The
Company shall have executed and delivered to Winston and Xxxxxx, counsel for the
SSF Purchasers, the Amended and Restated Certificate of Incorporation, together
with a letter of direction for filing with the Secretary of State of the State
of Delaware.
(xii) Aggregate Investment. The Company shall have issued and
sold to the Purchasers at least 2,000,000 Shares at an aggregate purchase price
of $8,000,000.
(xiii) Fees and Expenses. The Company shall have paid all fees
and expenses of Winston & Xxxxxx pursuant to the terms of Section 6(e) hereto.
(xiv) Notes. In accordance with Section 3(y) hereof, the Notes
shall have been converted to Shares and warrants to purchase Common Stock.
(b) Second Closing. The obligation of each Purchaser purchasing Shares
at the Second Closing to purchase such Shares shall be subject to the
fulfillment
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Securities Purchase Agreement
on or prior to the Second Closing Date of the following conditions, any of which
may be waived by such Purchaser:
(i) Certificates. The Company shall have delivered to each such
Purchaser a duly executed certificate representing the Shares and the Warrants
issuable to such Purchaser.
(ii) Trading. The Common Stock shall be trading on the OTCBB.
(iii) Representations and Warranties; Performance of Obligations.
The representations and warranties of the Company set forth in this Agreement
and in any other Transaction Document shall be true and correct when made, and
shall be true and correct on the Second Closing Date with the same force and
effect as if they had been made on and as of said date, except for
representations and warranties made as of a specific date which shall be true
and correct as of such date. The Company shall have performed, satisfied and
complied with all obligations and conditions required to be performed or
observed by it under this Agreement or any other Transaction Document on or
prior to the Second Closing Date.
(iv) Consents and Waivers. The Company shall have made all
filings and obtained any and all consents (including, without limitation, all
governmental or regulatory consents), approvals or authorizations, permits and
waivers necessary or appropriate for consummation of the transactions
contemplated by this Agreement and any other Transaction Document.
(v) No Litigation or Legislation. No statute, rule, regulation,
decree, ruling or injunction shall have been enacted or entered, and no
litigation, proceeding, government inquiry or investigation shall be pending,
which challenges, prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document, or restricts or impairs the ability of the Purchasers to
own an equity interest in the Company.
(vi) Compliance Certificate. The Company shall have delivered to
each such Purchaser a certificate, executed by the Chief Executive Officer of
the Company, dated as of the Second Closing Date, certifying to the fulfillment
of the conditions set forth in Sections 7(b)(ii),(iii), (iv), (v) and (viii) and
such other matters as the Purchasers shall reasonably request.
(vii) No Material Adverse Change. There shall not have occurred
since the execution of any of the Transaction Documents any Material Adverse
Change.
(viii) Registration Rights Agreement. The Company shall have
executed and delivered the Registration Rights Agreement with such Purchasers.
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Securities Purchase Agreement
8. Conditions to Obligation of the Company at the Closings.
(a) First Closing. The obligation of the Company to sell and issue the
Shares and the Warrants to the Purchasers at the First Closing shall be subject
to the fulfillment on or prior to the First Closing Date of the following
conditions, any of which may be waived by the Company:
(i) Purchase Price. Each such Purchaser shall have delivered the
purchase price for the Shares to be purchased by such Purchaser hereunder.
(ii) Representations and Warranties. The representations and
warranties made by such Purchasers in this Agreement shall be true and correct
when made, and shall be true and correct on the First Closing Date with the same
force and effect as if they had been made on and as of said date.
(iii) No Litigation or Legislation. No Federal, State or local
statute, rule, regulation, decree, ruling or injunction shall have been enacted
or entered, and no litigation, proceeding, government inquiry or investigation
shall be pending, which challenges, prohibits, restricts, or seeks to prohibit
or restrict, the consummation of the transactions contemplated by this Agreement
or the other agreements referred to herein, or restricts or impairs the ability
of any Purchaser to own an equity interest in the Company.
(b) Second Closing. The obligation of the Company to sell and issue
the Shares and the Warrants to each Purchaser at the Second Closing shall be
subject to the fulfillment on or prior to the Second Date of the following
conditions, any of which may be waived by the Company:
(i) Purchase Price. Each such Purchaser shall have delivered the
purchase price for the Shares to be purchased by such Purchaser hereunder.
(ii) Representations and Warranties. The representations and
warranties made by such Purchasers in this Agreement shall be true and correct
when made, and shall be true and correct on the Second Closing Date with the
same force and effect as if they had been made on and as of said date.
(iii) No Litigation or Legislation. No Federal, State or local
statute, rule, regulation, decree, ruling or injunction shall have been enacted
or entered, and no litigation, proceeding, government inquiry or investigation
shall be pending, which challenges, prohibits, restricts, or seeks to prohibit
or restrict, the consummation of the transactions contemplated by this Agreement
or the other agreements referred to herein, or restricts or impairs the ability
of any Purchaser to own an equity interest in the Company.
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Securities Purchase Agreement
9. Miscellaneous.
(a) Survival. The representations and warranties of the Company and
the agreements and covenants set forth in this Agreement shall survive the
Closing notwithstanding any due diligence investigation conducted by or on
behalf of any Purchaser. The Company shall indemnify and hold harmless each
Purchaser and each of such Purchaser's officers, directors, employees, partners,
members, agents and affiliates for any loss, damage or expense (including
reasonable counsel fees) arising as a result of or related to any breach or
alleged breach by the Company of any of its representations, warranties or
covenants set forth in this Agreement, including advancement of expenses as they
are incurred.
(b) Governing Law; Jury Waiver. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. Each of the
Company and the Purchasers irrevocably consent to the exclusive jurisdiction of
the United States Federal courts and state courts, located in New York County,
New York, in any suit or proceeding based on or arising under this Agreement and
irrevocably agree that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. Service of
process on the Company mailed by first class mail shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the right of any Purchaser to serve
process in any manner permitted by law. The parties hereto waive all right to
trial by jury in any action or proceeding to enforce or defend any rights under
this Agreement.
(c) Finder's Fee. Each party shall indemnify and hold the other
harmless from any liability for any commission or compensation in the nature of
a finder's or broker's fee (and the costs and expenses of defending against such
liability or asserted liability) for which such party or any of its officers,
partners, employees or representatives shall be responsible.
(d) Further Assurances. Each party, whether prior to or after the
Closing, shall execute, acknowledge and deliver all such other instruments and
documents, and shall take all such other actions, as may be reasonably requested
by any other party for the purpose of effecting and evidencing the consummation
of the transactions contemplated by this Agreement.
(e) Successors. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties hereto; provided,
however, that the rights of any Purchaser hereunder may be transferred in
connection with a transfer by such Purchaser of all or part of the Securities in
accordance with the terms of this Agreement or the terms of the Warrants, as the
case may be, in a private transaction exempt from registration under the
Securities Act. Any transferee of any of the Securities to whom rights shall be
transferred in such a private transaction, other than
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Securities Purchase Agreement
an affiliate of the Purchaser, shall be required, as a condition precedent to
acquiring such Securities, to agree in writing to be bound by all the terms and
conditions of this Agreement. A Purchaser may not assign its rights under this
Agreement in connection with the sale of Shares or Warrant Shares pursuant to a
registration statement under the Securities Act or under Rule 144.
(f) Counterparts; Facsimile Execution. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any counterpart or other
signature delivered by a party by facsimile shall be deemed for all purposes as
being good and valid execution and delivery of this Agreement by such party.
(g) Entire Agreement. This Agreement, including and incorporating all
Schedules and all Exhibits hereto and referred to herein, the Registration
Rights Agreement and the Warrants constitute and contain the entire agreements
and understandings of the parties regarding the subject matter of each such
agreement and supercede any and all prior negotiations, correspondence,
understandings and agreements, written or oral, among the parties with respect
to the subject matter of any of the foregoing agreements.
(h) Notices. All notices required to be given hereunder shall be given
by personal delivery, facsimile transmission, nationally recognized overnight
carrier (prepaid) or registered or certified mail, postage prepaid with return
receipt requested. Notices shall be addressed, if to the Company, at its
principal corporate offices located at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Facsimile No. (000) 000-0000, Attention: Chief
Executive Officer and, if to a Purchaser, to the address set forth below such
Purchaser's name on the signature pages hereto. Notices delivered personally
shall be deemed given as of actual receipt; notices sent via facsimile
transmission shall be deemed given as of one business day following receipt by
the sender of written confirmation of transmission thereof; notices sent via
overnight courier shall be deemed given as of one business day following
sending; and notices mailed shall be deemed given as of five business days after
proper mailing. A party may change his or its address by written notice in
accordance with this Section 10(h).
(i) Amendments and Waivers. Except as otherwise provided therein, no
provision of this Agreement or any other Transaction Document may be waived or
amended other than by an instrument in writing signed by the Company and the
Purchasers owning or having the right to acquire sixty-six and two-thirds
percent (66 2/3%) of the Shares and Warrant Shares (which such 66 2/3 percent
must include the Securities held by the SSF Purchasers). Notwithstanding the
foregoing, no amendment or waiver may affect any Purchaser in any manner
differently from any other Purchaser without the written consent of such first
mentioned Purchaser.
(j) Severability. If one or more provisions of this Agreement shall be
held to be unenforceable under applicable law, such provisions shall be excluded
from this Agreement to the extent unenforceable and the balance of this
Agreement shall be
-22-
Securities Purchase Agreement
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
(k) Expenses. Except as otherwise provided herein, the parties hereto
shall pay their own costs and expenses.
(l) Publicity. The parties shall consult with each other, to the
extent practicable, as to the form and content of any press releases and other
third party communications or disclosures relating to this Agreement or the
transactions contemplated hereby, and shall use reasonable efforts, acting in
good faith, to agree upon disclosure which shall be satisfactory to the parties
hereto.
(m) Headings. The headings of this Agreement are for convenience of
reference and shall not form a part of, or affect the interpretation of, this
Agreement.
(n) Termination of Covenants. The covenants of the Company set forth
in Section 6 of this Agreement shall terminate at such time as the Purchasers
shall not own any Securities issued pursuant to this Agreement.
-23-
Signature Pages to Instant Video Technologies Securities Purchase Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY:
INSTANT VIDEO TECHNOLOGIES, INC.
By:
-----------------------------
Name: Xxxxxxx Xxxx
Title: Chairman and CEO
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
THE SPECIAL SITUATIONS FUNDS:
SPECIAL SITUATIONS FUND III, L.P. SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: By:
----------------------------- -----------------------------
Name: Xxxxx Greenhouse Name: Xxxxx Greenhouse
Title: Managing Director Title: Managing Director
Address: 000 X. 00xx Xxxxxx, Address: 000 X. 00xx Xxxxxx,
00xx Floor 55th Floor
New York, New York 10022 Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: New York Residence: Cayman Islands
SPECIAL SITUATIONS PRIVATE EQUITY SPECIAL SITUATIONS TECHNOLOGY
FUND, L.P. FUND, L.P.
By: By:
----------------------------- -----------------------------
Name: Xxxxx Greenhouse Name: Xxxxx Greenhouse
Title: Managing Director Title: Managing Director
Address: 000 X. 00xx Xxxxxx, Address: 000 X. 00xx Xxxxxx,
00xx Floor 55th Floor
New York, New York 10022 Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: Xxx Xxxx Xxxxxxxxx: Xxx Xxxx
X-0
OTHER PURCHASERS:
BAYSTAR CAPITAL, L.P. BAYSTAR CAPITAL, L.P.
By: By:
----------------------------- -----------------------------
Name: Xxxxxx Xxxxx Name: Xxxxxx Xxxxx
Title: Managing Partner Title: Managing Partner
Address: 000 Xxxxxx Xxxxxx, Address: 000 Xxxxxx Xxxxxx,
00xx Xxxxx 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
BAYSTAR INTERNATIONAL LIMITED XXXXXXX CAPITAL
By: By:
----------------------------- -----------------------------
Name: Xxxxxx Xxxxx Name: Xxxx Xxxxxxxx
Title: Managing Partner Title:
Address: 000 Xxxxxx Xxxxxx, Address: 0000 Xxxxxx xx xxx
00xx Xxxxx Xxxxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: New York
XXXX XXXXXXXX
By:
-----------------------------
Name: Xxxx Xxxxxxxx
Title:
Address: c/o Xxxxxxx Capital
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Residence:
S-2
RAVINIA CAPITAL VENTURES XXXXXX PARTNERS L.P.
By: By:
----------------------------- -----------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Managing Member Title: Managing Partner
Address: 0000 Xxxxxxxx, Xxxxx 00X Address: 000 Xxxx Xxxxxx,
Xxx Xxxx, N.Y. 10023 Suite 2700
Facsimile No.: (000) 000-0000 Xxx Xxxxxxxxx, XX 00000
Residence: New York Facsimile No.: (000) 000-0000
Residence: California
XXXXXX MANAGEMENT, INC. XXXX XXXXXXX
By: By:
----------------------------- -----------------------------
Name: Xxxxxx Rock Address: 000 Xxxxx Xxxxxxx Xxxxxx
Title: President Xxxxx Xxxxxxx, XX 00000
Address: 0000 Xxxx Xxxxxx Xxx Facsimile No.: (000) 000-0000
Xxxxxx Xxxxxx, XX 00000 Residence: California
Facsimile No.: (000) 000-0000
Residence: Xxxxxxxxxx
XXXX XXXXXXXX
XXXXXXX XXXXXX & CO., INC.
CUSTODIAN FBO
XXXXXX LONDON XXXX XXXXX XXXXXXXX SEP-XXX
By: By:
----------------------------- -----------------------------
Address: c/o Cruttenden & Xxxx Title: Chief Technology Officer
000 Xxxxxxxx Xxxxxx Instant Video Technologies,
Xxxxx Xxxxxxx, XX 00000 Inc
Facsimile No.: (000) 000-0000 Address: 0000 Xxxxx Xxxx Xxxxx
Xxxxxxxxx: Xxxxxxxxxx Xxxxxxx, XX 00000
Facsimile No.: __________________
Residence: California
XXXXXX X. XXXXXX
XXXXXXX XXXXXX TRUST (Xxxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Name: Xxxxxxx Xxxxxx Address: Bay Venture Counsel, LLP
Title: Trustee Lake Xxxxxxx Plaza
Address: 00000 Xxxxxxx Xxxx Xxx Xxxxxxxx
Xxxxxxxxx, XX 00000 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx No.: (000) 000-0000 Suite 0000
Xxxxxxxxx: Xxxxxxxxxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Residence: California
S-3
XXXXXXX X. XXXXXX XXXXX X. XXXX
(Xxxxxx Investment Group) (Xxxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: Bay Venture Counsel, LLP Address: Bay Venture Counsel, LLP
Lake Xxxxxxx Plaza Lake Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx, 0000 Xxxxxxxx Xxxxxx,
Xxxxx 0000 Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXXX X. XXXXXX, TRTE XXXXXXX X. XXXXXXX
(Xxxxxx Investment Group) (Xxxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: Bay Venture Counsel, LLP Address: Bay Venture Counsel, LLP
Lake Xxxxxxx Plaza Lake Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx, 0000 Xxxxxxxx Xxxxxx,
Xxxxx 0000 Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXXX XXXXXXX XXXXXXX X. XXXXXXX
(Xxxxxx Investment Group) (Xxxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: Bay Venture Counsel, LLP Address: Bay Venture Counsel, LLP
Lake Xxxxxxx Plaza Lake Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx, 0000 Xxxxxxxx Xxxxxx,
Xxxxx 0000 Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXXX X. XXXXXXX XXX XXXXXX XXXXX
(Xxxxxx Investment Group) (Xxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: Bay Venture Counsel, LLP Address: c/o 3600 West Bayshore
Lake Xxxxxxx Xxxxx Xxxxx 000
Xxxxxxxx Xxxx Xxxx, XX 00000
0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx No.: (000) 000-0000
Suite 0000 Xxxxxxxxx: Xxxxxxxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Residence: California
S-4
XXXXXX XXXXX XXXXX XXXXX
(Xxxxx Investment Group) (Xxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: c/o 0000 Xxxx Xxxxxxxx Address: c/o 0000 Xxxx Xxxxxxxx
Xxxxx 000 Xxxxx 000
Xxxx Xxxx, XX 00000 Xxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXXX XXXXX XXXXXXX XXXXX
(Xxxxx Investment Group) (Xxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: c/o 0000 Xxxx Xxxxxxxx Address: c/o 0000 Xxxx Xxxxxxxx
Xxxxx 000 Xxxxx 000
Xxxx Xxxx, XX 00000 Xxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXX X. XXXXX III INDEPENDENCE PROPERTIES LLC
(Xxxxx Investment Group)
By: By:
----------------------------- -----------------------------
Address: c/o 0000 Xxxx Xxxxxxxx Name: Xxxxxx Xxxxxxxx
Suite 101 Title:
Xxxx Xxxx, XX 00000 Address: 000 Xxxxxxxx Xxxxx
Facsimile No.: (000) 000-0000 Xxxx, XX 00000
Residence: California Facsimile No.: (000) 000-0000
Residence: California
XXXXXXX XXXX XXXX XXXXXXXX
By: By:
----------------------------- -----------------------------
Address: 000 Xxxxxxx Xxxxx Address: 0000 Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: __________________
Residence: California Residence: California
S-5
XXXXX XXXXXX XXXX XXXXXXX
By: By:
----------------------------- -----------------------------
Address: 0000 X. 00xx Xxxxxx Address: 0000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000 Suite 200
Facsimile No.: (000) 000-0000 Xxxxxxx, XX 00000
Residence: Colorado Facsimile No.: (000) 000-0000
Residence: Xxxxxxxxxx
XXXXXX XXXXXXX XXXXX XXXXXXX X. XXXXX
By: By:
----------------------------- -----------------------------
Address: 0000 Xxxxxxxx Xxxxxx Address: 0000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: __________________
Residence: California Residence: California
XXXXX XXXX XXXXX XXXXXX
By: By:
----------------------------- -----------------------------
Address: 0000 Xxxxxxx Xxxxxx, Xxxxx 000 Address: 0000 Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: Colorado Residence: Indiana
UNIVERSAL ASSURORS AGENCY, INC. XXXXXX XXXXX
By: By:
----------------------------- -----------------------------
Name: Xxxx X. Xxxxx III Title: Chief Operating Officer
Title: Instant Video Technologies,
-------------------------- Inc
Address: 0000 Xxxx Xxxxxxxx, Xxxxx 000 Address: 000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: __________________
Residence: California Residence: California
S-6
JUNE X. XXXXX HAN XXX XXX
By: By:
----------------------------- -----------------------------
Title: Vice President, Engineering Address: 0000 Xxx Xxxxx Xxxx
Instant Video Technologies, Inc. Xxxxx, XX 00000
Address: 00 Xxxxx Xxxxx Facsimile No.: (000) 000-0000
Xxxxxxxxxxxx, XX 00000 Residence: Texas
Facsimile No.: __________________
Residence: California
XXXX XXXX BAY VENTURE COUNSEL, LLP
By: By:
----------------------------- -----------------------------
Address: 000 Xxxxxxxx Xxxxxx Name: Xxxxxx X. Xxxxxx
Xxx Xxxxx, XX 00000 Title: Managing Partner
Facsimile No.: (000) 000-0000 Address: Bay Venture Counsel, LLP
Residence: California Lake Xxxxxxx Plaza
Building
0000 Xxxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Residence: California
XXXXX XXXXXXXX XXXX XXXXXXXX
By: By:
----------------------------- -----------------------------
Address: 000 Xxx Xxxxx Xxxxxx Address: 000 Xxx Xxxxx Xxxxxx,
Xxxxx 000 Xxxxx 000
Xxxxx Xxxx, XX 00000 Xxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Residence: California Residence: California
XXXXXX XXXXXX XXXXXXX XXXXXXXXX
By: By:
----------------------------- -----------------------------
Address: 0000 Xxxxxxx Xxxxxx. Title: Vice Xxxxxxxxx, Xxxxxxxx
Xxxxx 0000 Xxxxxxxxxxx
Xxxxxx, XX 00000-0000 Instant Video Technologies,
Facsimile No.: (000) 000-0000 Inc.
Residence: Colorado Address: 000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: __________________
Residence: California
S-7
R&T XXXXXXXX FAMILY PARTNERS
XXXXXX X. XXXX XXXXX XXXXXXXX, General Partner
By: By:
----------------------------- -----------------------------
Address: 0000 Xxxxxx Xxxxxx Name: Xxxxx Xxxxxxxx,
Xxxxxxx, XX 00000 General Partner
Facsimile No.: __________________ Address: 14 Xxxxxxx Court
Residence: California Xxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Residence: California
XXXXX XXXXXXXX XXXXX X. XXXXXXXX
By: By:
----------------------------- -----------------------------
Address: 000 Xxxxxx Xxxx Xxxxxx Title: Vice President, Technology
Xxxxxxxx, XX 00000 Partnerships
Facsimile No.: __________________ Instant Video Technologies,
Residence: California Inc
Address: 000 X. Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Residence: California
XXXXXX XXXXX XXXXX X. XXXXX
By: By:
----------------------------- -----------------------------
Address: 00 Xxxxxx Xxxxxx, Xxx. 00 Address: 0 Xxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000 Xx. Xxxxx, XX 00000
Facsimile No.: __________________ Facsimile No.: (000) 000-0000
Residence: California Residence: New Jersey
XXXXXXX XXX XXXXXXXXX X. XXXXXXXXXX
By: By:
----------------------------- -----------------------------
Address: 00 Xxxxxx Xxxxxx Address: 0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: __________________ Facsimile No.: __________________
Residence: California Residence: California
S-8
XXXXXXX X. XXXXXXXXX XXXXXXX X. XXXXXX
By: By:
----------------------------- -----------------------------
Address: 00000 Xxxxxxxxx Xxxxx Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: __________________
Residence: Florida Residence: California
XXXX XXXXX XX XXXXX
By: By:
----------------------------- -----------------------------
Address: 0000 00xx Xxxxxx Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxxx, XX 00000
Facsimile No.: __________________ Facsimile No.: __________________
Residence: California Residence: California
XXXXX BER XXXX SOC BANH
By: By:
----------------------------- -----------------------------
Address: 0000 0xx Xxxxxx Address: 0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Facsimile No.: __________________ Facsimile No.: __________________
Residence: California Residence: California
S-9
Securities Purchase Agreement
Schedule 1
Purchasers/Purchased Shares and Warrant Shares
Number of Aggregate Form of
Purchaser Shares Warrant Shares Purchase Price Payment
--------- ------ -------------- -------------- -------
Special Situations Fund III, L.P. 375,000 375,000 $1,500,000 Wire Transfer
Warrant Shares $1,500,000
Special Situations Cayman Fund, L.P. 125,000 125,000 $500,000 Wire Transfer
Warrant Shares $500,000
Special Situations Private Equity Fund, L.P 250,000 250,000 $1,000,000 Wire Transfer
Warrant Shares $1,000,000
Special Situations Technology Fund, L.P. 250,000 250,000 $1,000,000 Wire Transfer
Warrant Shares $1,000,000
BayStar Capital, L.P. 375,000 375,000 $1,500,000 Wire Transfer
Warrant Shares $1,500,000
BayStar International Limited 375,000 375,000 1,500,000 Wire Transfer
Warrant Shares 1,500,000
Xxxxxxx Capital 750,000 750,000 $3,000,000 Wire Transfer
Warrant Shares $3,000,000
Xxxxx Xxxx* 0 0 0 0
Xxxx Xxxxxxxx 100,000 100,000 $400,000 Wire Transfer
Warrant Shares $400,000
Ravinia Capital Ventures LLC 593,500 593,500 $2,374,000 Wire Transfer
Warrant Shares $2,374,000
Xxxxxx Partners LLP 500,000 500,000 $2,000,000 Cancelled Notes:
Warrant Shares $1,500,000
$500,000
Xxxxxx Management, Inc. 387,500 387,500 $1,550,000 Cancelled Notes:
Warrant Shares $450,000
$100,000
$500,000
$300,000
$200,000
Xxxx Xxxxxxx 130,000 130,000 $520,000 Cancelled Note
Warrant Shares $520,000
Xxxxxx London 125,000 125,000 $500,000 Cancelled Note
Warrant Shares $500,000
Xxxx Xxxxxxxx 62,500 62,500 $250,000 Wire Transfer
Warrant Shares $250,000
Xxxxxxx Xxxxxx Trust 50,000 50,000 $200,000 Wire Transfer
Warrant Shares $200,000
Xxxxxx Investment Group 40,000 40,000 $160,000 Cancelled Note
Warrant Shares $110,000
Check - $50,000
Number of Aggregate Form of
Purchaser Shares Warrant Shares Purchase Price Payment
--------- ------ -------------- -------------- -------
Xxxxx Investment Group 31,250 31,250 $125,000 Cancelled Note
Warrant Shares $100,000
Check - $25,000
Independence Properties LLC 25,000 25,000 $100,000 Cancelled Note
Warrant Shares $100,000
Xxxx Xxxx 25,000 25,000 $100,000 Wire Transfer
Warrant Shares $100,000
Xxxx Xxxxxxxx 23,000 23,000 $92,000 Wire Transfer
Warrant Shares $92,000
Xxxxx Xxxxxx 18,750 18,750 $75,000 Cancelled Note
Warrant Shares $75,000
Xxxx Xxxxxxx 18,750 18,750 $75,000 Cancelled Note
Warrant Shares $75,000
Xxxxxx Xxxxxxx Xxxxx 18,750 18,750 $75,000 Check
Warrant Shares $75,000
Xxxxxxx X. Xxxxx 15,000 15,000 $60,000 Check
Warrant Shares $60,000
Xxxxx Xxxx 12,500 12,500 $50,000 Cancelled Note
Warrant Shares $50,000
Xxxxx Xxxxxx 12,500 12,500 $50,000 Cancelled Note
Warrant Shares $50,000
Universal Assurors Agency, Inc. 12,500 12,500 $50,000 Cancelled Note
Warrant Shares $50,000
Xxxxxx Xxxxx 10,000 10,000 $40,000 Check
Warrant Shares $40,000
June X. Xxxxx 10,000 10,000 $40,000 Check
Warrant Shares $40,000
Han Xxx Xxx 10,000 10,000 $40,000 Cancelled Note
Warrant Shares $40,000
Xxxx Xxxx 10,000 10,000 $40,000 Wire Transfer
Warrant Shares $40,000
Bay Venture Counsel , LLP 6,250 6,250 $25,000 Wire Transfer
Warrant Shares $25,000
Xxxxx Xxxxxxxx 6,250 6,250 $25,000 Cancelled Note
Warrant Shares $25,000
Xxxx Xxxxxxxx 6,250 6,250 $25,000 Cancelled Note
Warrant Shares $25,000
Xxxxxx Xxxxxx 6,250 6,250 $25,000 Cancelled Note
Warrant Shares $25,000
Xxxxxxx Xxxxxxxxx 6,000 6,000 $24,000 Check
Warrant Shares $24,000
Xxxxx X. Xxxx 5,000 5,000 $20,000 Check
Warrant Shares $20,000
R&T Xxxxxxxx Family Partners
Xxxxx Xxxxxxxx, Managing Partner 3,750 3,750 $15,000 Cancelled Note
Warrant Shares $15,000
Number of Aggregate Form of
Purchaser Shares Warrant Shares Purchase Price Payment
--------- ------ -------------- -------------- -------
Xxxxx Xxxxxxxx 3,750 3,750 $15,000 Check
Warrant Shares $15,000
Xxxxx X. Xxxxx 3,750 3,750 $15,000 Check
Warrant Shares $15,000
Xxxxx X. Xxxxxxxx 3,250 3,250 $13,000 Check
Warrant Shares $13,000
Xxxxxx Xxxxx 2,500 2,500 $10,000 Check
Warrant Shares $10,000
Xxxxxxx Xxx 2,500 2,500 $10,000 Check
Warrant Shares $10,000
Xxxxxxxxx X. Xxxxxxxxxx 2,000 2,000 $8,000 Check
Warrant Shares $8,000
Xxxxxxx X. Xxxxxxxxx 2,000 2,000 $8,000 Check
Warrant Shares $8,000
Xxxxxxx X. Xxxxxx 2,000 2,000 $8,000 Check
Warrant Shares $8,000
Xxxx Xxxxx 2,000 2,000 $8,000 Check
Warrant Shares $8,000
Xx Xxxxx 1,250 1,250 $5,000 Check
Warrant Shares $5,000
Xxxxx Ber 1,125 1,125 $4,500 Check
Warrant Shares $4,500
Xxxx Soc Xxxx 1,000 1,000 $4,000 Check
Warrant Shares $4,000
--------- --------- ----------- -----------
Total 4,808,375 4,808,375 $19,233,500 $19,233,500
========= ========= =========== ===========
----------
* While there was a provision in the Agreement to allow Xxxxx Hawk to invest
by January 31, no investment was made.
