AVISTAR COMMUNICATIONS CORPORATION CONVERTIBLE NOTE PURCHASE AGREEMENT Dated as of January 4, 2008
Exhibit
10.23
AVISTAR
COMMUNICATIONS CORPORATION
Dated
as of January 4, 2008
Exhibit
10.23
AVISTAR
COMMUNICATIONS CORPORATION
This
Convertible Note Purchase Agreement (this “Agreement”) is made and
entered into as of January 4, 2008 by and between Avistar Communications
Corporation, a Delaware corporation (the “Company”), and each of the
purchasers listed on Schedule A attached hereto (collectively, the
“Purchasers” and each individually, a “Purchaser”).
RECITALS
WHEREAS,
the Company desires to sell to the Purchasers, and the Purchasers desire to
purchase from the Company, certain convertible subordinated secured promissory
notes on the terms and conditions set forth in this Agreement;
WHEREAS,
the Company’s obligations under the convertible subordinated secured notes will
be secured pursuant to the terms of a Security Agreement among the Company
and
the Purchasers of even date herewith (the “Security Agreement”);
and
NOW,
THEREFORE, in consideration of the foregoing, the mutual promises hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT
TO PURCHASE AND SELL STOCK
.
(a) Authorization
.
The Board of Directors of the Company has authorized the issuance, pursuant
to
the terms and conditions of this Agreement, of up to $7,000,000 in aggregate
principal amount of 4.5% convertible subordinated secured promissory notes
due
2010 in the form attached hereto as Exhibit A (each individually a
“Note” and collectively the “Notes”).
(b) Agreement
to Purchase and Sell Securities
.
Subject to the terms and conditions of this Agreement, each Purchaser severally
agrees to purchase, and the Company agrees to sell and issue to each Purchaser,
at the Closing (as defined below), a Note in the initial principal amount set
forth opposite such Purchaser’s name on Schedule A attached
hereto. The purchase price of each Note shall be the principal amount
of such Note as set forth on Schedule A.
(c) Use
of
Proceeds
.
The Company intends to utilize the net proceeds from the sale of the Notes
for
general corporate purposes and, at the Company’s option, to repay the Company’s
obligations, if any, to JPMorgan Chase Bank, N.A. under the Company’s revolving
line of credit with such bank.
2. CLOSING.
(a) Closing.
The purchase and sale of the Notes shall take place, upon the satisfaction
of
the closing conditions set forth in Sections 7 and 8 hereof, at the offices
of ▇▇▇▇▇▇
(b) Delivery.
At the Closing or promptly thereafter, the Company shall issue to each
Purchaser, against delivery of payment of the amount set forth opposite such
Purchaser’s name on Schedule A, a signed original Note issued in the name
of each Purchaser, with the initial principal amount set forth opposite such
Purchaser’s name on Schedule A and bearing the legend set forth in
Section 6(h) herein and such other legends as may be contemplated by this
Agreement. Closing documents may be delivered by
facsimile.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser that the statements
in this Section 3 are true and correct, except as set forth in the Company
Disclosure Schedule attached hereto as Schedule B (the
“Disclosure Schedule”) and delivered to the Purchasers concurrently
herewith:
(a) Organization
Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all corporate power
and
authority required to (a) carry on its business as presently conducted and
(b) enter into this Agreement and the other agreements, instruments and
documents contemplated hereby, and to consummate the transactions contemplated
hereby and thereby. The Company is qualified to do business and is in
good standing in each jurisdiction in which the failure to so qualify would
have
a Material Adverse Effect on the Company. As used in this Agreement,
“Material Adverse Effect” means a material adverse effect on, or a
material adverse change in, the business, operations, prospects, financial
condition or results of operations of the applicable party and its subsidiaries,
taken as a whole.
(b) Capitalization.
The capitalization of the Company, without giving effect to the transactions
contemplated by this Agreement, is as follows. As of
December 19, 2007, the authorized stock of the Company consisted of
(i) 250,000,000 shares of Common Stock, of which 34,495,932 shares were
issued and outstanding; and (ii) 10,000,000 shares of Preferred Stock, none
of which were issued and outstanding. All such shares of Common Stock
and Preferred Stock have been duly authorized, and all such issued and
outstanding shares of Common Stock have been validly issued, and are fully
paid
and nonassessable. No such outstanding shares of Common Stock were
issued in violation of any pre-emptive rights.
As
of
December 19, 2007, the Company had also reserved (net of exercises and
purchases): (i) 10,316,898 shares of Common Stock for issuance upon
exercise of options granted under the Company’s 2000 Stock Option Plan;
(ii) 480,150 shares of Common Stock for issuance upon exercise of options
granted under the Company’s 1997 Stock Option Plan; (iii) 1,301,967 shares
of Common Stock for issuance to employees of the Company under the Company’s
-2-
(c) Subsidiaries.
Except for Avistar Financial Corporation and Avistar Systems U.K. Limited,
the
Company does not have any subsidiaries, nor does the Company own any capital
stock, assets comprising the business of, obligations of, or any other interest
(including any equity or partnership interest) in, or any outstanding loan
or
advance to or from, any person or entity.
(d) Due
Authorization.
All corporate actions on the part of the Company necessary for the
authorization, execution, delivery of, and the performance of all obligations
of
the Company under this Agreement, the Notes and the Security Agreement
(collectively, the “Transaction Documents”) and the authorization,
issuance, reservation for issuance and delivery of all of the Notes being sold
under this Agreement and the shares of Common Stock issuable upon conversion
of
the Notes (the “Conversion Shares”) have been taken, and the Transaction
Documents constitute the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with their terms, except
(a) as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (ii) the effect of rules
of law governing the availability of equitable remedies and (b) as rights
to indemnity or contribution may be limited under federal or state securities
laws or by principles of public policy thereunder.
(e) Valid
Issuance of Stock.
The Notes, upon payment therefor by the Purchasers in accordance with this
Agreement, and the Conversion Shares, upon their issuance in accordance with
the
Notes, will be duly authorized, validly issued, fully paid and
non-assessable.
(f) Governmental
Consents.
No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, or notice to, any federal, state or
local governmental authority on the part of the Company is required in
connection with the issuance of the Notes and the Conversion Shares to the
Purchasers, or the consummation of the other transactions contemplated by this
Agreement, except (i) such filings as have been made prior to the date
hereof, (ii) the filing of a notification form with The Nasdaq Stock
Market, Inc. (“Nasdaq”),
-3-
(iii) the
filing of a Form D with respect to the Notes as required by
Regulation D promulgated under the Securities Act, and (iv) such
additional post-Closing filings as may be required to comply with applicable
state and federal securities laws.
(g) Non-Contravention.
The execution, delivery and performance of this Agreement by the Company, and
the consummation by the Company of the transactions contemplated hereby
(including issuance of the Notes and the Conversion Shares), do not:
(i) contravene or conflict with the Amended and Restated Certificate of
Incorporation or Bylaws of the Company, each as amended; (ii) constitute a
material violation of any provision of any federal, state, local or foreign
law
binding upon or applicable to the Company; or (iii) constitute a default or
require any consent under, give rise to any right of termination, cancellation
or acceleration of, or to a loss of any material benefit to which the Company
is
entitled under, or result in the creation or imposition of any lien, claim
or
encumbrance on any assets of the Company under, any material contract to which
the Company is a party or any material permit, license or similar right relating
to the Company or by which the Company may be bound or affected.
(h) Litigation.
There is no action, suit, proceeding, claim, arbitration or investigation
(“Action”) pending or, to the Company’s knowledge, threatened:
(a) against the Company, its activities, properties or assets, or any
officer, director or employee of the Company in connection with such officer’s,
director’s or employee’s relationship with, or actions taken on behalf of, the
Company, that, if determined adversely to the Company, is reasonably likely
to
have a Material Adverse Effect on the Company, or (b) that seeks to
prevent, enjoin, alter or delay the transactions contemplated by this Agreement
(including issuance of the Notes and the Conversion Shares). The
Company is not a party to or subject to the provisions of, any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality that is reasonably likely to have a Material Adverse Effect
on
the Company. No Action by the Company is currently pending nor does
the Company intend to initiate any Action that is reasonably likely to have
a
Material Adverse Effect on the Company.
(i) Compliance
with Law and Charter Documents.
The Company is not in violation or default of any provisions of its Amended
and
Restated Certificate of Incorporation or Bylaws. The Company has
complied in all respects and is in compliance with all applicable statutes,
laws, rules, regulations and orders of the United States of America and all
states thereof, foreign countries and other governmental bodies and agencies
having jurisdiction over the Company’s business or properties, including without
limitation, laws, rules, regulations or orders relating to the export or import
of goods as technology, except for any instance of non-compliance that has
not
had, and would not reasonably be expected to have, a Material Adverse Effect
on
the Company.
(j) SEC
Documents.
(1) Reports. The
Company has made available to the Purchasers prior to the date hereof copies
of
its Annual Report on Form 10-K for the fiscal year ended December 31, 2006,
its quarterly report on Form 10-Q for the fiscal quarter ended
September 30, 2007, its Current Reports on Form 8-K filed since such
report on Form 10-Q and its Proxy Statement on
-4-
(2) Financial
Statements. The financial statements of the Company in the SEC
Documents present fairly, in accordance with generally accepted accounting
principles (“GAAP”), the financial position of the Company as of the
dates indicated, and the results of its operations and cash flows for the period
therein specified, subject, in the case of unaudited financial statements for
interim periods, to normal year-end audit adjustments.
(k) Absence
of Certain Changes Since Balance Sheet Date.
Since September 30, 2007, the business and operations of the Company have
been conducted in the ordinary course consistent with past practice, and there
has not been:
(i) any
declaration, setting aside or payment of any dividend or other distribution
of
the assets of the Company with respect to any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company or
any
subsidiary of the Company of any outstanding shares of the Company’s capital
stock, other than the repurchase of Common Stock acquired upon the exercise
of
stock options from former employees or consultants of the Company pursuant
to
existing contractual agreements;
(ii) any
damage, destruction or loss, whether or not covered by insurance, except for
such occurrences, individually and collectively, that have not had, and would
not reasonably be expected to have, a Material Adverse Effect on the
Company;
(iii) any
waiver by the Company of a valuable right or of a material debt owed to
it;
(iv) any
change by the Company in its accounting principles, methods or practices or
in
the manner it keeps its accounting books and records, except any such change
required by a change in GAAP or by the SEC; or
(v) any
other
event or condition of any character, except for such events and conditions
that
have not resulted, and are not expected to result, either individually or
collectively, in a Material Adverse Effect on the Company.
(l) Intellectual
Property.
The Company owns or possesses adequate rights to use all patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names,
copyrights or other information (collectively, “Intellectual Property”),
which are necessary to conduct its businesses as currently conducted, except
where the failure to currently own or possess would not result, either
individually or in the aggregate, in a Material Adverse Effect on the
Company. The Company has not received any notice of, and has no
knowledge of, any infringement
-5-
(m) Registration
Rights.
Except as contemplated by Section 5 herein, the Company is not currently
subject to any agreement providing any person or entity any rights (including
piggyback registration rights) to have any securities of the Company registered
with the SEC or registered or qualified with any other governmental
authority.
(n) Title
to Property and Assets.
Except as set forth in the Amended and Restated Security Agreement between
the
Company and JPMorgan Chase Bank, N.A. dated December 17, 2007, the
properties and assets of the Company are owned by the Company free and clear
of
all mortgages, deeds of trust, liens, charges, encumbrances and security
interests except for statutory liens for the payment of current taxes that
are
not yet delinquent and for which adequate reserves have been created and liens,
encumbrances and security interests that arise in the ordinary course of
business and do not in any material respect affect the properties and assets
of
the Company. With respect to the property and assets it leases, the
Company is in compliance with such leases in all material respects.
(o) Taxes.
The Company has filed all necessary federal, state, and foreign income and
franchise tax returns due prior to the date hereof or requested available
extensions thereof and has paid or accrued all taxes shown as due thereon,
and
the Company has no knowledge of any material tax deficiency which has been
or
might be asserted or threatened against it.
(p) Insurance.
The Company maintains and will continue to maintain insurance of the types
and
in the amounts that the Company reasonably believes is prudent and adequate
for
its business, all of which insurance is in full force and effect.
(q) Broker’s
or Finder’s Fee.
Except as set forth in the engagement letter between the Company and RBC Capital
Markets dated June 7, 2007 as amended on September 26, 2007, no agent, broker,
person or firm acting on behalf of the Company or any of the Company’s
subsidiaries is, or will be, entitled to any fee, commission or brokers or
finder’s fees from any of the parties hereto, or from any person controlling,
controlled by, or under common control with any of the parties hereto, in
connection with this Agreement or any of the transactions contemplated
hereby.
(r) Foreign
Corrupt Practices.
Neither the Company nor any director, officer, employee, agent or other person
acting on behalf of the Company, nor any subsidiary of the Company, has, in
the
course of that person’s actions for, or on behalf of, the Company, (a) used
any corporate assets for any unlawful contribution, gift, entertainment or
other
unlawful expenses
-6-
(s) Employee
Benefit Plans.
Each employee benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited
to
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan, excluding
transactions effected pursuant to a statutory or administrative exemption;
and
for each such plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions.
(t) Environmental
Compliance.
The Company has operated its business in material compliance with all applicable
foreign, federal, state or local laws relating to the protection of human health
and the environment (“Environmental Laws”). The Company has
all the material permits required under applicable Environmental Laws for the
conduct of its business and for the operations on, in or at it places of
businesss (the “Environmental Permits”) and the Company is in material
compliance with the terms and conditions of all such Environmental
Permits. There exists no environmental condition that requires
reporting, investigation, assessment, cleanup, remediation or any other type
of
response action pursuant to any Environmental Law or that could be the basis
for
any material liability of the Company pursuant to any Environmental
Law.
(u) Tax
Returns and Payments.
The Company has timely filed all tax returns and reports (federal, state and
local) as required by law. These returns and reports are true and correct in
all
material respects. The Company has paid all taxes and other assessments due,
except those contested by it in good faith. None of the Company’s federal income
tax returns and none of its state income or franchise tax or sales or use tax
returns has ever been audited by governmental authorities. The Company has
made
adequate provisions on its books of account for all taxes, assessments, and
governmental charges with respect to its business, properties, and operations.
The Company has withheld or collected from each payment made to each of its
employees, the amount of all taxes, including, but not limited to, federal
income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment
Tax Act taxes required to be withheld or collected therefrom, and has paid
the
same to the proper tax receiving officers or authorized
depositaries.
-7-
4. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company severally and
not
jointly, and agrees that:
(a) Power
and Authority.
Such Purchaser has all requisite authority, including in the case of
non-individual Purchasers, all trustee, corporate, membership or partnership
power and authority required to enter into this Agreement and the other
agreements, instruments and documents contemplated hereby, and to consummate
the
transactions contemplated hereby and thereby.
(b) Authorization.
With respect to non-individual Purchasers, the execution of this Agreement
has
been duly authorized by all necessary trustee, corporate, membership or
partnership action on the part of such Purchaser. This Agreement
constitutes such Purchaser’s legal, valid and binding obligation, enforceable in
accordance with its terms, except (a) as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies and (b) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(c) Litigation.
There is no Action pending against such Purchaser that seeks to prevent, enjoin,
alter or delay the transactions contemplated by this Agreement.
(d) Purchase
for Own Account.
The Note being acquired by such Purchaser is being acquired for investment
for
such Purchaser’s own account, not as a nominee or agent, and not with a view to
the public resale or distribution thereof within the meaning of the Securities
Act, and such Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. With respect to
any Purchaser that is not a natural person, such Purchaser also represents
that
it has not been formed for the specific purpose of acquiring the Note and that,
as of the date hereof, and except as disclosed in such Purchaser’s public
filings with the SEC or in Schedule C to this Agreement, it is not
the beneficial owner of any shares of Common Stock of the Company.
(e) Investment
Experience.
Such Purchaser understands that the purchase of the Note involves substantial
risk. Such Purchaser has experience as an investor in securities of
companies and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment in the Note and has such knowledge and
experience in financial or business matters that it is capable of evaluating
the
merits and risks of this investment in the Note and protecting its own interests
in connection with this investment.
(f) Accredited
Purchaser Status.
Such Purchaser is an “accredited investor” within the meaning of Regulation D
promulgated under the Securities Act.
(g) Reliance
Upon Purchaser’s Representations.
Such Purchaser understands that the issuance and sale of the Note to it and
the
issuance of Common Stock to Purchaser in the event of conversion of the Note
will not be registered under the Securities Act on the ground that such issuance
and sale will be exempt from registration under the Securities Act pursuant
to
Regulation D
-8-
(h) Receipt
of Information.
Such Purchaser has had an opportunity review the SEC Documents and to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance and sale of the Note and the Conversion Shares and
the business, properties, prospects and financial condition of the Company
and
to obtain any additional information requested and has received and considered
all information it deems relevant to make an informed decision to purchase
the
Note.
(i) HSR
Compliance.
(i) Such
Purchaser is its own “ultimate parent entity” as defined in the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the “HSR
Act”).
(ii) Such
Purchaser will hold less than $50,000,000 in voting securities of the Company
following execution of this Agreement and conversion of the Notes and conversion
of the Note, as valued under the HSR Act.
(j) Forms
13D or 13G.
Such Purchaser has filed or will file promptly with the SEC any reports
regarding its ownership of the Company’s Common Stock as required by
Section 13(d) or Section 13(g) of the Exchange Act and the rules and
regulations promulgated thereunder. If such Purchaser is required to
file such SEC reports regarding its ownership of the Company’s Common Stock,
such Purchaser will fully and accurately reflect the purchase of the Note by
such Purchaser.
(k) Reporting
Obligations Pursuant to Section 16.
Such Purchaser has filed or will file promptly with the SEC any reports required
to be filed pursuant to Section 16(a) of the Exchange Act and the rules and
regulations promulgated thereunder by such Purchaser and, in the case of
non-individual Purchasers, their officers, directors, employees or affiliates,
within the time such filings are required to be made.
5. REGISTRATION;
COMPLIANCE WITH THE SECURITIES ACT.
(a) Certain
Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth
below:
(i) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any
similar successor federal statute and the rules and regulations thereunder,
all
as the same shall be in effect from time to time.
(ii) “Holder”
shall mean any Purchaser who holds Registrable Securities and any holder of
Registrable Securities to whom the registration rights conferred by this
Agreement have been duly and validly transferred in accordance with Section
5(j)
of this Agreement.
-9-
(iii) “Indemnified
Party” shall have the meaning set forth in Section
5(e)(iii) hereto.
(iv) “Indemnifying
Party” shall have the meaning set forth in Section
5(e)(iii) hereto.
(v) “Other
Selling Stockholders” shall mean persons other than Holders who, by virtue
of agreements with the Company, are entitled to include their Other Shares
in
certain registrations hereunder.
(vi) “Other
Shares” shall mean shares of Common Stock, other than Registrable Securities
(as defined below), (including shares of Common Stock issuable upon conversion
of shares of any currently unissued series of Preferred Stock of the Company)
with respect to which registration rights have been or will be
granted.
(vii) “Registrable
Securities” shall mean (i) shares of Common Stock issued or issuable
upon conversion of the Notes issued pursuant to this Agreement and (ii) any
Common Stock issued as a dividend or other distribution with respect to or
in
exchange for or in replacement of the shares referenced in (i) above;
provided, however, that Registrable Securities shall not include
any shares of Common Stock described in clause (i) or (ii) above which have
previously been registered or which have been sold to the public either pursuant
to a registration statement or Rule 144, or which have been sold in a private
transaction in which the transferor’s rights under this Agreement are not
validly assigned in accordance with this Agreement.
(viii) The
terms
“register,” “registered” and “registration” shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(ix) “Registration
Expenses” shall mean all expenses incurred in effecting any registration
pursuant to this Agreement, including, without limitation, all registration,
qualification, and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, fees and disbursements of a single
law
firm acting as counsel for the Holders, Blue Sky fees and expenses, and expenses
of any regular or special audits incident to or required by any such
registration, but shall not include Selling Expenses, fees and disbursements
of
other counsel for the Holders and the compensation of regular employees of
the
Company, which shall be paid in any event by the Company.
(x) “Restricted
Securities” shall mean any Registrable Securities required to bear the
legend set forth in Section 6(h) hereof.
(xi) “Rule
144” shall mean Rule 144 as promulgated by the SEC under the Securities Act,
as such Rule may be amended from time to time, or any similar successor rule
that may be promulgated by the SEC.
-10-
(xii) “Rule
145” shall mean Rule 145 as promulgated by the SEC under the Securities Act,
as such Rule may be amended from time to time, or any similar successor rule
that may be promulgated by the SEC
(xiii) “Rule
415” shall mean Rule 415 as promulgated by the SEC under the Securities Act,
as such Rule may be amended from time to time, or any similar successor rule
that may be promulgated by the SEC.
(xiv) “Selling
Expenses” shall mean all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities and fees
and disbursements of counsel for any Holder other than the single counsel
representing all Holders pursuant to subsection (ix) above.
(i) Company
Registration. If the Company shall determine to register any of
its securities either for its own account or the account of a security holder
or
holders, other than a registration relating solely to employee benefit plans,
a
registration relating to a corporate reorganization or other Rule 145
transaction, or a registration on any registration form that does not permit
secondary sales, the Company will:
(1) promptly
give written notice of the proposed registration to all Holders;
and
(2) use
its
commercially reasonable efforts to include in such registration (and any related
qualification under Blue Sky laws or other compliance), except as set forth
in
Section 5(b)(ii) below, and in any underwriting involved therein, all
of such Registrable Securities as are specified in a written request or requests
made by any Holder or Holders received by the Company within twenty (20) days
after such written notice from the Company is mailed or
delivered. Such written request may specify all or a part of a
Holder’s Registrable Securities.
(ii) Underwriting. If
the registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Holders
as a
part of the written notice given pursuant to Section 5(b)(i). In
such event, the right of any Holder to registration pursuant to this
Section 5 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with
the
Company and the Other Selling Stockholders, if any, distributing their
securities through such underwriting) enter into an underwriting agreement
in
customary form with the representative of the underwriter or underwriters
selected by the Company. Notwithstanding any other provision of this
Section 5(b), if the underwriters advise the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the underwriters may (subject to the limitations set forth below)
exclude all Registrable Securities from, or limit the number of Registrable
Securities to be included in, the registration and underwriting. The
Company shall so advise all holders of securities requesting registration,
and
the number of
-11-
(iii) Right
to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this
Section 5(b) prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration.
(c) Expenses
of Registration.
All Registration Expenses incurred in connection with registrations
pursuant to this Section 5 shall be borne by the Company. All
Selling Expenses relating to securities registered on behalf of the Holders
shall be borne by the holders of securities included in such registration pro
rata among each other on the basis of the number of Registrable Securities
and
Other Shares so registered.
(d) Registration
Procedures.
In the case of each registration effected by the Company pursuant to this
Section 5, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. At
its expense, the Company will use its commercially reasonable efforts
to:
(i) Keep
such
registration effective for a period ending on the earlier of the date which
is
one hundred and twenty (120) days from the effective date of the registration
statement or such time as the Holder or Holders have completed the distribution
described in the registration statement relating thereto;
(ii) Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement for the period set forth in subsection (i) above;
-12-
(iii) Furnish
such number of prospectuses, including any preliminary prospectuses, and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request;
(iv) Use
its
reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdiction as shall be reasonably requested by the Holders; provided,
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions;
(v) Notify
each seller of Registrable Securities covered by such registration statement
at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then existing, and
following such notification promptly prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in light of the circumstances then existing;
(vi) Cause
all
such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange or automated quotation system such as the Nasdaq on which
similar securities issued by the Company are then listed, if any;
and
(vii) In
connection with any underwritten offering pursuant to a registration statement
filed pursuant to this Section 5, enter into an underwriting agreement in
form reasonably necessary to effect the offer and sale of Common Stock, provided
such underwriting agreement contains reasonable and customary provisions, and
provided further, that each Holder participating in such underwriting shall
also
enter into and perform its obligations under such an agreement.
(e) Indemnification.
(i) To
the
extent permitted by law, the Company will indemnify and hold harmless each
Holder, each of its officers, directors and partners, legal counsel, and
accountants and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Section 5,
and each underwriter, if any, and each person who controls within the meaning
of
Section 15 of the Securities Act any underwriter, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on: (i) any untrue
statement (or alleged untrue statement) of a material fact contained or
incorporated by reference in any prospectus, offering circular, or other
document (including any related registration statement, notification, or the
like) incident to any such registration, qualification, or compliance,
(ii) any omission (or alleged omission) to state therein a material fact
required to be stated therein or
-13-
(ii) To
the
extent permitted by law, each Holder will, if Registrable Securities held by
such Holder are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify and hold harmless
the
Company, each of its directors, officers, partners, legal counsel, and
accountants and each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, each
other such Holder, and each of their officers, directors, and partners, and
each
person controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on:
(i) any untrue statement (or alleged untrue statement) of a material fact
contained or incorporated by reference in any such registration statement,
prospectus, offering circular, or other document, or (ii) any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company and such Holders, directors, officers, partners, legal counsel,
and
accountants, persons, underwriters, or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of
such Holder and stated to be specifically for use therein; provided,
however, that the obligations of such Holder hereunder shall not apply
to
amounts paid in settlement of any such claims, losses, damages, or liabilities
(or actions in respect thereof) if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably withheld);
and
provided that in no event shall any indemnity under this
Section 5(e) exceed the net proceeds from the offering received by such
Holder.
(iii) Each
party entitled to indemnification under this Section 5(e) (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the
-14-
(iv) If
the
indemnification provided for in this Section 5(e) is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect
to
any loss, liability, claim, damage, or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as
a
result of such loss, liability, claim, damage, or expense in such proportion
as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage,
or
expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall
be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f) Information
by Holder.
Each Holder of Registrable Securities shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Section 5.
(g) Restrictions
on Transfer.
The holder of each certificate representing Registrable Securities by acceptance
thereof agrees to comply in all respects with the provisions of this
Section 5(g). Each Holder agrees not to make any sale,
assignment, transfer, pledge or other disposition of all or any portion of
the
Restricted Securities, unless and until (x) the transferee
-15-
(h) Rule
144 Reporting.
With a view to making available the benefits of certain rules and regulations
of
the SEC that may permit the sale of the Restricted Securities to the public
without registration, the Company agrees to use its commercially reasonable
efforts to:
(i) Make
and
keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act;
(ii) File
with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(iii) So
long
as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon
written request a written statement by the Company as to its compliance with
the
reporting requirements of Rule 144 and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed as a Holder may reasonably request
in
availing itself of any rule or regulation of the SEC allowing a Holder to sell
any such securities without registration.
(i) Delay
of Registration.
No Holder shall have any right to take any action to restrain, enjoin, or
otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section
5.
(j) Transfer
or Assignment of Registration Rights.
The rights to cause the Company to register securities granted to a Holder
by
the Company under this Section 5 may be transferred or assigned by a Holder
only
to a transferee or assignee of not less than 100,000 shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments
for
stock splits, stock dividends, reverse stock splits, and the like);
provided that (i) such transfer or assignment of Registrable
Securities is effected in accordance with the terms of Section 5(g) hereof
and
applicable securities laws, (ii) the Company is given written notice prior
to said transfer or assignment, stating the name and address of the transferee
or assignee and identifying the securities with respect to which such
registration rights are intended to be transferred or assigned and
(iii) the transferee or assignee of such rights assumes in writing the
obligations of such Holder under this Agreement, including without limitation
the obligations set forth in Section 5(g).
(k) Termination
of Registration Rights.
The right of any Holder to request registration or inclusion in any registration
pursuant to this Section 5 shall terminate on the earlier of (i) such date
on which all shares of Registrable Securities held by such Holder may
immediately be sold under Rule 144 during any ninety (90)-day period, and
(ii) three (3) years after the Closing Date.
6. COVENANTS.
-16-
(a) Satisfaction
of Conditions.
The parties shall use their best efforts to satisfy in a timely manner each
of
the conditions set forth in Section 7 and Section 8 of this
Agreement.
(b) Form
D; Blue Sky Laws.
The Company agrees to file a Form D with respect to the Notes as required under
Regulation D and to provide upon request a copy thereof to each Purchaser
promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Notes and the Conversion Shares for sale to the
Purchasers pursuant to this Agreement and under the Securities Act, the Exchange
Act and applicable securities or Blue Sky laws of the states of the United
States or obtain exemption therefrom, and shall provide upon request evidence
of
any such action so taken to each Purchaser on or prior to the Closing
Date.
(c) Expenses.
All fees, costs and expenses (including attorneys’ fees and expenses) incurred
by any party hereto in connection with the preparation, negotiation and
execution of this Agreement and the exhibits and schedules hereto and the
consummation of the transactions contemplated hereby and thereby (including
the
costs associated with any filings with, or compliance with any of the
requirements of, any governmental authorities), shall be the sole and exclusive
responsibility of such party.
(d) Listing
of Conversion Shares.
The Company shall use its best efforts to cause the Conversion Shares to be
authorized for quotation or listing on the Nasdaq or such other automated
quotation system or securities exchange on which similar securities issued
by
the Company are then listed, if any.
(e) Forms
13D or 13G.
Each Purchaser shall, when and as required, file with the SEC any reports
regarding its ownership of the Company’s Common Stock as required by Section
13(d) or Section 13(g) of the Exchange Act and the rules and regulations
promulgated thereunder.
(f) Reporting
Obligations Pursuant to Section 16.
Each Purchaser shall, when and as required, file with the SEC any reports
required to be filed pursuant to Section 16(a) of the Exchange Act, and the
rules and regulations promulgated thereunder, by such Purchaser, its officers,
directors, employees or Affiliates within the time such filings are required
to
be made and to provide the Company with a copy of all such filings promptly
thereafter.
(g) Restricted
Securities.
No Purchaser may sell, offer to sell, assign, pledge, hypothecate or otherwise
transfer any of the Notes or the Conversion Shares unless (i) pursuant to
an effective registration statement under the Securities Act, (ii) such
Purchaser provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a sale, assignment or transfer of the Notes
or the Conversion Shares, as applicable, may be made without registration under
the Securities Act, or (iii) such Purchaser provides the Company with an
opinion of counsel that (A) the Purchaser is or is not an “affiliate” for
purposes of Rule 144, and (B) the Notes or the Conversion Shares, as applicable,
can be sold pursuant to Rule 144 under the Securities
Act. Notwithstanding anything to the contrary contained in this
Agreement, such Purchaser may transfer (without restriction and without the
need
for an opinion of counsel) the Notes and the Conversion Shares to its Affiliates
(as such term is defined in Rule 405 promulgated by the SEC under the
-17-
(h) Legends.
Each Purchaser agrees that Notes and the certificates for the Conversion Shares
shall bear the following legend:
“THE
SECURITIES REPRESENTED HEREBY 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, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM.”
In
addition, each Purchaser agrees that the Company may place stop transfer orders
with its transfer agents with respect to the Notes and the Conversion
Shares. The appropriate portion of the legend and the stop transfer
orders will be removed promptly upon delivery to the Company of such
satisfactory evidence as described in Section 6(g) or otherwise as reasonably
may be required by the Company that such legend or stop orders are not required
to ensure compliance with the Securities Act.
(i) Material
Confidential Information.
(i) In
connection with the Purchasers’ decision-making with respect to their
acquisition or conversion of the Notes the Company may furnish to the Purchasers
and their officers, directors, employees and agents, if applicable (collectively
referred to as “Purchasers andAgents”) financial and other
information which has not theretofore been made available to the public
(“Material Confidential Information”). The Purchasers and
Agents shall treat all such Material Confidential Information in accordance
with
the provisions of this Agreement and agree to take or abstain from taking
certain other actions herein set forth. The term “Material
Confidential Information” does not include information which (i) was already in
the Purchasers’ or Agents’ possession prior to the disclosure by the Company of
the Material Confidential Information, provided that such information is not
known by the Purchasers and Agents to be subject to another confidentiality
agreement with or other obligation of secrecy to the Company or another party,
(ii) becomes generally available to the public other than as a result of
disclosure by the Purchasers or Agents or (iii) becomes available to Purchasers
and Agents on a non-confidential basis from a source other than the Company
or
its advisors, provided that such source is not known to the Purchasers or Agents
to be bound by a confidentiality agreement with or other obligation of secrecy
to the Company or another party. The Purchasers agree that the
Company’s Material Confidential Information, including, without limitation, the
Company’s financial condition and the progress and conduct of the Company’s
business and operations, will be used solely for the purpose of monitoring
the
Purchasers’ holdings of the Notes, the conversion of the Notes, and monitoring
of the Purchasers’ holding of the Conversion Shares. The Purchasers
also agree that the Purchasers and
-18-
(j) Market-Standoff.
Subject to the rights of each Purchaser set forth in Section 5, if requested
by
the Company and an underwriter of Common Stock (or other securities) of the
Company, each Purchaser shall not sell or otherwise transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, of any Common
Stock
(or other securities) of the Company held by such Purchaser (other than those
included in the registration) during the ninety (90) day period
following the effective date of a registration statement of the Company filed
under the Securities Act (or such other period as may be requested by the
Company or an underwriter to accommodate regulatory restrictions on (i) the
publication or other distribution of research reports and (ii) analyst
recommendations and opinions, including, but not limited to, the restrictions
contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto), provided that: all officers and directors
of
the Company and holders of at least one percent (1%) of the Company’s voting
securities are bound by and have entered into similar agreements. The
obligations described in this Section 6(j) shall not apply to a registration
relating solely to employee benefit plans on Form S-l or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a transaction on Form S-4 or similar forms that may be promulgated in the
future. The Company may impose stop-transfer instructions and may stamp each
such certificate with the second legend with respect to the shares of Common
Stock (or other securities) subject to the foregoing restriction until the
end
of such ninety (90) day (or other) period. Each Holder agrees to execute a
market standoff agreement with said underwriters in customary form consistent
with the provisions of this Section 6(j).
-19-
7. CONDITIONS
TO THE PURCHASER’S OBLIGATIONS AT CLOSING.
The obligations of each Purchaser under Sections 1 and 2 of this Agreement
are
subject to the fulfillment or waiver, at or before the Closing, of each of
the
following conditions:
(a) Representations
and Warranties True.
Except as set forth in the Disclosure Schedule, each of the representations
and
warranties of the Company contained in Section 3 shall be true and correct
in all material respects on and as of the date hereof and on and as of the
date
of the Closing, with the same effect as though such representations and
warranties had been made as of the Closing.
(b) Performance.
The Company shall have performed and complied in all material respects with
all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Compliance
Certificate.
The Company will have delivered to such Purchaser at the Closing a certificate
signed on its behalf by its Chief Financial Officer certifying that the
conditions specified in Sections 7(a) and 7(b) hereof have been
fulfilled.
(d) Opinion
of Company Counsel.
Such Purchaser will have received an opinion on behalf of the Company, dated
as
of the date of the Closing, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Professional Corporation, counsel to the Company, in the form attached as
Exhibit A.
(e) Absence
of Litigation.
No proceeding challenging this Agreement or the transactions contemplated
hereby, or seeking to prohibit, alter, prevent or materially delay the Closing,
shall have been instituted before any court, arbitrator or governmental body,
agency or official and shall be pending.
(f) Proceedings
and Documents.
All corporate and other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto will be
reasonably satisfactory in form and substance to the Purchasers and to the
Purchasers’ legal counsel, and the Purchaser will have received all such
counterpart originals and certified or other copies of such documents as it may
reasonably request.
(g) Consents.
The Company shall have obtained any and all consents, permits and waivers
necessary or appropriate for the performance by the Company of its obligations
pursuant to the Transaction Documents, including the consent and waiver of
▇▇
▇▇▇▇▇▇ Chase Bank, N.A. in form and substance reasonably satisfactory to the
Purchasers.
(h) Delivery
of the Notes.
The Company shall have delivered to each Purchaser, against delivery of payment
of the amount set forth opposite such Purchaser’s name on Schedule A, a
signed original Note issued in the name of each Purchaser, with the initial
principal amount set forth opposite such Purchaser’s name on Schedule
A.
-20-
(i) UCC-1
Filings.
UCC-1 financing statements evidencing the security interests granted to the
Purchasers pursuant to the Security Agreement, in form and substance reasonably
satisfactory to the Purchasers, shall have been filed with the Secretary of
State for the State of Delaware.
(j) Other
Actions.
The Company shall have executed such certificates, agreements, instruments
and
other documents, and taken such other actions as shall be customary or
reasonably requested by the Purchasers in connection with the transactions
contemplated hereby.
8. CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING.
The obligations of the Company to the Purchasers under Sections 1 and 2 of
this
Agreement are subject to the fulfillment or waiver, on or before the Closing,
of
each of the following conditions:
(a) Representations
and Warranties True.
The representations and warranties of the Purchasers contained in Section 4
shall be true and correct in all material respects on and as of the date hereof,
and on and as of the date of the Closing with the same effect as though such
representations and warranties had been made as of the Closing.
(b) Performance.
The Purchasers shall have performed and complied in all material respects with
all agreements, obligations and conditions contained in this Agreement that
are
required to be performed or complied with by them on or before the Closing
and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Securities
Exemptions.
The offer and sale of the Notes to the Purchasers pursuant to this Agreement
and
the issuance of the Conversion Shares pursuant to the Notes shall be exempt
from
the registration requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(d) Payment
of Purchase Price.
The Purchasers shall have delivered to the Company same day funds in full
payment of the purchase price as specified in Section 1(b).
(e) Proceedings
and Documents.
All corporate and other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto will be
reasonably satisfactory in form and substance to the Company and to the
Company’s legal counsel, and the Company will have received all such counterpart
originals and certified or other copies of such documents as it may reasonably
request.
(f) Purchaser
Questionnaires.
Each Purchaser shall have executed and delivered to the Company a Purchaser
Questionnaire, in the form attached hereto as Exhibit C, pursuant to
which each Purchaser shall provide information necessary to confirm such
Purchaser’s status as an “accredited investor” (as such term is defined in Rule
501 promulgated under the Securities Act).
(g) Absence
of Litigation.
No proceeding challenging this Agreement or the transactions contemplated
hereby, or seeking to prohibit, alter, prevent or materially delay the
-21-
(h) Other
Actions.
The Purchasers shall have executed such certificates, agreements, instruments
and other documents, and taken such other actions as shall be customary or
reasonably requested by the Company in connection with the transactions
contemplated hereby.
9. RIGHT
OF FIRST REFUSAL
The
Company hereby grants to each Purchaser who purchases $3,000,000 or more in
aggregate principal amount of Notes pursuant to this Agreement (the
“Significant Purchasers”), the right of first
refusal to purchase its pro rata share of New Securities (as defined in this
Section 9) which the Company may, from time to time, propose to sell and issue
after the date of this Agreement. A Significant Purchaser’s pro rata share, for
purposes of this right of first refusal, is equal to the ratio of (a) the number
of shares of Common Stock issued upon conversion of the Notes purchased by
such
Purchaser, as determined immediately prior to the issuance of New Securities,
to
(b) the total number of shares of Common Stock outstanding immediately prior
to
the issuance of New Securities (assuming full conversion of all
Notes). Significant Purchasers who have not converted all or part of
their Note to Common Stock prior to the issuance of New Securities shall not
be
entitled to any right of first refusal pursuant to this Section 9 with respect
to such New Securities.
(i) “New
Securities” shall mean any capital stock (including Common Stock and/or
Preferred Stock) of the Company whether now authorized or not, and rights,
convertible securities, options or warrants to purchase such capital stock,
and
securities of any type whatsoever that are, or may become, exercisable or
convertible into capital stock; provided that the term “New
Securities” does not include:
(1) the
Notes
and the Conversion Shares;
(2) securities
issued or issuable to officers, employees, directors, consultants, placement
agents, and other service providers of the Company (or any subsidiary) pursuant
to stock grants, option plans, purchase plans, agreements or other employee
stock incentive programs or arrangements approved by the Board of Directors
of
the Company;
(3) securities
issued pursuant to the conversion or exercise of options, warrants or any other
convertible or exercisable securities outstanding as of this date of this
Agreement;
(4) securities
issued or issuable as a dividend or distribution on Preferred Stock or Common
Stock of the Company or pursuant to any stock split or recapitalization of
the
Company;
(5) securities
offered pursuant to a bona fide, firmly underwritten public offering pursuant
to
a registration statement filed under the Securities Act;
-22-
(6) securities
issued or issuable pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such
issuances are approved by the Board of Directors of the Company;
(7) securities
issued or issuable to banks, equipment lessors or other financial institutions
pursuant to a commercial leasing or debt financing transaction approved by
the
Board of Directors of the Company;
(8) securities
issued or issuable in connection with sponsored research, collaboration,
technology license, development, OEM, marketing or other similar agreements
or
strategic partnerships approved by the Board of Directors of the
Company;
(9) securities
issued to suppliers or third party service providers in connection with the
provision of goods or services pursuant to transactions approved by the Board
of
Directors of the Company;
(10) securities
of the Company which are otherwise excluded by the affirmative vote or consent
of the Significant Purchasers; and
(11) any
right, option or warrant to acquire any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections (1)
through (10) above.
(ii) In
the
event the Company proposes to undertake an issuance of New Securities, it shall
give each Significant Purchaser written notice of its intention, describing
the
type of New Securities, and their price and the general terms upon which the
Company proposes to issue the same. Each Significant Purchaser shall have twenty
(20) days after any such notice is mailed or delivered to agree to purchase
such
Significant Purchaser’s pro rata share of such New Securities for the price and
upon the terms specified in the notice by giving written notice to the Company,
in substantially the form attached hereto as Schedule D, and stating
therein the quantity of New Securities to be purchased.
(iii) In
the
event a Significant Purchaser fails to exercise fully its right of first refusal
within said twenty (20) day period (the “Election Period”), the Company
shall have ninety (90) days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within ninety (90) days from the date of said agreement) to sell
that
portion of the New Securities with respect to which the Significant Purchasers’
right of first refusal option set forth in this Section
9 was not exercised, at a price and upon terms no more
favorable to the purchasers thereof than specified in the Company’s notice to
Significant Purchasers delivered pursuant to this Section 9. In
the event the Company has not sold within such ninety (90) day period following
the Election Period, or such ninety (90) day period following the date of said
agreement, the Company shall not thereafter issue or sell any New Securities,
without first again offering such securities to the Significant Purchasers
in
the manner provided in this Section 9.
-23-
(iv) The
right
of first refusal granted under this Agreement shall expire upon the third
anniversary of the date of this Agreement.
10. MISCELLANEOUS.
(a) Successors
and Assigns.
The terms and conditions of this Agreement will inure to the benefit of and
be
binding upon the respective successors and permitted assigns of the
parties.
(b) Governing
Law.
This Agreement will be governed by and construed under the internal laws of
the
State of New York, without reference to principles of conflict of laws or choice
of laws.
(c) Counterparts.
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original, but all of which together will constitute one and the
same instrument.
(d) Headings.
The headings and captions used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement. All references in this Agreement to sections, paragraphs,
exhibits and schedules will, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by this reference.
(e) Notices.
Any notice required or permitted under this Agreement shall be given in writing,
shall be effective when received, and shall in any event be deemed received
and
effectively given upon personal delivery to the party to be notified or three
(3) business days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, or one (1) business day after
deposit with a nationally recognized courier service such as Federal Express
for
next business day delivery under circumstances in which such service guarantees
next business day delivery, or one (1) business day after facsimile with copy
delivered by registered or certified mail, in any case, postage prepaid and
addressed to the party to be notified at the address indicated for such party
on
the signature pages hereto or on Schedule A or at such other address as
the Purchaser or the Company may designate by giving at least ten (10) days
advance written notice pursuant to this Section 10(e).
(f) Amendments
and Waivers.
This Agreement may be amended and the observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of Notes representing at least a majority of the total aggregate
principal amount of Notes then outstanding (excluding any of such shares that
have been sold in a transaction in which registration rights are not assigned
in
accordance with this Agreement or sold to the public pursuant to SEC
Rule 144 or otherwise). Any amendment or waiver effected in
accordance with this Section 10(f) will be binding upon the Purchasers, the
Company and their respective successors and assigns.
(g) Severability.
If any provision of this Agreement is held to be unenforceable under applicable
law, such provision will be excluded from this Agreement and the balance of
this
Agreement will be interpreted as if such provision were so excluded and will
be
enforceable in accordance with its terms.
-24-
(h) Entire
Agreement.
This Agreement, the Notes and the Security Agreement together with all exhibits
and schedules hereto and thereto constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the
subject matter hereof.
(i) Further
Assurances.
From and after the date of this Agreement upon the request of the Company or
the
Purchasers, the Company and the Purchasers will execute and deliver such
instruments, documents or other writings, and take such other actions, as may
be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
(j) Meaning
of Include and Including and Beneficial Ownership.
Whenever in this Agreement the word “include” or “including” is used, it shall
be deemed to mean “include, without limitation” or “including, without
limitation,” as the case may be, and the language following “include” or
“including” shall not be deemed to set forth an exhaustive list. For
purposes of this Agreement, “beneficial owner,” “beneficially own” and similar
words shall have the meaning ascribed to “beneficial owner” in Rule 13d-3 under
the Exchange Act.
(k) Stock
Splits, Dividends and other Similar Events.
The provisions of this Agreement (including the number of shares of Common
Stock
and other securities described herein) shall be appropriately adjusted to
reflect any stock split, stock dividend, reorganization or other similar event
that may occur with respect to the Company after the date hereof.
[The
balance of this page is left blank intentionally.]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
and year first above written.
AVISTAR
COMMUNICATIONS CORPORATION
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇
Name:
▇▇▇▇▇▇
▇▇▇▇▇
Title:
CFO
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
and year first above written.
PURCHASERS: ▇▇▇▇▇▇▇
ENTERPRISES, INC.
By:
/s/ ▇▇▇▇▇▇ ▇.
Orlando
Name:
▇▇▇▇▇▇ ▇.
Orlando
Title:
Vice
President
THE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ REVOCABLE TRUST FOR THE BENEFIT OF
▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:
/s/ ▇. ▇.
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title:
Trustee
▇▇▇▇▇▇▇▇▇
REVOCABLE TRUST
By:
/s/ R. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Name:
R. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Title:
Trustee
THE
▇▇▇▇▇▇▇▇ FAMILY 2001 TRUST DATED 2/07/01
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Title:
Trustee
/s/
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇
/s/
▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
/s/
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
WS
INVESTMENT COMPANY, LLC (2007A)
By:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Title:
WS
INVESTMENT COMPANY, LLC (2007D)
By:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Title:
Schedule
A
Schedule
of Purchasers
|
Name
of Purchaser
|
Initial
Principal Amount and Purchase Price of Note
|
|
▇▇▇▇▇▇▇
Enterprises, Inc.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
$4,000,000.00
|
|
The
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Trust for the
benefit
of ▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
|
$1,540,000.00
|
|
▇▇▇▇▇▇▇▇▇
Revocable Trust
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
|
$1,000,000.00
|
|
The
▇▇▇▇▇▇▇▇ Family 2001 Trust dated 2/07/01
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
|
$100,000.00
|
|
▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
|
$50,000.00
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
|
$200,000.00
|
|
▇▇▇▇▇▇
▇▇▇▇▇
▇/▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
Floor
▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
$59,980.00
|
|
WS
Investment Company, LLC (2007A)
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
$40,000.00
|
|
WS
Investment Company, LLC (2007D)
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
$10,000.00
|
|
TOTAL
|
$6,999,980.00
|
Schedule
B
Company
Disclosure Schedule
This
Disclosure Schedule is made and given pursuant to Section 3 of the
Convertible Note Purchase Agreement, dated as of January __, 2008 (the
“Agreement”), among Avistar Communications Corporation (the
“Company”) and the Purchasers listed on Schedule A
thereto. All capitalized terms used but not defined herein shall have
the meanings as defined in the Agreement, unless otherwise
provided. The section numbers below correspond to the section numbers
of the representations and warranties in the Agreement; provided, however,
that
any information disclosed herein under any section number shall be deemed to
be
disclosed and incorporated into any other section number under the Agreement
where such disclosure would be readily apparent.
The
information contained herein is disclosed solely for the purposes of the
Agreement, and no information contained herein shall be deemed to be an
admission by any party hereto to any third party of any matter whatsoever,
including without limitation, any violation of law or breach of any
agreement. The information contained in this Disclosure Schedule is
confidential, proprietary information of the Company, and the Purchasers shall
be obligated to maintain and protect such confidential information.
3(g)
Under
the
Lease Agreement among the Registrant and Crossroads Associates and Clocktower
Associates dated December 1, 2006, the Company may not make an assignment
or hypothecation without prior written consent.
Under
the
Company’s Form of Indemnification Agreement, a change in control changes the
method of attorney selection in the case of indemnification of the individual
by
the Company.
Under
the
Settlement Agreement among the Registrant, Collaboration Properties, Inc. and
Polycom, Inc. dated November 12, 2004, the Company may not make an assignment
unless in connection with a disposition of all assets.
Under
the
Patent Cross-License Agreement Among the Company, Collaboration Properties,
Inc.
and Polycom, Inc. dated November 12, 2004, the Company may not make an
assignment without prior written consent.
Under
the
Patent License Agreement dated May 15, 2006 among the Registrant, Collaboration
Properties, Inc., Sony Corporation and Sony Computer Entertainment, Inc., any
transfer of certain patents is subject to the granted license as well as the
covenant not to ▇▇▇ contained in the agreement.
Under
the
Patent License Agreement dated February 15, 2007 by and among the Registrant,
Collaboration Properties, Inc., Tandberg ASA, Tandberg Telecom AS, and Tandberg,
Inc., any assignee must agree in writing to become subject to that
agreement.
Under
the
Patent License Agreement dated May 15, 2007 by and among the Registrant, Avistar
Systems (UK) Limited, and Radvision LTD., an assignment may only occur upon
the
transfer of all assets and written notice.
Under
the
Employment Agreement between Avistar Communications Corporation and ▇▇▇▇▇ ▇▇▇▇
effective July 16, 2007, a change in control would cause 50% of the options
granted to accelerate and become fully vested.
3(h)
Litigation has been used in the past and may be considered in the future to
enforce the Company’s rights pertaining to its intellectual property
portfolio. The entry into litigation to enforce these rights may have
a Material Adverse Effect on the Company.
3(k)
(v): On December 7, 2007, the Company received a deficiency letter from
The Nasdaq Stock Market indicating that the Company does not comply with
Marketplace Rule 4310(c)(4), which requires the Company to have a minimum bid
price of $1.00 for continued listing. Subject to the additional
listing compliance issue discussed below, the Company may be provided 180
calendar days, or until June 4, 2008, to regain compliance.
On
December 13, 2007, the Company received a notice from The Nasdaq Stock Market
stating that Avistar had not regained compliance with Nasdaq Marketplace Rule
4310(c)(3) and, as a result, the Company’s securities are subject to de-listing
from The Nasdaq Capital Market unless the Company appealed the Nasdaq Staff’s
determination to a Nasdaq Listing Qualifications Panel. The Company
requested a hearing before the Panel to appeal the Nasdaq Staff’s determination,
and that appeal has been scheduled for January 24, 2008. A de-listing of the
Company’s common stock has been stayed, pending the hearing. The
Listing Qualifications Panel would have authority to grant the Company a further
extension of time in which to regain compliance with the Marketplace Rules,
though there can be no assurance that the Panel will grant a further extension
of time.
3(l)
See attached table for a listing of trademarks.
|
Country
|
Number
|
Title
|
Expiration*
|
|
|
US
|
5,617,539
|
MULTIMEDIA
COLLABORATION SYSTEM WITH SEPARATE DATA NETWORK AND A/V NETWORK CONTROLLED
BY INFORMATION TRANSMITTING ON THE DATA NETWORK
|
6/7/2016
|
|
|
GB
|
2,296,620
|
METHODS
AND SYSTEMS FOR MULTIMEDIA COMMUNICATIONS VIA PUBLIC TELEPHONE
NETWORKS
|
10/3/2014
|
|
|
US
|
5,689,641
|
MULTIMEDIA
COLLABORATION SYSTEM ARRANGEMENT FOR ROUTING COMPRESSED AV SIGNAL
THROUGH
A PARTICIPANT SITE WITHOUT DECOMPRESSING THE AV SIGNAL
|
11/18/20014
|
|
|
GB
|
2,308,526
|
METHODS
AND SYSTEMS FOR MULTIMEDIA COMMUNICATIONS VIA PUBLIC TELEPHONE
NETWORKS.
|
10/11/2015
|
|
|
US
|
5,751,338
|
METHODS
AND SYSTEMS FOR MULTIMEDIA COMMUNICATIONS VIA PUBLIC TELEPHONE
NETWORKS
|
5/12/2015
|
|
|
US
|
5,758,079
|
CALL
CONTROL IN VIDEO CONFERENCING ALLOWING ACCEPTANCE AND IDENTIFICATION
OF
PARTICIPANTS IN A NEW INCOMING CALL DURING AN ACTIVE
TELECONFERENCE
|
10/1/2013
|
|
|
GB
|
2,282,506
|
TELECONFERENCING
SYSTEM
|
5/27/2014
|
|
|
GB
|
2,319,135
|
TELECONFERENCING
SYSTEM
|
5/27/2014
|
|
|
GB
|
2,319,136
|
TELECONFERENCING
SYSTEM
|
5/27/2014
|
|
|
GB
|
2,319,137
|
TELECONFERENCING
SYSTEM
|
5/27/2014
|
|
|
GB
|
2,319,138
|
TELECONFERENCING
SYSTEM
|
5/27/2014
|
|
|
US
|
5,802,294
|
TELECONFERENCING
SYSTEM IN WHICH LOCATION VIDEO MOSAIC GENERATOR SENDS COMBINED LOCAL
PARTICIPANTS IMAGES TO SECOND LOCATION VIDEO MOSAIC GENERATOR FOR
DISPLAYING COMBINED IMAGES
|
6/7/2016
|
|
|
CA
|
2,204,442
|
MULTIMEDIA
COLLABORATION SYSTEM WITH SEPARATE DATA NETWORK AND A/V NETWORK CONTROLLED
BY INFORMATION TRANSMITTING ON THE DATA NETWORK
|
3/16/2014
|
|
|
US
|
5,854,893
|
SYSTEM
FOR TELECONFERENCING IN WHICH COLLABORATION TYPES AND PARTICIPANTS
BY
NAMES OR ICONS ARE SELECTED BY A PARTICIPANT OF THE
TELECONFERENCE
|
10/1/2013
|
|
|
US
|
5,867,654
|
TWO
MONITOR VIDEOCONFERENCING HARDWARE
|
10/1/2013
|
|
|
US
|
5,884,039
|
SYSTEM
FOR PROVIDING A DIRECTORY OF AV DEVICES AND CAPABILITIES AND CALL
PROCESSING SUCH THAT EACH PARTICIPANT PARTICIPATES TO THE EXTENT
OF
CAPABILITIES AVAILABLE
|
10/1/2013
|
|
|
SG
|
53,410
|
PUBLIC
DIGITAL TELEPHONE NETWORK AND TELEPHONE UTP LOOP PLANT CARRYING AUDIO,
VIDEO, AND DATA
|
10/4/2015
|
|
|
US
|
5,896,500
|
SYSTEM
FOR CALL REQUEST WHICH RESULTS IN FIRST AND SECOND CALL HANDLE DEFINING
CALL STATE CONSISTING OF ACTIVE OR HOLD FOR ITS RESPECTIVE AV
DEVICE
|
10/1/2013
|
|
|
US
|
5,915,091
|
SYNCHRONIZATION
IN VIDEO CONFERENCING
|
6/11/2016
|
|
|
US
|
5,978,835
|
MULTIMEDIA
MAIL, CONFERENCE RECORDING AND DOCUMENTS IN VIDEO
CONFERENCING
|
10/1/2013
|
|
|
CH
|
690,154
|
FASCICULE
DU BREVET
|
9/28/2014
|
|
|
CA
|
2,173,204
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
US
|
6,081,291
|
METHODS
AND SYSTEMS FOR MULTIMEDIA COMMUNICATION VIA PUBLIC TELEPHONE
NETWORKS
|
12/30/2014
|
|
|
CA
|
2,208,987
|
METHODS
AND SYSTEMS FOR MULTIMEDIA COMMUNICATION VIA PUBLIC TELEPHONE
NETWORKS
|
10/4/2015
|
|
|
EP-DE
|
898,424
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
▇▇-▇▇
|
▇▇▇,▇▇▇
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
EP-GB
|
898,424
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
CA
|
2,296,182
|
CALL
CONTROL IN VIDEO CONFERENCING ALLOWING ACCEPTANCE AND IDENTIFICATION
OF
PARTICIPANTS IN A NEW INCOMING CALL DURING AN ACTIVE
TELECONFERENCE
|
10/3/2014
|
|
|
EP-DE
|
721,726
|
VIDEOCONFERENCE
SIGNAL SWITCHING WITHOUT DECOMPRESSION
|
10/3/2014
|
|
|
▇▇-▇▇
|
▇▇▇,▇▇▇
|
VIDEOCONFERENCE
SIGNAL SWITCHING WITHOUT DECOMPRESSION
|
10/3/2014
|
|
|
EP-GB
|
721,726
|
VIDEOCONFERENCE
SIGNAL SWITCHING WITHOUT DECOMPRESSION
|
10/3/2014
|
|
|
CA
|
2,173,209
|
MULTIMEDIA
COLLABORATION SYSTEM
|
10/3/2014
|
|
|
US
|
6,212,547
|
UTP
based video and data conferencing
|
10/1/2013
|
|
|
US
|
6,237,025
|
MULTIMEDIA
COLLABORATION SYSTEM
|
10/1/2013
|
|
|
CA
|
2,296,181
|
SYSTEM
FOR PROVIDING A DIRECTORY OF AV DEVICES AND CAPABILITIES AND CALL
PROCESSING SUCH THAT EACH PARTICIPANT PARTICIPATES TO THE EXTENT
OF
CAPABILITIES AVAILABLE
|
10/3/2014
|
|
|
CA
|
2,296,185
|
SYSTEM
FOR CALL REQUEST WHICH RESULTS IN FIRST AND SECOND CALL HANDLE DEFINING
CALL STATE CONSISTING OF ACTIVE OR HOLD FOR ITS RESPECTIVE AV
DEVICE
|
10/3/2014
|
|
|
CA
|
2,296,187
|
SYNCHRONIZATION
IN VIDEO CONFERENCING
|
10/3/2014
|
|
|
CA
|
2,296,189
|
SYSTEM
FOR TELECONFERENCING IN WHICH COLLABORATION TYPES AND PARTICIPANTS
BY
NAMES OR ICONS ARE SELECTED BY A PARTICIPANT OF THE
TELECONFERENCE
|
10/3/2014
|
|
|
EP-DE
|
912,056
|
SYNCHRONIZATION
IN A MULTIMEDIA SYSTEM
|
10/3/2014
|
|
|
EP-FR
|
912,056
|
SYNCHRONIZATION
IN A MULTIMEDIA SYSTEM
|
10/3/2014
|
|
|
EP-GB
|
912,056
|
SYNCHRONIZATION
IN A MULTIMEDIA SYSTEM
|
10/3/2014
|
|
|
US
|
6,343,314
|
REMOTE
PARTICIPANT HOLD AND DISCONNECT DURING VIDEOCONFERENCING
|
10/1/2013
|
|
|
US
|
6,351,762
|
METHOD
AND SYSTEM FOR LOG-IN-BASED VIDEO AND MULTIMEDIA CALLS
|
10/1/2013
|
|
|
EP-DE
|
899,953
|
PARTICIPANT
LOCATION IN MULTIMEDIA COLLABORATION SYSTEM
|
10/3/2014
|
|
|
▇▇-▇▇
|
▇▇▇,▇▇▇
|
PARTICIPANT
LOCATION IN MULTIMEDIA COLLABORATION SYSTEM
|
10/3/2014
|
|
|
EP-GB
|
899,953
|
PARTICIPANT
LOCATION IN MULTIMEDIA COLLABORATION SYSTEM
|
10/3/2014
|
|
|
US
|
6,426,769
|
HIGH-QUALITY
SWITCHED ANALOG VIDEO COMMUNICATIONS OVER UNSHIELDED TWISTED
PAIR
|
10/1/2013
|
|
|
US
|
6,437,818
|
VIDEO
CONFERENCING ON EXISTING UTP INFRASTRUCTURE
|
10/1/2013
|
|
|
CA
|
2,297,940
|
TWO
MONITOR VIDEOCONFERENCING HARDWARE
|
3/16/2014
|
|
|
EP-DE
|
721,725
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
▇▇-▇▇
|
▇▇▇,▇▇▇
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
EP-GB
|
721,725
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
EP-DE
|
912,055
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
▇▇-▇▇
|
▇▇▇,▇▇▇
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
EP-GB
|
912,055
|
MULTIMEDIA
COLLABORATION SYSTEM
|
3/16/2014
|
|
|
EP-DE
|
899,952
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
EP-FR
|
899,952
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
EP-GB
|
899,952
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
US
|
6,583,806
|
VIDEOCONFERENCING
HARDWARE
|
10/1/2013
|
|
|
US
|
6,594,688
|
DEDICATED
ECHO CANCELER FOR A WORKSTATION
|
10/1/2013
|
|
|
EP-DE
|
899,954
|
MULTIMEDIA
MAIL IN A TELECONFERENCING SYSTEM
|
10/3/2014
|
|
|
EP-FR
|
899,954
|
MULTIMEDIA
MAIL IN A TELECONFERENCING SYSTEM
|
10/3/2014
|
|
|
EP-GB
|
899,954
|
MULTIMEDIA
MAIL IN A TELECONFERENCING SYSTEM
|
10/3/2014
|
|
|
EP-GB
|
801,858
|
PUBLIC
DIGITAL TELEPHONE NETWORK AND TELEPHONE UTP LOOP PLANT CARRYING AUDIO,
VIDEO, AND DATA
|
10/4/2015
|
|
|
US
|
6,789,105
|
MULTIPLE-EDITOR
AUTHORING OF MULTIMEDIA DOCUMENTS INCLUDING REAL-TIME VIDEO AND
TIME-INSENSITIVE MEDIA
|
10/1/2013
|
|
|
US
|
6,816,904
|
NETWORKED
VIDEO MULTIMEDIA STORAGE SERVER ENVIRONMENT
|
11/4/2018
|
|
|
CA
|
2,318,395
|
MULTIFUNCTION
VIDEO COMMUNICATIONS SERVICE DEVICE
|
1/27/2019
|
|
|
US
|
6,898,620
|
MULTIPLEXING
VIDEO AND CONTROL SIGNALS ONTO UTP
|
5/22/2018
|
|
|
US
|
6,959,322
|
UTP
BASED VIDEO CONFERENCING
|
11/11/2013
|
|
|
US
|
6,972,786
|
MULTIMEDIA
SERVICES USING CENTRAL OFFICE
|
12/30/2014
|
|
|
US
|
7,054,904
|
MARKING
AND SEARCHING
|
5/4/2015
|
|
|
US
|
7,185,054
|
PARTICIPANT
DISPLAY AND SELECTION IN VIDEO CONFERENCE CALLS
|
11/4/2014
|
|
|
GB
|
1,029,273
|
VIDEO
STORAGE SERVER
|
11/4/2018
|
|
|
FR
|
1,029,273
|
VIDEO
STORAGE SERVER
|
11/4/2018
|
|
|
DE
|
1,029,273
|
VIDEO
STORAGE SERVER
|
11/4/2018
|
|
|
US
|
7,152,093
|
SYSTEM
FOR REAL-TIME COMMUNICATION BETWEEN PLURAL USERS
|
12/5/2013
|
|
|
US
|
7,206,809
|
METHOD
FOR REAL-TIME COMMUNICATION BETWEEN PLURAL USERS
|
11/14/2013
|
|
|
GB
|
1,307,038
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
FR
|
1,307,038
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
DE
|
1,307,038
|
CALL
DETECTION & HANDLING IN MULTIMEDIA COLLABORATION
SYSTEM
|
10/3/2014
|
|
|
GB
|
2,296,620
|
METHOD
AND SYSTEM FOR MULTIMEDIA COMMUNICATION VIA PUBLIC TELEPHONE
NETWORKS
|
10/11/2015
|
|
|
|
*
Expiration dates obtained from Computer Patent Annuities (CPA), ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Jersey. CPA has been managing
CPI/Avistar patent renewals since 1999.
|
|
||
3(n)
Avistar has granted a security interest to Comerica Bank- California in certain
restricted money market accounts maintained by the Company with Comerica Bank
–
California to secure the Company’s obligations with respect to a letter of
credit in the amount of $145,200 issued by such bank to ▇▇▇▇▇▇▇▇ Properties
Partners L.P.
3(o)
and (u) The Company is currently undergoing a sales and use tax audit
by the State of California, which has resulted in a preliminary estimate for
sales and uses taxes due for the years ended December 31, 2005, 2006 and 2007,
of $38,000. The Company does not expect the final results of the
audit to have a Material Adverse Effect on the Company.
Schedule
C
Purchasers’
Disclosure Schedule
Section
4(d)
The
following Purchasers beneficially own the shares listed opposite their
names:
|
Name
|
Shares
Owned
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
R.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
|
14,213,627
948,262
5,286,460
80,088
|
Schedule
D
NOTICE
AND WAIVER/ELECTION OF
RIGHT
OF
FIRST REFUSAL
I
do hereby waive or exercise, as indicated below, my rights of first refusal
under the Convertible Note Purchase Agreement dated as of January 4, 2008 (the
“Agreement”):
1. Waiver
of
20 Days’ Notice Period in Which to Exercise Right of First Refusal:
(please check only one)
|
|
( )
|
WAIVE
in full the 20-day notice period provided to exercise my right of
first
refusal granted under the
Agreement.
|
|
|
( )
|
DO
NOT WAIVE the notice period described
above.
|
2. Issuance
and Sale of New Securities: (please check only
one)
|
|
( )
|
WAIVE
in full the right of first refusal granted under the Agreement with
respect to the issuance of the New
Securities.
|
|
|
( )
|
ELECT
TO PARTICIPATE in $__________ in New Securities proposed to be issued
by
Avistar Communications Corporation, representing less than my pro
rata portion of the aggregate of $__________ in New Securities being
offered in the financing.
|
|
|
( )
|
ELECT
TO PARTICIPATE in my full pro rata portion of the aggregate of
$____________ in New Securities being made available in the
financing.
|
Date:
___________,
20__ ______________________________________
Signature
of Stockholder or
Authorized
Signatory
Title,
if applicable
This
is neither a commitment to purchase nor a commitment to issue the New Securities
described above. Such issuance can only be made by way of definitive
documentation related to such issuance. Avistar will supply you with such
definitive documentation upon request or if you indicate that you would like
to
exercise your first offer rights in whole or in part.
[Avistar
Convertible Note Purchase
Agreement]
Exhibit A
Form
of
Convertible Subordinated Secured Note Due 2010
Exhibit B
Form
of
Legal Opinion
Exhibit C
Purchaser
Questionnaire