SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of , 2004 (this
"Agreement"), by and between ROOMLINX, INC., a Nevada corporation (the
"Company") and the individuals or entities who execute the signature page hereof
or a counterpart signature page as a purchaser (the "Purchasers").
WHEREAS, the Company desires to sell to each Purchaser, and each
Purchaser desires to purchase from the Company, (i) a promissory note in the
aggregate principal amount set forth opposite such Purchaser's name on a
schedule to be prepared at the time that such Purchaser purchases such
promissory note, such promissory note to be in the form attached hereto as
Exhibit A (the "Note") and such schedule to be in the form attached hereto as
Exhibit B and (ii) a warrant to purchase 0.50 warrants per common share assuming
shares were issued on the closing date of loan based on the Company's closing
price of common shares on that day, par value $0.001 per share, of the Company
(the "Common Stock") as set forth opposite such Purchaser's name on such
schedule, such warrant to be in the form attached hereto as Exhibit C (the
"Warrant"; the Warrants together with all of the Notes herein referred to as the
"Securities"), in each case, on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, the aggregate principal amount of the Notes shall not
exceed $500,000; and
WHEREAS, the maximum number of shares of Common Stock issuable
upon exercise of the Warrants (the "Underlying Shares") shall not exceed
shares;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties agree as follows:
SECTION 1. Issuance, Sale and Purchase of Securities.
[INTENTIALLY LEFT BLANK]
SECTION 2. Closing.
2.1 Closing. For each Purchaser, a closing (for such Purchaser, the
"Closing") shall take place simultaneously with the execution and delivery
hereof at the offices of the Company at a time mutually convenient to the
parties (for each Purchaser, such date of closing being referred to as the
"Closing Date").
2.2 Deliveries at Closing. At the Closing, the Company shall deliver
such Purchaser's Note and Warrants, in the name of such Purchaser, against
receipt by the Company of a certified check or wire transfer of immediately
available funds to an account designated by the Company in an amount equal to
the Purchase Price.
SECTION 3. Representations and Warranties of the Company. The
Company represents and warrants to each of the Purchasers as follows:.
(a) Copies of the Company's most recent Annual Report on Form
10-KSB the "Form 10-KSB"), and all other reports filed by the Company pursuant
to Securities and Exchange Act of 1934 (the "Exchange Act") since the filing of
the Form 10-KSB and prior to the date hereof (collectively, the "SEC Filings")
are available on XXXXX. The SEC Filings are the only filings required of the
Company under the Exchange Act for such period.
(b) At the time of filing thereof, the SEC Filings complied as to
form in all material respects with the requirements of the Exchange Act and did
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
SECTION 4. Representations and Warranties of the Purchaser. Each
Purchaser represents and warrants to the Company as follows:
(a) it is an "accredited Purchaser" within the meaning of Rule 501
under the Securities Act of 1933 (the "Securities Act") and was not organized
for the specific purpose of acquiring the Securities or the Underlying Shares;
(b) it has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the
Company and it is able financially to bear the risks thereof, including the
complete loss of its investment.
(c) it has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management;
(d) the Securities are being acquired, and the Underlying Shares
shall be acquired, for its own account for the purpose of investment and not
with a view to or for resale in connection with any distribution or public
offering by it;
(e) it understands that (i) the Securities and the Underlying Shares
have not been registered under the Securities Act of 1933 (the "Securities Act")
by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or
Regulation D promulgated under the Securities Act nor will they have been
registered under any state securities or blue sky laws, (ii) the Securities and
the Underlying Shares must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration, (iii) the Securities and the Underlying Shares will bear a legend
to such effect and (iv) the Company will make a notation on its transfer books
to such effect;
(f) if it sells any Underlying Shares pursuant to Rule 144
promulgated under the Securities Act, it will take all necessary steps in order
to perfect the exemption from registration provided thereby;
(g) it agrees to the imprinting, so long as appropriate, of a legend
in substantially the following form on certificates representing the Securities
and the Underlying Shares:
-2-
"THESE SECURITIES AND ANY SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND ANY SECURITIES ISSUABLE
UPON EXERCISE HEREOF MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR PLEDGED, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS, OR UPON RECEIPT OF AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
(h) if it is not a natural person, it is duly organized and validly
existing under the laws of the jurisdiction of its formation and is in good
standing, or duly existing, as the case may be, in such jurisdiction;
(i) it has the requisite power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby and, upon execution by it, this Agreement will be
enforceable in accordance with its terms against such Purchaser, subject to
general principles of equity and to applicable bankruptcy, fraudulent transfer,
insolvency, reorganization, moratorium and other laws from time to time in
effect affecting the enforcement of creditors' rights generally (regardless of
whether such enforcement is considered in a proceeding in equity or at law); and
(j) no broker, finder, agent or similar intermediary has acted on
behalf of the it in connection with this Agreement, and there are no brokerage
commissions, finders' fees or similar fees or commissions payable in connection
therewith based on any agreement, arrangement or understanding with the
Purchaser or any action taken by the Purchaser.
SECTION 5. Registration Rights. The Company and each Purchaser shall
abide by the registration rights provisions set forth on Exhibit D.
SECTION 6. Events of Default.
6.1 Definitions. In each case of the happening of the
following events (each of which is an "Event of Default"):
(a) if any representation or warranty of the Company made herein
shall prove to have been false or misleading in a material respect when made;
(b) if a default occurs in the payment of any premium, principal of,
interest on, or other obligation with respect to, a Purchaser's Note, whether at
the due date thereof or upon acceleration thereof and such default remains in
effect for fifteen (15) days;
(c) if a default in any material respect occurs in the due
observance or performance of any covenant hereunder on the part of the Company
to be observed or performed other than pursuant to any of clauses (a) or (b)
above or pursuant to the terms of the Notes and such default remains uncured for
thirty (30) days;
-3-
(d) if the Company shall (1) discontinue its business, (2) apply for
or consent to the appointment of a receiver, trustee, custodian or liquidator of
it or any of its property, (3) admit in writing its inability to pay its debts
as they mature, (4) make a general assignment for the benefit of creditors, or
(5) file a voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors, or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation laws or statutes, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law; or
(e) there shall be filed against the Company an involuntary petition
seeking reorganization of the Company or the appointment of a receiver, trustee,
custodian or liquidator of the Company or a substantial part of its assets, or
an involuntary petition under any bankruptcy, reorganization or insolvency law
or any jurisdiction, whether now or hereafter in effect (any of the foregoing
petitions being hereinafter referred to as an "Involuntary Petition") and such
Involuntary Petition shall not have been dismissed within one hundred and twenty
(120) days after it was filed;
then, upon each and every such Event of Default and at any time thereafter
during the continuance of such Event of Default, at the election of the holder
of a Note to which such Event of Default is applicable, such Note shall
immediately become due and payable, both as to principal and interest (including
any deferred interest and any accrued and unpaid interest), without presentment,
demand, or protest, all of which are hereby expressly waived, anything contained
herein or in the Note to the contrary notwithstanding (except in the case of an
Event of Default under paragraphs (d) or (e) of this Section 6.1, in which event
such indebtedness shall automatically become due and payable).
6.2 Remedies on Default, Etc. In case any one or more Events of
Default shall occur and be continuing and acceleration of a Note to a Purchaser
shall have occurred, such Purchaser may, inter alia, proceed to protect and
enforce such Purchaser's rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained in this Agreement or such Purchaser's Note, or for an injunction
against a violation of any of the terms hereof or thereof or in and of the
exercise of any power granted hereby or thereby or by law. No right conferred
upon a Purchaser hereby or by the Note shall be exclusive of any other right
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
SECTION 7. Miscellaneous Provisions.
7.1 Notices. All notices, demands and requests of any kind to be
delivered to any party in connection with this Agreement shall be in writing and
shall be deemed to have been duly given if personally delivered, sent by
facsimile, sent by verifiable electronic mail or if sent by
nationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
(a) if the to Company:
-0-
XxxxXxxX, Inc.
000 Xxxxxxxxxx Xxx.
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000, ext 102
Facsimile: 000-000-0000
(b) if to Purchaser,
--------------------
--------------------
--------------------
Attention:
Telephone:
Facsimile:
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance with the
provisions of this Section. Any such notice or communication shall be deemed to
have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of facsimile or electronic mail, when receipt is
confirmed, (iii) in the case of nationally-recognized overnight courier, on the
next business day after the date when sent and (iv) in the case of mailing, on
the third business day following that on which the piece of mail containing such
communication is posted.
7.2 Entire Agreement. This Agreement, the other Financing Documents
and the other writings and agreements referred to herein or therein or delivered
pursuant hereto or thereto contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
7.3 Amendments. This Agreement may not be modified or amended, or
any of the provisions hereof waived, except by written agreement of the Company
and Purchasers who purchased Notes covering more than 50% of the aggregate
principal amount of all Notes issued hereunder as of the time of such
modification or amendment.
7.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey (without giving effect to
principles of conflicts of laws of the State of New Jersey or any other state).
[Signature page follows]
-5-
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Securities Purchase Agreement as of November __, 2004.
ROOMLINX, INC.
By:
------------------------------
Name
Title:
PURCHASER
By:
------------------------------
Name
Title:
PURCHASER
By:
------------------------------
Name
Title:
-6-
EXHIBIT A
FORM OF PROMISSORY NOTE
-7-
EXHIBIT B
PURCHASERS
--------------------------------------------------------------------------
Purchaser Aggregate Principal Maximum Number of
Amount of the Note to Shares Issuable Upon
be Issued to the Exercise of the
Purchaser Warrant Granted to
the Purchaser
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
-8-
EXHIBIT C
FORM OF INITIAL WARRANT
-9-
EXHIBIT D
REGISTRATION RIGHTS
1. Definitions.
As used in this Exhibit E, the following terms shall have the following
meanings:
"Person" means a corporation, a limited liability company, an association,
a partnership, an organization, a business, an individual, or any other entity,
including a governmental or political subdivision thereof or a governmental
agency.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in compliance with the Securities Act of 1933 (the "1933 Act") and
pursuant to Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the "SEC").
"Registrable Securities" means the shares of Common Stock underlying
the Warrants.
"Registration Statement" means a registration statement under the
1933 Act which covers the Registrable Securities.
"Termination Date" means October 31, 2009.
2. Registration.
(a) The Company shall use its best efforts to prepare and file with
the SEC a Registration Statement on Form X-0, XX-0 or on such other form as is
available within forty-five (45) days after any of the Registrable Securities
are issued. The Company shall use its best efforts to cause the SEC to declare
such Registration Statement promptly thereafter.
(b) Until the earlier of the Termination Date or the date on which
all Registrable Securities are eligible to be sold under Rule 144 within any
ninety day period (the period from the date hereof until the earlier of such
dates, the "Registration Period"), the Company shall use its best efforts to
keep the Registration Statement effective pursuant to Rule 415. Such
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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, in light of the circumstances in which
they were made, not misleading.
(c) During the Registration Period, the Company shall use its best
efforts to prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
required by law. Notwithstanding any provision herein to the contrary, the
Company shall not be deemed to be in violation of this Section 2(b) or any other
-10-
provision of this Schedule if, at any time, the Company delivers to the
Purchasers a notice (a "Suspension Notice") indicating that the Purchasers must
suspend the use of any Registration Statement while the Company either amends or
supplements such Registration Statement or files a new Registration Statement,
provided that (i) the Company determines, upon advice of counsel, that such
suspension is appropriate under applicable securities laws and (ii) the Company
promptly seeks to take such action as it determines to be appropriate under such
laws to enable the disposition of the Registrable Securities by the Purchasers.
The Purchasers shall refrain from disposing of any Registrable Securities upon
receipt of a Suspension Notice delivered in accordance with this Section 2(b).
(d) The Company shall furnish to each Purchaser without charge, (i)
at least one copy of such Registration Statement as declared effective by the
SEC and any amendment(s) thereto, including financial statements and schedules,
all documents incorporated therein by reference, all exhibits and each
preliminary prospectus, (ii) one copy of the final prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Purchaser may reasonably request) and (iii) such other
documents as such Purchaser may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Purchaser.
(e) As promptly as practicable after becoming aware of such event or
development, the Company shall notify the Purchasers in writing of the happening
of any event as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver two (2) copies of such supplement or amendment to each Purchaser. The
Company shall also promptly notify the Purchaser of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
(f) The Company shall use its best efforts either to cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or to secure the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 2(f).
3. Obligations of the Purchaser.
Each Purchaser agrees that, upon receipt of any Suspension Notice, such
Purchaser will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Purchaser is advised that the suspension described therein no longer
applies. Each Purchaser shall, as a condition to having such Purchaser's
Registrable Securities registered hereunder, provide the Company with such
information as the Company shall reasonably request for inclusion in the
Registration Statement(s) prepared hereunder.
-11-
4. Expenses of Registration.
All expenses incurred in connection with registrations hereunder shall be
paid by the Company. However, the Company shall not be responsible for any
commissions, fees or other selling expenses incurred by the Purchasers.
5. Indemnification.
With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Purchasers and the directors,
officers, partners, employees, agents, representatives of, and each Person, if
any, who controls the Purchaser within the meaning of the 1933 Act (each, an
"Indemnified Person"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid in settlement or expenses, joint or several (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which
the statements therein were made, not misleading; or (iii) any violation or
alleged violation by the Company of the 1933 Act or any state securities law, or
any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). The
Company shall reimburse the Purchasers and each such controlling person promptly
as such expenses are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 5(a): (w) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
-12-
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (x) shall not be
available to the extent such Claim is based on a failure of the Purchaser to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
this Schedule; (y) shall not inure to the benefit of any Indemnified Party if
the untrue statement or omission of material fact contained in the prospectus
was corrected and such new prospectus was delivered to the Purchaser prior to
the Purchaser's use of the prospectus to which the Claim relates; and (z) shall
not (nor shall the Company's obligations under Section 6) apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person.
(b) In connection with a Registration Statement, each Purchaser
agrees to indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 5(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if
any, who controls the Company within the meaning of the 1933 Act (each an
"Indemnified Party"), against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act or otherwise, insofar as such Claim
or Indemnified Damages arise out of or is based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Purchaser expressly for use in connection with such Registration Statement; and
such Purchaser will reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 5(b) and the
agreement with respect to contribution contained in Section 6 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Purchaser, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 5 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 5,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
claim. No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, provided.
Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all Persons relating to the matter for which indemnification has
been made.
-13-
6. Contribution.
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 5 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any Person who was not guilty of fraudulent misrepresentation;
and (ii) contribution by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities.
