CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
I-LINK INCORPORATED
and
JNC OPPORTUNITY FUND LTD.
June 30, 1998
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"),
dated as of June 30, 1998, between I-Link Incorporated, a Florida
corporation (the "Company"), and JNC Opportunity Fund Ltd., a Cayman
Islands corporation (the "Purchaser").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser and the
Purchaser desires to purchase from the Company, shares of the Company's 5%
Series [A] Convertible Preferred Stock, par value [$ ] per share (the
"Preferred Stock"), which are convertible into shares of the Company's
common stock, par value $.007 per share (the "Common Stock").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy are
hereby acknowledged, the Company and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED STOCK
1.1 The Closing.
(a) The Closing. (i) Subject to the terms and conditions set
forth in this Agreement, the Company shall issue and sell to the Purchaser
and the Purchaser shall purchase 1,000 shares of Preferred Stock (the
"Shares") for an aggregate purchase price of $10,000,000. The closing of
the purchase and sale of the Shares (the "Closing") shall take place at the
offices of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP (the "Escrow
Agent"), 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, immediately
following the execution hereof or such later date as the parties shall
agree. The date of the Closing is hereinafter referred to as the "Closing
Date."
(ii) Prior to the Closing, the parties shall deliver or
shall cause to be delivered to the Escrow Agent such items as are required
to be delivered by them in accordance with and subject to the terms and
conditions of the Escrow Agreement, dated as of the date hereof, by and
among the Company, the Purchaser and the Escrow Agent, in the form of
Exhibit E (the "Escrow Agreement"), including the following: (A) the
Company shall deliver (1) stock certificates representing the Shares,
registered in the name of the Purchaser, (2) a Common Stock purchase
warrant, in the form of Exhibit D, registered in the name of the Purchaser,
pursuant to which the Purchaser shall have the right at any time and from
time to time thereafter through the fifth anniversary of the Closing Date
to acquire 250,000 shares of Common Stock at an exercise price per share
(subject to adjustment as provided therein) of $[ ] (the "Warrant"),
(3) the legal opinion of Hardy & Xxxxx, outside counsel to the Company,
substantially in the form of Exhibit C, and (4) all other documents,
instruments and writings required to have been delivered at or prior to the
Closing Date by the Company pursuant to this Agreement, including an
executed Registration Rights Agreement, dated the date hereof, between the
Company and the Purchaser, in the form of Exhibit
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1 120% of the average of the Per Share Market Values for the five (5)
Trading Days immediately preceding the Original Issue Date.
B (the "Registration Rights Agreement"), and the Irrevocable Transfer Agent
Instructions, in the form of Exhibit F, delivered to and acknowledged by
the Company's transfer agent (the "Transfer Agent Instructions"); and (B)
the Purchaser shall deliver (1) $10,000,000 in United States dollars in
immediately available funds by wire transfer to an account designated in
writing by the Company for such purpose, and (2) all documents, instruments
and writings required to have been delivered at or prior to the Closing
Date by the Purchaser pursuant to this Agreement, including, without
limitation, an executed Registration Rights Agreement.
1.2 Form of Preferred Stock. The Preferred Stock shall have the
rights preferences and privileges set forth in Exhibit A, and shall be
incorporated into a Certificate of Designation ("Certificate of
Designation"), in form and substance mutually agreed to by the parties.
For purposes of this Agreement, "Conversion Price," "Original
Issue Date," "Conversion Date" and "Trading Day" shall have the meanings
set forth in Exhibit A; "Business Day" shall mean any day except Saturday,
Sunday and any day which shall be a federal legal holiday or a day on which
banking institutions in the State of New York are authorized or required by
law or other governmental action to close.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to the
Purchaser:
(a) Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing under
the laws of the State of Florida, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company has no subsidiaries other
than as set forth in Schedule 2.1(a) (collectively the "Subsidiaries").
Each of the Subsidiaries is an entity, duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
full power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing,
as the case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of the Securities
(as defined below) or any of this Agreement, the Certificate of
Designation, the Registration Rights Agreement, the Warrant or the Escrow
Agreement (collectively, the "Transaction Documents"), (y) have or result
in a material adverse effect on the results of operations, assets,
prospects, or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (z) adversely impair the Company's
ability to perform fully on a timely basis its obligations under any of
the Transaction Documents (any of (x), (y) or (z), a "Material Adverse
Effect").
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents, and
otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no
further action is required by the Company. Each of the Transaction
Documents has been duly executed by the Company and, when delivered (or
filed, as the case may be) in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. Neither the Company nor
any Subsidiary is in violation of any of the provisions of its respective
certificate of incorporation, by-laws or other charter documents.
(c) Capitalization. The number of authorized, issued and
outstanding capital stock of the Company is set forth in Schedule 2.1(c).
No shares of Common Stock are entitled to preemptive or similar rights, nor
is any holder of the Common Stock entitled to preemptive or similar rights
arising out of any agreement or understanding with the Company by virtue of
any of the Transaction Documents. Except as disclosed in Schedule 2.1(c),
there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or, except as
a result of the purchase and sale of the Shares and the Warrant,
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of
Common Stock, or contracts, commitments, understandings, or arrangements by
which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. To the knowledge of the Company,
except as specifically disclosed in the SEC Documents (as defined below) or
Schedule 2.1(c), no Person or group of related Persons beneficially owns
(as determined pursuant to Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) or has the right to
acquire by agreement with or by obligation binding upon the Company
beneficial ownership of in excess of 5% of the Common Stock. A "Person"
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other
entity of any kind.
(d) Issuance of the Shares and the Warrant. The Shares and the
Warrant are duly authorized, and, when issued and paid for in accordance
with the terms hereof, shall have been validly issued, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of
first refusal of any kind (collectively, "Liens"). The Company has on the
date hereof and will, at all times while the Shares and the Warrant are
outstanding, maintain an adequate reserve of duly authorized shares of
Common Stock, reserved for issuance to the holders of the Shares, to enable
it to perform its conversion, exercise and other obligations under this
Agreement, the Certificate of Designation and the Warrant. Such number of
reserved and available shares of Common Stock is not less than the sum of
(i) 200% of the number of shares of Common Stock which would be issuable
upon conversion in full of the Shares, assuming such conversion occurred on
the Original Issue Date or the Filing Date (as defined in the Registration
Rights Agreement), whichever yields a lower Conversion Price, (ii) the
number of shares of Common Stock issuable upon exercise of the Warrant, and
(iii) the number of shares Common Stock which would be issuable upon
payment of dividends on the Shares, assuming each Share is outstanding for
three years and all dividends are paid in shares of Common Stock (such
number of shares, the "Initial Minimum"). All such authorized shares of
Common Stock shall be duly reserved for issuance to the holders of such
Shares and Warrant. The shares of Common Stock issuable upon conversion of
the Shares, as payment of dividends thereon and upon exercise of the
Warrant are collectively referred to herein as the "Underlying Shares."
The Shares, the Warrant and the Underlying Shares are collectively, the
"Securities." When issued in accordance with the Certificate of
Designation and the Warrant, in accordance with their respective terms, the
Underlying Shares shall have been duly authorized, validly issued, fully
paid and nonassessable, free and clear of all Liens.
(e) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its certificate of incorporation,
bylaws or other charter documents (each as amended through the date
hereof), or (ii) subject to obtaining the Required Approvals (as defined
below), conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, indenture or instrument (evidencing a Company debt or otherwise)
to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii)
result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including Federal and state
securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except in the case of each of clauses (ii)
and (iii), as could not, individually or in the aggregate, have or result
in a Material Adverse Effect. The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually or in the
aggregate, could not have or result in a Material Adverse Effect.
(f) Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any
court or other Federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and performance by
the Company of the Transaction Documents, other than (i) the filing of the
Certificate of Designation with the Secretary of State of Florida, (ii) the
filings required pursuant to Section 3.12, (iii) the filing of the
Underlying Securities Registration Statement with the Securities and
Exchange Commission (the "Commission") meeting the requirements set forth
in the Registration Rights Agreement and covering the resale of the
Underlying Shares by the Purchaser, (iv) the application(s) to the Nasdaq
SmallCap Market (the "NASDAQ") for the listing of the Underlying Shares
with the NASDAQ (and with any other national securities exchange or market
on which the Common Stock is then listed), (v) applicable Blue Sky filings
and, and (vi) in all other cases where the failure to obtain such consent,
waiver, authorization or order, or to give such notice or make such filing
or registration could not have or result in, individually or in the
aggregate, a Material Adverse Effect (the consents, waivers,
authorizations, orders, notices and filings referred to in (i)-(vi) of
this Section are, collectively, the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed
in the SEC Documents, there is no action, suit, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or
any of their respective properties before or by any court, governmental or
administrative agency or regulatory authority (Federal, state, county,
local or foreign) which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, individually or in the aggregate, have or result
in a Material Adverse Effect.
(h) No Default or Violation. Neither the Company nor any
Subsidiary (i) is in default under or in violation of (and no event has
occurred which has not been waived which, with notice or lapse of time or
both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound, (ii) is in
violation of any order of any court, arbitrator or governmental body, or
(iii) is in violation of any statute, rule or regulation of any
governmental authority, except as could not individually or in the
aggregate, have or result in a Material Adverse Effect.
(i) Private Offering. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchaser
as contemplated hereby are exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Neither the
Company nor any Person acting on its behalf has taken any action could
subject the offering, issuance or sale of the Securities to the
registration requirements of the Securities Act.
(j) SEC Documents; Financial Statements. The Company has filed
all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three years preceding
the date hereof (or such shorter period as the Company was required by law
to file such material) (the foregoing materials being collectively referred
to herein as the "SEC Documents" and, together with the Schedules to this
Agreement the "Disclosure Materials") on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Documents
prior to the expiration of any such extension. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. All material agreements to
which the Company is a party or to which the property or assets of the
Company are subject have been filed as exhibits to the SEC Documents as
required. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been prepared in accordance with generally accepted accounting ("GAAP")
principles applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the
notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. Since December 31, 1997, except as
specifically disclosed in the SEC Documents, (a) there has been no event,
occurrence or development that has had or that could have or result in a
Material Adverse Effect, (b) the Company has not incurred any liabilities
(contingent or otherwise) other than (x) liabilities incurred in the
ordinary course of business consistent with past practice and (y)
liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made
with the Commission, (c) the Company has not altered its method of
accounting or the identity of its auditors and (d) the Company has not
declared or made any payment or distribution of cash or other property to
its stockholders or officers or directors (other than in compliance with
existing Company stock option plans) with respect to its capital stock, or
purchased, redeemed (or made any agreements to purchase or redeem) any
shares of its capital stock. The Company last filed audited financial
statements with the Commission on [April 15, 1998], and has not received
any comments from the Commission in respect thereof.
(k) Investment Company. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities Act) of, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(l) Certain Fees. Except for certain fees payable by the
Company to Xxxxxxx Capital Partners, Ltd. and Alpine Capital Partners,
Inc., no fees or commissions will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment
banker, or bank with respect to the transactions contemplated by this
Agreement. The Purchaser shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by this Agreement. The Company shall
indemnify and hold harmless the Purchaser, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of
preparation and attorney's fees) and expenses suffered in respect of any
such claimed or existing fees, as such fees and expenses are incurred.
(m) Solicitation Materials. Neither the Company nor any Person
acting on the Company's behalf has (i) distributed any offering materials
in connection with the offering and sale of the Securities, or (ii)
solicited any offer to buy or sell the Securities by means of any form of
general solicitation or advertising.
(n) Form S-3 Eligibility. The Company is eligible to register
securities for resale with the Commission under Form S-3 promulgated under
the Securities Act.
(o) Exclusivity. The Company shall not issue and sell the
Shares to any Person other than the Purchaser other than with the specific
prior written consent of the Purchaser.
(p) Seniority. No class of equity securities of the Company is
senior to the Shares in right of payment, whether upon liquidation or
dissolution, or otherwise.
(q) Listing and Maintenance Requirements Compliance. The
Company has not, in the two years preceding the date hereof, received
notice (written or oral) from the NASDAQ or any other stock exchange,
market or trading facility on which the Common Stock is or has been listed
(or on which it has been quoted) to the effect that the Company is not in
compliance with the listing or maintenance requirements of such exchange or
market. The Company is in compliance with all such maintenance
requirements.
(r) Patents and Trademarks. The Company has, or has rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and rights (collectively,
the "Intellectual Property Rights") which are necessary or material for use
in connection with its business, and which the failure to so have would
have a Material Adverse Effect. To the best knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.
(s) Registration Rights; Rights of Participation. Except as set
forth on Schedule 6(b) to the Registration Rights Agreement, (i) the
Company has not granted or agreed to grant to any Person any rights
(including "piggy-back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority
which has not been satisfied and (ii) no Person, has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
(t) Regulatory Permits. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate Federal, state or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Documents,
except where the failure to possess such permits could not, individually or
in the aggregate, have or result in a Material Adverse Effect ("Material
Permits"), and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any
Material Permit.
(u) Title. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and personal property
owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all Liens, except for liens,
claims or encumbrances as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and its Subsidiaries. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiaries.
(v) Disclosure. The Company confirms that it has not provided
the Purchaser or its agents or counsel with any information that
constitutes or might constitute material non-public information. The
Company understands and confirms that the Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to the Purchaser regarding the Company,
its business and the transactions contemplated hereby, including the
Schedules to this Agreement, furnished by or on behalf of the Company are
true and correct and do 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 light of the circumstances under which they
were made, not misleading.
2.2 Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with the requisite corporate power and
authority, to enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its obligations
thereunder. The purchase by the Purchaser of the Securities hereunder has
been duly authorized by all necessary action on the part of the Purchaser.
Each of this Agreement, the Registration Rights Agreement and the Escrow
Agreement has been duly executed and delivered by the Purchaser and
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against it in accordance with its terms.
(b) Investment Intent. The Purchaser is acquiring the
Securities for its own account for investment purposes only and not with a
view to or for distributing or reselling such Securities or any part
thereof or interest therein, without prejudice, however, to the Purchaser's
right, subject to the provisions of this Agreement and the Registration
Rights Agreement, at all times to sell or otherwise dispose of all or any
part of such Securities pursuant to an effective registration statement
under the Securities Act and in compliance with applicable state securities
laws or under an exemption from such registration.
(c) Purchaser Status. At the time the Purchaser was offered the
Shares and the Warrant, it was, and at the date hereof it is, and at each
exercise date under the Warrant, it will be, an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
(d) Experience of the Purchaser. The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.
(e) Ability of the Purchaser to Bear Risk of Investment. The
Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of
such investment.
(f) Access to Information. The Purchaser acknowledges receipt
of the Disclosure Materials and further acknowledges that it has reviewed
the Disclosure Materials and has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
which the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with
respect to the investment and to verify the accuracy and completeness of
the information contained in the Disclosure Materials. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect
such Purchaser's right to rely on the truth, accuracy and completeness of
the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(g) General Solicitation. The Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article,
notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar.
(h) Reliance. The Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without registration
under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act and (ii) the availability of
such exemption, depends in part on, and the Company will rely upon the
accuracy and truthfulness of, the foregoing representations and the
Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) Securities may only be disposed of
pursuant to an effective registration statement under the Securities Act,
to the Company or pursuant to an available exemption from or in a
transaction not subject to the registration requirements of the Securities
Act. In connection with any transfer of Securities other than pursuant to
an effective registration statement or to the Company, except as otherwise
set forth herein, the Company may require the transferor thereof to provide
to the Company an opinion of counsel selected by the transferor, the form
and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of
such transferred securities under the Securities Act. Notwithstanding the
foregoing, the Company hereby consents to and agrees to register on the
books of the Company and with any transfer agent for the securities of the
Company any transfer of Securities by the Purchaser to an Affiliate of the
Purchaser or to funds under common management with the Purchaser, and any
transfer among any such Affiliates or funds, provided that transferee
certifies to the Company that it is an "accredited investor" as defined in
Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes. Any such transferee shall agree
in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.
(b) The Purchaser agrees to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
Underlying Shares shall not contain the legend set forth above
nor any other legend if the conversion of Shares, the payment of dividends
thereon, and exercise of the Warrant or other issuances of Underlying
Shares as contemplated hereby, by the Certificate of Designation or the
Warrant occurs at any time while an Underlying Securities Registration
Statement is effective under the Securities Act or, in the event there is
not an effective Underlying Securities Registration Statement at such time,
if in the opinion of counsel to the Company such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).
The Company shall cause its counsel to issue the legal opinion included in
the Transfer Agent Instructions to the Company's transfer agent on the day
that the Underlying Securities Registration Statement is declared effective
by the Commission. The Company agrees that it will provide the Purchaser,
upon request, with a certificate or certificates representing Underlying
Shares, free from such legend at such time as such legend is no longer
required hereunder. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company which enlarge the
restrictions of transfer set forth in this Section.
3.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Underlying Shares upon (i) conversion of the Shares and
payment of dividends thereon in accordance with the terms of the
Certificate of Designation, and (ii) exercise of the Warrant in accordance
with its terms, may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue Underlying
Shares upon (x) conversion of the Shares and payment of dividends thereon
in accordance with the terms of the Certificate of Designation, and (y)
exercise of the Warrant in accordance with its terms, is unconditional and
absolute, subject to the limitations set forth herein in the Certificate of
Designation or pursuant to the Warrant, regardless of the effect of any
such dilution.
3.3 Furnishing of Information. As long as the Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act. As long as the Purchaser owns
Securities, if the Company is not required to file reports pursuant to such
sections, it will prepare and furnish to the Purchaser and make publicly
available in accordance with Rule 144(c) promulgated under the Securities
Act annual and quarterly financial statements, together with a discussion
and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act,
as well as any other information required thereby, in the time period that
such filings would have been required to have been made under the Exchange
Act. The Company further covenants that it will take such further action
as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell Underlying Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act,
including the legal opinion referenced above in this Section. Upon the
request of any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has
complied with such requirements.
3.4 Blue Sky Laws. In accordance with the Registration Rights
Agreement, the Company shall qualify or exempt the issuance and sale of
the Underlying Shares under the securities or Blue Sky laws of such
jurisdictions as the Purchaser may reasonably request and shall continue
such qualification or exemption at all times until the Purchaser notifies
the Company in writing that it no longer owns Securities; provided,
however, that neither the Company nor its Subsidiaries shall be required in
connection therewith to qualify as a foreign corporation where they are not
now so qualified or to take any action that would subject the Company to
general service of process in any such jurisdiction where it is not then
subject.
3.5 Integration. The Company shall not, and shall use its best
efforts to ensure that, no Affiliate shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer
or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchaser.
3.6 Increase in Authorized Shares. At such times as the Company
would be, if a notice of conversion or exercise (as the case may be) were
to be delivered on such date, precluded from (a) issuing 200% of the number
of Underlying Shares as would then be issuable upon a conversion in full of
the Shares and as payment of any accrued and unpaid dividends in respect
thereof in shares of Common Stock, or (b) honoring the exercise in full of
the Warrant, in either case, due to the unavailability of a sufficient
number of shares of authorized but unissued or reserved Common Stock, the
Board of Directors of the Company shall promptly (and in any case, within
30 Business Days from such date) prepare and mail to the stockholders of
the Company proxy materials requesting authorization to amend the Company's
Certificate of Incorporation to increase the number of shares of Common
Stock which the Company is authorized to issue to at least such number of
shares as reasonably requested by the Purchaser in order to provide for
such number of authorized and unissued shares of Common Stock to enable the
Company to comply with its conversion exercise and reservation of shares
obligations as set forth in this Agreement, the Certificate of Designation
and the Warrant (the sum of (x) the number of shares of Common Stock then
authorized, (y) the number of shares of Common Stock then outstanding plus
all shares of Common Stock issuable upon exercise of all outstanding
options, warrants and convertible instruments, and (z) the sum of (i) 200%
of the number of Underlying Shares as are then issuable upon a conversion
in full of all Shares and as payment of dividends thereon, and (ii) the
number of Underlying Shares as are issuable upon exercise in full of the
Warrant, shall be a reasonable number). In connection therewith, the Board
of Directors shall (a) adopt proper resolutions authorizing such increase,
(b) recommend to and otherwise use its best efforts to promptly and duly
obtain stockholder approval to carry out such resolutions (and hold a
special meeting of the stockholders no later than the 60th day after
delivery of the proxy materials relating to such meeting) and (c) within
five (5) Business Days of obtaining such stockholder authorization, file an
appropriate amendment to the Company's Certificate of Incorporation to
evidence such increase.
3.7 Listing and Reservation of Underlying Shares. (a) The Company
shall (i) not later than the fifth Business Day following the Closing Date
prepare and file with the NASDAQ (or such other national securities
exchange or market or trading or quotation facility on which the Common
Stock is then listed) an additional shares listing application covering a
number of shares of Common Stock which is at least equal to the number of
shares required to be reserved pursuant to Section 2.1(d), (ii) take all
steps necessary to cause such shares to be approved for listing in the
NASDAQ (as well as on any such other national securities exchange or market
or trading or quotation facility on which the Common Stock is then listed)
as soon as possible thereafter, and (iii) provide to the Purchaser evidence
of such listing, and the Company shall maintain the listing of its Common
Stock thereon. If the number of Underlying Shares as are issuable upon
conversion in full of the then outstanding Shares, as payment of dividends
thereon, and upon exercise of the then unexercised portion of the Warrant
exceeds 85% of the number of Underlying Shares previously listed on account
thereof with NASDAQ (and such other required exchanges), the Company shall
take the necessary actions to immediately list a number of Underlying
Shares as equals the sum of (x) 200% of the number of Underlying Shares
then issuable upon conversion of the Shares and as payment of dividends
thereon and (y) the number of Underlying Shares as are then issuable upon
exercise of the Warrant.
(b) The Company shall maintain a reserve of Common Stock for
issuance upon conversion of the Shares and for payment of dividends
thereupon in shares of Common Stock pursuant to the terms of the
Certificate of Designation and upon exercise of the Warrant in accordance
with its terms, in such amount as may be required to fulfill obligations in
full under the Transaction Documents, which reserve shall include a number
of shares of Common Stock equal to no less than the Initial Minimum.
3.8 Conversion Procedures. The Transfer Agent Instructions,
Conversion Notice (as defined in Exhibit A) and Notice of Exercise under
the Warrant set forth the totality of the procedures with respect to the
conversion of the Shares and exercise of the Warrant, including the form of
legal opinion, if necessary, that shall be rendered to the Company's
transfer agent and such other information and instructions as may be
reasonably necessary to enable the Purchaser to convert its Shares and
exercise the Warrant as contemplated in the Certificate of Designation and
the Warrant (as applicable).
3.9 Notice of Breaches. (a) Each of the Company and the Purchaser
shall give prompt written notice to the other of any breach by it of any
representation, warranty or other agreement contained in any Transaction
Document, as well as any events or occurrences arising after the date
hereof which would reasonably be likely to cause any representation or
warranty or other agreement of such party, as the case may be, contained
therein to be incorrect or breached as of the Closing Date. However, no
disclosure by either party pursuant to this Section shall be deemed to cure
any breach of any representation, warranty or other agreement contained in
any Transaction Document.
(b) Notwithstanding the generality of Section 3.9(a), the
Company shall promptly notify the Purchaser of any notice or claim (written
or oral) that it receives from any lender of the Company to the effect that
the consummation of the transactions contemplated by the Transaction
Documents violates or would violate any written agreement or understanding
between such lender and the Company, and the Company shall promptly furnish
by facsimile to the holders of the Securities a copy of any written
statement in support of or relating to such claim or notice.
3.10 Conversion and Exercise Obligations of the Company. The Company
shall honor conversions of the Shares and exercises of the Warrant and
shall deliver Underlying Shares in accordance with the respective terms,
conditions and time periods set forth in the respective Certificate of
Designation and the Warrant.
3.11 Right of First Refusal; Subsequent Registrations. (a) The
Company shall not, directly or indirectly, without the prior written
consent of the Purchaser, offer, sell, grant any option to purchase, or
otherwise dispose of (or announce any offer, sale, grant or any option to
purchase or other disposition) any of its or its Affiliates' equity or
equity-equivalent securities or a transaction intended to be exempt or not
subject to registration under the Securities Act (a "Subsequent Placement")
for a period of 180 days after the Closing Date, except (i) the granting of
options or warrants to employees, officers and directors, and the issuance
of shares upon exercise of options granted, under any stock option plan
heretofore or hereinafter duly adopted by the Company, (ii) shares of
Common Stock issued upon exercise of any currently outstanding warrants and
upon conversion of any currently outstanding convertible securities of the
Company, in each case disclosed in Schedule 2.1(c), and (iii) shares of
Common Stock issued upon conversion of Preferred Stock and as payment of
dividends thereon and upon exercise of the Warrant in accordance with the
Certificate of Designation or the Warrant, respectively, unless (A) the
Company delivers to the Purchaser a written notice (the "Subsequent
Placement Notice") of its intention effect such Subsequent Placement, which
Subsequent Placement Notice shall describe in reasonable detail the
proposed terms of such Subsequent Placement, the amount of proceeds
intended to be raised thereunder, the Person with whom such Subsequent
Placement shall be effected, and attached to which shall be a term sheet or
similar document relating thereto and (B) the Purchaser shall not have
notified the Company by 5:00 p.m. (New York City time) on the tenth (10th)
Trading Day after its receipt of the Subsequent Placement Notice of its
willingness to cause the Purchaser to provide (or to cause its sole
designee to provide), subject to completion of mutually acceptable
documentation, financing to the Company on substantially the terms set
forth in the Subsequent Placement Notice. If the Purchaser shall fail to
notify the Company of its intention to enter into such negotiations within
such time period, the Company may effect the Subsequent Placement
substantially upon the terms and to the Persons (or Affiliates of such
Persons) set forth in the Subsequent Placement Notice; provided, that the
Company shall provide the Purchaser with a second Subsequent Placement
Notice, and the Purchaser shall again have the right of first refusal set
forth above in this paragraph (a), if the Subsequent Placement subject to
the initial Subsequent Placement Notice shall not have been consummated for
any reason on the terms set forth in such Subsequent Placement Notice
within thirty (30) Trading Days after the date of the initial Subsequent
Placement Notice with the Person (or an Affiliate of such Person)
identified in the Subsequent Placement Notice.
(b) Except for (x) Underlying Shares, (y) other "Registrable
Securities" (as such term is defined in the Registration Rights Agreement)
to be registered, and securities of the Company permitted pursuant to
Schedule 6(b) of the Registration's Rights Agreement to be registered in
the Underlying Securities Registration in accordance with the Registration
Rights Agreement, and (z) Common Stock to be registered for resale in
connection with financings permitted pursuant to paragraph (a)(i) and (iii)
of Section 3.11(a), the Company shall not, without the prior written
consent of the Purchaser (i) issue or sell any of its or any of its
Affiliates' equity or equity-equivalent securities pursuant to Regulation S
promulgated under the Securities Act, or (ii) register for resale any
securities of the Company for a period of not less than 90 Trading Days
after the date that the Underlying Securities Registration Statement is
declared effective by the Commission. Any days that a Purchaser is unable
to sell Underlying Securities under the Underlying Securities Registration
Statement shall be added to such 90 Trading Day period for the purposes of
(i) and (ii) above.
3.12 Certain Securities Laws Disclosures; Publicity. The Company
shall: (i) issue a press release acceptable to the Purchaser disclosing the
transactions contemplated hereby on the Closing Date, (ii) file with the
Commission a Report on Form 8-K disclosing the transactions contemplated
hereby within ten (10) Business Days after the Closing Date, and (iii)
timely file with the Commission a Form D promulgated under the Securities
Act as required under Regulation D promulgated under the Securities Act and
provide a copy thereof to the Purchaser promptly after the filing thereof.
The Company shall, no less than two (2) Business Days prior to the filing
of any disclosure required by clauses (ii) and (iii) above, provide a copy
thereof to Encore Capital Management, L.L.C. ("Encore"). No such filing
or disclosure may be made that mentions the Purchaser or Encore by name
without the prior consent of Encore.
3.13 Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and not for
the satisfaction of any portion of Company debt or to redeem any Company
equity or equity-equivalent securities. Pending application of the
proceeds of this placement in the manner permitted hereby, the Company will
invest such proceeds in interest bearing accounts and/or short-term,
investment grade interest bearing securities.
3.14 Transfer of Intellectual Property Rights. Except in connection
with the sale of all or substantially all of the assets of the Company, the
Company shall not transfer, sell or otherwise dispose of any Intellectual
Property Rights, or allow any of the Intellectual Property Rights to become
subject to any Liens, or fail to renew such Intellectual Property Rights
(if renewable and it would otherwise lapse if not renewed), without the
prior written consent of the Purchaser.
3.15 Reimbursement. If the Purchaser, other than by reason of its
gross negligence or willful misconduct, becomes involved in any capacity in
any action, proceeding or investigation brought by or against any Person,
including stockholders of the Company, in connection with or as a result of
the consummation of the transactions contemplated by Transaction Documents,
the Company will reimburse the Purchaser for its reasonable legal and other
expenses (including the cost of any investigation and preparation) incurred
in connection therewith, as such expenses are incurred. In addition,
other than with respect to any matter in which the Purchaser is a named
party, the Company will pay the Purchaser the charges, as reasonably
determined by the Purchaser, for the time of any officers or employees of
the Purchaser devoted to appearing and preparing to appear as witnesses,
assisting in preparation for hearings, trials or pretrial matters, or
otherwise with respect to inquiries, hearings, trials, and other
proceedings relating to the subject matter of this Agreement. The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall
extend upon the same terms and conditions to any Affiliates of the
Purchaser who are actually named in such action, proceeding or
investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of the Purchaser and any such
Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Purchaser and any such Affiliate and any such Person. The Company also
agrees that neither the Purchaser nor any such Affiliates, partners,
directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in
right of the Company in connection with or as a result of the consummation
of the Transaction Documents except to the extent that any losses, claims,
damages, liabilities or expenses incurred by the Company result from the
gross negligence or willful misconduct of the Purchaser or entity in
connection with the transactions contemplated by this Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 Fees and Expenses. At the Closing the Company shall (i) pay
$20,000 to the Escrow Agent in connection with the preparation and
negotiation of the Transaction Documents, and (ii) pay to $10,000 to Encore
for its due diligence expenses and disbursements in connection with the
transactions contemplated hereby. Other than the amounts contemplated in
the immediately preceding sentence, and except as otherwise set forth in
the Registration Rights Agreement, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The
Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Securities.
4.2 Entire Agreement; Amendments. This Agreement, together with
the Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificate of Designation, the Transfer Agent Instructions, the Warrant
and the Escrow Agreement contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
4.3 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior
to 8:00 p.m. (New York City time) on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in the
Purchase Agreement later than 8:00 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the
party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
If to the Company: I-Link Incorporated
00000 X. Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Facsimile No.: (801)_______
Attn: Chief Financial Officer
With copies to: Hardy & Xxxxx
00 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxx
If to the Purchaser: JNC Opportunity Fund Ltd.
c/o Olympia Capital (Cayman) Ltd.
Xxxxxxxx Xxxxx, 00 Xxxx Xxxxxx
Xxxxxxxx XX00, Xxxxxxx
Facsimile No.: (000) 000-0000
Attn: Director
With copies to: Encore Capital Management, L.L.C.
00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Managing Member
With copies to: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxx
or such other address as may be designated in writing hereafter, in the
same manner, by such Person.
4.4 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by both the Company and the Purchaser; or, in the case of a
waiver, by the party against whom enforcement of any such waiver is
sought. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any
right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
4.5 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
4.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the
Purchaser. Except as set forth in Section 3.1(a), the Purchaser may not
assign this Agreement or any of the rights or obligations hereunder (other
than to an Affiliate of the Purchaser) without the consent of the Company,
except that the Purchaser may assign its rights hereunder and under the
Transaction Documents without the consent of the Company as long as such
assignee demonstrates to the reasonable satisfaction of the Company its
satisfaction of the representations and warranties set forth in Section
2.2. This provision shall not limit the Purchaser's right to transfer
securities or transfer or assign rights hereunder or under the Registration
Rights Agreement.
4.7 No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and, other with respect to Encore who is an intended
beneficiary of, and entitled to enforce, Sections 3.12, 4.1 and 4.11, is
not for the benefit of, nor may any provision hereof be enforced by, any
other Person.
4.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York without regard to the principles of conflicts of law thereof.
Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.
4.9 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery and
conversion or exercise (as the case may be) of the Shares and the Warrant.
4.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect
as if such facsimile signature page were an original thereof.
4.11 Publicity. The Company and the Purchaser shall consult with
each other in issuing any press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such
press release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which
consent shall not be unreasonably withheld or delayed, except that no prior
consent shall be required if such disclosure is required by law, in which
such case the disclosing party shall provide the other party with prior
notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the
name of the Purchaser or Encore, or include the name of the Purchaser or
Encore in any filing with the Commission, or any regulatory agency, trading
facility or stock market without the prior written consent of Encore,
except to the extent such disclosure (but not any disclosure as to the
controlling Persons thereof) is required by law, in which case the Company
shall provide the Purchaser and Encore with prior notice of such
disclosure.
4.12 Severability. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affecting or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision which
shall be a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
4.13 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages,
the Purchaser will be entitled to specific performance of the obligations
of the Company under the Transaction Documents. Each of the Company and
the Purchaser agree that monetary damages may not be adequate compensation
for any loss incurred by reason of any breach of its obligations described
in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at
law would be adequate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Preferred Stock Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.
I-LINK INCORPORATED
By:_____________________________________
Name: Xxxx X. Xxxxxxx
Title: President
JNC OPPORTUNITY FUND LTD.
By:_____________________________________
Name:
Title:
