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CONVERTIBLE DEBENTURE PURCHASE AGREEMENT
Among
LUMINANT WORLDWIDE CORPORATION
and
THE INVESTORS SIGNATORY HERETO
Dated as of September 21, 2000
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Convertible Debenture Purchase Agreement
CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (this "AGREEMENT"), dated as
of September 21, 2000, among Luminant Worldwide Corporation, a Delaware
corporation (the "COMPANY"), and the investors signatory hereto (each such
investor is a "PURCHASER" and all such investors are, collectively, the
"PURCHASERS").
WHEREAS, subject to the terms and conditions set forth in this
Agreement in accordance with Section 4(2) of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), the Company desires to issue and sell to the
Purchasers and the Purchasers, severally and not jointly, desire to purchase
from the Company, an aggregate principal amount of $17,000,000 of the
Company's 6% Convertible Debentures, due September 21, 2003, which shall be
in the form of EXHIBIT A (the "DEBENTURES"), and which are convertible into
shares of the Company's common stock, $.01 par value per share (the "Common
Stock").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 THE CLOSING
(a) THE CLOSING. Subject to the terms and conditions set
forth in this Agreement, the Company shall issue and sell to the Purchasers
and the Purchasers shall, severally, and not jointly, purchase from the
Company the Debentures for an aggregate purchase price of $17,000,000. The
closing of the purchase and sale of the Debentures (the "CLOSING") shall take
place at the offices of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
("XXXXXXXX XXXXXXXXX"), 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) At the Closing, the parties shall deliver or shall
cause to be delivered the following: (A) the Company shall deliver to each
Purchaser: (1) Debentures registered in the name of such Purchaser in the
aggregate principal amount indicated below such Purchaser's name on the
signature page to this Agreement, (2) a Common Stock purchase warrant, in the
form of EXHIBIT D, registered in the name of such Purchaser, pursuant to which
such Purchaser shall have the right to acquire a number of shares of Common
Stock equal to 25% of the quotient obtained by dividing the principal amount
of Debentures purchased by such Purchaser by the Exercise Price (as defined in
the Warrants), upon the terms and conditions set forth therein (collectively,
the "WARRANTS"), (3) the legal opinion of Xxxxxx, Xxxxxx & Xxxxxxxxx, outside
counsel to the Company, in the form of EXHIBIT C, (4) an executed Registration
Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of
Convertible Debenture Purchase Agreement
EXHIBIT B (the "REGISTRATION RIGHTS AGREEMENT"), (5) an executed Letter
Agreement, dated the date hereof, among the Company and the Purchasers, in the
form of EXHIBIT F (the "LETTER AGREEMENT") and (6) Transfer Agent
Instructions, in the form of EXHIBIT E, delivered to and acknowledged by the
Company's transfer agent (the "TRANSFER AGENT INSTRUCTIONS"), and (B) each
Purchaser will deliver to the Company: (1) the purchase price indicated below
such Purchaser's name on the signature page to this Agreement 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) an executed
Registration Rights Agreement and Letter Agreement.
1.2 CERTAIN DEFINED TERMS. For purposes of this Agreement,
"CONVERSION PRICE," "ORIGINAL ISSUE DATE" and "TRADING DAY" shall have the
meanings set forth in the Debentures; "BUSINESS DAY" shall mean any day
except Saturday, Sunday and any day which shall be a federal legal holiday in
the United States or a day on which banking institutions in the State of New
York or California are authorized or required by law or other governmental
action to close. 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.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchasers:
(a) ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware 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 requisite 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
or other entity 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 Registration Rights Agreement, the Transfer Agent
Instructions, the Letter Agreement, the Debentures or the Warrants
(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) have or result in a material adverse effect on the Company's
Convertible Debenture Purchase Agreement
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 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 or articles of incorporation, by-laws or other organizational or
charter documents.
(c) CAPITALIZATION. The number of authorized, issued and
outstanding capital stock of the Company is set forth in SCHEDULE 2.1(c).
Except as disclosed in Schedule 2.1(c), the Company owns all of the Capital
Stock of each Subsidiary. No shares of Common Stock are entitled to preemptive
or similar rights, nor is any holder of the securities of the Company or any
Subsidiary entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company or any Subsidiary by virtue of any
of the Transaction Documents. Except as a result of the purchase and sale of
the Debentures and the Warrants and 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 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. The issue and sale of the Debentures, Warrants or Underlying
Shares (as hereinafter defined) will not obligate the Company to issue shares
of Common Stock or other securities to any Person other than the Purchasers
and will not result in a right of any holder of Company securities to adjust
the exercise or conversion or reset price under such securities.
(d) ISSUANCE OF THE DEBENTURES AND THE WARRANTS. The Company
has on the date hereof (and will, at all times while Debentures and the
Warrants are outstanding, maintain) an adequate reserve of duly authorized
shares of Common Stock, reserved for issuance to the holders of such
Debentures and Warrants, to enable it to perform its conversion, exercise and
other obligations under this Agreement, the Debentures and the Warrants. Such
number of reserved and available shares of Common Stock shall not be less
than the sum of 200% of the number of shares of Common Stock which would be
issuable upon: (i) conversion in full of the Debentures assuming such
conversion occurred on the Original Issue Date, the Debentures remain
outstanding for three years and all interest is paid in shares of Common Stock
and (ii) exercise in full of the Warrants. All such authorized shares of
Common Stock shall be duly
Convertible Debenture Purchase Agreement
reserved for issuance to the holders of the Debentures and the Warrants. The
shares of Common Stock issuable upon conversion of the Debentures and upon
exercise of the Warrants are collectively referred to herein as the
"UNDERLYING SHARES." The Debentures, the Warrants and the Underlying Shares
are collectively referred to herein as, the "SECURITIES." When issued in
accordance with the Debentures and the Warrants, the Underlying Shares will be
duly authorized, validly issued, fully paid and nonassessable, free and clear
of all liens, encumbrances and rights of first refusal of any kind
(collectively, "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 the Company's or any Subsidiary's certificate or
articles 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, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding 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 or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary 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) FILINGS, CONSENTS AND APPROVALS. Except as set forth in
SCHEDULE 2.1(f), 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 filings required pursuant to Section 3.10, (ii) the filing with
the Securities and Exchange Commission (the "COMMISSION")of a registration
statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale of the Underlying Shares by the Purchasers
(the "UNDERLYING SHARES REGISTRATION STATEMENT"), (iii) the application(s) to
the Nasdaq National Market ("NASDAQ") for the listing of the underlying shares
for trading on the NASDAQ (and with any other national securities exchange or
market on which the Common Stock is then listed) in the time and manner
required thereby, (iv) applicable Blue Sky filings, and (v) 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
(collectively, the "REQUIRED APPROVALS").
Convertible Debenture Purchase Agreement
(g) LITIGATION; PROCEEDINGS. There is no action, suit,
inquiry, 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, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an
"ACTION") which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, individually or in the
aggregate, have or result in a Material Adverse Effect. To the best of the
Company's knowledge, neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty. The Company does not have pending before the
Commission any request for confidential treatment of information and the
Company has no knowledge of any expected such request that would be made prior
to the Effectiveness Date (as defined in the Registration Rights Agreement).
There has not been, and to the best of the Company's knowledge there is not
pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company.
(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, in each case of
clauses (i), (ii) or (iii) above, 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 Purchasers set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchasers
as contemplated hereby are exempt from the registration requirements of the
Securities Act. Neither the Company nor any Person acting on its behalf has
taken or is, to the knowledge of the Company, contemplating taking any action
which could subject the offering, issuance or sale of the Securities to the
registration requirements of the Securities Act including soliciting any offer
to buy or sell the Securities by means of any form of general solicitation or
advertising.
(j) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has
filed all reports required to be filed by it under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), including, without limitation, all
filings required pursuant to Sections 13(a) and 15(d) thereof, for the two
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
Convertible Debenture Purchase Agreement
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 under the Exchange Act. 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 principles applied on a consistent basis
during the periods involved ("GAAP"), 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 June 30,
2000, except as specifically disclosed in the SEC Documents, (a) there has
been no event, occurrence or development that has or that could 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.
(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 Avalon Research Group Inc. pursuant to an agreement dated as of
August 16, 2000, no fees or commissions will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement. The Purchasers 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 Purchasers, their
Convertible Debenture Purchase Agreement
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 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 under Form S-3 promulgated under the Securities
Act.
(o) EXCLUSIVITY. The Company shall not issue and sell the
Debentures to any Person other than the Purchasers without the specific prior
written consent of the Purchasers.
(p) SENIORITY. Except as set forth in SCHEDULE 2.1(p), no
indebtedness of the Company is senior to the Debentures in right of payment,
whether with respect to interest or upon liquidation or dissolution, or
otherwise.
(q) LISTING AND MAINTENANCE REQUIREMENTS COMPLIANCE. Except
as set forth in the SEC Documents, the Company has not, in the two years
preceding the date hereof, received notice (written or oral) from the NASDAQ
or any 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, market or trading facility. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(r) PATENTS AND TRADEMARKS. The Company and its
Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and rights which are necessary or material for use in connection with
their respective businesses as described in the SEC Documents and which the
failure to so have would have a Material Adverse Effect (collectively, the
"INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or its Subsidiaries violates or infringes upon the rights of any
Person. 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
disclosed in Section 6(c) of the Registration Rights Agreement, 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
Convertible Debenture Purchase Agreement
not been satisfied. Except as set forth on SCHEDULE 6(b) to the Registration
Rights Agreement, 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 owned by them which is
material to the business of the Company and its Subsidiaries and good and
marketable title in all personal property owned by them which is material to
the business of the Company and its Subsidiaries, in each case, except as set
forth in SCHEDULE 2.1(p) and the Credit and Security Agreement by and among
the Company, its Subsidiaries and Xxxxx Fargo Business Credit, Inc. dated as
of April 5, 2000, as amended by an amendment dated as of August 31, 2000, and
any amendments, extensions, modifications or renewals thereto (the "CREDIT
AGREEMENT"), free and clear of all Liens, except for Liens 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 of which the Company and its Subsidiaries are in compliance
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) LABOR RELATIONS. No material labor problem exists or, to
the knowledge of the Company, is imminent with respect to any of the employees
of the Company.
(w) DISCLOSURE. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Purchasers or its
agents or counsel with any information that constitutes or might constitute
material non-public information. The Company understands and confirms that
the Purchasers shall be relying on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the
Purchasers 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 PURCHASERS. Each
Purchaser hereby for
Convertible Debenture Purchase Agreement
itself and for no other Purchaser represents and warrants to the Company as
follows:
(a) ORGANIZATION; AUTHORITY. Such Purchaser is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
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 such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of
such Purchaser. Each of this Agreement, the Letter Agreement and the
Registration Rights Agreement has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms.
(b) INVESTMENT INTENT. Such Purchaser is acquiring the
Securities as principal 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, without prejudice, however, to such Purchaser's right, subject
to the provisions of this Agreement, the Registration Rights Agreement, the
Debentures and the Warrants, 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 or under an exemption from such
registration and in compliance with applicable federal and state securities
laws. Nothing contained herein shall be deemed a representation or warranty
by such Purchaser to hold the Securities for any period of time. Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute the Securities.
(c) PURCHASER STATUS. At the time such Purchaser was
offered the Debentures and its respective Warrants, it was, and at the date
hereof it is, and at each exercise date under its respective Warrants, it
will be, an "accredited investor" as defined in Rule 501(a) under the
Securities Act. Such Purchaser acknowledges that the Securities are
"restricted securities" under the Securities Act and applicable rules and
regulations and neither the Securities nor any interest therein may be
offered for sale or transferred in the absence of registration under the
Securities Act or amn exemption therefrom.
(d) EXPERIENCE OF SUCH PURCHASER. Such 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 SUCH PURCHASER TO BEAR RISK OF INVESTMENT.
Such 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. Such Purchaser acknowledges that
it has reviewed
Convertible Debenture Purchase Agreement
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. Such 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 or any other general solicitation or general
advertisement.
(h) RELIANCE. Such 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 such
Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that no Purchaser makes or
has made any 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, and in
compliance with any applicable federal and state securities laws. 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 (at transferor's expense) 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
Convertible Debenture Purchase Agreement
transferred securities under the Securities Act. Notwithstanding the
foregoing, the Company, without requiring a legal opinion as described in the
immediately preceding sentence, 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 a Purchaser to an Affiliate of such
Purchaser or to one or more funds or managed accounts under common management
with such Purchaser, and any transfer among any such Affiliates or one or more
funds or managed accounts, provided that the 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 (subject to the qualifications hereof). 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 Purchasers agree 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] [EXERCISABLE] 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, AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.
Underlying Shares shall not contain the legend set forth above
nor any other legend if the conversion of Debentures and exercise of the
Warrants or other issuances of Underlying Shares as contemplated hereby, by
the Debentures or the Warrants occurs at any time while an Underlying Shares
Registration Statement is effective under the Securities Act or the holder of
any such security is relying on Rule 144 promulgated under the Securities Act
("RULE 144") in connection with the resale of such Underlying Shares or, in
the event there is not an effective Underlying Shares Registration Statement,
at such time and Rule 144 is not then available 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 Shares Registration
Statement is declared effective by the Commission (the "EFFECTIVE DATE"). The
Company agrees that, in the event any Underlying
Convertible Debenture Purchase Agreement
Shares are issued with a legend in accordance with this Section 3.1(b), it
will, within three (3) Trading Days after request therefor by a Purchaser is
received by the Company, provide such Purchaser with a certificate or
certificates representing such Underlying Shares, free from such legend at
such time as such legend would not have been required under this Section
3.1(b) had such issuance occurred on the date of such request. 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 Debentures in
accordance with the terms of the Debentures, and (ii) exercise of the Warrants
in accordance with their terms, will 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 Debentures in accordance with the
terms of the Debentures, and (y) exercise of the Warrants in accordance with
their terms, is unconditional and absolute, subject to the limitations set
forth herein in the Debentures or pursuant to the Warrants, regardless of the
effect of any such dilution.
3.3 FURNISHING OF INFORMATION. As long as the Purchasers own
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 Purchasers own
Securities, if the Company is not required to file reports pursuant to such
sections, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
such information as is required for the Purchasers to sell the Securities
under Rule 144 promulgated under the Securities 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 causing its attorneys to
render and deliver any legal opinion required in order to permit a Purchaser
to receive Underlying Shares free of all restrictive legends and to
subsequently sell Underlying Shares under Rule 144 upon receipt of a notice of
an intention to sell or other form of notice having a similar effect. 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 INTEGRATION. The Company shall not, and shall use its best
efforts to ensure that, no Affiliate of the Company 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 Purchasers.
3.5 INCREASE IN AUTHORIZED SHARES. If on any date the Company
would be, if a notice
Convertible Debenture Purchase Agreement
of conversion or exercise (as the case may be) were to be delivered on such
date, precluded from issuing (a) 200% of the number of Underlying Shares as
would then be issuable upon a conversion in full of the Debentures and (b) the
number of Underlying Shares issuable upon exercise in full of the Warrants
(the "CURRENT REQUIRED MINIMUM"), in either case, due to the unavailability of
a sufficient number of authorized but unissued or reserved shares of Common
Stock, then the Board of Directors of the Company shall promptly prepare and
mail to the stockholders of the Company proxy materials requesting
authorization to amend the Company's certificate or articles 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 Purchasers in order to provide for such number of authorized and
unissued shares of Common Stock to enable the Company to comply with its
issuance, conversion exercise and reservation of shares obligations as set
forth in this Agreement, the Debentures and the Warrants (the sum of (x) 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 (y) the Current Required Minimum, 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 earlier to occur of the sixtieth (60th) day
after delivery of the proxy materials relating to such meeting and the
ninetieth (90th) day after request by a holder of Securities to issue the
number of Underlying Shares in accordance with the terms hereof) and (c)
within five (5) Business Days of obtaining such stockholder authorization,
file an appropriate amendment to the Company's certificate or articles of
incorporation to evidence such increase.
3.6 RESERVATION AND LISTING OF UNDERLYING SHARES. (a) The Company
shall (i) in the time and manner required by any national securities exchange,
market, trading or quotation facility on which the Common Stock is then
traded, prepare and file with such national securities exchange, market,
trading or quotation facility on which the Common Stock is then traded an
additional shares listing application covering a number of shares of Common
Stock which is not less than the Initial Minimum, (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing on
any such national securities exchange, market or trading or quotation facility
on which the Common Stock is then listed as soon as possible thereafter, and
(iii) provide to the Purchasers evidence of such listing, and the Company
shall maintain the listing of its Common Stock thereon. If the number of
Underlying Shares issuable upon (x) conversion in full of the then outstanding
Debentures and (y) exercise in full of the then unexercised portion of the
Warrants, exceeds eighty-five percent (85%) of the number of Underlying Shares
previously listed on account thereof with any such required exchanges, then
the Company shall take the necessary actions to immediately list a number of
Underlying Shares as equals no less than the then Current Required Minimum.
(b) The Company shall maintain a reserve of shares of Common
Stock for issuance upon conversion of the Debentures in full and upon exercise
in full of the Warrants in accordance with this Agreement, in such amount as
may be required to fulfill its obligations in
Convertible Debenture Purchase Agreement
full under the Transaction Documents, which reserve shall equal no less than
the then Current Required Minimum.
3.7 CONVERSION AND EXERCISE PROCEDURES. The Transfer Agent
Instructions, the Conversion Notice (as defined in the Debentures) and the
Form of Election to Purchase (as defined in the Warrants) sets forth the
totality of the procedures with respect to the conversion of the Debentures
and the exercise of the Warrants, 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 Purchasers to convert their Debentures and exercise their Warrants, as the
case may be.
3.8 CONVERSION AND EXERCISE OBLIGATIONS OF THE COMPANY. The Company
shall honor conversions of the Debentures and exercises of the Warrants and
shall deliver Underlying Shares in accordance with the respective terms,
conditions and time periods set forth in the Debentures.
3.9 SUBSEQUENT FINANCING; LIMITATION ON REGISTRATIONS. (a) Subject
to Section 3.9(d) and (e), from the date hereof through the ninetieth (90th)
Trading Day following the Effective Date, the Company will not 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 (including the issuance of
any debt or other instrument at any time over the life thereof convertible
into or exchangeable for Common Stock.
(b) Subject to Section 3.9(d) and (e), the Company shall not,
directly or indirectly, 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 equity or equity-equivalent
securities or securities of any of its Affiliates that are exchangeable or
convertible (directly or indirectly) for shares of Common Stock, including the
issuance of any debt or other instrument at any time over the life thereof
convertible into or exchangeable for Common Stock (collectively, a "SUBSEQUENT
PLACEMENT") from the date hereof until the expiration of the 180th Trading
Day after the Effective Date, unless (A) the Company delivers to each of the
Purchasers a written notice (the "SUBSEQUENT PLACEMENT NOTICE") of its
intention to 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)
such Purchaser shall not have notified the Company by 6:30 p.m. (New York City
time) on the tenth Trading Day after its receipt of the Subsequent Placement
Notice of its willingness to provide (or to cause its sole designee to
provide), subject to completion of mutually acceptable documentation,
financing to the Company on the same terms set forth in the Subsequent
Placement Notice. If the Purchasers shall fail to notify the Company of their
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
Convertible Debenture Purchase Agreement
Purchasers with a second Subsequent Placement Notice, and the Purchasers 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. If the Purchasers
shall indicate a willingness to provide financing in excess of the amount set
forth in the Subsequent Placement Notice, then each Purchaser shall be
entitled to provide financing pursuant to such Subsequent Placement Notice up
to an amount equal to such Purchaser's pro-rata portion of the aggregate
principal amount of Debentures purchased by such Purchaser under this
Agreement, but the Company shall not be required to accept financing from the
Purchasers in an amount in excess of the amount set forth in the Subsequent
Placement Notice.
(c) 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 Section
6(c) of the Registration Rights Agreement to be registered, in the Underlying
Shares Registration Statement in accordance with the Registration Rights
Agreement, and (z) Common Stock permitted to be issued pursuant to Section 3.9
(e), the Company shall not, for a period of not less than ninety (90) Trading
Days after the Effective Date, without the prior written consent of the
Purchasers (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 any securities of the Company. Any days
after the Effective Date that a Purchaser is unable to sell Underlying Shares
under the Underlying Shares Registration Statement shall be added to such
ninety (90) Trading Day period.
(d) With respect to Section 3.9(a) and (b), the ninety (90)
and one hundred and eighty (180) Trading Day periods shall be extended for the
number of Trading Days during such period (A) in which trading in the Common
Stock is suspended by any securities exchange or market or quotation system on
which the Common Stock is then listed, or (B) during which the Underlying
Shares Registration Statement is not effective, or (C) during which the
prospectus included in the Underlying Shares Registration Statement may not be
used by the holders thereof for the resale of Underlying Shares.
(e) The restrictions contained in Section 3.9(a) and (b)
above, shall not apply to (i) the granting of options or warrants to
employees, officers or directors of the Company, and the issuance of Common
Stock upon exercise of such options or warrants granted under any stock option
plan heretofore or hereinafter duly adopted by the Company or (ii) the sale to
the President of the Company, within 24 days of the Closing Date, of
Debentures in the aggregate principal amount of up to $2,000,000 and a Warrant
to purchase a number of shares of Common Stock equal to 25% of the quotient
obtained by dividing the principal amount of Debentures purchased by the
President by the Exercise Price.
3.10 CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The Company
shall: (i) on the
Convertible Debenture Purchase Agreement
Closing Date, issue a press release acceptable to the Purchasers disclosing
the transactions contemplated hereby, (ii) file with the Commission a Report
on Form 8-K disclosing the transactions contemplated hereby within ten
Business Days after the Closing Date, and (iii) timely file with the
Commission a Form D promulgated under the Securities Act. The Company shall,
no less than two Business Days prior to the filing of any disclosure required
by clauses (ii) and (iii) above, provide a copy thereof to the Purchasers for
their review. The Company and the Purchasers shall consult with each other in
issuing any other 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, except that if such disclosure
is required by law or stock market regulation, in which such case the
disclosing party shall promptly 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 names of the
Purchasers, or include the names of the Purchasers in any filing with the
Commission, or any regulatory agency, trading facility or stock market without
the prior written consent of the Purchasers, except to the extent such
disclosure (but not any disclosure as to the controlling Persons thereof) is
required by law or stock market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure.
3.11 TRANSFER OF INTELLECTUAL PROPERTY RIGHTS. Except in connection
with the sale of all or substantially all of the assets of the Company or
licensing arrangements in the ordinary course of the Company's business or
pursuant to the Credit Agreement, 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 Purchasers.
3.12 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 the Company's debt (other than payment of
trade payables in the ordinary course of the Company's business and prior
practices), to redeem any Company equity or equity-equivalent securities or to
settle any outstanding litigation.
3.13 REIMBURSEMENT. If any Purchaser becomes involved in any
capacity in any action, proceeding or investigation brought by or against any
Person, including stockholders of the Company, solely as a result of acquiring
the Securities under this Agreement, the Company will reimburse such Purchaser
for its reasonable legal and other expenses (including, but not limited to,
the cost of any investigation, preparation or travel) incurred in connection
therewith, as such expenses are incurred. 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 Purchasers 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
Purchasers and any such Affiliate, and
Convertible Debenture Purchase Agreement
shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Purchasers and any such
Affiliate and any such Person. The Company also agrees that neither the
Purchasers 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 solely as a result of
acquiring the Securities under this Agreement.
3.14 WELL FARGO CREDIT LINE. So long as the rights of the Purchasers
under the Transaction Documents shall not be adversely affected, the consent
of the Purchasers shall not be required in connection with any amendments,
extensions, modifications or renewals to the Credit Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 FEES AND EXPENSES. At the Closing, the Company shall
reimburse the Purchasers for their legal fees and expenses incurred in
connection with the preparation and negotiation of the Transaction Documents
by paying to Xxxxxxxx Xxxxxxxxx $25,000 for the preparation and negotiation of
the Transaction Documents. The amount contemplated by the immediately
preceding sentence shall be retained by the Purchasers and shall not be
delivered to the Company at the Closing. Other than the amount contemplated
herein, 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. The Transaction Documents,
together with the Exhibits and Schedules thereto and Transfer Agent
Instructions, 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 6:30 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 this Agreement later than 6:30
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 U.S. nationally recognized overnight courier service, or
Convertible Debenture Purchase Agreement
(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: Luminant Worldwide Corporation
00000 Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Facsimile: No. (000) 000-0000
Attn: Chief Financial Officer
With copies to: Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
If to a Purchaser: To the address set forth under such
Purchaser's name on the signature pages
hereto.
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 the Company and each of the Purchasers 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 Purchasers.
Except as set forth in Section 3.1(a), the Purchasers may not assign this
Agreement or any of the rights or obligations hereunder without the consent of
the Company. This provision shall not limit any Purchaser's right to transfer
securities or transfer or assign rights under the Registration Rights
Agreement.
4.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended
for the benefit
Convertible Debenture Purchase Agreement
of the parties hereto and their respective successors and permitted assigns
and is not for the benefit of, nor may any provision hereof be enforced by,
any other Person.
4.8 GOVERNING LAW. All questions concerning the
construction, validity, enforcement and interpretation of 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 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 via registered or certified mail or overnight delivery
(with evidence of delivery) 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,
exercise and conversion of the Warrants or the Debentures, as the case may be.
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 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.
4.12 REMEDIES. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each
of the Purchasers will be entitled to specific performance of the obligations
of the Company under the Transaction Documents. The parties hereto agree that
monetary damages may not be adequate compensation for any loss
Convertible Debenture Purchase Agreement
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.
4.13 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.
The obligations of each Purchaser under any Transaction Document is several
and not joint with the obligations of any other Purchaser and no Purchaser
shall be responsible in any way for the performance of the obligations of any
other Purchaser under any Transaction Document. Nothing contained herein or
in any Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect
to such obligations or the transactions contemplated by the Transaction
Document. Each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
Convertible Debenture Purchase Agreement
IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Debenture Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.
LUMINANT WORLDWIDE CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: CEO
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
Convertible Debenture Purchase Agreement
MONTROSE INVESTMENTS LTD.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Authorized Signatory
Purchase Price: $10,000,000
Address for Notice:
Montrose Investments Ltd.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxx Xxxxx and Xxx Xxxxxx
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq. and Xxxx X. Xxxxx, Esq.
Convertible Debenture Purchase Agreement
STRONG RIVER INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
Attorney-in-fact
Purchase Price: $5,000,000
Address for Notice:
Strong River Investments, Inc.
x/x Xxxxxxxx-Xxxx 0 Xxxxxx (XXX) Xxxxxxx
Xxxxxxxx Cay I, Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxx, Xxxxxxxx, XXX
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq. and Xxxx X. Xxxxx, Esq.
Convertible Debenture Purchase Agreement
XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
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Purchase Price: $2,000,000
Address for Notice:
Luminant Worldwide Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxx
