AGREEMENT OF SETTLEMENT
This Agreement of Settlement (the "Agreement") is entered into this day of
March 2005 (the "Closing Date"), by and among Tissera, Inc. (the "Company") and
the investors set forth on Exhibit A (the "Investors").
W I T N E S S E T H:
WHEREAS, the Company and the Investors entered into a Subscription
Agreement dated March 18, 2004 (the "March 2004 Closing Date") whereby the
Investors, in consideration of an aggregate purchase price of $5,500,000,
purchased an aggregate of shares (the "March 2004 Shares") of the Company's
common stock, 3,142,858 Class A Common Stock Purchase Warrants ("Class A
Warrants") exercisable at $3.75 for a period of one year from the effective date
of the Form SB-2 Registration Statement, 3,142,858 Class B Common Stock Purchase
Warrants ("Class B Warrants") exercisable at $4.50 for a period of two years
from the March 2004 Closing Date, and 3,142,858 Class C Common Stock Purchase
Warrants ("Class C Warrants") exercisable at $6.00 for a period of three years
from the March 2004 Closing Date;
WHEREAS, due to various actions taken by the former CEO of the Company, a
dispute has arisen between the Company and the Investors and the Investors have
threatened to commence legal action to enforce their rights;
WHEREAS, in order to settle the aforementioned dispute the Company has
agreed to restructure the Class A Warrants, the Class B Warrants and the Class C
Warrants and issue the investors a Class D Common Stock Purchase Warrant ("Class
D Warrants") to purchase an amount of shares equal to 200% of the March 2004
Shares exercisable at $0.15 per share commencing on the date of issuance for a
period of one (1) year from the effective date of the Form SB-2 Registration
Statement (the "Form SB-2") to be filed registering the shares of common stock
underlying the Class A Warrants and the Class D Warrants; and
WHEREAS, the Company and the Investors will execute a general mutual
release in favor of each other.
NOW, THEREFORE, in consideration of the covenants, payments, and
agreements set forth in this Agreement, the Company and the Investors intending
to be legally bound thereby, and hereby warranting that they each have the
capacity and authority to execute this Agreement, it is agreed by and among the
undersigned parties, that all of the claims asserted (or which could have been
asserted) by the Investors are hereby settled and compromised on the following
terms and conditions, to wit:
1. Compromise. In consideration for entering into the general mutual
releases as set forth in Section 2 of this Agreement, the Company and the
Investors agree as follows:
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(i) The exercise price of the Class A Warrants, Class B Warrants and
Class C Warrants will be reduced to $0.50 per share;
(ii) The term of the Class A Warrants will be extended to one (1) year
from the effective date of the Form SB-2;
(iii) The Company shall issue and sell to the Investors Class D Warrants,
a form of which is attached hereto as Exhibit C, to purchase an
amount of shares as set forth on Exhibit A, exercisable at $0.15 per
share commencing on the date of issuance for a period of one (1)
year from the effective date of the Form SB-2; and
(iv) The Company shall file with the Commission not later than sixty (60)
days after the Closing Date (the "Filing Date"), and diligently
cause to be declared effective within ninety (90) days after the
Filing Date (the "Actual Effective Date"), the Form SB-2 in order to
register the shares of common stock underlying the Class A Warrants
and the Class D Warrants (the "Registrable Securities") for resale
and distribution under the Securities Act of 1933, as amended;
provided; however, if certain events outside of the control of the
Company occur, such as an extended review of the Form SB-2 by the
Securities and Exchange Commission, then the Actual Effective Date
may be extended at the sole discretion of the Company. The
Registrable Securities shall be reserved and set aside exclusively
for the benefit of the Investors, pro rata, and not issued, employed
or reserved for anyone other than each such Investor.
2. Release. The parties shall execute general mutual releases in favor of
each other in the form annexed hereto as Exhibit B.
3. Binding Agreement. The terms of this Agreement are binding upon and
inure to the benefit of each of the parties hereto, their respective successors,
assigns, dependents, and all other related persons, affiliates or associates.
4. Headings. The captions of the paragraphs and sections of this Agreement
are provided solely for convenience, and are not intended to, and in fact, shall
not affect the substance or meaning of this Agreement.
5. Representation. Each of the parties hereto represents that each has
read and fully understands each of the provisions as contained herein, and has
been afforded the opportunity to review same with his attorney of choice; and
further that each of the parties hereto represents that each and every one of
the provisions contained in this Agreement is fair and not unconscionable to
either party.
6. Investor's Representations and Warranties. Each Investor hereby
represents and warrants to and agrees with the Company only as to such Investor
that:
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(i) Information on Investor. The Investor is, and will be at the time of
the exercise of any of the Class A Warrants, Class B Warrants, Class
C Warrants and Class D Warrants (collectively, the "Warrants"), an
"accredited investor", as such term is defined in Regulation D
promulgated by the Commission under the Securities Act of 1933 (the
"1933 Act"), is experienced in investments and business matters, has
made investments of a speculative nature and has purchased
securities of United States publicly-owned companies in private
placements in the past and, with its representatives, has such
knowledge and experience in financial, tax and other business
matters as to enable the Investor to utilize the information made
available by the Company to evaluate the merits and risks of and to
make an informed investment decision with respect to the proposed
issuance pursuant to this Agreement. The Investor has the authority
and is duly and legally qualified to acquire and own the Warrants
and the shares of common stock issuable upon exercise of the
Warrants (collectively, the "Securities").
(ii) Compliance with Securities Act. The Investor understands and agrees
that the Securities have not been registered under the 1933 Act or
any applicable state securities laws, by reason of their issuance in
a transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties
of Investor contained herein), and that such Securities must be held
indefinitely unless a subsequent disposition is registered under the
1933 Act or any applicable state securities laws or is exempt from
such registration.
(iii) Legend. The shares of common stock underlying the Warrants shall
bear the following or similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO TISSERA, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED."
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(iv) Warrants Legend. The Warrants shall bear the following or similar
legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO TISSERA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
7. Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile signature and delivered by facsimile transmission.
8. Entire Agreement; Assignment. This Agreement and other documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by all parties. Neither the Company nor the Subscribers
have relied on any representations not contained or referred to in this
Agreement and the documents delivered herewith. No right or obligation of either
party shall be assigned by that party without prior notice to and the written
consent of the other party, which will not be unreasonably withheld.
9. Law Governing this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York. The parties and the individuals executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the jurisdiction of such courts and
waive trial by jury. The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs. In the event that any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of any agreement.
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IN WITNESS WHEREOF, the parties have read and executed this Agreement as
of the date and year first above written. TISSERA, INC.
By: __________________________
Name: Xxxx Xxxxx
Title: Acting CEO
5
ALPHA CAPITAL AKTIENGESELLSCHAFT WHALEHAVEN FUNDS LIMITED
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
XXXXXXXXXXX LIMITED PARTNERSHIP GENESIS MICROCAP INC.
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
VERTICAL VENTURES, LLC GENERATION CAPITAL ASSOCIATES
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
OMEGA CAPITAL SMALL CAP FUND, LTD.
By: _________________________________ ____________________________________
Name: XXXXX XXXXX
Title:
GREENWICH GROWTH FUND LIMITED COUNTRYWIDE PARTNERS LLC
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
PLATINUM PARTNERS VALUE PLATINUM PARTNERS GLOBAL
ARBITRAGE FUND LP MACROFUND LP
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
XXXXXX FAMILY FOUNDATION JM INVESTORS
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
[SIGNATURE PAGE TO THE AGREEMENT OF SETTLEMENT DATED MARCH [ ], 2005]
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PROFESSIONAL TRADERS FUND, LLC CAPE MAY INVESTORS INC.
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
GREENWOOD PARTNERS LP BRISTOL INVESTMENT FUND, LTD.
By: _________________________________ By: ________________________________
Name: Name:
Title: Title:
[SIGNATURE PAGE TO THE AGREEMENT OF SETTLEMENT DATED MARCH [ ], 2005]
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EXHIBIT A
------------------------------------------------------------------------
SUBSCRIBER D WARRANTS
------------------------------------------------------------------------
ALPHA CAPITAL AKTIENGESELLSCHAFT 1,142,856
Xxxxxxxxx 0
0000 Xxxxxxxxxxx
Xxxxx, Lichtenstein
Fax: 000-00-00000000
------------------------------------------------------------------------
WHALEHAVEN FUNDS LIMITED 142,858
0xx Xxxxx, 00 Xxx-Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx XX00
Fax: (000) 000-0000
------------------------------------------------------------------------
XXXXXXXXXXX LIMITED PARTNERSHIP 000,000
X/x Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0, Xxxxxx
Fax: (000) 000-0000
------------------------------------------------------------------------
GENESIS MICROCAP INC. 228,572
000 Xxxxx Xxxxx
Xxxxxx X00 0XX, Xxxxxxx
Attn: Xxxxxxxx X. Xxxxxxx
Fax: 000-000-0000-0000
------------------------------------------------------------------------
VERTICAL VENTURES, LLC 685,714
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
GENERATION CAPITAL ASSOCIATES 240,000
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
OMEGA CAPITAL SMALL CAP FUND, LTD. 228,572
0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
BRISTOL INVESTMENT FUND, LTD. 800,000
Caledonia House, Xxxxxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Fax: (000) 000-0000
------------------------------------------------------------------------
XXXXX XXXXX 114,286
00 Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
GREENWICH GROWTH FUND LIMITED 114,286
0xx Xxxxx, 00 Xxx-Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx XX00
Fax: (000) 000-0000
------------------------------------------------------------------------
COUNTRYWIDE PARTNERS LLC 114,286
000 Xxxx 00xx Xxxxxx, (00)xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
PLATINUM PARTNERS VALUE ARBITRAGE FUND LP 971,428
000 Xxxx 00xx Xxxxxx, (00)xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
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------------------------------------------------------------------------
SUBSCRIBER D WARRANTS
------------------------------------------------------------------------
PLATINUM PARTNERS GLOBAL MACROFUND LP 228,572
000 Xxxx 00xx Xxxxxx, (00)xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
XXXXXX FAMILY FOUNDATION 114,286
000 Xxxx 00xx Xxxxxx, (00)xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
JM INVESTORS 145,714
000 Xxxx 0xx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
PROFESSIONAL TRADERS FUND, LLC 300,000
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
CAPE MAY INVESTORS INC. 100,000
000 Xxxxxxx Xxxxxx
Xxxx Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
GREENWOOD PARTNERS LP 100,000
000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
------------------------------------------------------------------------
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EXHIBIT B
To all to whom these Present shall come or may Concern, Know That
______________ as RELEASOR,
in consideration of the sum of: Ten Dollars and no cents ($10.00) and other
valuable consideration received from
Tissera, Inc. as RELEASEE,
receipt whereof is hereby acknowledged, releases and discharges
Tissera, Inc.
the RELEASEE, RELEASEE'S directors, officers, partners, past
and present employees, agents, administrators, holding company, parent company,
subsidiaries, successors, insurers, assigns, principals and past and present
control persons; provided, however, the aforementioned shall in no way be deemed
to include Xx. Xxxxx Xxxxxxx, the RELEASEE's former CEO and director, from all
actions, cause of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, in law, admiralty or equity, which
against the RELEASEE(S), the RELEASOR, RELEASOR'S directors, officers, partners,
past and present employees, agents, administrators, holding company, parent
company, subsidiaries, successors, insurers, assigns, principals and past and
present control persons ever had, now have or hereafter can, shall or may, have
for, upon, or by reason of any matter, cause or thing with respect to the
matters relating to or that has or may have arisen from the purchase of the
securities issued in connection with the private placement of the RELEASEE in
March 2004 by the RELEASOR from the beginning of the world to the day of the
date of this RELEASE.
The words RELEASOR and RELEASEE include all releasors and all releasees
under this RELEASE.
This RELEASE may not be changed orally.
In Witness Whereof, the RELEASOR has hereunto set RELEASOR'S hand and seal
on the ___ day of _______________, 2005
_________________________________
By: _____________________________
Name:
Title:
10
To all to whom these Present shall come or may Concern, Know That
TISSERA, INC. as RELEASOR,
in consideration of the sum of: Ten Dollars and no cents ($10.00) and other
valuable consideration received from
________________________ as RELEASEE,
receipt whereof is hereby acknowledged, releases and discharges
________________________
the RELEASEE, RELEASEE'S directors, officers, partners, past
and present employees, agents, administrators, holding company, parent company,
subsidiaries, successors, insurers, assigns, principals and past and present
control persons, from all actions, cause of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims, and demands whatsoever, in law, admiralty or
equity, which against the RELEASEE(S), the RELEASOR, RELEASOR'S directors,
officers, partners, past and present employees, agents, administrators, holding
company, parent company, subsidiaries, successors, insurers, assigns, principals
and past and present control persons ever had, now have or hereafter can, shall
or may, have for, upon, or by reason of any matter, cause or thing with respect
to the matters relating to or that has or may have arisen from the purchase of
the securities issued in connection with the private placement of the RELEASEE
in March 2004 by the RELEASOR from the beginning of the world to the day of the
date of this RELEASE.
The words RELEASOR and RELEASEE include all releasors and all releasees
under this RELEASE.
This RELEASE may not be changed orally.
In Witness Whereof, the RELEASOR has hereunto set RELEASOR'S hand and seal
on the ____ day of ________________, 2005
Tissera, Inc.
By: ______________________________
Name: Xxxx Xxxxx
Title: Acting CEO
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