Exhibit 10.10
STOCK ISSUANCE, STOCK TRANSFER AND OPTION GRANT AGREEMENT
This Stock Issuance, Stock Transfer and Option Grant Agreement (the
"Agreement") dated March __, 2004, but effective as of February 26, 2004 (the
"Effective Date") is entered into by and among Broadcast International, Inc.,
a Utah corporation (formerly Laser Corp., a Utah corporation) (the "Company")
and each of the individuals whose names are set forth on Schedule A attached
hereto (each, a "Purchaser" and together, the "Purchasers").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. ISSUANCE OF COMPANY SHARES. In consideration for each
Purchaser transferring to the Company the number of Series A shares of
Streamware Solutions AB ("Streamware") set forth opposite such Purchaser's
name on Schedule A attached hereto and as more fully described in Section 3
below (the "Streamware Shares"), the Company hereby issues to such Purchaser
the number of shares of the Company's Common Stock, par value $0.05 per share
set forth opposite such Purchaser's name on Schedule A attached hereto (the
"Company Shares"). The Company shall deliver a stock certificate representing
such Company Shares to such Purchaser on or prior to the later of (a) the day
that is five (5) business days from the Effective Date, (b) the day the
purchasers of shares of the Company's Common Stock, pursuant to the Stock
Purchase and Option Grant Agreement between the Company and such purchasers
dated February 6, 2004 (the "Stock Purchase Agreement"), deliver to the
Company at least three hundred seventy five thousand dollars ($375,000.00) as
the purchase price for such shares or (c) the day the Company receives the
stock certificate representing the Streamware Shares from such Purchaser. The
Company will authorize and reserve, free of preemptive rights and other
similar contractual rights of shareholders, a sufficient number of its
authorized but unissued shares of its Common Stock for the issuance of the
Company Shares to the Purchasers.
SECTION 2. GRANT OF OPTION.
2.1 Grant of Option. In consideration for each Purchaser transferring
to the Company the Streamware Shares, the Company hereby grants to each
Purchaser a fully-vested, non-qualified option (each, an "Option" and
collectively, the "Options") to purchase that number of shares of the
Company's Common Stock, par value $0.05 per share, set forth opposite such
Purchaser's name on Schedule A attached hereto (subject to adjustment pursuant
to Section 2.6) (the "Option Shares"), at a per share exercise price of $4.50
(the "Exercise Price"). The Option is granted to each Purchaser outside of,
and is not subject to, the Broadcast International, Inc. 2004 Long Term
Incentive Plan (the "Plan").
2.2 Term. Each Purchaser shall have the right to exercise all or any
portion of the Option at any time prior to the two (2)-year anniversary of the
Effective Date by executing and delivering to the Company the exercise notice
substantially in the form attached hereto as Exhibit A (the "Exercise Notice")
and delivering to the Company payment of the Exercise Price.
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2.3 Notice. The Company shall notify each Purchaser in writing of the
Company's proposed sale or transfer of substantially all of its assets or
capital stock to, merger into, or consolidation or share exchange with, any
other entity (the "Acquiring Entity"), or any other proposed acquisition of
the Company by any Acquiring Entity (a "Corporate Event") at least thirty (30)
days prior to the closing of such Corporate Event. If a Corporate Event
occurs, the Company shall require the Acquiring Entity to assume the
unexercised portion of the Options as a condition precedent to the Corporate
Event.
2.4 Reservation of Shares. The Company shall authorize and reserve,
free of preemptive rights and other similar contractual rights of
shareholders, a sufficient number of Option Shares.
2.5 Method of Exercise. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of each
Purchaser:
(a) Cash; or
(b) Check.
2.6 Adjustment. In the event of a stock split, stock combination,
recapitalization, issuance of additional shares of capital stock, options or
warrants or other rights to acquire capital stock of the Company or a
Corporate Event (to the extent the Option is assumed by the Acquiring Entity)
(each, an "Adjustment Event"), the kind and number of Option Shares hereunder
and the Exercise Price related thereto shall be adjusted so that each
Purchaser will be entitled to receive, upon exercise of the Option (or any
portion thereof), the kind and number of Option Shares or other securities
which such Purchaser would have received had such Purchaser exercised the
Option immediately prior to such Adjustment Event. An adjustment made
pursuant to this Section 2.6 shall become effective immediately after the
effective date of the Adjustment Event. Whenever the type or number of Option
Shares or the Exercise Price is adjusted pursuant to this Section 2.6, the
Company shall promptly mail by first class mail, postage prepaid, to each
Purchaser, notice of such adjustment or adjustments.
SECTION 3. TRANSFER OF STREAMWARE SHARES TO THE COMPANY; TRANSFER
RESTRICTIONS; PRE-EMPTIVE RIGHTS; INDEMNIFICATION
3.1 Transfer of Streamware Shares. In consideration for the Company
issuing the Company Shares and the Option to each Purchaser as described in
Sections 1 and 2 above, each Purchaser hereby transfers to the Company the
number of Streamware Shares set for opposite such Purchaser's name on Schedule
A attached hereto. Such Purchaser shall deliver a certificate to the Company
issued by the Board of Directors of Streamware confirming that the Company has
been registered as the holder of such Streamware Shares in the shareholders
register. Such certificate shall on or prior to the later of (a) the day that
is five (5) business days following the Effective Date or (b) the day such
Purchaser has received the stock certificate representing the Company Shares
from the Company. The total number of Streamware Shares transferred by the
Purchasers pursuant to this Section 3 shall constitute twenty percent (20%) of
the then issued and outstanding capital stock of Streamware after taking into
account the transfer of the Streamware Shares to the Company.
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3.2 Transfer of Shares. The Company undertakes to observe the following
in connection with any transfer of title to any and all of the Streamware
Shares.
(a) In the event that the Company elects to transfer title to any of
the Streamware Shares (the "Offered Shares"), whether or not to an existing
shareholder and whether by gift, barter, bankruptcy, liquidation, merger,
business combination or otherwise, the Company shall first offer such
Streamware Shares to the Purchasers and any other shareholders of Streamware
(the "Streamware Shareholders") in accordance with the terms of this Section
3.2 (the "Offer"). In the event that the Company makes a general assignment
for the benefit of creditors, or a petition in bankruptcy or for
reorganization or to effect a plan or arrangement with creditors, is filed by
the Company, or the Company suffers, applies for, or permits the appointment
of a receiver or trustee or a receiver or trustee is appointed for the
Company, and such actions or proceedings are not vacated within ninety (90)
days of commencement, the provisions of this Section 3.2 shall be binding upon
such receiver or trustee.
(b) The Company shall fulfill its obligation to offer the Offered
Shares for purchase by the Streamware Shareholders by notifying Streamware
shareholders in writing of the proposed transfer of the Offered Shares. Each
Streamware Shareholder shall be entitled to accept the Offer within thirty
(30)-day period following such shareholder's receipt of the Offer (the
"Acceptance Period").
(c) The purchase price to be paid to the Company by each Streamware
Shareholder electing to purchase the Offered Shares (the "Purchase Price")
shall, if the Company and the Streamware Shareholders cannot agree on the
Purchase Price, be established as follows:
(i) If the Company has received a bona fide cash offer by a
willing and able buyer for the Offered Shares, the Purchase Price shall
correspond to the price so offered.
(ii) If no such offer has been received, the Company or any
Streamware Shareholder may request that the value of the Offered Shares be
determined by an independent valuation firm or similar entity agreed upon by
the Company and the other shareholders (the "Appraiser").
(iii) If the Company and the Streamware Shareholders, within
thirty (30) days from the request for the appointment of an Appraiser, have
failed to agree upon the Appraiser to be appointed, then the Appraiser shall
be appointed by the Chairman of the Arbitration Institute of the Stockholm
Chamber of Commerce. The Appraiser shall act as expert and not as arbitrator
and its costs shall be borne by the parties involved in relation to each
party's shareholding in Streamware.
(d) Each Streamware Shareholder shall be entitled to purchase up to
its pro rata share of the Offered Shares, which shall be determined by
multiplying the total number of Offered Shares by a quotient, the numerator of
which is the number of shares of capital stock of
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Streamware held by such Streamware Shareholder and the denominator of which is
the total number of shares of capital stock of Streamware held by all
Streamware Shareholders. In the event that one or more Streamware
Shareholders elect to purchase less than their pro rata share of the Offered
Shares in accordance with the preceding sentence, each Streamware Shareholder
who elected to purchase such Streamware Shareholder's pro rata share of the
Offered Shares shall be entitled, but not obligated, to purchase such
Streamware Shareholder's pro rata share of the remaining Offered Shares, which
shall be determined by multiplying the total number of remaining Offered
Shares by a quotient, the numerator of which is the number of shares of
capital stock of Streamware held by such Streamware Shareholder and the
denominator of which is the total number of shares of capital stock of
Streamware held by all Streamware Shareholders who elected to purchase their
pro rata share of the Offered Shares and have elected to purchase all or a
portion of the remaining Offered Shares.
(e) Each Streamware Shareholder exercising its rights under this
Section 3.2 with respect to the Streamware Shares shall pay the applicable
Purchase Price to the Company in cash within thirty (30) days of the later of
the expiration of the Acceptance Period or the date when the Appraiser's award
has been rendered (the "Purchase Period"). A Streamware Shareholder who
initially elected to purchase all or a portion of the Offered Shares may elect
to withdraw such election, and shall not be required to purchase the Offered
Shares, in the event that such Streamware Shareholder determines that the
Purchase Price is too high or provides any other good faith reason for
electing not to purchase the Offered Shares.
(f) In the event that less than all of the Offered Shares are
purchased by the Streamware Shareholders in accordance with the aforementioned
procedure, the Company shall be free, during the thirty (30)-day period
following the expiration of the Purchase Period, to transfer all but not less
than all of the Offered Shares not purchased by the Streamware Shareholders to
the party making the offer to purchase the Offered Shares. Such transfer may
however not be made at a lower price than the Purchase Price or on different
terms than those set forth in the Offer. Each purchaser of the Offered Shares
shall agree to be bound by this Section 3.2 as a condition precedent to such
purchase. After the expiration of such thirty (30)-day-period, the Streamware
Shares held by the Company shall again be bound by the terms and conditions of
this Section 3.2.
3.3. Pre-emptive Rights
(a) The Company shall at all times be entitled to have a twenty
percent (20%) share of the capital stock of Streamware. Streamware and the
Purchasers therefore agree that, upon Streamware's issuance of new shares of
capital stock, convertible debt instruments or any other instrument entitling
the holder thereof to receive shares of capital stock in Streamware, the
Purchasers shall cause Streamware to give the Company the right, on the same
terms and conditions, to purchase a number of such shares of capital stock, or
an instrument convertible into a number of shares of capital stock, sufficient
to enable the Company to maintain a twenty percent (20%) share of the capital
stock of Streamware after taking into account all shares of capital stock of
Streamware held by the Company.
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(b) The Company's preemptive rights under this Section 3.3 shall not
apply to Streamware's issuance of capital stock, or any option or other right
to purchase capital stock of Streamware, under an incentive plan for the
management or employees of Streamware.
3.4 Indemnification. The Company shall indemnify and hold harmless
each Purchaser and any of its shareholders, officers, directors, employees,
partners, counsel, or agents who was or is a party or is threatened to be made
a party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, by reason of or
arising from any actual or alleged misrepresentation or misstatement of facts
or omission to represent or state facts made by the Company to such Purchaser
concerning itself or its financial position, including without limitation any
misrepresentation or misstatement of facts or omissions in this Agreement, in
connection with the transfer of the Streamware Shares by such Purchaser to the
Company, against losses, liabilities, and expenses for which such Purchaser or
any of its shareholders, officers, directors, employees, counsel, or agents
have not otherwise been reimbursed (including attorneys' fees, judgments,
fines, and amounts paid in settlement) as actually and reasonably incurred by
such person or entity in connection with such action, suit, or proceeding.
SECTION 4 BOARD SEAT AND OBSERVATION RIGHTS; INSURANCE
4.1 Board Seat. The Company shall, if necessary, increase the
authorized number of members of the Board of Directors of the Company and
shall appoint Xxxx Xxxxx as a member of the Board to fill the vacancy created
by the new board position, which appointment shall become effective as of the
Effective Date, and shall nominate Xx. Xxxxx to continue as a member of the
Board at the Company's next annual shareholders meeting and present Xx. Xxxxx
to the Company's shareholders for approval as a member of the Board at such
meeting. Xx. Xxxxx shall have the right to elect not to accept such
appointment for any reason, including, without limitation, the Company's
failure to obtain directors' liability insurance coverage in an amount and on
terms and conditions satisfactory to Xx. Xxxxx. Until such time as Xx. Xxxxx
accepts his appointment to the Board, Xx. Xxxxx shall be entitled to
participate as an observer of all meetings of the Board and shall be entitled
to notice of such meetings and Board materials as if Xx. Xxxxx was a member of
the Board. In the event that Xx. Xxxxx accepts appointment to the Board and
dies, is removed or resigns as a member of the Board, the Company shall
appoint Xxxxxxx Xxxxxx as a member of the Board within thirty (30) days of Xx.
Xxxxx'x death, removal or resignation to fill the vacancy created by Xx.
Xxxxx'x death, removal or resignation, and shall nominate Xx. Xxxxxx to
continue as a member of the Board at the Company's next annual shareholders
meeting and present Xx. Xxxxxx to the Company's shareholders for approval as a
member of the Board at such meeting. In the event Xx. Xxxxxx dies, is removed
or resigns as a member of the Board, a designee of Streamware shall be
entitled to participate as an observer of all meetings of the Board. Such
designee shall be entitled to notice of the Board meetings and Board materials
as if such designee were a member of the Board. As an observer, such designee
shall be entitled to reimbursement of reasonable and normal domestic travel
costs associated with attending meetings of the Board, on the same basis as if
he were a member of the Board.
4.2 Insurance. The Company shall apply for such policies of directors'
liability insurance coverage for the benefit of the members of the Board with
a minimum annual premium amount of forty eight thousand dollars ($48,000.00)
within five (5) business days of the Effective Date and shall obtain such
policies within thirty (30) days of the Effective Date. The Company
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shall maintain such insurance policies during such time as Xxxx Xxxxx or
Xxxxxxx Xxxxxx serve as a member of the Board and for a period of eighteen
(18) months thereafter.
SECTION 5 DELIVERIES
The Company has delivered to each Purchaser each of the following
documents, the delivery of each of which is a condition to such Purchaser's
obligations under this Agreement:
(a) a certificate executed by an officer of the Company certifying that
the representations and warranties of the Company are true and correct and
that all actions required to be taken by the Company prior to the Effective
Date have been or will be taken;
(b) a certified copy of the resolutions of the Board authorizing the
execution and performance of this Agreement;
(c) a certified copy of the Company's current bylaws;
(d) a certified copy of the Company's current articles of incorporation;
(e) a copy of the stock certificate representing the Company Shares to
be issued to such Purchaser within five (5) business days of the Effective
Date; and
(f) a lock-up agreement executed by Xxxxxx X. Xxxxx in the form attached
hereto as Exhibit B.
Each Purchaser has delivered to the Company a copy of an executed lock up
agreement in the form attached hereto as Exhibit C, the delivery of which is a
condition to the Company's obligations under this Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each Purchaser, except as set forth on the
Schedule of Exceptions attached hereto as Exhibit D (the "Schedule of
Exceptions") or as disclosed in the Company's annual report on Form 10-K for
the fiscal year ended December 31, 2002 (the "Form 10-K"), its quarterly
reports on Form 10-Q for the fiscal quarters ended September 30, 2003, June
30, 2003 and March 31, 2003 (each, a "Form 10-Q"), its current report on Form
8-K dated October 15, 2003 and the amendment thereto dated December 11, 2003
(the "Form 8-K"), and its definitive information statement on Schedule 14C
dated December 23, 2003 and (the "Schedule 14C"), filed by the Company with
the Securities and Exchange Commission (the "Commission") (the Form 10-K, the
Form 10-Qs, the Form 8-K, the Schedule 14C and such registration statements,
reports, proxy statements and amendments thereto, the "SEC Documents"), as
follows:
6.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where the failure to so qualify would not individually or in the
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aggregate have a material adverse effect on, or a material adverse change in,
or a group of such effects on or changes in, the business, operations,
financial condition, results of operations, prospects, assets or liabilities
(a "Material Adverse Effect") on the Company or the Subsidiary.
6.2 Subsidiaries. As of the date hereof, the Company wholly-owns or has
a greater than fifty percent (50%) ownership interest in the following
subsidiaries: BI Acquisitions, Inc., a Utah corporation (the "Subsidiary").
The Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and the
Subsidiary is qualified to do business as a foreign corporation in each
jurisdiction in which qualification is required, except where the failure to
so qualify would not individually or in the aggregate have a Material Adverse
Effect on the Company or the Subsidiary.
6.3 Authorized and Outstanding Capital Stock. The Company has
authorized the issuance of 40,000,000 shares of Common Stock, $0.05 par value
per share, of which approximately 17,759,000 shares are issued and outstanding
as of the Effective Date. All shares of Common Stock have been duly
authorized, have been validly issued, are fully paid and nonassessable and are
free of any liens or encumbrances. The Plan provides for the granting of
options to the Company's employees, directors, consultants and advisors, to
purchase an aggregate of up to 6,000,000 shares of Common Stock, of which as
of the Effective Date, options to purchase an aggregate of approximately
3,950,000 shares of Common Stock are outstanding, none of which have been
exercised and 2,050,000 shares are available for grant. All shares of Common
Stock subject to issuance pursuant to the Plan, upon issuance, will be duly
authorized, validly issued, fully paid and nonassessable. The Company has
agreed to issue up to 250,000 shares of Common Stock and options to purchase
up to 1,750,000 shares of Common Stock to certain officers, directors,
shareholders and affiliates of Streamware pursuant to the Stock Purchase
Agreement (the "Additional Shares and Options"). The Company has issued to
Meridel Limited, a Turks and Caicos corporation, and Xxxxxx Holdings Limited,
a Turks and Caicos corporation, a convertible line of credit promissory note
dated December 23, 2003 in the amount of $1,000,000 (the "Note"), which is
convertible into a maximum of 1,000,000 shares of the Company's Common Stock.
Except for the Company Shares, the Options, the Additional Shares and Options,
the Note and the options described in this Section 6.3, there are no
authorized or outstanding capital stock, options, warrants, preemptive rights,
rights of first refusal or other rights to purchase any capital stock of the
Company or any equity or debt securities convertible into or exchangeable or
exercisable for capital stock of the Company.
6.4 Issuance and Delivery of the Company Shares and Option Shares and
Grant and Delivery of the Options. The issuance of the Company Shares and the
Option Shares, when issued, and the grant of the Options have been duly
authorized. The Company Shares and the Option Shares, when issued, are or, in
the case of the Option Shares, when issued will be, duly authorized, validly
issued, fully paid and nonassessable. No preemptive rights or other rights to
subscribe for or purchase exists with respect to the issuance of the Company
Shares or the Options or will exist with respect to the issuance of the Option
Shares, when issued. No further approval or authority of the shareholders or
the Board is required for the issuance of the Company Shares or the Option
Shares, when issued, and the grant of the Options. The offer and
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issuance of the Company Shares and the Options and the Option Shares is in
compliance with the Securities Act of 1933, as amended (the "Securities Act")
and all rules and regulations promulgated thereunder and all state securities
laws, regulations and requirements.
6.5 Due Execution, Delivery and Performance of the Agreements. The
Company has full legal right, corporate power and authority to carry on its
business as presently conducted and enter into this Agreement and to perform
the transactions contemplated hereby. The Subsidiary has full legal right,
corporate power and authority to carry on its business as presently conducted.
This Agreement has been duly authorized, executed and delivered by the
Company. The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions herein contemplated will not
violate any provision of the organizational documents of the Company or the
Subsidiary and will not result in the creation of any lien, charge, security
interest or encumbrance upon any assets or property of the Company or the
Subsidiary pursuant to the terms or provisions of, or will not conflict with,
result in the breach or violation of, or constitute, either by itself or upon
notice or the passage of time or both, a default under any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Company or the Subsidiary is a party or by which the
Company or the Subsidiary or any of their assets or properties may be bound or
affected, including, without limitation, any contract listed in the SEC
Documents (as defined below), or any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other domestic or international governmental body
applicable to the Company or the Subsidiary or any of their properties. No
consent, approval, authorization or other order of or registration,
qualification, designation, declaration or filing with any court, regulatory
body, administrative agency or other governmental body is required for the
execution, delivery and performance of this Agreement or the consummation by
the Company of the transactions contemplated hereby, except for compliance
with the Blue Sky laws of any state of the United States and United States
federal securities laws applicable to the issuance of the Company Shares and
the Option Shares, when issued, and the grant of the Options. Assuming the
valid execution hereof by Streamware, this Agreement will constitute the
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Company in Section 9.4 hereof may be legally
unenforceable.
6.6 No Actions or Violations. There is no legal or governmental
actions, suits, arbitrations, investigation or proceeding (each, an "Action")
pending or, to the Company's knowledge, threatened to which the Company or the
Subsidiary is or may be a party (a) which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result
of the consummation of such transactions or (b) which is reasonably likely to
have a Material Adverse Effect on the Company or the Subsidiary. Neither the
Company nor the Subsidiary is subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. No Action by the Company or the Subsidiary is currently
pending, nor does the Company or the Subsidiary intend to initiate any Action,
that is reasonably likely to have a Material Adverse Effect on the Company.
The Company is not in violation of any term of its articles of incorporation,
as amended, or bylaws, as amended.
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6.7 Investment Company. The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940,
as amended.
6.8 Conflicting Registration Rights. Except as set forth in the
Schedule of Exceptions, no shareholder of the Company other than the
Purchasers has or will have any right (which has not been waived or has not
expired by reason of lapse of time following notification of the Company's
intent to file the Registration Statement (as defined below)) to request or
require the Company to register the sale of any shares owned by such
shareholder under the Securities Act on the Registration Statement.
6.9 Brokers. There is no broker, finder or other party that is entitled
to receive from the Company or the Subsidiary any brokerage or finder's fee or
other fee or commission as a result of any transactions contemplated by this
Agreement.
6.10 Books and Records. The books, records and accounts of the Company
and the Subsidiary accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and the Subsidiary, respectively, all to the extent
required by generally accepted accounting principles. The Company and the
Subsidiary each maintain a system of internal accounting controls sufficient
to provide reasonable assurances that (a) transactions are executed in
accordance with management's general or specific authorizations, (b)
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and to
maintain asset accountability, (c) access to assets is permitted only in
accordance with management's general or specific authorization and (d) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
6.11 SEC Documents.
(a) Reports. The Company has furnished to each Purchaser prior to
the date hereof copies of its SEC Documents. Each of the SEC Documents, as of
the Effective Date, does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Neither the Company nor the Subsidiary is a party to
any material contract, agreement or other arrangement that was required to
have been filed as an exhibit with the Commission that was not so filed.
(b) Financial Statements. The Company has provided each Purchaser
with copies of its audited financial statements (the "Audited Financial
Statements") for the fiscal year ended December 31, 2002, and its unaudited
financial statements for the nine (9)-month period ended September 30, 2003
(the "Balance Sheet Date"). Since the Balance Sheet Date, the Company has
duly filed with the Commission all SEC Documents required to be filed by it
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
the Securities Act. The audited and unaudited consolidated financial
statements of the Company included in
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the SEC Documents filed prior to the Effective Date fairly present, in
conformity with United States generally accepted accounting principles
("GAAP") (except as otherwise permitted by Form 10-Q) applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company as at the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended (subject
to normal year-end audit adjustments in the case of unaudited interim
financial statements).
6.12 Absence of Certain Changes Since Balance Sheet Date. Except for
the acquisition of the Subsidiary by the Company on October 1, 2003, since the
Balance Sheet Date or as disclosed in the SEC Documents, the business and
operations of the Company and the Subsidiary have been conducted in the
ordinary course consistent with past practice, and there has not been:
(a) any declaration, setting aside or payment of any dividend or
other distribution of the assets of the Company or the Subsidiary with respect
to any shares of its capital stock or any repurchase, redemption or other
acquisition by the Company or the Subsidiary of any outstanding shares of the
Company's or the Subsidiary's capital stock;
(b) any damage, destruction or loss, whether or not covered by
insurance, except for such occurrences that have not resulted, and are not
expect to result, in a Material Adverse Effect on the Company or the
Subsidiary;
(c) any waiver by the Company or the Subsidiary of a valuable right
or of a material debt owed to it, except for such waivers that have not
resulted, and are not expected to result, individually or in the aggregate, in
a Material Adverse Effect on the Company or the Subsidiary;
(d) any material change or amendment to, or any waiver of any
material rights under a material contract or other arrangement, including,
without limitation, any supply or service contract, or the termination of any
such contract or arrangement, to which the Company or the Subsidiary is a
party or by which the Company, the Subsidiary or any of the Company's or the
Subsidiary's assets or properties is bound or subject, except for changes,
amendments or waivers that are expressly provided for or disclosed in this
Agreement or that have not resulted, and are not expected to result,
individually or in the aggregate, in a Material Adverse Effect on the Company
or the Subsidiary;
(e) any change by the Company or the Subsidiary in its accounting
principles, methods or practices or in the manner in which it keeps its
accounting books and records, except any such change required by a change in
GAAP; or
(f) any other event or condition of any character, except for such
events and conditions that have not resulted, and are not expected to result,
individually or in the aggregate, in a Material Adverse Effect on the Company
or the Subsidiary.
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6.13 Intellectual Property
(a) Ownership or Right to Use. The Company has sole title to and
owns, or is licensed or otherwise possesses legally enforceable right to use,
all patents or patent applications, software, know-how, registered or
unregistered trademarks and service marks and any applications therefore,
registered or unregistered copyrights, trade names, and any applications
therefore, trade secrets or other confidential or proprietary information (the
"Intellectual Property") necessary to enable the Company and the Subsidiary to
carry on its business as currently conducted, except where any deficiency, or
group of deficiencies, therein would not have a Material Adverse Effect on the
Company or the Subsidiary. The Company covenants that it will, and that it
will cause the Subsidiary to, where the Company in the exercise of reasonable
judgment deems it appropriate, use reasonable business efforts to seek
copyright and patent registration, and other appropriate intellectual property
protection, for the Intellectual Property of the Company and the Subsidiary.
(b) Licenses; Other Agreements. Except as set forth in the Schedule
of Exceptions, neither the Company nor the Subsidiary is subject to any
exclusive license (whether such exclusivity is temporary or permanent) to any
material portion of the Intellectual Property of the Company or the
Subsidiary. There are not outstanding any licenses or agreements of any kind
relating to the Intellectual Property of the Company or the Subsidiary.
Neither the Company nor the Subsidiary is obligated to pay any royalties or
other payments to third parties with respect to the marketing, sale,
distribution, manufacture, license or use of any Intellectual Property, except
as it may be so obligated in the ordinary course of its business, as disclosed
in the SEC Documents or where the aggregate amount of such payments could not
reasonably be expected to be material.
(c) No Infringement. Neither the Company nor the Subsidiary has
violated or infringed, nor is currently violating or infringing, and neither
the Company nor the Subsidiary has received any communication alleging that it
has violated or infringed, any Intellectual Property of any other individual
or entity, to the extent that any such violation or infringement, either
individually or together with all other such violations and infringements,
would have a Material Adverse Effect on the Company or the Subsidiary.
6.14 Title to Property and Assets. The Company and the Subsidiary each
have all requisite corporate power and authority to own or lease its assets
and other properties. Except as set forth in the Schedule of Exceptions, the
material properties and assets of the Company and the Subsidiary are owned by
the Company and the Subsidiary free and clear of all mortgages, deeds of
trust, liens, charges, encumbrances and security interests except for
statutory liens for the payment of current taxes that are not yet delinquent
and liens, encumbrances and security interests that arise in the ordinary
course of business and do not affect such properties and assets of the Company
and the Subsidiary. With respect to leased property and assets, the Company
and the Subsidiary are each in compliance with such leases in all material
respects.
6.15 Tax Matters. Except as set forth in the SEC Documents, the Company
and the Subsidiary have filed all material tax returns required to be filed,
which returns are true, complete and correct in all material respects, and
neither the Company nor the Subsidiary is in default in the payment of such
taxes, including penalties and interest, assessments, fees and other charges,
shown thereon due or otherwise assessed, other than those being contested in
good faith
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and for which adequate reserves have been provided or those currently payable
without interest that were payable pursuant to such returns or any assessments
with respect thereto.
6.16 Streamware Shares
(a) The Company is acquiring the Streamware Shares for its own
account, for investment purposes only, and not for the account of any other
person or entity. The Company has no present intention of distributing any of
the Streamware Shares, or entering into any arrangement or understanding with
any other person regarding the distribution of the Streamware Shares.
(b) The Company has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to acquire the
Streamware Shares and the Company has been given the opportunity to ask
questions to such Purchaser and Streamware with respect to the subscription.
(c) The Company recognizes that Streamware has limited financial or
operating history and that investment in the Streamware Shares involves
substantial risks, and the Company has taken full cognizance of and
understands all of the risk factors related to the acquisition of the
Streamware Shares. Accordingly, the Company represents that it fully
understands that this is a highly speculative investment and that there are
substantial risks that the Company will suffer a complete loss of its
investment in the Streamware Shares.
(d) The Company has the capacity, by reason of the Company's
business and financial experience, to evaluate the merits and risks of an
investment in the Streamware Shares and to protect the Company's own interests
in connection with such investment and the Company is able to bear the
economic risk of such investment.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each
Purchaser represents and warrants to the Company as follows:
Each Purchaser, severally but not jointly, represents and warrants to the
Company as follows:
7.1 Due Execution, Delivery and Performance of the Agreements. Each
Purchaser has full legal right, power and authority to enter into this
Agreement and to perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by such Purchaser. The
execution, delivery and performance of this Agreement by such Purchaser and
the consummation of the transactions herein contemplated will not violate
result in the creation of any lien, charge, security interest or encumbrance
upon any assets or property of such Purchaser pursuant to the terms or
provisions of, or will not conflict with, result in the breach or violation
of, or constitute, either by itself or upon notice or the passage of time or
both, a default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which such
Purchaser is a party or by which such Purchaser or any of its assets or
properties may be bound or affected or any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory
body,
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administrative agency or other governmental body applicable to such Purchaser
or any of its properties. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body is required for the execution, delivery and performance of this Agreement
or the consummation by such Purchaser of the transactions contemplated hereby.
Assuming the valid execution hereof by the Company, this Agreement will
constitute the legal, valid and binding obligation of such Purchaser,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of such Purchaser in Section 9.4
hereof may be legally unenforceable.
7.3 No Actions. There are no legal or governmental actions, suits or
proceedings pending or, to such Purchaser's knowledge, threatened to which
such Purchaser is or may be a party which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result
of the consummation of such transactions.
7.4 Nature of Purchaser. Such Purchaser is knowledgeable, sophisticated
and experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved
in the purchase of the Company Shares and the acquisition of the Option
Shares, when issued, and the Option, including investments in securities
issued by the Company. Such Purchaser is able to bear the economic risk of
loss of such Purchaser's entire investment in the Company Shares, the Option
Shares and the Option.
7.5 Review of Information. Such Purchaser has requested, received,
reviewed and considered all information it deems relevant in making an
informed decision to purchase the Company Shares and acquire the Option. Such
Purchaser has received and reviewed, and has been given the opportunity to ask
questions of the Company with respect to, the SEC Documents.
7.6 Investment Intent. Such Purchaser is purchasing the Company Shares,
the Option Shares, when issued, and the Option in the ordinary course of its
business and for its own account for investment only and with no present
intention of distributing any of the Company Shares, the Option Shares or the
Option or entering into any arrangement or understanding with any other person
regarding the distribution of the Company Shares, the Option Shares or the
Option (it being understood that the foregoing does not limit such Purchaser's
right to sell the Company Shares and the Option Shares pursuant to the
Registration Statement).
7.7 Accredited Investor. Such Purchaser resides outside of the United
States or, if such Purchaser resides in the United States, such Purchaser is,
with the exception of Xxxxx Xxxxxxx, an "accredited investor," as that term is
defined in Rule 501 of Regulation D promulgated under the Securities Act.
7.8 Restrictions on Transfer. Such Purchaser acknowledges and
understands that the Company Shares, unless registered, constitute "restricted
securities" under the Securities Act and
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may only be sold, offered, transferred, pledge or hypothecated in reliance
upon a specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of such Purchaser's investment intent as
expressed herein or pursuant to an effective registration statement under the
Securities Act. Such Purchaser understands and agrees that the Company shall
cause the legend set forth below or a legend substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Company
Shares together with any other legends that may be required by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE SECURITIES ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS, SUCH
OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECA-
TION IS PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS OR,IN THE OPINION
OF COUNSEL, SUCH OFFER, SALE, TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
7.9 Sole Representations and Warranties. Except for the representations
and warranties contained in this Section 5, such Purchaser makes no
representation or warranty to the Company, express or implied, in connection
with the transactions contemplated by this Agreement.
SECTION 8. SURVIVAL. Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Purchasers herein and in the
certificates delivered pursuant hereto shall survive the execution of this
Agreement, the delivery to the Purchasers of the Company Shares and the Option
Shares, when issued, and the delivery of the Option and the delivery to the
Company of the Streamware Shares.
SECTION 9. REGISTRATION OF COMPANY SHARES AND OPTION SHARES; COMPLIANCE
WITH SECURITIES ACT
9.1 Registration Procedures and Expenses.
(a) Demand Registration. At any time following the one hundred twenty
day (120)-day anniversary of the Effective Date, each Purchaser shall have the
right to request that the Company prepare and file with the Commission a
registration statement on Form S-3 or other applicable form as determined by
the Company (the "Registration Statement") for the purpose of registering the
sale of the Company Shares and the Option Shares by such Purchaser from time
to time on the facilities of any securities exchange or trading system on
which the Common Stock of the Company is then traded or in
privately-negotiated transactions. The Company shall prepare and file the
Registration Statement with the Commission within thirty (30) days of the
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Company's receipt of such Purchaser's written request of registration (the
"Registration Request"). The Registration Statement shall contain all
material non-public information disclosed to such Purchaser by the Company in
connection with the purchase of the Company Shares, the issuance of the Option
Shares and the grant of the Option. For purposes of this Section 9, the term
"Company Shares" and "Option Shares" shall include any other securities of the
Company issued in exchange for the Company Shares or the Option Shares,
respectively, as a dividend on the Company Shares and the Option Shares or in
connection with a stock split or other reorganization transaction, including,
without limitation a Corporate Event (as applicable to the Option and the
Option Shares to the extent the Option is assumed by the Acquiring Entity)
affecting the Company Shares or the Option Shares. The Company shall use its
commercially reasonable efforts to cause the Registration Statement to become
effective (the "Registration Effective Date") within sixty (60) days of the
Company's receipt of the Registration Request. The Company and such Purchaser
shall bear equally, on a dollar-for-dollar basis, all expenses incurred by the
Company and Purchaser (other than underwriting discounts, brokerage fees and
commissions) in connection with the registration of such Purchaser's Company
Shares and Option Shares pursuant to this Section 9.1(a); provided, however,
that such Purchaser shall bear all expenses incurred by the Company and such
Purchaser in connection with the registration if such Purchaser previously had
the opportunity to register an equivalent number of Company Shares and Options
Shares under its registration rights under Section 9.1(b) below, but elected
not to do so.
(b) Piggy-back Registration. If the Company shall determine to
register any of its securities either for its own account or the account of
any holders of its equity securities exercising their respective demand
registration rights, other than a registration relating solely to employee
benefit plans, or a registration relating to a corporate reorganization or
other transaction on Form S-4, or a registration on any registration form that
does not permit secondary sales, the Company shall on each such occasion:
(i) promptly give each Purchaser written notice thereof at
least thirty (30) days before the filing of the registration statement; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Company Shares and Option Shares
specified in a written request made by each Purchaser and received by the
Company within fifteen (15) days after such Purchaser's receipt of the written
notice from the Company described in clause (i) above. Such written request
may specify all or a part of such Purchaser's Company Shares and Option
Shares.
If the registration of which the Company gives notice is for an underwritten
offering, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 9.1(b)(i). In such event, the right of each
Purchaser to registration pursuant to this Section 9.1(b) shall be conditioned
upon such Purchaser's participation in such underwriting. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 9.1(b) prior to the effectiveness of such registration whether or
not such Purchaser has elected to include securities in such registration.
The Company shall bear all expenses incurred by the Company and each Purchaser
(other than underwriting discounts, brokerage fees, commissions and the legal
fees of legal counsel to such Purchaser) in connection with the registration
of Company Shares and Option Shares pursuant to this Section 9.1(b).
9.2 Covenants of the Company
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(a) The Company shall prepare and file with the Commission such
amendments and supplements to the Registration Statement (which term shall
also include for purposes of this and all other sections of this Agreement
other than Section 9.1 any registration statement prepared and filed by the
Company pursuant to Section 9.1(b)) and the prospectus forming a part thereof
as may be necessary to keep the Registration Statement effective until the
earlier of the date on which (i) all Company Shares and the Option Shares have
been disposed of pursuant to the Registration Statement, (ii) all Company
Shares and the Option Shares then held by all Purchasers may be sold under the
provisions of Rule 144 promulgated under the Securities Act ("Rule 144")
without limitation as to volume, whether pursuant to Rule 144(k) or otherwise,
or (iii) the Company has determined that all Company Shares and the Option
Shares then held by all Purchasers may be sold without restriction under the
Securities Act and has removed any stop transfer instructions relating to such
Company Shares and Option Shares and offered to cause to be removed any
restrictive legends on the certificates, if any, representing such Company
Shares and Option Shares (the period between the Registration Effective Date
(which terms shall for purposes of this Section 10.2 and Sections 9.3 and 9.4
include the date on which any Registration Statement filed by the Company
pursuant to Section 9.1(b) is declared effective) and the earliest of such
dates is referred to herein as the "Registration Period"). At any time after
the end of the Registration Period, the Company may withdraw the Registration
Statement and its obligations under this Section 9 (other than its obligations
under Section 9.4) shall automatically terminate.
(b) The Company shall take all lawful action such that the
Registration Statement, any amendment thereto and the prospectus forming a
part thereof does not, on the Registration Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. Upon becoming aware
of the occurrence of any event or the discovery of any facts during the
Registration Period that make any statement of a material fact made in the
Registration Statement or the related prospectus untrue in any material
respect or which material fact is omitted from the Registration Statement or
related prospectus that requires the making of any changes in the Registration
Statement or related prospectus so that it will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading (taking into account any prior amendments or
supplements), the Company shall promptly notify each Purchaser, and, subject
to the provisions of Section 9.2(c), as soon as reasonably practicable prepare
and file with the Commission a supplement or post-effective amendment to the
Registration Statement or the related prospectus or file any other required
document so that the Registration Statement and such prospectus will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c) The Company shall not be obligated to prepare and file a
post-effective amendment or supplement to the Registration Statement or the
prospectus constituting a part
-16-
thereof during the continuance of a Blackout Event. A "Blackout Event" shall
mean any of the following: (i) the possession by the Company of material
information that is not ripe for disclosure in a registration statement or
prospectus, as determined in good faith by the Chief Executive Officer of the
Company (the "CEO") or the Board or that, if disclosed, would be detrimental
to the business and affairs of the Company or (ii) any material engagement or
activity by the Company which would, in the good faith determination of the
CEO or the Board, be adversely affected by disclosure in a registration
statement or prospectus at such time.
(d) At least ten (10) days prior to the filing with the Commission
of the Registration Statement (or any amendment thereto) or the prospectus
forming a part thereof (or any supplement thereto), the Company shall provide
draft copies thereof to each Purchaser and shall consider incorporating into
such documents such comments as each Purchaser (and its counsel) may propose
to be incorporated therein. Notwithstanding the foregoing, no prospectus
supplement, the form of which has previously been provided to a Purchaser,
need be delivered in draft form to such Purchaser.
(e) The Company shall promptly notify each Purchaser upon the
occurrence of any of the following events in respect of the Registration
Statement or the prospectus forming a part thereof: (i) the receipt of any
request for additional information from the Commission or any other federal or
state governmental authority, the response to which would require any
amendments or supplements to the Registration Statement or related prospectus;
(ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; or (iii) the
receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Company Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(f) The Company shall furnish to each Purchaser with respect to the
Company Shares and the Option Shares registered under the Registration
Statement (and to each underwriter, if any, of such Company Shares and Option
Shares) such number of copies of prospectuses and such other documents as such
Purchaser may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Company Shares and the Option Shares by
such Purchaser pursuant to the Registration Statement.
(g) The Company shall file or cause to be filed such documents as
are required to be filed by the Company for normal Blue Sky clearance in
states of the United States specified in writing by Purchasers; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented.
(h) With a view to making available to Purchasers the benefits of
Rule 144, the Company agrees, throughout the Registration Period and so long
as a Purchaser owns Company Shares or the Option Shares to:
-17-
(i) comply with the provisions of paragraph (c)(1) of Rule 144;
and
(ii) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company pursuant to Section 13
or 15(d) under the Exchange Act; and, if at any time it is not required to
file such reports but in the past had been required to or did file such
reports, it will, upon the request of a Purchaser, make available other
information as required by, and so long as necessary to permit sales of the
Company Shares and the Option Shares pursuant to, Rule 144.
9.3 Covenants of Purchasers.
(a) If at any time or from time to time after the Registration
Effective Date, the Company notifies Purchasers in writing that the
Registration Statement or the prospectus forming a part thereof (taking into
account any prior amendments or supplements thereto) contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading, no Purchaser shall offer or sell any Company Shares
or the Option Shares or engage in any other transaction involving or relating
to the Company Shares or the Option Shares, from the time of the giving of
notice with respect to such untrue statement or omission until Purchasers
receive written notice from the Company that such untrue statement or omission
no longer exists or has been corrected or disclosed in an effective
post-effective amendment to the Registration Statement or a valid prospectus
supplement to the prospectus forming a part thereof.
(b) In connection with the sale of any Company Shares or the Option
Shares pursuant to the Registration Statement, each Purchaser shall deliver to
the purchaser thereof the Registration Statement and the prospectus forming a
part of the Registration Statement and all relevant supplements thereto which
have been provided by the Company to such Purchaser on or prior to the
applicable delivery date, all in accordance with the requirements of the
Securities Act and the rules and regulations promulgated thereunder and any
applicable Blue Sky laws of any state of the United States.
(c) The Company may refuse to register (or permit its transfer agent
to register) any transfer of any Company Shares or the Option Shares not made
in accordance with this Section 9.3 and for such purpose may place stop order
instructions with its transfer agent with respect to the Company Shares.
(d) Each Purchaser will cooperate with the Company in all respects
in connection with the performance by the Company of its obligations under
Sections 9.1 and 9.2, including timely supplying all information reasonably
requested by the Company (which shall include all information regarding such
Purchaser, and any person who beneficially owns Company Shares or the Option
Shares held by such Purchaser within the meaning of Rule 13d-3 promulgated
under the Exchange Act, and the proposed manner of sale of the Company Shares
and the Option Shares required to be disclosed in the Registration Statement)
and executing and returning all documents reasonably requested in connection
with the registration and sale of the Company Shares and the Option Shares.
Each Purchaser hereby consents to be named as an underwriter in the
Registration Statement, if applicable, in accordance with current Commission
policy and, if necessary, to join in the request of the Company for the
acceleration of the effectiveness of the Registration Statement.
-18-
9.4 Indemnification. For the purpose of this Agreement, the term
"Registration Statement" shall include any final prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Sections 9.1 or 9.2.
(a) The Company agrees to indemnify and hold harmless each Purchaser
against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Purchaser may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, as amended as of the Registration Effective Date,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 promulgated
under the Securities Act, or the prospectus, in the form first filed with the
Commission pursuant to Rule 424(b) promulgated under the Securities Act, or
filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, (ii) the omission or alleged omission to state in the
Registration Statement as of the Registration Effective Date a material fact
required to be stated therein or necessary to make the statements in the
Registration Statement or any post-effective amendment or supplement thereto,
or in the Prospectus or any amendment or supplement thereto, not misleading,
in each case in the light of the circumstances under which the statements
contained therein were made, or (iii) any inaccuracy in the representations
and warranties of the Company contained in this Agreement, or any failure of
the Company to perform its obligations hereunder, and will reimburse such
Purchaser for any legal and other expenses which are reasonably incurred by
such Purchaser in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (1) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Purchaser
expressly for use therein, (2) the failure of such Purchaser to comply with
the covenants and agreements contained in Section 9.3 hereof respecting the
sale of the Company Shares and the Option Shares, (3) the inaccuracy of any
representations made by such Purchaser in this Agreement or (4) any statement
or omission in any Prospectus that is corrected or disclosed in any subsequent
Prospectus that was delivered to such Purchaser prior to the pertinent sale or
sales by such Purchaser.
(b) Each Purchaser will, severally and not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act, against
any losses, claims, damages, liabilities or expenses to which the Company,
each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other United States federal or state statutory law or
regulation, or at common law or
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otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser) insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any failure of such
Purchaser to comply with the covenants and agreements contained in Section 9.3
hereof respecting the sale of the Company Shares of the Option Shares, (ii)
the inaccuracy of any representation made by such Purchaser in this Agreement,
or (iii) any (1) untrue or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or (2) omission or alleged omission to state in the
Registration Statement, the Prospectus or any amendment or supplement thereto
a material fact required to be stated therein or necessary to make the
statements in the Registration Statement or any amendment or supplement
thereto, or in the Prospectus or any amendment or supplement thereto, not
misleading, in each case in the light of the circumstances under which they
were made; provided, that such Purchaser's indemnification obligation under
this clause (iii) shall apply only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such Purchaser expressly for use therein, and will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.
(c) Promptly after receipt by an indemnified party or parties under
this Section 9.4 of notice of the threat or commencement of any action, such
indemnified party or parties will, if a claim in respect thereof is to be made
against an indemnifying party or parties under this Section 9.4, promptly
notify the indemnifying party or parties in writing thereof; provided, the
omission so to notify the indemnifying party or parties will not relieve it
from any liability which it may have to any indemnified party for contribution
(except as provided in paragraph (d)) or otherwise under the indemnity
agreement contained in this Section 9.4 to the extent it is not prejudiced as
a result of such failure. In case any such action is brought against any
indemnified party or parties and such indemnified party or parties seeks or
intends to seek indemnity from an indemnifying party or parties, the
indemnifying party or parties will be entitled to participate in and assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party or parties. Upon the indemnified party's or parties' receipt of notice
from the indemnifying party or parties of its election to assume the defense
of such action and approval by the indemnified party or parties of counsel,
the indemnifying party or parties will not be liable to such indemnified party
under this Section 9.4 for any legal or other expenses subsequently incurred
by such indemnified party or parties in connection with the defense thereof
unless the indemnifying party or parties shall not have employed counsel
reasonably satisfactory to the indemnified party or parties to represent the
indemnified party or parties within a reasonable time after notice of
commencement of action, in which case the reasonable fees and expenses of
counsel to the indemnified party or parties shall be at the expense of the
indemnifying party or parties.
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(d) If the indemnification provided for in this Section 9.4 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party or parties under
paragraphs (a) or (b) of this Section 9.4 in respect to any losses, claims,
damages, liabilities or expenses referred to herein (subject to the limitation
of paragraph (c) of this Section 9.4), then the indemnifying party or parties
shall contribute to the amount paid or payable by such indemnified party or
parties as a result of any losses, claims, damages, liabilities or expenses
referred to herein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the applicable Purchasers from
the placement of the Company Shares and the Option Shares contemplated by this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but the
relative fault of the Company and the applicable Purchasers in connection with
the statements or omissions or inaccuracies in the representations and
warranties in this Agreement that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the applicable Purchasers on the other shall be deemed to be in the same
proportion as the fair market value of the Company Shares and the Option
Shares sold pursuant to the Registration Statement (determined at the time as
the Company Shares and the Option Shares were issued by the Company to the
applicable Purchasers) bears to the difference (the "Difference") between the
fair market value of the Company Shares and the Option Shares sold pursuant to
the Registration Statement (determined at the time as the Company Shares and
the Option Shares were issued by the Company to the applicable Purchasers) and
the amount received by the applicable Purchasers from such sale. The relative
fault of the Company on the one hand and the applicable Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company
or by the applicable Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement,
omission or inaccuracy. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in paragraph (c) of
this Section 9.4, any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim.
The provisions set forth in paragraph (c) of this Section 9.4 with respect to
the notice of the threat or commencement of any threat or action shall apply
if a claim for contribution is to be made under this paragraph (d); provided,
however, that no additional notice shall be required with respect to any
threat or action for which notice has been given under paragraph (c) for
purposes of indemnification. The Company and each Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 9.4
were determined solely by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
9.4, no Purchaser shall be required to contribute any amount in excess of the
amount by which the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission exceeds the Difference. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
-21-
9.5 Information Available. So long as the Registration Statement is
effective covering the resale of Company Shares and the Option Shares then
still owned by any Purchaser, the Company will furnish to such Purchaser as
soon as practicable after available, one copy of its annual report to
shareholders (which annual report shall contain financial statements audited
in accordance with generally accepted accounting principles by a firm of
certified public accountants) and, upon written request, each of the SEC
Documents.
SECTION 10. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
Broadcast International, Inc.
Attention: Xxx Xxxxx
0000 Xxxxx Xxxx Xxx. #000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
(b) if Purchasers, to the address and facsimile number set forth
below each Purchaser's name on the signature page attached hereto.
SECTION 11. ASSIGNMENT. None of the parties hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement, whether by operation of law, merger, acquisition,
consolidation, share exchange, or otherwise, and any attempted assignment or
delegation of such rights or obligations shall be void. Except as expressly
provided in Section 9.4 with respect to directors and controlling persons of
the Company and officers of the Company who signed the Registration Statement,
no person, including without limitation any person who purchases or otherwise
acquires or receives any Company Shares, an Option or any Option Shares, is an
intended third party beneficiary of this Agreement, and no party to this
Agreement shall have any obligation arising under this Agreement to any person
other than the other parties hereto and, to the extent expressly provided in
Section 9.4, directors and controlling persons of the Company and officers of
the Company who signed the Registration Statement.
SECTION 12. CHANGES. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and each
Purchaser.
SECTION 13. HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not
be deemed to be part of this Agreement.
-22-
SECTION 14. SEVERABILITY. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 15. GOVERNING LAW. This Agreement, with the exception of
Section 3 and Section 6.16, shall be governed by and construed in accordance
with the laws of the State of Utah without regard to its conflicts of law
principles and the federal law of the United States of America. Section 3 and
Section 6.16 of this Agreement shall be enforced, governed and construed in
all respects in accordance with Swedish law. Any dispute, controversy or
claim arising out of or in connection with Section 3 or Section 6.16 of this
Agreement, or the breach, termination or invalidity thereof shall be finally
settled by arbitration in accordance with the Rules of Arbitration Institute
of the Stockholm Chamber of Commerce. The arbitral tribunal shall be composed
of a sole arbitrator. The place of arbitration shall be Stockholm. The
language to be used in the arbitral proceedings shall be English.
SECTION 16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
SECTION 17 LIMITATION ON REMEDIES. In the event of a breach of Section
6.11(a) of this Agreement by the Company with respect to any SEC Document
filed with the Commission prior to October 15, 2003, each Purchaser agrees
that it will not seek to rescind its acquisition of the Company Shares or the
Option or its purchase of any Option Shares, provided that this Section 17
shall in no way be construed to limit or restrict such Purchaser's ability or
right to seek any other remedy available at law or in equity, including
damages, in the event of the Company's breach of Section 6.11(a) or to seek
rescission or any other remedy available at law or in equity, including
damages, in the event of the Company's breach of any other provision of this
Agreement.
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY:
BROADCAST INTERNATIONAL, INC.
By: /s/ Xxxxxx X Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-24-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxxx Xxxxx
__________________________________________
Address: ______________________________
______________________________
Facsimile: ______________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxx Xxxxxxxx
__________________________________________
Address: Xxxxxxxxxxx 00
0000 Xxxxxxxxxx, Xxxxxx
Facsimile: 33481130
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxxx Xxxxxx
__________________________________________
Address: 0000 Xxxxxxxx Xxx
XXX, Xxxx 00000
Facsimile: _____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxx Xxxxx
__________________________________________
Address: Thonhohen 00
X. 0000 Xxxxxxxxxx, Xxxxxx
Facsimile: ______________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
TTA Holdings, Ltd.
/s/ J. Xxxxxxx Xxxxxx
__________________________________________
Address: 0 Xxxxxxxx Xxxxx #000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxx Xxxxxxx
__________________________________________
Address: Orrspelsvagen 2F_
XX-000 00 Xxxxxxxxx, Xxxxxx
Facsimile: 46 8 655 44 40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
Global Solutions SA
/s/ Xxxx Xxxx Xxxxxxx
__________________________________________
Address: Mor Xxx 25 V1
42837 Kallered
Facsimile: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
Pro Xxxx AS
/s/ Xxxx Xxxxxx
__________________________________________
Address: XX Xxx 000
X. 0000 Xxxxxxxxxx, Xxxxxx
Facsimile: 47 33 42 18 01
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxx Xxxxxxx
__________________________________________
Address: 0000 X. Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxx Xxxxxxxx
__________________________________________
Address: Xxxxxxxxxxx 0
000 00 Xxxxxxxxx, Xxxxxx
Facsimile: 46 13 37 58 45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxx Xxxxxxxxxx
__________________________________________
Address: Vastra Xxxxxxxxx 0
000 00 Xxxxxxxx, Xxxxxx
Facsimile: _____________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxx Xxxxxxxxxx
__________________________________________
Address: Vastra Xxxxxxxxx 0
000 00 Xxxxxxxx, Xxxxxx
Facsimile: ______________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxx Xxxxx
__________________________________________
Address: XX Xxx 0000
Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxx Xxxxxxxx
__________________________________________
Address: Xxxxxxxxxxxx 00
000 00 Xxxxxxxxx, Xxxxxx
Facsimile: 46 132 10 851
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxxxx Xxxxxxxxxx
__________________________________________
Address: Xxxxxxxxxxxxxx 0
000 00 Xxxxxxxxxx, Xxxxxx
Facsimile: ______________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxxx Xxxxxxx
__________________________________________
Address: Xxxxxxxxxxxxxx 0
XX 00000 Xxxxxxxxx, Xxxxxx
Facsimile: _______________________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ E. Xxxxxxx Xxxxxxxx
__________________________________________
Address: Xxxxxxxxxx Xxxxxxx
X 00000 Xxxxxxxxx
Facsimile: 46 142 36 00 70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
PURCHASER:
/s/ Xxxxx Xxxxxxx
____________________________________
Address: Sofies Xxx 00
00000 Xxxxxx, Xxxxxx
Facsimile: 46 300 18 665
SCHEDULE A
------------------------------------------------------------------------------
Number of
Streamware
Shares to be
Transferred
Company Shares Number of Shares by Purchaser
to be Issued to Shares to be Issued to the
Name of Purchaser Purchaser To Purchaser Company
------------------------- ----------------- -------------------- -------------
TTA Holdings Ltd 65,624 134,247 639,046
Solution Financial 16,893 34,082
Xxx Xxxxxx-Xxxxxxxx 5,270 3,549 10,000
Xxxxxx Xxxxxxx 8,312 15,617 44,000
Xxxxxxxx Xxxxxxxxxx 9,414 11,713 33,000
Viking Finance AS 354,371 647,740 719,118
Xxxxxx Xxxxxxxxx 1,511 3,839 8,000
Xxxxx Xxxxxxxxxx 32,617 46,141 130,000
Xxxxx Xxxxxxx 54,339 2,079 287,600
Xxxx Xxxxx 262,793 364,300 253,004
Xxxxxx Xxxxxxxxx 4,698 6,389 18,000
TTA Holdings Ltd 140,104 174,080 180,541
Xxxx Xxxxx 10,000 14,304 40,300
Pro xxxx AS 2,834 5,324 15,000
Xxxxx Matre 11,112 20,879 58,824
Xxxx Xxxxxx 12,000 13,980 25,300
Xxxxxx Xxxxxxx 3,000 1,796 5,060
Xxxxx Xxxxxxx 5,000
Xxx Xxxxxx 108 941
----------------------- -------------------- -------------------- -----------
TOTAL 1,000,000 1,500,000 2,530,043
-----------------------------------------------------------------------------
-26-
EXHIBIT A
OPTION EXERCISE NOTICE
Broadcast International, Inc.
_________________________
_________________________
Attn: Chief Executive Officer or President
SECTION 1. EXERCISE OF OPTION. Effective as of today, ___________,
20__ (the "Effective Date"), the undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase _________ shares of the Common Stock
(the "Option Shares") of Broadcast International, Inc. (the "Company") under
and pursuant to the Stock Issuance, Stock Transfer and Stock Option Agreement
dated March __, 2004 between Optionee and the Company (the "Option Agreement")
and the terms and conditions of this exercise notice (the "Agreement").
SECTION 2. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that
Optionee has received, read and understood the Option Agreement and agrees to
abide by and be bound by its terms and conditions.
SECTION 3. RIGHTS AS SHAREHOLDER. Until the stock certificate
evidencing such Option Shares is issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Option Shares, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly following the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued.
SECTION 4. TAX CONSULTATION. Optionee understands that Optionee may
suffer adverse tax consequences as a result of Optionee's purchase or
disposition of the Option Shares. Optionee represents that Optionee has
consulted with any tax consultants Optionee deems advisable in connection with
the purchase or disposition of the Option Shares and that Optionee is not
relying on the Company for any tax advice.
SECTION 5. RESTRICTIONS ON TRANSFER. Optionee acknowledges and
understands that the Option Shares, unless registered, constitute "restricted
securities" under the Securities Act of 1933, as amended (the "Securities
Act"), and may only be sold, offered, transferred, pledge or hypothecated in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Optionee's investment intent as
expressed herein or pursuant to an effective registration statement under the
Securities Act. Optionee understands and agrees that in the event the Option
Shares are not registered, the Company shall cause the legend set forth below
or a legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Option Shares together with any
other legends that may be required by state or federal securities laws:
-27-
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS,
SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHE-
CATION IS PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS OR, IN THE OPINION OF
COUNSEL TO THE COMPANY, SUCH OFFER, SALE,
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
SECTION 7. GOVERNING LAW; SEVERABILITY. This Agreement shall be
governed by and construed in accordance with the laws of the State of Utah.
Should any provision of this Agreement be determined by a court of law to be
illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.
SECTION 8. NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States mail by certified mail, with postage and
fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.
SECTION 9. DELIVERY OF PAYMENT. Optionee herewith delivers to the
Company the full exercise price for the Option Shares in accordance with
Section 2.5 of the Option Agreement.
SECTION 10. ENTIRE AGREEMENT. The Option Agreement is incorporated
herein by reference. This Agreement and the Option Agreement constitute the
entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof.
OPTIONEE:
_______________________________
__________________________
By:____________________________
Its:___________________________
-28-
EXHIBIT B
LOCK-UP AGREEMENT
In consideration of various shareholders of Streamware Solutions AB (the
"Purchasers") entering into the Stock Issuance, Stock Transfer and Option
Grant Agreement between such shareholders and Broadcast International, Inc.
(the "Company"), dated March __, 2004 (the "Agreement"), and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
undersigned agrees that the undersigned will not offer, sell, contract to sell
or otherwise dispose of any shares of Common Stock or other capital stock of
the Company or any options, warrants or other rights to purchase such shares
now owned or hereinafter acquired by the undersigned (collectively, the
"Shares") until June 30, 2005.
The undersigned hereby acknowledges that this Lock-Up Agreement is valid
and binding notwithstanding any prior agreements relating to this matter and
further agrees and consents to the entry of stop-transfer of any of the Shares
held by the undersigned unless such transfer is in compliance with this
Lock-Up Agreement. The undersigned also understands that the delivery of this
Lock-Up Agreement to the Purchasers is a condition to the Purchasers's
entering into the Agreement.
XXXXXX X. XXXXX
Date:
-29-
EXHIBIT C
LOCK-UP AGREEMENT
In consideration of Broadcast International, Inc. (the "Company")
entering into the Stock Issuance, Stock Transfer and Option Grant Agreement
between the undersigned and the Company, dated March __, 2004 (the
"Agreement"), and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the undersigned agrees that the undersigned will
not offer, sell, contract to sell or otherwise dispose of any shares of Common
Stock or other capital stock of the Company or any options, warrants or other
rights to purchase such shares now owned or hereinafter acquired by the
undersigned (collectively, the "Shares") until March 31, 2005, but shall
thereafter comply with the volume limitations in Rule 144(e) of the Securities
Act of 1933, as amended, until June 15, 2005.
The undersigned hereby acknowledges that this Lock-Up Agreement is valid
and binding notwithstanding any prior agreements relating to this matter and
further agrees and consents to the entry of stop-transfer of any of the Shares
held by the undersigned unless such transfer is in compliance with this
Lock-Up Agreement. The undersigned also understands that the delivery of this
Lock-Up Agreement to the Company is a condition to the Company's entering into
the Agreement.
______________________________
Date:
-30--
EXHIBIT D
SCHEDULE OF EXCEPTIONS
None.
- 31 -
