NOTE PURCHASE AGREEMENT
AGREEMENT
(this
“Agreement”),
dated
as of October 15, 2008, by and among DigitalFX International, Inc., a Florida
corporation, with headquarters located at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 0,
Xxx
Xxxxx, XX 00000 (the “Company”),
Xxxxxxx X. Xxxx (the “ New
Investor”)
and
__________________________________________ (the “Selling
Investor”).
WHEREAS:
A. The
Company the Selling Investor and certain other investors (the “Other
Investors”
and
collectively with the New Investor and the Selling Investor, the “Investors”)
are
parties to that certain Securities Purchase Agreement, dated as of November
29,
2007 (the “Original
Securities Purchase Agreement”)
and
that certain Amendment and Exchange Agreement dated as of March 24, 2008 (the
“Amendment
and Exchange Agreement”).
B. The
Company, the New Investor and the Selling Investor desire to enter into this
Agreement, pursuant to which, among other things, (i) the New Investor will
purchase from the Selling Investor, and the Selling Investor will sell, assign
and transfer to the New Investor, (A)
$_____________ of the aggregate unpaid principal amount of the Note held by
the
Selling Investor (the “Purchased
Principal Amount”)
and (B) such number of Warrants and Common Shares heretofore issued by the
Company to the Selling Investor set forth opposite the Selling Investor’s name
in columns 4 and 6 on the Securities Schedule attached hereto (collectively,
the
“Purchased
Warrants and Shares”);
and (ii) the Selling Investor and the New Investor shall forbear, for a period
of 30 days from the Closing Date, from seeking to enforce any rights that each
may have as a result of the Event of Default that occurred with respect to
Company’s failure to satisfy one or more Financial Covenants for the Fiscal
Quarter ended June 30, 2008.
C. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to them in the Original Securities Purchase Agreement, the
Amendment and Exchange Agreement or any other Transaction Document, as
applicable.
NOW,
THEREFORE,
in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the Company, the New Investor and the Other Investors hereby agree
as
follows:
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1.
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SALE
AND TRANSFER OF THE PURCHASED PRINCIPAL AMOUNT AND THE PURCHASED
WARRANTS
AND SHARES.
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(a)
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At
the Closing:
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(i) the
Selling Investor shall sell, assign and transfer to the New Investor, and the
New Investor shall purchase from the Selling Investor the Purchased Principal
Amount and the Purchased Warrants and Shares (the “Sale”).
The Sale shall be consummated, as follows:
(1) The
New Investor shall pay $___________ (the “Purchase
Price”)
to the Selling Investor by payment of such amount by wire transfer of
immediately available funds to an account maintained by the Selling Investor,
such account to be designated by the Selling Investor by written notice to
the
New Investor not later than two business days prior to the Closing
Date
(2) the
Selling Investor shall deliver its Note to the Company for cancellation, and
the
Company, pursuant to Section 18(a) of such Note, shall issue and deliver to
the
Selling Investor and the New Investor Notes which shall be in the principal
amount set forth opposite their names in columns (1) and (2) on the Securities
Schedule attached hereto;
(3) the
Selling Investor shall deliver its Warrant to the Company for cancellation,
and
the Company, pursuant to section 7(a) of such Warrant, shall issue and deliver
to the Selling Investor and the New Investor Warrants which shall be exercisable
to acquire that number of Warrant Shares set forth opposite their names in
columns (3) and (4) of the Securities Schedule attached hereto; and
(4) the
Selling Investor shall deliver or cause to be delivered to the Company for
cancellation the Common Shares held by it, and the Company shall issue or cause
its transfer agent to issue to the Selling Investor and the New Investor such
number of Common Shares as is set forth opposite their names in columns (5)
and
(6) of the Securities Schedule attached hereto.
(b) Closing
Date.
The date and time of the Closing (the “Closing
Date”)
shall be 10:00 a.m., New York Time, on October 15, 2008, or such other time
and
date as is mutually agreed to by the Company and the Investors.
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2.
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AGREEMENTS
TO FORBEAR
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(a) In
consideration for the New Investor’s payment of the Purchase Price, and the
Selling Investor’s agreement to sell and transfer the above-mentioned portion of
its Note, Warrant and Shares to the New Investor, the New Investor and the
Selling Investor hereby covenant and agree that, for a period of 30 days from
the Closing Date (the “First
Forbearance Period”),
each of them shall forbear from taking, or causing any other Person to take,
any
action to enforce any rights that either of them may have, individually or
together with the Other Investors, as a result of the Event of Default that
occurred with respect to Company’s failure to satisfy one or more Financial
Covenants for the Fiscal Quarter ended June 30, 2008.
(b) In
the event that, on or before the last day of the First Forbearance Period,
the
Selling Investor and the Other Investors receive payment in the aggregate amount
of $250,000, which such amount shall be applied pro rata in payment of the
Company’s obligations under the Notes held by the Selling Investor and the Other
Investors, each of the New Investor and the Selling Investor further covenants
and agrees that, for a period of 30 days from the end of the First Forbearance
Period (the “Second
Forbearance Period”),
each of them shall forbear from taking, or causing any other Person to take,
any
action to enforce any rights that either of them may have, individually or
together with the Other Investors, as a result of the Event of Default that
occurred with respect to Company’s failure to satisfy one or more Financial
Covenants for the Fiscal Quarter ended June 30, 2008 or any Event of Default
that may occur with respect to the Company’s failure to satisfy one or more
Financial Covenants for the Fiscal Quarter ending September 30,
2008.
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(c) In
the event that, on or before the last day of the Second Forbearance Period,
the
Selling Investor and the Other Investors receive payment in the aggregate amount
of $250,000, which such amount shall be applied pro rata in payment of the
Company’s obligations under the Notes held by the Selling Investor and the Other
Investors, each of the New Investor and the Selling Investor further covenants
and agrees that, for a period of 30 days from the end of the Second Forbearance
Period, each of them shall forbear from taking, or causing any other Person
to
take, any action to enforce any rights that either of them may have,
individually or together with the Other Investors, as a result of the Event
of
Default that occurred with respect to Company’s failure to satisfy one or more
Financial Covenants for the Fiscal Quarter ended June 30, 2008 or any Event
of
Default that may occur with respect to the Company’s failure to satisfy one or
more Financial Covenants for the Fiscal Quarter ending September 30,
2008.
(d) For
the avoidance of doubt, the Company, the Selling Investor and the New Investor
agree that the agreement of the Selling Investor and the New Investor to forbear
hereunder shall not toll the application of the default interest rate to which
they are entitled under the Notes.
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3.
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RIGHTS
OF THE NEW INVESTOR UNDER THE REGISTRATION RIGHTS
AGREEMENT.
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(a) The
Company hereby agrees to prepare and file a post-effective amendment to the
Registration Statement on SEC Form S-3 (Commission File No. 333-150191), or
it
shall prepare and file a new Registration Statement on an appropriate SEC form,
reflecting the changes made, as a result of the transactions contemplated by
this Agreement, to the ownership by the New Investor and the Selling Investor
of
the Common Shares, the Convertible Shares issuable upon conversion of the Notes
and the Warrant Shares issuable upon exercise of the Warrants that are currently
held by the Selling Investor. All costs associated with the preparation and
filing of such post-effective amendment or new registration statement shall
be
borne by the Company.
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4.
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AMENDMENTS
TO TRANSACTION DOCUMENTS.
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(a) Reaffirmation.
The Company hereby confirms and agrees that, except as otherwise expressly
provided herein:
(i) the
Original Securities Purchase Agreement, as amended by the Amendment and Exchange
Agreement, and each other Transaction Document is, and shall continue to be,
in
full force and effect and is hereby ratified and confirmed in all respects,
except that on and after the Closing Date (i) all references in the Original
Securities Purchase Agreement to “this Agreement,” “hereto,” “hereof,”
“hereunder” or words of like import referring to the Original Securities
Purchase Agreement shall mean the Original Securities Purchase Agreement, as
amended by the Amendment and Exchange Agreement, after taking into account
the
transactions contemplated herein and hereby, (ii) all references in the other
Transaction Documents to the “Original Securities Purchase Agreement” “thereto,”
“thereof,” “thereunder” or words of like import referring to the Original
Securities Purchase Agreement, shall mean the Original Securities Purchase
Agreement, as amended by the Amendment and Exchange Agreement, after taking
into
account the transactions contemplated herein and hereby, and (iii) all
references in the other Transaction Documents to the “Registration Rights
Agreement,” “thereto,” “thereof,” “thereunder” or words of like import referring
to the Registration Rights Agreement shall mean the Registration Rights
Agreement, after taking into account the transactions contemplated herein and
hereby. REFERENCES TO NOTES AND WARRANTS IN ALL TRANSACTION DOCUMENTS MEANS
NOTES AND WARRANTS AFTER TAKING INTO CONSIDERATION THE TRANSACTIONS CONTEMPLATED
HEREIN AND HEREBY;
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(ii) to
the extent that the Original Securities Purchase Agreement, as amended by the
Amendment and Exchange Agreement, after taking into account the transactions
contemplated herein and hereby, or any other Transaction Document purports
to
assign or pledge to the Collateral Agent for the Buyers and the holders of
the
Securities, or to grant to the Collateral Agent a security interest in or lien
on, any collateral as security for the obligations of the Company from time
to
time existing in respect of the Notes and any other existing Transaction
Document, such pledge, assignment and/or grant of the security interest or
lien
is hereby ratified and confirmed in all respects, and shall apply with respect
to the obligations under the Notes held by all Investors after taking into
account the transactions contemplated herein and hereby, and no additional
filing is required to be made in order to maintain the perfection of the
security interest in, or lien, on such collateral; and
(iii) the
execution, delivery and effectiveness of this Agreement shall not operate as
an
amendment of any right, power or remedy of the Collateral Agent or the Investors
under any Transaction Document, nor constitute an amendment of any provision
of
any Transaction Document.
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5.
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REPRESENTATIONS
AND WARRANTIES
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(a) Selling
Investor’s Bring Down.
The Selling Investor hereby represents and warrants to the Company and the
New
Investor with respect to itself only as set forth in Section 2 of the Original
Securities Purchase Agreement as if such representations and warranties were
made as of the date hereof and set forth in their entirety in this Agreement.
Such representations and warranties to the transactions thereunder and the
securities issued thereby are hereby deemed for purposes of this Agreement
to be
references to the transactions hereunder and the issuance of the securities
hereby.
(b) No
Event of Default.
The Company represents and warrants to the Selling Investor and the New Investor
that after giving effect to the terms of this Agreement and the Other
Agreements, no Event of Default (as defined in the Note) shall have occurred
and
be continuing as of the date hereof, except for the Event of Default or Events
of Default which have occurred or may occur by reason of one or more of
Financial Covenant Failures with respect to the Company’s Fiscal Quarter ended
June 30, 2008 and the Company’s Fiscal Quarter ending on September 30, 2008, as
the case may be.
(c) Investor
Status.
As of the date hereof and during the preceding three-month period,
(i) the
Selling Investor, together with any other Person with whom the Selling Investor
must aggregate sales under Rule 144, (A) does not beneficially own, and has
not
beneficially owned, in excess of 10% of the Common Stock, (B) has not appointed
any member to the board of directors of the Company or (C) has not participated
in the management or daily operations of the Company; and
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(ii) the
New Investor, together with any other Person with whom the New Investor must
aggregate sales under Rule 144, has beneficially owned in excess of 10% of
the
Common Stock, but has not (A) appointed any member to the board of directors
of
the Company or (B) participated in the management or daily operations of the
Company.
(d) Shell
Company Status.
The Company has complied with all of the requirements set forth in Rule
144(i)(2).
(e) New
Investor Representations and Warranties.
The New Investor represents and warrants to the Selling Investor and to the
Company as follows:
(i) Enforceability.
This Agreement, when executed and delivered by the New Investor, will constitute
a valid and legally binding obligation of the New Investor, enforceable against
the New Investor in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement
of
creditors’ rights generally, or (b) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
(ii) Investment
Experience; Access to Information.
The New Investor (a) either alone or together with his representatives, but
without reliance upon the Selling Investor, has such knowledge and experience
in
financial and business matters as to be capable of evaluating the merits and
risks of this investment and make an informed decision to so invest, and has
so
evaluated the risks and merits of such investment, (b) has the ability to bear
the economic risks of this investment and can afford a complete loss of such
investment, (c) understands the terms of and risks associated with the
acquisition of the Purchased Principal Amount and the Purchased Warrants and
Shares, including, without limitation, a lack of liquidity, price transparency
or pricing availability and risks associated with the industry in which the
Company operates, (d) has had the opportunity to review such disclosure
regarding the Company, its business, its financial condition and its prospects
as the New Investor has determined to be necessary in connection with the
purchase of the Purchased Principal Amount and the Purchased Warrants and
Shares, including, without limitation, the Company’s Annual Report on Form 10-K
(or substantially equivalent form) for its most recently completed fiscal year,
the Company's Quarterly Reports on Form 10-Q (or substantially equivalent form)
for the fiscal quarters since the end of such completed fiscal year, and the
Company’s Current Reports on Form 8-K (or substantially equivalent form) since
the end of such completed fiscal year, each as amended, and (e) has had an
opportunity to ask such questions and make such inquiries concerning the
Company, its business, its financial condition and its prospects as the New
Investor has deemed appropriate in connection with such purchase and to receive
satisfactory answers to such questions and inquiries. The New Investor
acknowledges that the Selling Investor has not given the New Investor any
investment advice, credit information or opinion on whether the purchase of
the
Notes, Common Shares and Warrants is prudent.
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(iii) No
Conflicts; Advice.
Neither the execution and delivery of this Agreement, nor the consummation
of
the transactions contemplated hereby, does or will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court to which
the New Investor is subject, or conflict with, violate or constitute a default
under any agreement, credit facility, debt or other instrument or understanding
to which the New Investor is a party. The New Investor has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary
or appropriate in connection with its purchase of the Notes, Common Shares
and
Warrants.
(iv) No
Litigation.
There is no action, suit, proceeding, judgment, claim or investigation pending,
or to the knowledge of the New Investor, threatened against the New Investor
which could reasonably be expected in any manner to challenge or seek to
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement.
(v) Consents.
No authorization, consent, approval or other order of, or declaration to or
filing with, any governmental agency or body or other Person is required for
the
valid authorization, execution, delivery and performance by the New Investor
of
this Agreement and the consummation of the transactions contemplated
hereby.
(vi) New
Investor Status.
At the time the New Investor was offered the Purchased Principal Amount and
the
Purchased Warrants and Shares, it was, at the date hereof it is, and at the
Closing it will be, an “accredited investor” as defined in Rule 501(a) under the
Securities Act. The New Investor is not, and is not required to be registered
as, a broker-dealer under Section 15 of the Securities Exchange Act of 1934,
as
amended.
(vii) General
Solicitation.
The New Investor is not purchasing the Purchased Principal Amount and the
Purchased Warrants and Shares as a result of any advertisement, article, notice
or other communication regarding such securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented
at
any seminar or any other general solicitation or general
advertisement.
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6.
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CERTAIN
COVENANTS AND AGREEMENTS.
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(a) Best
Efforts.
Each party shall use its best efforts timely to satisfy each of the conditions
to be satisfied by it as provided in Sections 7 and 8 of this
Agreement.
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(b) Disclosure
of Transactions and Other Material Information.
On or before 8:30 a.m., New York City time, on the first Business Day following
the date of this Agreement, the Company shall issue a press release and file
a
Current Report on Form 8-K, which the Collateral Agent shall have approved
prior
to its release and filing, describing the terms of the transactions contemplated
by this Agreement in the form required by the 1934 Act and attaching the
material Transaction Documents not previously filed (including, without
limitation, this Agreement) (including all attachments, the “New
Investor 8-K Filing”).
Neither the Company, its Subsidiaries nor the Selling Investor or the New
Investor shall issue any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of the Selling Investor
or
the New Investor, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the New Investor
8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) the Selling
Investor and the New Investor shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release).
From and after the filing of the New Investor 8-K Filing with the SEC, the
Selling Investor shall not be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of its
respective officers, directors, employees or agents, that is not disclosed
in
the New Investor 8-K Filing. The Company shall not, and shall cause each of
its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide the Selling Investor with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after
the
filing of the New Investor 8-K Filing with the SEC without the express written
consent of the Selling Investor. If the Selling Investor has, or believes it
has, received any such material, nonpublic information regarding the Company
or
any of its Subsidiaries, it shall provide the Company with written notice
thereof. The Company shall, within five (5) Trading Days of receipt of such
notice, make public disclosure of such material, nonpublic information. In
the
event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the
Transaction Documents, the Selling Investor shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, nonpublic information without the prior approval
by
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Selling Investor shall not have any
liability to the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, stockholders or agents for any such disclosure.
Subject to the foregoing, without the prior written consent of the Selling
Investor, neither the Company nor any of its Subsidiaries or affiliates shall
disclose the name of the Selling Investor in any filing (other than as is
required by applicable law or regulations), announcement, release or
otherwise.
(c) The
Company acknowledges that, to the extent that any of the shares of Common Stock
held by the Selling Investor were not registered for sale or other disposition
by the Selling Investor under the above-mentioned registration statement, the
Selling Investor has held such shares for a period in excess of six months.
Accordingly, the Company covenants and agrees that it shall (i) issue such
instructions to its transfer agent as shall be necessary to cause the
certificates for the shares of Common Stock to be issued to the Selling Investor
and the New Investor, as provided in columns (5) and (6) of the Securities
Schedule attached hereto to be issued without any restrictive legend appearing
thereon and without any stop transfer notations being placed in the records
of
the transfer agent with respect thereto; and (ii) deliver or cause to be
delivered such opinions of counsel as its transfer agent may require in order
to
accomplish the foregoing.
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7.
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CONDITIONS
TO COMPANY’S OBLIGATIONS
HEREUNDER.
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The
obligations of the Company to the Selling Investor and the New Investor
hereunder are subject to the satisfaction of each of the following conditions,
provided that these conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion by providing the
Selling Investor and the New Investor with prior written notice
thereof:
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(a) The
Selling Investor and the New Investor shall have executed this Agreement and
delivered the same to the Company.
(b) The
Selling Investor shall have delivered to the Company its Note and Warrant for
cancellation.
(c) The
representations and warranties of the Selling Investor and the New Investor
shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the
date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall
be
true and correct as of such specified date) and the Selling Investor and the
New
Investor shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to
be
performed, satisfied or complied with by the Selling Investor and the New
Investor at or prior to the Closing Date.
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8.
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CONDITIONS
TO THE INVESTORS’ OBLIGATIONS HEREUNDER.
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The
obligations of the Selling Investor and the New Investor hereunder are subject
to the satisfaction of each of the following conditions, provided that these
conditions are for the Selling Investor’s and the New Investor’s sole benefit
and may be waived by the Selling Investor and the New Investor (with respect
to
their respective obligations only) at any time in their sole discretion by
providing the Company with prior written notice thereof:
(a) The
Company, the Selling Investor and the New Investor each shall have executed
this
Agreement and delivered the same to the other parties hereto.
(b) The
Company shall have executed and delivered to the Selling Investor and the New
Investor the Notes, the Common Shares and the Warrants being issued to the
Selling Investor and the New Investor, respectively, at the
Closing.
(c) The
representations and warranties of the Selling Investor and the New Investor
shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the
date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall
be
true and correct as of such specified date) and the Selling Investor and the
New
Investor shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to
be
performed, satisfied or complied with by the Selling Investor and the New
Investor at or prior to the Closing Date.
(d) The
Company, the Selling Investor and the New Investor shall have delivered to
the
Company’s transfer agent Irrevocable Transfer Agent Instructions in the form of
Exhibit
A
attached hereto.
(e) The
Company shall have performed, satisfied and complied in all respects with the
covenants, agreements and conditions required by this Agreement and the other
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date and after giving effect to the terms of this
Agreement and the Other Agreements, no default or Event of Default shall have
occurred and be continuing as of the Closing Date. The Investors shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other
matters as may be reasonably requested by the Investors in the form attached
hereto as Exhibit
B.
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(f) Each
of the Other Investors shall have (i) executed agreements identical to this
Agreement (the “Other
Agreements”)
(other than proportional changes in the numbers reflecting the different dollar
amount of each such Other Investor’s Note, the number of Common Shares being
issued to each such Other Investor and the number of Warrant Shares underlying
each such Other Investor’s Warrant), (ii) satisfied or waived all conditions to
the closings contemplated by such Other Agreements and (iii) surrendered their
respective Notes, Common Shares and Warrants for Notes, Common Shares and
Warrants provided for by such Other Agreements.
(g) The
Company shall have delivered to the New Investor and the Selling Investor such
other documents relating to the transactions contemplated by this Agreement
as
the New Investor, the Selling Investor and their respective counsel may
reasonably request.
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9.
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TERMINATION.
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In
the event that the Closing does not occur on or before five (5) Business Days
from the date hereof, due to the Company’s, the New Investor’s or the Selling
Investor’s failure to satisfy the conditions set forth in Sections 7 and 8
hereof (and the nonbreaching party’s failure to waive such unsatisfied
conditions(s)), the nonbreaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on
such
date without liability of any party to any other party. Upon such termination,
the terms hereof shall be null and void and the parties shall continue to comply
with all terms and conditions of the Transaction Documents, as in effect prior
to the execution of this Agreement.
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10.
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MISCELLANEOUS.
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(a) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution
and
shall be binding upon the signatory thereto with the same force and effect
as if
the signature were an original, not a facsimile signature.
(b) Headings.
The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement.
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(c) Severability.
If any provision of this Agreement is prohibited by law or otherwise determined
to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable shall
be
deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision shall
not
affect the validity of the remaining provisions of this Agreement so long as
this Agreement as so modified continues to express, without material change,
the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties. The parties will endeavor in
good
faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close
as
possible to that of the prohibited, invalid or unenforceable
provision(s).
(d) Governing
Law; Jurisdiction; Jury Trial.
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of
the
State of New York, without giving effect to any choice of law or conflict of
law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than
the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(e) No
Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of,
nor
may any provision hereof be enforced by, any other Person.
(f)
Further
Assurances.
Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated
hereby.
(g) No
Strict Construction.
The language used in this Agreement will be deemed to be the language chosen
by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
10
(h) Entire
Agreement; Effect on Prior Agreements; Amendments.
Except for the Transaction Documents in effect prior to this Agreement (to
the
extent any such Transaction Document is not amended by this Agreement), this
Agreement supersedes all other prior oral or written agreements between the
Investor, the Company, their affiliates and Persons acting on their behalf
with
respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company, the Selling Investor and the New Investor. No
provision hereof may be waived other than by an instrument in writing signed
by
the party against whom enforcement is sought. No consideration shall be offered
or paid to any Person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration
also
is offered to all of the parties to the Transaction Documents, holders of Notes
or holders of the Warrants, as the case may be. The Company has not, directly
or
indirectly, made any agreements with any of the Other Investors relating to
the
terms or conditions of the transactions contemplated by the Transaction
Documents, including through any agreement that is not identical to this
Agreement, except as set forth in the Transaction Documents. In the event that
the Company enters into any such agreement with more favorable terms than those
set forth in this Agreement and the documents contemplated hereby, the Investor
shall be granted the benefit of such more beneficial terms.
(i) Notices.
Any notices, consents, waivers or other communications required or permitted
to
be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
If
to the Company:
DigitalFX
International, Inc.
0000
Xxxx Xxxxxxx Xxxx, Xxxxx 0
Xxx
Xxxxx, Xxxxxx 00000
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
Attention:
|
Xxxxxx
Xxxxxxxxx
|
Copy
to:
Xxxxxx
Xxxxxxxx & Markiles, LLP
00000
Xxxxxxx Xxxxxxxxx
00xx
Xxxxx
Xxxxxxx
Xxxx, Xxxxxxxxxx 00000
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
Attention:
|
Xxxxxxx
Xxxxxxxx
|
11
If
to any Selling Investor, to its address and facsimile number set forth in the
Securities Schedule attached hereto,
with
a copy (for informational purposes only) to:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
Telephone:
|
(000)
000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
Attention:
|
Xxxxxxx
X. Xxxxx, Esq.
|
If
to the New Investor:
Xx.
Xxxxxxx X. Xxxx
0000
Xxxxxxx Xxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
Email:
xxxxxxxx@xxxxxxxx.xxx
with
a copy (for informational purposes only) to:
Arent
Fox, LLP
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
Telephone:
|
(000)000-0000
|
|
Facsimile:
|
(000)
000-0000
|
|
Attention:
|
Xxxxxx
X. Xxxxxx, Esq.
|
or
to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above,
respectively.
(j) Successors
and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties
and
their respective successors and assigns, including any purchasers of the Notes
or the Warrants. The Company shall not assign this Agreement or any rights
or
obligations hereunder without the prior written consent of the Investor,
including by way of a Fundamental Transaction (unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions
set
forth in the Notes and the Warrants). Each of the Selling Investor and the
New
Investor may assign some or all of its rights hereunder without the consent
of
the Company, in which event such assignee shall be deemed to be an Investor
hereunder with respect to such assigned rights.
12
(k) Survival.
Unless this Agreement is terminated under Section 9, the representations and
warranties of the Company and the Investors contained herein and the agreements
and covenants set forth herein shall survive the Closing.
(l) Remedies.
The Selling Investor, the New Investor and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under
any
other agreement or contract and all of the rights which such holders have under
any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond
or
other security), to recover damages by reason of any breach of any provision
of
this Agreement and to exercise all other rights granted by law. Furthermore,
the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under this Agreement, any remedy at
law
may prove to be inadequate relief to the Investors. The Company therefore agrees
that the Investors shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
(m) Independent
Nature of Investor’s Obligations and Rights.
The obligations of the Selling Investor and New Investor under any Transaction
Document (including this Agreement) are several and not joint with the
obligations of any Other Investor, and the Selling Investor and New Investor
shall not be responsible in any way for the performance of the obligations
of
any other Investor under any Transaction Document. Nothing contained herein
or
in any other Transaction Document, and no action taken by the Selling Investor
or the New Investor pursuant hereto, shall be deemed to constitute the Selling
Investor, the New Investor and the Other Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group,
and the Company will not assert any such claim with respect to the obligations
or the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Investors are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. The Company acknowledges and the Selling Investor and New Investor
each confirms that such Investor has independently participated in the
negotiation of the transactions contemplated hereby with the advice of its
own
counsel and advisors. Each such Investor shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and
it
shall not be necessary for any other Investor to be joined as an additional
party in any proceeding for such purpose.
[Signature
Page Follows]
13
IN
WITNESS WHEREOF,
the Investors and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written
above.
| COMPANY: | ||
|
DIGITALFX
INTERNATIONAL, INC.
|
||
|
|
||
| By: | ||
|
Name:
Xxxxx Xxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
[Signature
Page to Note Purchase
Agreement]
IN
WITNESS WHEREOF,
the Investors and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written
above.
|
SELLING
INVESTOR:
|
||
|
[______________________]
|
||
|
|
||
| By: | ||
|
Name:
|
||
|
Title:
|
||
[Signature
Page to Note Purchase Agreement]
IN
WITNESS WHEREOF,
the Investors and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written
above.
|
NEW
INVESTOR:
|
||
|
|
||
|
Xxxxxxx
X. Xxxx
|
||
[Signature
Page to Note Purchase Agreement]
SECURITIES
SCHEDULE
Note
Purchase Agreement Between
[Selling
Investor]
and
Xxxxxxx
X. Xxxx
|
Principal
Amount of Note to be Issued to
|
Number
of Common Shares Issuable Under Warrants to be
Issued
to
|
Common
Shares to be Issued to
|
|||
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
|
Selling
Investor
|
New
Investor
|
Selling
Investor
|
New
Investor
|
Selling
Investor
|
New
Investor
|
Selling
Investor’s Address and Facsimile Number:
____________________.
____________________.
____________________.
Attn:
Facsimile
No.
