EXHIBIT 10.12
STOCK PURCHASE AGREEMENT
Between
IVI Communications, Inc.
and
SEASIDE INVESTMENTS PLC
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August 16, 2004
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TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS........................................3
1.1 Certain Definitions..........................................3
ARTICLE II PURCHASE AND SALE OF SHARES................................4
2.1 Purchase and Sale; Purchase Price............................4
2.2 Execution and Delivery of Documents; The Closing.............4
ARTICLE III REPRESENTATIONS AND WARRANTIES............................6
3.1 Representations, Warranties and Agreements of IVCM...........6
3.2 Representations and Warranties of Seaside....................9
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES...........................12
4.1 Manner of Offering..........................................12
4.2 Notice of Certain Events....................................12
4.3 Blue Sky Laws...............................................12
4.4 Integration.................................................13
4.5 Furnishing of Rule 144(c) Materials.........................13
4.6 Solicitation Materials......................................13
4.7 Listing of Common Stock.....................................13
4.8 Indemnification.............................................13
4.9 Sale of Seaside Shares......................................15
4.10 Lock Up by Seaside..........................................15
4.11 Short Sales.................................................15
4.12 Liquidation of Consideration Stock..........................16
4.13 Definitive Certificates.....................................16
4.14 London Stock Exchange.......................................16
4.15 Liquidation of Seaside Consideration Shares.................16
ARTICLE V MISCELLANEOUS.............................................16
5.1 Fees and Expenses...........................................16
5.2 Entire Agreement............................................17
5.3 Notices.....................................................17
5.4 Amendments; Waivers.........................................18
5.5 Headings....................................................18
5.6 Successors and Assigns......................................18
5.7 No Third Party Beneficiaries................................18
5.8 Governing Law; Venue; Service of Process....................18
5.9 Survival....................................................18
5.10 Counterpart Signatures......................................18
5.11 Publicity...................................................19
5.12 Severability................................................19
5.13 Limitation of Remedies......................................19
LIST OF SCHEDULES:
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization and Registration Rights
Schedule 3.1(d) Equity and Equity Equivalent Securities
Schedule 3.1(e) Conflicts
Schedule 3.1(f) Consents and Approvals
Schedule 3.1(g) Litigation
Schedule 3.1(h) Defaults and Violations
LIST OF EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Officer's Certificate
Exhibit C Registration Rights Agreement
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of August 16, 2004, between IVI Communications, Inc., a corporation
organized and existing under the laws of the State of Nevada ("IVCM"), and
Seaside Investments PLC, a corporation organized under the laws of England and
Wales with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("Seaside").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, IVCM desires to issue and sell to Seaside and Seaside desires to
acquire from IVCM 6,130,827 shares of IVCM's common stock, par value $.001 (the
"Common Stock") for the Total Purchase Price set forth in Section 2.1(b) below.
The consideration to be paid by Seaside for the Common Stock shall be subject to
certain downside price protection (the "Downside Price Protection") provided in
Section 2 of the Escrow Agreement.
IN CONSIDERATION of the mutual covenants contained in this Agreement,
IVCM and Seaside agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Business Day" means any day except Saturday, Sunday, any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Bid Price" shall mean the closing bid price for a share of
Common Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg, L.P.
(or similar organization or agency succeeding to its functions of reporting
prices).
"Closing Date" shall have the meaning set forth in Section 2.2(a)
hereof.
"Closing Price" shall be the Closing Bid Price of the Common Stock on
the day of Closing.
"Common Stock" shall have the meaning in the recital.
"Consideration Stock" shall have the meaning set forth in Section
2.1(a) hereof.
"Control Person" shall have the meaning set forth in Section 4.8(a)
hereof.
"Disclosure Documents" means IVCM's reports filed under the Exchange
Act with the SEC.
"Downside Price Protection" shall have the meaning in the recital.
"Escrow Agent" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00
Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Escrow Agreement" means the escrow agreement, dated the date hereof,
by and among IVCM, Seaside and the Escrow Agent annexed hereto as Exhibit A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"G&P" means Gottbetter & Partners, LLP.
"HW" means Xxxxxx Xxxx Financial Group, LLC, and/or Xxxxxx Xxxx
Securities, LLC, a NASD registered Broker/Dealer, 0000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000, a non-exclusive
corporate finance advisor to IVCM.
"Indemnified Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"Losses" shall have the meaning set forth in Section 4.8(a) hereof.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a) hereof.
"Material" shall mean having a financial consequence in excess of
$25,000.
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)
"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
"p" shall mean xxxxx or 1/100th of a British Pound Sterling.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Private Placement Memorandum" shall have the meaning set forth in
Section 3.1(l) hereof.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Registration Rights Agreement" means the Registration Rights Agreement
in the form of Exhibit C annexed hereto.
"Seaside" shall have the meaning in the introductory paragraph.
"Seaside Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.
"Seaside Escrow Shares" means the Seaside Consideration Shares
deposited into escrow by IVCM under the terms of the Escrow Agreement in Exhibit
A.
"Seaside Protection Shares" means the Seaside Escrow Shares that IVCM
is required to sell to Seaside under the terms of the Escrow Agreement in
Exhibit A.
"Seaside Shares" shall mean ordinary shares of 1.0p each in Seaside.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Short Sales" shall have the meaning set forth in Section 4.12 hereof.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a)
hereof.
"IVCM" shall have the meaning set forth in the introductory paragraph.
"Total Purchase Price" shall have the meaning set forth in Section
2.1(b) hereof.
"Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale; Purchase Price.
(a) Subject to the terms and conditions set forth herein, IVCM
shall issue and sell and Seaside shall purchase Six Million One Hundred
Thirty Thousand Eight Hundred and Twenty Seven (6,130,827) shares of
IVCM's Common Stock (the "Consideration Stock").
(b) The total purchase price (the "Total Purchase Price") shall be
the number of shares of Consideration Stock multiplied by $0.33 per
share, or $2,023,173.
(c) The Total Purchase Price shall be paid by delivery to IVCM of
the number of Seaside Shares (the "Seaside
Consideration Shares") equal to the Total Purchase Price divided by the
conversion rate of the British Pound Sterling to purchase US Dollars as
determined below. The Seaside Shares shall have a value of (pound)1 per
share. The number of Seaside Shares to be issued will be based on the
conversion rate of the British Pound Sterling to the US Dollar in effect
as of the close of business on the day preceding the Closing Date, as
quoted by Xxxxxx & Co. as the commercial rate it gives to purchase US
Dollars. For example, if the effective conversion rate is $1.80/(pound)1
and the Total Purchase Price is $8,000,000, then the number of Seaside
Shares IVCM will receive shall equal the $8,000,000/$1.80, or 4,444,444
Seaside Shares. The Seaside Consideration Shares shall be subject to the
"Downside Price Protection" provided in Section 2 of the Escrow
Agreement.
2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the shares of
Consideration Stock (the "Closing") shall take place within sixty (60)
days from the date hereof (the "Closing Date"). On the Closing Date,
(i) IVCM shall execute and deliver to the Escrow Agent a
certificate in the name of Seaside representing the shares of
Consideration Stock;
(ii) IVCM shall execute and deliver to Seaside a
certificate of its President, in the form of Exhibit B annexed
hereto, certifying that attached thereto is a copy of resolutions
duly adopted by the Board of Directors of IVCM authorizing IVCM to
execute and deliver the Transaction Documents and to enter into
the transactions contemplated thereby, provided that IVCM may
execute such certificate upon the execution of this Agreement, in
which case it will be held in escrow by the Escrow Agent and
delivered at Closing;
(iii) Seaside shall execute and deliver to the Escrow Agent
a certificate in the name of IVCM or a provisional letter of
allotment for a trading account in the name of the Escrow Agent
representing the Seaside Escrow Shares and a certificate in the
name of IVCM or a provisional letter of allotment for a trading
account in the name of Escrow Agent (to be held for the benefit of
IVCM) representing the balance of the Seaside Consideration
Shares;
(iv) IVCM and Seaside shall execute and deliver to each
other an executed Registration Rights Agreement in the form
annexed hereto as Exhibit C, provided that IVCM and Seaside may
execute the Registration Rights Agreement upon the execution of
this Agreement, in which case it will be held in escrow by the
Escrow Agent and delivered at Closing;
(v) IVCM, Seaside and the Escrow Agent shall execute and
deliver to each other an executed Escrow Agreement in the form
annexed hereto as Exhibit A, provided that IVCM, Seaside and
Escrow Agent may execute the Escrow Agreement upon the execution
of this Agreement, in which case it will be held in escrow by the
Escrow Agent and delivered at Closing;
(vi) IVCM shall execute and deliver to HW or its assigns
certificates or access to a trading account in the name of HW
representing the Consideration Stock and the Seaside Shares owed
to HW pursuant to a separate advisory agreement between HW and
IVCM;
(vii) Seaside shall execute and deliver to the Escrow Agent
a stock power endorsed in blank relating to the Consideration
Stock; and
(viii) IVCM shall wire the monies owed to G&P pursuant to
Section 5.1 hereof for legal fees with the following wire
instructions:
Citibank, N.A.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX
ABA Routing No.: 000000000
Account Name: Gottbetter & Partners, LLP
Account No. 00000000
Reference: [IVCM]
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of IVCM. IVCM
hereby makes the following representations and warranties to Seaside, all
of which shall survive the Closing:
(a) Organization and Qualification. IVCM is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its formation, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. IVCM has no subsidiaries other than as
set forth on Schedule 3.1(a) attached hereto (collectively, the
"Subsidiaries"). Each of the Subsidiaries is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the full corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. Each of IVCM and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the
case may be, would not, individually or in the aggregate, have a material
adverse effect on the results of operations, assets, prospects, or
financial condition of IVCM and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").
(b) Authorization, Enforcement. IVCM has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated hereby and by each other Transaction Document and to
otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other
Transaction Documents by IVCM and the consummation by it of the
transactions contemplated hereby and thereby has been duly authorized by
all necessary action on the part of IVCM. Each of this Agreement and each
of the other Transaction Documents has been or will be duly executed by
IVCM and when delivered in accordance with the terms hereof or thereof
will constitute the valid and binding obligation of IVCM enforceable
against IVCM in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
(c) Capitalization. The authorized, issued and outstanding capital
stock of the Company is set forth on Schedule 3.1(c). No shares of Common
Stock are entitled to preemptive or similar rights, nor is any holder of
the Common Stock entitled to preemptive or similar rights arising out of
any agreement or understanding with IVCM by virtue of this Agreement.
Except as disclosed in Schedule 3.1(c), there are no outstanding options,
warrants, script, rights to subscribe to, registration rights, calls or
commitments of any character whatsoever relating to securities, rights or
obligations convertible into or exchangeable for, or giving any person
any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings, or arrangements by which IVCM or
any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into
shares of Common Stock. Neither IVCM nor any Subsidiary is in violation
of any of the provisions of its Certificate of Incorporation, bylaws or
other charter documents.
(d) Issuance of Securities. The shares of Consideration Stock have
been duly and validly authorized for issuance, offer and sale pursuant to
this Agreement and, when issued and delivered as provided hereunder
against payment in accordance with the terms hereof, shall be valid and
binding obligations of IVCM enforceable in accordance with their
respective terms.
(e) No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by IVCM and the
consummation by IVCM of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of its
Certificate of Incorporation or bylaws (each as amended through the date
hereof) or (ii) be subject to obtaining any consents except those
referred to in Section 3.1(f), conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument
to which IVCM is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which IVCM or its
Subsidiaries is subject (including, but not limited to, those of other
countries and the federal and state securities laws and regulations), or
by which any property or asset of IVCM or its Subsidiaries is bound or
affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
would not, individually or in the aggregate, have a Material Adverse
Effect. The business of IVCM and its Subsidiaries is not being conducted
in violation of any law, ordinance or regulation of any governmental
authority.
(f) Consents and Approvals. Except as specifically set forth in
Schedule 3.1(f), neither IVCM nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by IVCM of this Agreement and each of the other
Transaction Documents.
(g) Litigation; Proceedings. Except as specifically disclosed in
Schedule 3.1(g), there is no Proceeding threatened against or affecting
IVCM or any of its Subsidiaries or any of their respective properties
before or by any court, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) which (i)
relates to or challenges the legality, validity or enforceability of any
of the Transaction Documents or the shares of Consideration Stock, (ii)
could, individually or in the aggregate, have a Material Adverse Effect
or (iii) could, individually or in the aggregate, materially impair the
ability of IVCM to perform fully on a timely basis its obligations under
the Transaction Documents.
(h) No Default or Violation. Except as set forth in Schedule
3.1(h) hereto, neither IVCM nor any Subsidiary (i) is in default under or
in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, except such conflicts or defaults as do not have
a Material Adverse Effect, (ii) is in violation of any order of any
court, arbitrator or governmental body, except for such violations as do
not have a Material Adverse Effect, or (iii) is in violation of any
statute, rule or regulation of any governmental authority which could
(individually or in the aggregate) (a) adversely affect the legality,
validity or enforceability of this Agreement, (b) have a Material Adverse
Effect or (c) adversely impair IVCM's ability or obligation to perform
fully on a timely basis its obligations under this Agreement.
(i) Disclosure Documents. The Disclosure Documents are accurate in
all material respects and do not contain any untrue statement of material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(j) Non-Registered Offering. Neither IVCM nor any Person acting on
its behalf has taken or will take any action (including, without
limitation, any offering of any securities of IVCM under circumstances
which would require the integration of such offering with the offering of
the Consideration Stock under the Securities Act) which might subject the
offering, issuance or sale of the Consideration Stock to the registration
requirements of Section 5 of the Securities Act.
(k) Placing Agent. IVCM accepts and agrees that Dungarvon
Associates, Inc. ("Dungarvon") is acting for Seaside and does not regard
any person other than Seaside as its customer in relation to this
Agreement, and that it has not made any recommendation to IVCM, in
relation to this Agreement and is not advising IVCM, with regard to the
suitability or merits of the Seaside Shares and in particular Dungarvon
has no duties or responsibilities to IVCM for the best execution of the
transaction contemplated by this Agreement.
(l) Private Placement Representations. IVCM (i) has received and
carefully reviewed such information and documentation relating to Seaside
that IVCM has requested, including, without limitation, Seaside's
Confidential Private Offering Memorandum, dated June 14, 2004 (the
"Private Placement Memorandum"); (ii) has had a reasonable opportunity to
ask questions of and receive answers from Seaside concerning the Seaside
Shares, and all such questions, if any, have been answered to the full
satisfaction of IVCM; (iii) has such knowledge and expertise in financial
and business matters that it is capable of evaluating the merits and
risks involved in an investment in the Seaside Shares; (iii) understands
that Seaside has determined that the exemption from the registration
provisions of the Securities Act, provided by Section 4(2) of the
Securities Act is applicable to the offer and sale of the Seaside Shares,
based, in part, upon the representations, warranties and agreements made
by IVCM herein; and (iv) except as provided herein and in the Private
Placement Memorandum, no representations or warranties have been made to
IVCM by Seaside or any agent, employee or affiliate of Seaside and in
entering into this transaction IVCM is not relying upon any information,
other than the results of independent investigation by IVCM.
Seaside acknowledges and agrees that IVCM makes no representation or warranty
with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of Seaside. Seaside hereby makes the
following representations and warranties to IVCM, all of which shall survive the
Closing:
(a) Organization; Authority. Seaside is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to
enter into and to consummate the transactions contemplated hereby and by
the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The acquisition of the shares of
Consideration Stock to be purchased by Seaside hereunder has been duly
authorized by all necessary action on the part of Seaside. This Agreement
has been duly executed and delivered by Seaside and constitutes the valid
and legally binding obligation of Seaside, enforceable against it in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to, or affecting generally the enforcement of,
creditors rights and remedies or by other general principles of equity.
(b) Investment Intent. Seaside is acquiring the shares of
Consideration Stock to be purchased by it hereunder, for its own account
for investment purposes only and not with a view to or for distributing
or reselling such shares of Consideration Stock, or any part thereof or
interest therein, without prejudice, however, to Seaside's right, subject
to the provisions of this Agreement, at all times to sell or otherwise
dispose of all or any part of such shares of Consideration Stock in
compliance with applicable federal and state securities laws.
(c) Experience of Seaside. Seaside, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the
merits and risks of an investment in the shares of Consideration Stock to
be acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
(d) Ability of Seaside to Bear Risk of Investment. Seaside is able
to bear the economic risk of an investment in the Consideration Stock to
be acquired by it hereunder and, at the present time, is able to afford a
complete loss of such investment.
(e) Access to Information. Seaside acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of IVCM
concerning the terms and conditions of the Consideration Stock offered
hereunder and the merits and risks of investing in such securities; (ii)
access to information about IVCM and IVCM's financial condition, results
of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment in the Consideration Stock; and
(iii) the opportunity to obtain such additional information which IVCM
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment and to verify the accuracy and completeness of the information
that it has received about IVCM.
(f) Reliance. Seaside understands and acknowledges that (i) the
shares of Consideration Stock being offered and sold to it hereunder are
being offered and sold without registration under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that IVCM will
rely upon the accuracy and truthfulness of, the foregoing representations
and Seaside hereby consents to such reliance.
(g) Regulation S. Seaside understands and acknowledges that (A)
the shares of Consideration Stock have not been registered under the
Securities Act, are being sold in reliance upon an exemption from
registration afforded by Regulation S; and that such shares of
Consideration Stock have not been registered with any state securities
commission or authority; (B) pursuant to the requirements of Regulation
S, the shares of Consideration Stock may not be transferred, sold or
otherwise exchanged unless in compliance with the provisions of
Regulation S and/or pursuant to registration under the Securities Act, or
pursuant to an available exemption hereunder; and (C) IVCM is under no
obligation to register the shares of Consideration Stock under the
Securities Act or any state securities law, or to take any action to make
any exemption from any such registration provisions available.
Seaside is not a U.S. Person and is not acquiring the shares of
Consideration Stock for the account of any U.S. Person; (B) no director or
executive officer of Seaside is a national or citizen of the United States; and
(C) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation S.
Seaside was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.
Seaside is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person as defined
in Regulation S and no other person has any interest in or participation in the
shares of Consideration Stock or any right, option, security interest, pledge or
other interest in or to the shares of Consideration Stock. Seaside understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the shares of Consideration Stock for an indefinite period of time and that
prior to any such offer or sale, IVCM may require, as a condition to effecting a
transfer of the shares of Consideration Stock, an opinion of counsel, acceptable
to IVCM, as to the registration or exemption therefrom under the Securities Act
and any state securities acts, if applicable.
Seaside will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the shares of Consideration Stock only in accordance with
Regulation S, or pursuant to an available exemption under the Securities Act
and, in any case, in accordance with applicable state securities laws. The
transactions contemplated by this Agreement have neither been pre-arranged with
a purchaser who is in the U.S. or who is a U.S. Person, nor are they part of a
plan or scheme to evade the registration provisions of the United States federal
securities laws.
The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, Seaside understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or any
person acting on his behalf reasonably believes that the purchaser is outside
the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the
transaction is executed in, or on or through a physical trading floor of an
established foreign exchange that is located outside the United States or (2)
Rule 904 of Regulation S, the transaction is executed in, on or through the
facilities of a designated offshore securities market, and neither the seller
nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither Seaside nor any Affiliate or any Person acting on Seaside's
behalf, has made or is aware of any "directed selling efforts" in the United
States, which is defined in Regulation S to be any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the shares of
Consideration Stock being purchased hereby.
Seaside understands that IVCM is the seller of the shares of
Consideration Stock which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
an "affiliate" is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question. Seaside agrees that Seaside will not, during the Restricted Period set
forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though
any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the
shares of Consideration Stock other than to a non-U.S. Person.
Seaside acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.
THE SALE OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED PURSUANT TO
THE TERMS OF A STOCK PURCHASE AGREEMENT, DATED JULY __, 2004, BETWEEN THE
COMPANY AND SEASIDE INVESTMENTS PLC, A COPY OF WHICH IS AVAILABLE UPON REQUEST.
IVCM acknowledges and agrees that Seaside makes no representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Consideration Stock being issued pursuant to
section 4(2) of the Securities Act and Regulation S thereunder. The Seaside
Consideration Shares are being issued pursuant to section 4(2) of the Securities
Act.
4.2 Notice of Certain Events. IVCM shall, on a continuing basis, (i)
advise Seaside promptly after obtaining knowledge of, and, if requested by
Seaside, confirm such advice in writing, of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of the shares of Consideration Stock, for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority, or (B)
any event that makes any statement of a material fact made by IVCM in Section
3.1 or in the Disclosure Documents untrue or that requires the making of any
additions to or changes in Section 3.1 or in the Disclosure Documents in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading, (ii) use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption from
qualification of the Consideration Stock under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Consideration Stock under any such laws, and
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
4.3 Blue Sky Laws. IVCM agrees that it will execute all necessary
documents and pay all necessary state filing or notice fees to enable IVCM to
sell the shares of Consideration Stock to Seaside.
4.4 Integration. IVCM shall not and shall use its best efforts to ensure
that no Affiliate shall sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the shares of
Consideration Stock in a manner that would require the registration under the
Securities Act of the sale of the shares of Consideration Stock to Seaside.
4.5 Furnishing of Rule 144(c) Materials. IVCM shall, for so long as any
of the Consideration Stock remain outstanding and during any period in which
IVCM is not subject to Section 13 or 15(d) of the Exchange Act, make available
to any registered holder of the Consideration Stock in connection with any sale
thereof and any prospective purchaser of such Consideration Stock from such
Person, such information in accordance with Rule 144(c) promulgated under the
Securities Act as is required to sell the Consideration Stock under Rule 144
promulgated under the Securities Act.
4.6 Solicitation Materials. IVCM shall not (i) distribute any offering
materials in connection with the offering and sale of the shares of
Consideration Stock other than the Disclosure Documents and any amendments and
supplements thereto prepared in compliance herewith or (ii) solicit any offer to
buy or sell the shares of Consideration Stock by means of any form of general
solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, IVCM shall (a) use its best efforts
to maintain the listing of its Common Stock on the OTCBB or such other exchange
on which the Common Stock is then listed until four (4) years from the date
hereof, and (b) shall provide to Seaside evidence of such listing.
Notwithstanding the foregoing, IVCM may voluntarily cease to be listed on the
OTCBB at such time as IVCM becomes listed on another exchange.
4.8 Indemnification.
(a) Indemnification
(i) IVCM shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold
harmless Seaside and its officers, directors, agents, employees
and Affiliates, each Person who controls or Seaside (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) (each such Person, a "Control Person") and the
officers, directors, agents, employees and Affiliates of each such
Control Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of, or relating to, a breach or breaches of
any representation, warranty, covenant or agreement by IVCM under
this Agreement or any other Transaction Document.
(ii) Seaside shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold
harmless IVCM, its officers, directors, agents and employees, each
Control Person and the officers, directors, agents and employees
of each Control Person, to the fullest extent permitted by
applicable law, from and against any and all Losses, as incurred,
arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by Seaside under
this Agreement or the other Transaction Documents, except for
Losses solely arising out of negligence, bad faith or breach of
this Agreement by IVCM.
(iii) IVCM and Seaside acknowledge that in the SEC's
opinion, directors, officers and persons controlling a company
subject to the Securities Act can not be indemnified for
liabilities arising under the Securities Act by such company.
(b) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party promptly shall
notify the Person from whom indemnity is sought (the "Indemnifying
Party") in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred
in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of the claim against the Indemnified Party but will
retain the right to control the overall Proceedings out of which the claim arose
and such counsel employed by the Indemnified Party shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party.
No right of indemnification under this Section shall be
available as to a particular Indemnified Party if the Indemnifying Party obtains
a non-appealable final judicial determination that such Losses arise solely out
of the negligence, breach of agreement or bad faith of such Indemnified Party in
performing the obligations of such Indemnified Party under this Agreement or a
breach by such Indemnified Party of its obligations under this Agreement.
(c) Contribution. If a claim for indemnification under this
Section is unavailable to an Indemnified Party or is insufficient to hold
such Indemnified Party harmless for any Losses in respect of which this
Section would apply by its terms (other than by reason of exceptions
provided in this Section), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative benefits received by
the Indemnifying Party on the one hand and the Indemnified Party on the
other and the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether there was a
judicial determination that such Losses arise in part out of the
negligence or bad faith of the Indemnified Party in performing the
obligations of such Indemnified Party under this Agreement or the
Indemnified Party's breach of its obligations under this Agreement. The
amount paid or payable by a party as a result of any Losses shall be
deemed to include any attorneys' or other fees or expenses incurred by
such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party.
(d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or liability
that the Indemnifying Parties may have to the Indemnified Parties.
4.9 Sale of Seaside Consideration Shares. Seaside shall assist IVCM in
setting up and maintaining a trading account at a registered broker in the
United Kingdom to facilitate the sale of the Seaside Consideration Shares.
Broker's commissions in the trading account shall not exceed one half percent
(0.5%).
4.10 Lock Up by Seaside. Seaside shall not sell, transfer or assign all
or any of the shares of Consideration Stock for a period of one (1) year
following the Closing, without the written consent of IVCM, which consent may be
withheld in IVCM's sole discretion.
4.11 Short Sales. Seaside agrees it will not enter into any Short Sales
(as hereinafter defined) until the date that Seaside no longer owns the shares
of Consideration Stock. For purpose hereof, a "Short Sale" shall mean a sale of
Common Stock by Seaside that is marked as a short sale and that is made at a
time when there is no equivalent offsetting long position in the Common Stock by
Seaside.
4.12 Liquidation of Consideration Stock. Commencing on the date occurring
one (1) year after the Closing, Seaside may sell its shares of Consideration
Stock at a monthly rate no greater than an amount equal to fifteen percent (15%)
of IVCM's prior month's trading volume, provided, however, that Seaside may
execute block trades of 50,000 or more shares of Consideration Stock and such
sales shall not count toward the fifteen percent (15%) limitation on the rate of
liquidation. Seaside shall use the proceeds from these liquidations to
re-purchase Seaside Shares in the marketplace.
4.13 Definitive Certificates. The definitive certificates evidencing the
shares of Consideration Stock shall be held at the office of the Secretary of
Seaside if and when the Consideration Stock is received from the Escrow Agent
pursuant to the Escrow Agreement and shall remain with the Secretary until one
(1) year from the date hereof.
4.14 London Stock Exchange. Seaside shall register the Seaside
Consideration Shares for trading on the London Stock Exchange PLC by September
30, 2004.
4.15 Liquidation of Seaside Consideration Shares. Commencing with the
month during which Seaside Shares are accepted for trading on the London Stock
Exchange PLC, and during each calendar month thereafter, IVCM may shall its
shares of Seaside Consideration Shares at a monthly rate that is no greater than
ten percent (10%) of the total of the Seaside Consideration Shares (the "Sales
Allowance"). Any unused portion of the Sales Allowance during any month may be
carried over to subsequent months. The Seaside Escrow Shares, after they have
been distributed to IVCM, may be sold without restriction.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
IVCM shall pay all stamp and other taxes and duties levied in connection with
the issuance of the shares of Consideration Stock pursuant hereto. Seaside shall
be responsible for any taxes payable by Seaside that may arise as a result of
the investment hereunder or the transactions contemplated by this Agreement or
any other Transaction Document. IVCM agrees to pay $7,500 to G&P for legal fees
associated with the transactions contemplated by this Agreement at Closing. IVCM
shall pay all fees owed to HW pursuant to a separate advisory agreement between
Xxxxxx Xxxx and IVCM. IVCM shall pay all costs, expenses, fees and all taxes
incident to and in connection with: (A) the issuance and delivery of the
Consideration Stock, (B) the exemption from registration of the Consideration
Stock for offer and sale to Seaside under the securities or Blue Sky laws of the
applicable jurisdictions, and (C) the preparation of certificates for the
Consideration Stock (including, without limitation, printing and engraving
thereof), and (D) all fees and expenses of counsel and accountants of IVCM.
5.2 Entire Agreement This Agreement, together with all of the Exhibits
and Schedules annexed hereto, and any other Transaction Document contains the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.
5.3 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:
If to IVCM: IVI Communications, Inc.
Attn: President and CEO
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
With copies to: IVI Comunications, Inc.
Attn: Controller
X.X. Xxx 0000
Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
If to Seaside: Seaside Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
With copies to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.
5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both IVCM and Seaside, or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.
5.7 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.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York. If
and only if New York declines jurisdiction within the State of New York, such
action shall be brought in the State and County where IVCM's principal place of
business is situated. Service of process in any action by Seaside or IVCM to
enforce the terms of this Agreement may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, by commercial
overnight courier to the other party at its principal address set forth in this
Agreement.
5.9 Survival. The representations and warranties of IVCM and Seaside
contained in Article III and the agreements and covenants of the parties
contained in Article IV and this Article V shall survive the Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Publicity. IVCM and Seaside shall consult with each other in issuing
any press releases or otherwise making public statements with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement without the prior written
consent of the other, which consent shall not be unreasonably withheld or
delayed, unless counsel for the disclosing party deems such public statement to
be required by applicable federal and/or state securities laws. Except as
otherwise required by applicable law or regulation, IVCM will not disclose to
any third party (excluding its legal counsel, accountants and representatives)
the name of Seaside.
5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.13 Limitation of Remedies. With respect to claims by IVCM or any person
acting by or through IVCM, or by Seaside or any person acting through Seaside,
for remedies at law or at equity relating to or arising out of a breach of this
Agreement, liability, if any, shall, in no event, include loss of profits or
incidental, indirect, exemplary, punitive, special or consequential damages of
any kind.
[ SIGNATURE PAGE FOLLOWS ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
IVI Communications, Inc.
IVCM
By: /s/ Xxxxxxx X Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Executive Vice President and COO
Seaside:
Seaside Investments Plc.
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Administrative Director
Schedule 3.1(a)
Subsidiaries
Internet Ventures, Inc.
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Schedule 3.1(c)
Capitalization and Registration Rights
--------------------------------------------------------------------------------
Common Stock
--------------------------------------------------------------------------------
Authorized 100,000,000
-------------------------------------------- -----------------------------------
Issued & Outstanding 55,734,791
-------------------------------------------- -----------------------------------
--------------------------------------------------------------------------------
Options and Warrants
--------------------------------------------------------------------------------
289,000 Options, Warrants 527,705
--------------------------------------------------------------------------------
Schedule 3.1(d)
Equity and Equity Equivalent Securities
6,130,827 shares
Schedule 3.1(e)
Conflicts
None
Schedule 3.1(f)
Consents and Approvals
None
Schedule 3.1(g)
Litigation
None
Schedule 3.1(h)
Defaults and Violations
INSTALLMENT DEBT - Installment debt consists of approximately 11 notes for
various pieces of equipment. The Company has not reflected the asset value on
the books because the assets are considered to have no value remaining. These
assets are however collateral for the debt. The Company has reflected these
balances in the consolidated balance sheets as installment debt and in accounts
payable. The portion in accounts payable represents the amounts overdue, and the
portion in installment debt represents the amounts still due under the
agreements. The installment debt liability at June 30, 2004 is $37,859 of which
$23,078 is current, and the remaining $14,781 is due through fiscal 2007.
NOTES PAYABLE - The Company has outstanding notes payable totalling $950,160
with accrued interest of $412,661 as of June 30, 2004. As of June 30, 2004, all
amounts unpaid are overdue.
CONVERTIBLE DEBENTURES - The Company has outstanding debentures totalling
$336,750 with accrued interest of $238,569 as of June 30, 2004.
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of August 16, 2004, by
and between IVI Communications, Inc., a Nevada corporation with its principal
place of business at 0000 X. Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000
("IVCM"); Gottbetter & Partners, LLP with its principal place of business at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Escrow Agent"); and Seaside Investments
Plc, a corporation organized under the laws of England and Wales with its
offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("Seaside").
Recitals
A. Simultaneously with the execution of this Agreement,
Seaside and IVCM entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of the date hereof and incorporated herein by reference,
pursuant to which IVCM has agreed to issue to Seaside the Consideration Stock in
exchange for the Seaside Consideration Shares.
B. The parties have agreed that the Consideration Stock and
Seaside Consideration Shares shall be deposited into escrow pursuant to this
Agreement, including thirty percent (30%) of the Seaside Consideration Shares to
be deposited into escrow as Downside Price Protection (the "Seaside Escrow
Shares").
C. The Escrow Agent is willing to act as escrow agent pursuant
to the terms of this Agreement with respect to the purchase of the shares of
Consideration Stock.
D. All capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Stock Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Deposit into Escrow. At Closing, the parties shall deposit
into escrow (i) the Seaside Consideration Shares, (ii) the Consideration Stock
and (iii) the stock power executed by Seaside. The deposit of the Seaside
Consideration Shares, at the election of Seaside, may be made as (i) a
certificate in the name of IVCM or a provisional letter of allotment for a
trading account in the name of the Escrow Agent representing the Seaside Escrow
Shares and (ii) a certificate in the name of IVCM or a provisional letter of
allotment for a trading account in the name of the Escrow Agent (to be held for
the benefit of IVCM) representing the balance of the Seaside Consideration
Shares. The Escrow Agent shall hold the Seaside Consideration Shares and the
Consideration Stock in escrow when delivered.
2. Terms of Escrow. (a) If the Market Value of the Common
Stock on the date occurring one year after Closing (the "One Year Anniversary")
is less than the Closing Price, IVCM shall sell to Seaside and Seaside shall
purchase the number of Seaside Escrow Shares (the "Seaside Protection Shares")
equal to (a) the Seaside Consideration Shares multiplied by (b) the Percentage
Decrease, at a purchase price of 1p per Seaside Consideration Share (the "Escrow
Purchase Price"). The "Percentage Decrease" shall be equal to 1 - Market
Value/the Closing Price. "Market Value" shall be the average of the ten (10)
closing bid prices per share of the Common Stock during the ten (10) trading
days immediately preceding the One Year Anniversary.
Within three (3) Business Days of the One Year Anniversary,
Seaside shall (i) send a notice ("Sale Notice") to IVCM and the Escrow Agent of
the Seaside Protection Shares to be sold by IVCM to Seaside, if any, and (ii)
deposit the Escrow Purchase Price with the Escrow Agent, if necessary. Within
fourteen (14) Business Days of IVCM's and the Escrow Agent's receipt of the Sale
Notice and Escrow Agent's receipt of the Escrow Purchase Price, the Escrow Agent
is authorized and directed simultaneously (i) to pay the Escrow Purchase Price,
if any, to IVCM, (ii) to deliver the Seaside Protection Shares, if any, to
Seaside and (iii) to deliver the remaining Seaside Escrow Shares, if any, to
IVCM.
(b) If at any time before September 30, 2004, the Escrow Agent
receives written notice (the "LSE Notice") from Seaside that the Seaside
Consideration Shares are listed on the London Stock Exchange plc (the "London
Exchange"), the Escrow Agent is authorized and directed to distribute, within
fourteen (14) Business Days of receipt of such LSE Notice, (i) the Consideration
Stock to Seaside and (ii) seventy percent (70%) of the Seaside Consideration
Shares to IVCM. If the Escrow Agent does not receive such LSE Notice by
September 30, 2004, the Escrow Agent is authorized and directed to distribute,
no later than October 5, 2004, (i) the Consideration Stock and the stock power
executed by Seaside to IVCM and (ii) the Seaside Consideration Shares to
Seaside; provided, however, that IVCM shall have the option to extend the
September 30, 2004 deadline by providing written notice to the Escrow Agent with
a written acknowledgement from Seaside.
3. Duties and Obligations of the Escrow Agent.
(a) The parties hereto agree that the duties and obligations
of the Escrow Agent shall be only those obligations herein specifically provided
and no other. The Escrow Agent's duties are those of a depositary only, and the
Escrow Agent shall incur no liability whatsoever, except as a direct result of
its willful misconduct or gross negligence in the performance of its duties
hereunder;
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted to be taken by
it in accordance with the advice of such counsel;
(c) The Escrow Agent shall not be bound in any way by the
terms of any other agreement to which Seaside and IVCM are parties, whether or
not the Escrow Agent has knowledge thereof, and the Escrow Agent shall not in
any way be required to determine whether or not any other agreement has been
complied with by Seaside and IVCM, or any other party thereto. The Escrow Agent
shall not be bound by any modification, amendment, termination, cancellation,
rescission or supersession of this Agreement unless the same shall be in writing
and signed jointly by Seaside and IVCM and agreed to in writing by the Escrow
Agent;
(d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in its
opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) or taking certain action
until the Escrow Agent is directed otherwise in writing jointly by Seaside and
IVCM or by a final judgment of a court of competent jurisdiction;
(e) The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which the Escrow Agent, in
good faith, believes to be genuine. The Escrow Agent shall not be responsible
for the sufficiency or accuracy of the form, execution, validity or genuineness
of documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement;
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration;
(g) If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of any of the securities
(to the extent delivered to the Escrow Agent pursuant hereto, the
"Consideration"), it may do so by delivering the same to another Person that
agrees to act as escrow agent hereunder and whose substitution for the Escrow
Agent is agreed upon in writing by Seaside and IVCM; provided, however that such
successor Escrow Agent must be resident in the United States. If no such escrow
agent is selected within three (3) days after the Escrow Agent gives notice to
Seaside and IVCM of the Escrow Agent's desire to so relinquish custody of the
Consideration and resign as Escrow Agent, then the Escrow Agent may do so by
delivering the Consideration to the clerk or other proper officer of a state or
federal court of competent jurisdiction situate in the state and county of New
York. The fee of any court officer shall be borne by IVCM. Upon such delivery,
the Escrow Agent shall be discharged from any and all responsibility or
liability with respect to the Consideration and this Agreement and each of IVCM
and Seaside shall promptly pay all monies it may owe to the Escrow Agent for its
services hereunder, including, but not limited to, reimbursement of its
out-of-pocket expenses pursuant to paragraph (i) below;
(h) This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to Seaside or IVCM, nor disqualify the Escrow Agent from
representing either party hereto in any dispute with the other, including any
dispute with respect to the Stock Purchase Agreement; provided, however, that in
the event of such dispute, the Escrow Agent shall have the right to commence an
interpleader action in any court of competent jurisdiction of the state of New
York or of the United States located in the county and state of New York,
deposit the Consideration with such court;
(i) The parties acknowledge and agree that the Escrow Agent is
counsel to Seaside. The parties agree to, and agree not to object to, the Escrow
Agent's engagement as Escrow Agent hereunder;
(j) Upon the full performance of this Agreement, the Escrow
Agent shall be deemed released and discharged of any further obligations
hereunder.
4. Indemnification.
(a) Seaside hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by IVCM against the Escrow Agent with
respect to the performance of any of the provisions of this Agreement;
(b) IVCM hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amount paid in
settlement) resulting from claims asserted by Seaside against the Escrow Agent
with respect to the performance of any of the provisions of this Agreement;
(c) Seaside and IVCM, jointly and severally, hereby indemnify
and hold the Escrow Agent harmless from and against any and all losses, damages,
taxes, liabilities and expenses that may be incurred by the Escrow Agent,
arising out of or in connection with its acceptance of appointment as the Escrow
Agent hereunder and/or the performance of its duties pursuant to this Agreement,
the Stock Purchase Agreement and the securities, including, but not limited to,
all legal costs and expenses of the Escrow Agent incurred defending itself
against any claim or liability in connection with its performance hereunder,
provided that the Escrow Agent shall not be entitled to any indemnity for any
losses, damages, taxes, liabilities or expenses that directly result from its
willful misconduct or gross negligence in its performance as Escrow Agent
hereunder
(d) In the event of any legal action or Proceeding involving
any of the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the legal fees of the prevailing party
or parties and the legal fees, if any, of the Escrow Agent.
5. Miscellaneous.
(a) All notices, including the Sale Notice, objections, requests, demands
and other communications sent to any party hereunder shall be deemed duly given
if (x) in writing and sent by facsimile transmission to the Person for whom
intended if addressed to such Person at its facsimile number set forth below or
such other facsimile number as such Person may designate by notice given
pursuant to the terms of this Section 5 and (y) the sender has confirmation of
transmission:
(i) If to IVCM: IVI Communications, Inc.
Attn: Xxxxxxx Xxxxxxxxxx
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
(ii) If to Seaside: Seaside Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
(iii) If to the Escrow
Agent: Gottbetter
& Partners, LLP
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx
00000 Attn: Xxxx
X. Xxxxxxxxxx,
Esq. Tel: (212)
000-0000 Fax:
(000) 000-0000
(b) This Agreement has been prepared, negotiated and delivered in the
state of New York and shall be governed by and construed and enforced in
accordance with the laws of the state of New York applicable to contracts
entered into and performed entirely within New York, without giving effect to
the principles of New York law relating to the conflict of laws.
(c) This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
(d) This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The assignment by a party of
this Agreement or any rights hereunder shall not affect the obligations of such
party under this Agreement.
6. Termination of Escrow. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until terminated upon the earlier to
occur of (i) the Seaside Escrow Shares are fully distributed or (ii) the written
agreement of the parties to terminate this Agreement. Upon the termination of
this Escrow Agreement pursuant to subsection (ii), the Escrow Agent shall
distribute any of the Seaside Escrow Shares then held by it pursuant to the
terms of the written agreement of the parties.
[ SIGNATURE PAGE FOLLOWS ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.
IVI Communications, Inc.:
IVCM
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Executive Vice President and COO
Seaside:
Seaside Investments Plc.
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: Administrative Director
Escrow Agent:
Gottbetter & Partners, LLP
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxx X Xxxxxxxxxx
Title: Managing Partner
EXHIBIT B
[IVCM]
OFFICER'S CERTIFICATE
I, Xxxxxxx X. Xxxxxxxxxx being the Executive Vice President and COO of
IVI Communications, Inc., a Nevada corporation ("IVCM"), pursuant to Section
2.2(a)(ii) of that certain Stock Purchase Agreement (the "Purchase Agreement"),
dated as of August 16, 2004, by and between IVCM and Seaside Investments PLC, do
hereby certify on behalf of IVCM that attached hereto is a copy of the
resolutions duly adopted by the Board of Directors of IVCM authorizing IVCM to
execute and deliver the Transaction Documents, as such term is defined in the
Purchase Agreement and to enter into the transactions contemplated thereby.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on
behalf of IVCM this 16th day of August, 2004.
IVCM
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxxxx, EVP & COO
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 16, 2004, by and among IVI Communications, Inc. a Nevada corporation,
with its principal office located at 0000 X. Xxxxxxx Xxxx., Xxxxx 000, Xxx
Xxxxxxx, XX 00000 ("IVCM"), and Seaside Investments Plc., a company incorporated
in England and Wales, with its principal place of business at 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX ("Seaside").
Simultaneously with the execution and delivery of this Agreement,
Seaside and IVCM have entered into a Stock Purchase Agreement, dated as of the
date hereof (the "Purchase Agreement"), which Purchase Agreement is incorporated
herein by reference, and pursuant to which the Purchaser has agreed to purchase
IVCM's common stock, par value $.001 (the "Common Stock"; and such shares of
Common Stock purchased, the "Consideration Stock"), all as more particularly
provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, IVCM and Seaside hereby agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual,
a governmental or political subdivision thereof or a governmental
agency.
(b) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and
pursuant to Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis ("Rule 415"),
and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange SEC (the
"SEC").
(c) "Registrable Securities" means the shares of Consideration Stock.
(d) "Registration Statement" means a registration statement under the
1933 Act which covers the Registrable Securities.
2. REGISTRATION.
(a) Subject to the terms and conditions of this Agreement, IVCM shall
prepare and file, no later than eight (8) months from the date hereof,
with the SEC a registration statement on Form S-1 or SB-2 (or, if IVCM
is then eligible, on Form S-3) under the 1933 Act (the "Initial
Registration Statement") for the registration for the resale by
Seaside, who purchased shares of Common Stock pursuant to the Purchase
Agreement the shares of Consideration Stock. IVCM shall cause the
Registration Statement to remain effective until all of the Registrable
Securities have been sold. Prior to the filing of the Registration
Statement with the SEC, IVCM shall furnish a copy of the Initial
Registration Statement to Seaside and Gottbetter & Partners LLP for
their review and comment. Seaside and Gottbetter & Partners LLP shall
furnish comments on the Initial Registration Statement to IVCM within
three (3) Business Days of the receipt thereof from IVCM.
(b) Effectiveness of the Initial Registration Statement. IVCM shall use
its best efforts (i) to have the Initial Registration Statement
declared effective by the SEC no later than one year anniversary from
date hereof (the "Scheduled Effective Deadline") and (ii) to insure
that the Initial Registration Statement and any subsequent Registration
Statement remains in effect until the earlier of (A) all of the
Registrable Securities have been sold, subject to the terms and
conditions of this Agreement or (B) in the written opinion of counsel
for IVCM all of the Registrable Securities are eligible for sale
without an effective Registration Statement under the 1933 Act.
(c) Failure to Obtain Effectiveness of the Registration Statement. In
the event the Registration Statement is not declared effective by the
SEC on or before the Scheduled Effective Deadline, sales cannot be made
pursuant to the Registration Statement whether because of a failure to
keep the Registration Statement effective, failure to disclose such
information as is necessary for sales to be made pursuant to the
Registration Statement, failure to register sufficient shares of Common
Stock or otherwise then as partial relief for the damages to any holder
of Registrable Securities by reason of any such delay in or reduction
of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies at law or in
equity), IVCM will pay as liquidated damages (the "Liquidated Damages")
to Seaside, at Seaside's option, either a cash amount or shares of
IVCM's Common Stock within three (3) business days, after demand
therefore, equal to three percent (3%) of the Per Share Market Value of
the Common Stock outstanding as Liquidated Damages.
(d) Liquidated Damages. IVCM and Seaside hereto acknowledge and agree
that the sums payable under subsections 2(c) above shall constitute
liquidated damages and not penalties and are in addition to all other
rights of Seaside, including the right to call a default. The parties
further acknowledge that (i) the amount of loss or damages likely to be
incurred is incapable or is difficult to precisely estimate, (ii) the
amounts specified in such subsections bear a reasonable relationship
to, and are not plainly or grossly disproportionate to, the probable
loss likely to be incurred in connection with any failure by IVCM to
obtain or maintain the effectiveness of a Registration Statement, (iii)
one of the reasons for IVCM and Seaside reaching an agreement as to
such amounts was the uncertainty and cost of litigation regarding the
question of actual damages, and (iv) IVCM and Seaside are sophisticated
business parties and have been represented by sophisticated and able
legal counsel and negotiated this Agreement at arm's length.
3. RELATED OBLIGATIONS.
(a) IVCM shall keep the Registration Statement effective pursuant to
Rule 415 at all times until the date on which Seaside shall have sold
all the Registrable Securities covered by such Registration Statement
(the "Registration Period"), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained
therein) shall not contain any 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
in which they were made, not misleading.
(b) IVCM shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement
and the prospectus used in connection with such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under
the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such
period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of IVCM covered by such
Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements
to a Registration Statement which are required to be filed pursuant to
this Agreement (including pursuant to this Section 3(b)) by reason of
IVCM's filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), IVCM shall incorporate such report by reference into
the Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the
1934 Act report is filed which created the requirement for IVCM to
amend or supplement the Registration Statement.
(c) IVCM shall furnish to Seaside, without charge, (i) at least one (1)
copy of such Registration Statement as declared effective by the SEC
and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) ten (10) copies of the
final prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as
Seaside may reasonably request) and (iii) such other documents as
Seaside may reasonably request from time to time in order to facilitate
the disposition of the Registrable Securities owned by Seaside.
(d) IVCM shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such
other securities or "blue sky" laws of such jurisdictions in the United
States as Seaside reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; provided, however, that IVCM shall not be
required in connection therewith or as a condition thereto to (w) make
any change to its certificate of incorporation or by-laws, (x) qualify
to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (y) subject itself to
general taxation in any such jurisdiction, or (z) file a general
consent to service of process in any such jurisdiction. IVCM shall
promptly notify Seaside of the receipt by IVCM of any notification with
respect to the suspension of the registration or qualification of any
of the Registrable Securities for sale under the securities or "blue
sky" laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threat of any proceeding for such
purpose.
(e) As promptly as practicable after becoming aware of such event or
development, IVCM shall notify Seaside in writing of the happening of
any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission 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 were made, not misleading (provided
that in no event shall such notice contain any material, nonpublic
information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission,
and deliver ten (10) copies of such supplement or amendment to Seaside.
IVCM shall also promptly notify Seaside in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has
been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness
shall be delivered to Seaside by facsimile on the same day of such
effectiveness), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or
related information, and (iii) of IVCM's reasonable determination that
a post-effective amendment to a Registration Statement would be
appropriate.
(f) IVCM shall use its best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction within the United States of
America and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment
and to notify Seaside of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of
any proceeding for such purpose.
(g) At the reasonable request of Seaside, IVCM shall furnish to
Seaside, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as Seaside may
reasonably request (i) a letter, dated such date, from IVCM's
independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten public offering, and (ii) an opinion,
dated as of such date, of counsel representing IVCM for purposes of
such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to
Seaside.
(h) IVCM shall make available for inspection by (i) Seaside and (ii)
one (1) firm of accountants or other agents retained by Seaside
(collectively, the "Inspectors") all pertinent financial and other
records, and pertinent corporate documents and properties of IVCM
(collectively, the "Records"), as shall be reasonably deemed necessary
by each Inspector, and cause IVCM's officers, directors and employees
to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree, and Seaside hereby
agrees, to hold in strict confidence and shall not make any disclosure
(except to Seaside) or use any Record or other information which IVCM
determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement or is otherwise required under the 1933 Act,
(b) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been
made generally available to the public other than by disclosure in
violation of this or any other agreement of which the Inspector and
Seaside has knowledge. Seaside agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt
notice to IVCM and allow IVCM, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for,
the Records deemed confidential.
(h) IVCM shall hold in confidence and not make any disclosure of
information concerning Seaside provided to IVCM unless (i) disclosure
of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to
a subpoena or other final, non-appealable order from a court or
governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. IVCM
agrees that it shall, upon learning that disclosure of such information
concerning Seaside is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written
notice to Seaside and allow Seaside, at Seaside's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(i) IVCM shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series
issued by IVCM are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such
exchange or (ii) the inclusion for quotation on the National
Association of Securities Dealers, Inc. OTC Bulletin Board for such
Registrable Securities. IVCM shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(i).
(j) IVCM shall cooperate with Seaside and, to the extent applicable, to
facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may
be, as Seaside may reasonably request and registered in such names as
Seaside may request.
(k) IVCM shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to consummate the disposition of such Registrable
Securities.
(l) IVCM shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 0000 Xxx) covering a twelve
(12) month period beginning not later than the first day of IVCM's
fiscal quarter next following the effective date of the Registration
Statement.
(m) IVCM shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
(n) Within two (2) business days after a Registration Statement which
covers Registrable Securities is declared effective by the SEC, IVCM
shall deliver, and shall cause legal counsel for IVCM to deliver, to
the transfer agent for such Registrable Securities (with copies to
Seaside whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
(o) IVCM shall take all other reasonable actions necessary to expedite
and facilitate disposition by Seaside of Registrable Securities
pursuant to a Registration Statement.
4. OBLIGATIONS OF SEASIDE.
Seaside agrees that, upon receipt of any notice from IVCM of the
happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), Seaside will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until Seaside's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(e) or receipt of notice that no
supplement or amendment is required. Notwithstanding anything to the contrary,
IVCM shall cause its transfer agent to deliver unlegended certificates for
shares of Common Stock to a transferee of Seaside in accordance with the terms
of the Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which Seaside has entered into a contract for sale
prior to Seaside's receipt of a notice from IVCM of the happening of any event
of the kind described in Section 3(f) or the first sentence of 3(e) and for
which Seaside has not yet settled. Seaside shall furnish IVCM with such
information as IVCM reasonably requests for disclosure in the Registration
Statement as required by the rules and regulations of the SEC.
5. EXPENSES OF REGISTRATION.
All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by IVCM, except that Seaside shall pay all discounts and
commission relating to the sale of Registrable Securities and the fees of any
attorneys or advisors retained by Seaside.
6. INDEMNIFICATION.
With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, IVCM will, and hereby does,
indemnify, hold harmless and defend Seaside, the directors, officers,
partners, employees, agents, representatives of, and each Person, if
any, who controls Seaside within the meaning of the 1933 Act or the
1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses,
joint or several (collectively, "Claims") incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court
or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto ("Indemnified Damages"), to which any of
them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection
with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) any untrue statement
or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if IVCM files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or
alleged violation by IVCM of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation there under relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations").
IVCM shall reimburse Seaside and each such controlling person promptly
as such expenses are incurred and are due and payable, for any legal
fees or disbursements or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) shall not
apply to a Claim by an Indemnified Person arising out of or based upon
a Violation which occurs in reliance upon and in conformity with
information furnished in writing to IVCM by such Indemnified Person
expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto; (y) shall not be available to the extent such Claim is based
on a failure of Seaside to deliver or to cause to be delivered the
prospectus made available by IVCM, if such prospectus was timely made
available by IVCM pursuant to Section 3(c); and (z) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of IVCM, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable
Securities by Seaside pursuant to Section 9 hereof.
(b) In connection with a Registration Statement, Seaside agrees to
severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a),
IVCM, each of its directors, each of its officers, employees,
representatives, or agents and each Person, if any, who controls IVCM
within the meaning of the 1933 Act or the 1934 Act (each an
"Indemnified Party"), against any Claim or Indemnified Damages to which
any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or
is based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to IVCM by Seaside
expressly for use in connection with such Registration Statement; and,
subject to Section 6(d), Seaside will reimburse any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect
to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the
prior written consent of Seaside, which consent shall not be
unreasonably withheld; provided, further, however, that Seaside shall
be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to Seaside as a
result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by Seaside pursuant to Section 9. Notwithstanding anything
to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any prospectus shall not
inure to the benefit of any Indemnified Party if the untrue statement
or omission of material fact contained in the prospectus was corrected
and such new prospectus was delivered to Seaside prior to Seaside's use
of the prospectus to which the Claim relates.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain
its own counsel with the fees and expenses of not more than one (1)
counsel for such Indemnified Person or Indemnified Party to be paid by
the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing
interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or
claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall,
without the prior written consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall
be subrogated to all rights of the Indemnified Party or Indemnified
Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such
action.
(d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii)
any liabilities the indemnifying party may be subject to pursuant to
the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to Seaside the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may at any time permit Seaside to sell securities of IVCM to the public without
registration ("Rule 144") IVCM agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of IVCM under the 1933 Act and the 1934 Act so long
as IVCM remains subject to such requirements (it being understood that
nothing herein shall limit IVCM's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents as are required by the applicable provisions of Rule 144; and
(c) furnish to Seaside so long as Seaside owns Registrable Securities,
promptly upon request, (i) a written statement by IVCM that it has
complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent annual or quarterly report
of IVCM and such other reports and documents so filed by IVCM, and
(iii) such other information as may be reasonably requested to permit
Seaside to sell such securities pursuant to Rule 144 without
registration.
9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of IVCM and
Seaside. Any amendment or waiver effected in accordance with this Section 9
shall be binding upon Seaside and IVCM. No such amendment shall be effective to
the extent that it applies to fewer than all of the holders of the Registrable
Securities. 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 this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.
10. MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such
Registrable Securities. If IVCM receives conflicting instructions,
notices or elections from two (2) or more Persons with respect to the
same Registrable Securities, IVCM shall act upon the basis of
instructions, notice or election received from the registered owner of
such Registrable Securities.
(b) 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 (1) business day after deposit with a nationally recognized
overnight delivery 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 IVCM, to: IVM Communications, Inc.
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Seaside: Seaside Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxxx Xxxxx
Telephone: 00.000.000.0000
Facsimile: 00.000.000.0000
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 a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) The laws of the State of Nevada shall govern all issues
concerning the relative rights of IVCM and Seaside as its stockholders. All
other 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 jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the Courts of the State of New York, sitting in New York County
and federal courts for the District of New York sitting New York, New York, 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. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
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 HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(e) This Agreement and the Purchase Agreement and related
documents constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the Purchase Agreement and related documents
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.
(f) This Agreement shall inure to the benefit of and be
binding upon the permitted successors and assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
(i) 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.
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.
(j) 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.
IVCM:
IVI Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Executive Vice President & COO
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Attention:
Re: [IVCM]
Ladies and Gentlemen:
We are counsel to [IVCM], a ________ corporation (the "IVCM"), and have
represented IVCM in connection with that certain Purchase Agreement (the
"Purchase Agreement") entered into by and among IVCM and Seaside Investments PLC
("Seaside") pursuant to which IVCM agreed to register, among other things,
Seaside's Common Stock of IVCM, par value US$____ per share (the "Common
Stock"). Pursuant to the Purchase Agreement, IVCM also has entered into a
Registration Rights Agreement with Seaside (the "Registration Rights Agreement")
pursuant to which IVCM agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with IVCM's
obligations under the Registration Rights Agreement, on ____________ ____, IVCM
filed a Registration Statement on Form ________ (File No. 333-_____________)
(the "Registration Statement") with the Securities and Exchange SEC (the "SEC")
relating to the Registrable Securities which names Seaside as a selling
stockholder there under.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
By:
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