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SECURITIES PURCHASE AGREEMENT
DATED AS OF
APRIL 14, 2000
BETWEEN
THIRD MILLENNIUM COMMUNICATIONS, INC.
AND
THE OFFICIAL INFORMATION COMPANY
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TABLE OF CONTENTS
Page
ARTICLE I: DEFINED TERMS; RULES OF CONSTRUCTION........................................................1
1.1 Defined Terms...............................................................................1
1.2 Rules of Construction.......................................................................6
ARTICLE II: PURCHASE AND SALE OF SHARES; CLOSINGS.......................................................7
2.1 Authorization of Issuance of Common Shares..................................................7
2.2 Closing.....................................................................................7
2.3 Closing Deliveries...............................................ERROR! BOOKMARK NOT DEFINED.
2.4 Use Of Proceeds..................................................ERROR! BOOKMARK NOT DEFINED.
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................7
3.1 Due Incorporation and Good Standing.........................................................7
3.2 Capitalization..............................................................................8
3.3 Subsidiaries................................................................................8
3.4 Authority...................................................................................8
3.5 Authorization of Common Shares..............................................................9
3.6 No Violation or Conflict; No Default........................................................9
3.7 Financial Statements: No Material Adverse Change..........................................10
3.8 Rights of Registration and Voting Rights...................................................11
3.9 Private Offering...........................................................................11
3.10 No Brokers.................................................................................11
3.11 Litigation.................................................................................12
3.12 Taxes......................................................................................12
3.13 Intellectual Property Rights...............................................................13
3.14 Compliance with Laws.......................................................................13
3.15 Full Disclosure............................................................................13
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................14
4.1 Organization and Standing..................................................................14
4.2 Purchase for Own Account...................................................................14
4.3 Accredited Investor........................................................................14
4.4 Authorization; Consents....................................................................14
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ARTICLE V: INDEMNIFICATION............................................................................15
5.1 Indemnification by Company.................................................................15
5.2 Indemnification by the Purchaser...........................................................16
5.3 Notification of Claims; Election to Defend.................................................16
ARTICLE VII: TRANSFER OF SECURITIES.....................................................................18
6.1 Restriction on Transfer....................................................................18
6.2 Restrictive Legends........................................................................18
ARTICLE VIII: MISCELLANEOUS..............................................................................18
7.1 Fees, Expenses and Issue Taxes.............................................................18
7.2 Further Assurances.........................................................................19
7.3 Successors and Assigns.....................................................................19
7.4 Entire Agreement...........................................................................19
7.5 Notices....................................................................................19
7.6 Amendments, Modifications and Waivers......................................................20
7.7 Time is of the Essence: Delays or Omissions...............................................20
7.8 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............................21
7.9 No Third Party Reliance....................................................................21
7.10 Extension; Waiver..........................................................................21
7.11 Severability...............................................................................22
7.12 Independence of Agreements, Covenants, Representations and Warranties......................22
7.13 Counterparts; Facsimile Signatures.........................................................22
7.14 Survival of Representations, Warranties and Agreements.....................................22
7.15 Disclosure of Financial Information........................................................23
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EXHIBITS
REGISTRATION RIGHTS AGREEMENT A
Shareholders Agreement B
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement") dated as of April 14,
2000, between Third Millennium Communications, Inc., a Georgia corporation (the
"Company"), and The Official Information Company, a Delaware corporation (the
"Purchaser").
A. The Company, the Purchaser and certain of Purchaser's shareholders
have entered into a letter of intent ("LOI") dated as of April 13, 2000,
pursuant to which, among other things, the Purchaser has agreed to purchase and
the Company has agreed to sell the E-Products division of the Company (the
"Acquisition") subject to the terms and conditions set forth in the LOI.
B. Pending the negotiation and consummation of definitive documentation
relating to the Acquisition (the "Acquisition Agreement"), Purchaser has agreed
to invest $5 million in the Company in exchange for 1,428,571 shares of Common
Stock (the "Common Shares") in the Company, subject to the terms and conditions
set forth in this Agreement.
C. Simultaneously herewith, the Company and the Purchaser have executed
and delivered the Registration Rights Agreement and the Shareholders Agreement
(each, as defined herein).
ACCORDINGLY, in consideration of the foregoing and the covenants,
agreements, representations and warranties contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties hereto hereby agree as follows:
ARTICLE I:
DEFINED TERMS; RULES OF CONSTRUCTION
1.1 DEFINED TERMS.
Capitalized terms used and not otherwise defined in this Agreement have
the meanings ascribed to them below or in the other locations of this Agreement
specified below:
"Affiliate," as applied to any specified Person, means any
other Person that, directly or indirectly, controls, is controlled by or is
under common control with such specified Person. For purposes of the foregoing,
"control," when used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by contract or otherwise, and the terms "controlled" and "controlling" shall
have meanings correlative to the foregoing. In the case of a Person who is an
individual, the term "Affiliate" shall include, with respect to such specified
Person, (i) members of such specified Person's immediate family (as defined in
Instruction 2 of Item 404(a) of Regulation S-K under the Securities Act), and
(ii) trusts, the trustee or the beneficiaries of which are such specified Person
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or members of such Person's immediate family as determined in accordance with
the foregoing clause (i). Notwithstanding the foregoing, the Purchaser and its
Affiliates shall not be deemed Affiliates of the Company for purposes of this
Agreement.
"Audit" means any audit, assessment of Taxes, other
examination by any Tax Authority, proceeding or appeal of such proceeding
relating to Taxes.
"Agreement" shall have the meaning given to such term in the
caption.
"Applicable Laws," with respect to any Person, means all
provisions of laws, statutes, ordinances, rules, regulations, permits,
certificates or orders of any Governmental Authority (including, without
limitation, laws relating to pollution or protection of human health or the
environment) applicable to such Person or any of its assets or property or to
which such Person or any of its assets or property is subject, and all
judgments, injunctions, orders and decrees of all courts and arbitrators in
proceedings or actions in which such Person is a party or by which it or any of
its assets or properties is or may be bound or subject.
"Articles of Incorporation" means the Articles of
Incorporation of the Company, as amended and in effect at the time in question.
"Business Day" means any day that is not a Saturday, Sunday,
legal holiday or other day on which banks are required to be closed in New York,
New York, or Atlanta, Georgia.
"By-Laws" means the by-laws of the Company, as amended and in
effect at the time in question.
"Claim" means any claim, demand, assessment, judgment, order,
decree, action, cause of action, litigation, suit, investigation or other
Proceeding.
"Closing" has the meaning ascribed thereto in Section 2.3.
"Closing Date" has the meaning ascribed thereto in Section
2.3.
"Common Shares" has the meaning ascribed thereto in Section
2.1.
"Common Stock" has the meaning ascribed thereto in Section
2.1.
"Code" means the Internal Revenue Code of 1986, as amended, or
any similar Federal law then in force, and the rules and regulations promulgated
thereunder, all as the same may from time to time be in effect.
"Company" has the meaning given to it in the caption to this
Agreement.
"Consolidated" or "consolidated," when used with reference to
any accounting term, means the amount described by such accounting term,
determined on a consolidated basis in accordance with GAAP, after elimination of
intercompany items.
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"Contracts" has the meaning ascribed thereto in Section 3.6.
"Documents" means this Agreement and the other documents,
agreements and certificates executed pursuant to or in connection with this
Agreement.
"Equity Interest" means (i) with respect to a corporation, any
and all issued and outstanding capital stock and warrants, options or other
rights to acquire capital stock and (ii) with respect to a partnership, limited
liability company or similar Person, any and all units, interests, or other
equivalents of, or other ownership interests in any such Person and warrants,
options or other rights to acquire any such units or interests.
"Financial Statements" has the meaning ascribed thereto in
Section 3.7.
"Fundamental Documents" means the documents by which any
Person (other than an individual) establishes its legal existence or which
govern its internal affairs. The Fundamental Documents of the Company are the
Articles of Incorporation and By-Laws and any other organizational document as
amended or restated (or both) to date.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Governmental Authority" means any domestic or foreign
government or political subdivision thereof, whether on a federal, state or
local level and whether executive, legislative or judicial in nature, including
any agency, authority, board, bureau, commission, court, department or other
instrumentality thereof.
"Holder" means the Purchaser and any transferee of the
Purchaser permitted by the Shareholders Agreement that is or becomes a holder of
the Common Shares, in each case, so long as the Person holds any Common Shares.
"Intellectual Property Rights" means all industrial and
intellectual property rights, including, without limitation, patents, patent
applications, patent rights, trademarks, trademark applications, trade names,
service marks, service xxxx applications, copyrights, copyright applications,
know-how, trade secrets, proprietary processes and formulae, confidential
information, franchises, licenses, inventions, instructions, marketing
materials, trade dress, logos and designs and all documentation and media
constituting, describing or relating to the foregoing, including manuals,
memoranda and records.
"Legal Requirements" means, as to any Person, all federal
state, local or foreign laws, statutes, rules, regulations, ordinances, permits,
certificates, requirements, regulations and restrictions of any Governmental
Authority applicable to such Person or any of its properties or assets.
"Liability" means any liability or obligation, whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated and whether due or to become due,
regardless of when asserted.
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"Lien" means any mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or resulting in a charge against real or
personal property, or security interest of any kind (including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell and any filing of
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Material Adverse Effect" means (a) a material adverse effect
upon the business, operations, properties, assets or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or (b) a
material adverse effect on the ability of the Company to perform its obligations
under this Agreement or any of the other Documents.
"Order" means any judgment, writ, decree, injunction, order,
stipulation, compliance agreement or settlement agreement issued or imposed by,
or entered into with, a Governmental Authority, whether or not having the force
of law.
"Permitted Lien" shall mean the following Liens: (a) Liens
existing on the date hereof as listed on Schedule 1.1; (b) Liens for taxes,
assessments or other governmental charges or levies not yet due; (c) statutory
Liens of landlords, carriers, warehousemen, mechanics, materialmen and other
Liens imposed by law created in the ordinary course of business of the Company
consistent with past practices for amounts not yet due; (d) Liens (other than
any Lien imposed by ERISA) incurred or deposits made in the ordinary course of
business of the Company consistent with past practices in connection with
worker's compensation, unemployment insurance or other types of social security;
and (e) with respect to interests in real property, minor defects of title,
easements, rights-of-way, restrictions and other similar charges or Liens not
materially detracting from the value or materially interfering with the use of
such real property.
"Person" shall be construed as broadly as possible and shall
include an individual, a partnership (including a limited liability
partnership), a company, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a Governmental Authority.
"Purchase Price" means five million dollars ($5,000,000.00).
"Proceeding" means any legal, administrative or arbitration
action, suit, complaint, charge, hearing, inquiry, investigation or proceeding
(including any partial or threatened proceedings).
"Purchaser" has the meaning given to it in the caption to this
Agreement and any Person succeeding to the rights of the Purchaser pursuant to
the terms hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof, among the Company and the Purchaser in
the form of Exhibit A attached hereto.
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"Reserved Common Shares" means the shares of Common Stock
reserved for issuance upon exercise of Equity Interests in the Company.
"Restricted Securities" shall mean the Common Shares, and any
shares of capital stock received in respect thereof, in each case which have not
then been sold to the public pursuant to (a) registration under the Securities
Act or (b) an exemption from the registration requirements of the Securities
Act, including but not limited to Rule 144 (or similar or successor rule)
promulgated under the Securities Act.
"Securities" means, with respect to any Person, such Person's
"securities" as defined in Section 2(1) of the Securities Act and includes such
Person's capital stock or other equity interests or any options, warrants or
other securities or rights that are directly or indirectly convertible into, or
exercisable or exchangeable for, such Person's capital stock or other equity
interests.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same may from time to time be in
effect.
"Shareholder' Agreement" means the Shareholder' Agreement
dated as of the date hereof, among the Company, certain of its shareholders and
the Purchaser in the form of Exhibit B attached hereto.
"Subsidiary" shall mean, at any time, with respect to any
Person (the "Subject Person"), (i) any Person of which either (x) more than 50%
of the shares of stock or other interests entitled to vote in the election of
directors or comparable Persons performing similar functions (excluding shares
or other interests entitled to vote only upon the failure to pay dividends
thereon or other contingencies) or (y) more than a 50% interest in the profits
or capital of such Person are at the time owned or controlled directly or
indirectly by the Subject Person or through one or more Subsidiaries of the
Subject Person or by the Subject Person and one or more Subsidiaries of the
Subject Person, or (ii) any Person whose assets, or portions thereof, are
consolidated with the net earnings of the Subject Person and are recorded on the
books of the Subject Person for financial reporting purposes in accordance with
GAAP.
"Tax" means any Taxes and the term "Taxes" means, with respect
to any Person, (A) all income taxes (including any tax on or based upon net
income, or gross income, or income as specially defined, or earnings, or
profits, or selected items of income, earnings or profits) and all gross
receipts, sales, use, ad valorem, transfer, franchise, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property or
windfall profits taxes, alternative or add-on minimum taxes, customs duties or
other taxes, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts imposed
by any taxing authority (domestic or foreign) on such Person and (B) any
Liability for the payment of any amount of the type described in the immediately
preceding clause (A) as a result of being a "transferee" (within the meaning of
Section 6901 of the Code or any other Applicable Laws) of another Person or a
member of an affiliated or combined group.
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"Tax Authority" means the Internal Revenue Service and any
other domestic or foreign governmental authority responsible for the
administration of any Taxes.
"Tax Returns" means all Federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax Return relating to Taxes.
"Transactions" shall have the meaning ascribed to such term in
Section 3.4.
"Transfer" means any disposition of any shares or other units
of Restricted Securities or any interest therein which would constitute a sale
thereof within the meaning of the Securities Act.
1.2 RULES OF CONSTRUCTION.
The term "this Agreement" means this agreement together with all
schedules and exhibits hereto, as the same may from time to time be amended,
modified, supplemented or restated in accordance with the terms hereof. The use
in this Agreement of the term "including" means "including, without limitation."
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole, including the schedules and exhibits, as the
same may from time to time be amended, modified, supplemented or restated, and
not to any particular section, subsection, paragraph, subparagraph or clause
contained in this Agreement. All references to sections, schedules and exhibits
mean the sections of this Agreement and the schedules and exhibits attached to
this Agreement, except where otherwise stated. The title of and the section and
paragraph headings in this Agreement are for convenience of reference only and
shall not govern or affect the interpretation of any of the terms or provisions
of this Agreement. The use herein of the masculine, feminine or neuter forms
shall also denote the other forms, as in each case the context may require or
permit. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Unless expressly provided
otherwise, the measure of a period of one month or year for purposes of this
Agreement shall be that date of the following month or year corresponding to the
starting date, provided that if no corresponding date exists, the measure shall
be that date of the following month or year corresponding to the next day
following the starting date. For example, one month following February 18 is
March 18, and one month following March 31 is May 1.
ARTICLE II:
PURCHASE AND SALE OF SHARES; CLOSING
2.1 AUTHORIZATION OF ISSUANCE OF COMMON SHARES
Subject to the terms and conditions hereof, the Company has authorized
the issuance of an aggregate of 1,428,571 shares (the "Common Shares") of the
Company's Common Stock, no
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par value ("Common Stock"), as may be adjusted proportionately for any
subdivision (by any stock split, stock dividend, recapitalization or otherwise)
or combination (by reverse stock split or otherwise) of the capital stock of the
Company per share.
2.2 SALE OF COMMON SHARES; CLOSING.
At the closing (the "Closing"), to be held on the date hereof (the "Closing
Date") at the offices of Xxxxxxxxx Xxxxxxx, 0000 Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxx, the Company shall issue and sell to the Purchaser and the Purchaser
shall purchase from the Company the Common Shares for the Purchase Price. 2.3
Closing Deliveries. At the Closing, the Company shall deliver to the Purchaser a
certificate, registered in the Purchaser's name, representing the Common Shares
against receipt by the Company of a wire transfer of immediately available funds
to an account designated by the Company of the Purchase Price. In addition, at
the Closing, the Purchaser and the Company shall enter into the Registration
Rights Agreement, and the Company, certain of its shareholders and the Purchaser
shall enter into the Shareholders' Agreement. .
ARTICLE III:
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company represents and warrants to the Purchaser that as of the
date hereof:
3.1 DUE INCORPORATION AND GOOD STANDING.
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Georgia with
corporate power and authority to own, lease and operate its properties, to
conduct its business as currently conducted and as proposed to be conducted and
to enter into and perform its obligations under this Agreement and the other
Documents to which it is a party. The Company is not required to be qualified as
a foreign corporation to transact business in any jurisdiction.
3.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
(i) 100 million shares of Common Stock and (ii) 25 million shares of blank check
preferred stock. After giving effect to the transactions contemplated by this
Agreement, (A) there will be issued and outstanding (y) {___________} shares of
Common Stock, all of which are validly issued and fully paid and nonassessable
and, (z) no shares of Preferred Stock and; (B) there will be reserved for
issuance {__________} shares of Common Stock to be issued upon conversion of
Equity Interests in the Company. Except as set forth above and on Schedule 3.2
hereto, as of the date hereof, after giving effect to the transactions
contemplated by this Agreement and the other Documents, there are no Equity
Interests of the Company or any Subsidiary of the Company, or
7
agreements obligating the Company or any Subsidiary of the Company to issue,
transfer, grant or sell any Equity Interests in the Company or any Subsidiary of
the Company.
(b) Except as set forth on Schedule 3.2, the Company has
complied in all material respects with all federal and state securities laws in
connection with the issuance of all outstanding Equity Interests.
(c) Except as listed on Schedule 3.2, and except as
contemplated by the Documents, there are no preemptive rights, voting
agreements, transfer restrictions (except those imposed by applicable federal
and state securities laws) or registration rights affecting the Equity Interests
in the Company.
3.3 SUBSIDIARIES.
Schedule 3.3 hereto sets forth a list of all Subsidiaries of the
Company and the respective state or jurisdiction of incorporation or
organization. Except as set forth on Schedule 3.3, all of the issued and
outstanding Equity Interests of such Subsidiaries have been duly and validly
issued and are fully paid and nonassessable and are owned, directly or
indirectly, by the Company. Each Subsidiary of the Company is duly incorporated
and is in good standing in its respective state or jurisdiction of incorporation
and has the corporate authority to own, lease or operate its properties and to
conduct its business as currently conducted and as proposed to be conducted. The
Subsidiary of the Company should be duly qualified to transact business in the
State of Tennesseeand the Company will promptly qualify such Subsidiary therein.
3.4 AUTHORITY.
The Company has all necessary corporate power and authority to execute
and deliver this Agreement and each of the other Documents to which it is a
party, and to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby (the
"Transactions"). The execution and delivery of this Agreement and the other
Documents to which it is a party has been authorized by all necessary corporate
action on the part of the Company and no other corporate proceedings or
approvals are required on the part of the Company to authorize this Agreement or
the other Documents to which it is a party or to consummate the Transactions.
This Agreement and the other Documents have been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Purchaser, constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and to the extent the indemnification provisions
contained herein and the Documents may be limited by applicable federal or state
securities laws.
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3.5 AUTHORIZATION OF COMMON SHARES.
The issuance and sale of the Common Shares have been duly authorized
and the Common Shares when issued to the Purchaser for the consideration set
forth herein will be fully paid and non-assessable, with no personal liability
attached to the ownership thereof, and free of restrictions on transfer other
than under this Agreement, the Shareholders Agreement, and applicable state and
federal securities laws.
3.6 NO VIOLATION OR CONFLICT; NO DEFAULT.
(a) Neither the execution, delivery or performance of this
Agreement, or any of the other Documents by the Company, nor the compliance by
the Company with its obligations hereunder or thereunder, nor the consummation
of the Transactions, nor the issuance, sale or delivery of the Common Shares
will:
(i) violate or conflict with any provision of the
Fundamental Documents of the Company or any of its Subsidiaries;
(ii) violate or conflict in any material respect with
any Applicable Laws; or
(iii) violate, be in conflict with, or constitute a
breach or default (or any event which, with the passage of time or
notice or both, would become a default) under, or permit the
termination of, or require the consent of any Person under, result
in the creation or imposition of any Lien upon any property of the
Company or its Subsidiaries under, result in the loss (by the
Company or any Subsidiary) or modification in any manner adverse to
the Company and its Subsidiaries of any right or benefit under, or
give to any other Person any right of termination, amendment,
acceleration, repurchase or repayment, increased payments or
cancellation under, any mortgage, indenture, note, debenture,
agreement, lease, license, permit, franchise or other instrument or
obligation, whether written or oral (collectively, "Contracts") to
which the Company or any of its Subsidiaries is a party or by which
their properties may be bound or affected except as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) The Company is not in default (without giving effect to
any grace or cure period or notice requirement) under any Contract except where
such default would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, or any of its Fundamental Documents or any
applicable judgments or orders.
(c) The execution and delivery of this Agreement and the other
Documents to which the Company is a party do not, and the performance of its
obligations under this Agreement and the other Documents and the consummation of
the Transactions will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Authority
pursuant to any Applicable Laws, except for (i) required filings under the
Securities Act or state "blue sky" laws as a result of the issuance of the
Common Shares hereunder, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits
9
or to make such filings or notifications, would not prevent or delay in any
material respect consummation of the Transactions, or otherwise prevent the
Company from performing its obligations under this Agreement or the other
Documents.
3.7 FINANCIAL STATEMENTS: NO MATERIAL ADVERSE CHANGE.
(a) The Company has made available to the Purchaser its (i)
unaudited financial statements for the years ended December 31, 1997 and 1998,
each as prepared, without a report and unissued, by its independent public
accountant, and (ii) its unaudited financial statements for the year ended
December 31, 1999, and its unaudited financial statements including balance
sheet at February 29, 2000, each as prepared by the Company (collectively, the
"Financial Statements"). The Financial Statements are attached hereto as
Schedule 3.7. The Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated, except that
(i) the unaudited Financial Statements do not contain all footnotes required by
GAAP and (ii) the unaudited Financial Statements for (x) the year ended December
31, 1999 and (y) the period ended February 29, 2000 are not prepared on a
consolidated basis in accordance with GAAP. The Financial Statements fairly
present in all material respects the financial condition and operating results
of the Company as of the dates, and for the periods, indicated therein, except
where the failure to do so is in any way related to the Company's non-compliance
with GAAP as identified in the preceding sentence.
(a) Except as set forth on Schedule 3.7 hereto, subsequent to
December 31, 1999, there has not been (i) any material adverse change in the
properties, business, operations, assets or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a whole, (ii) any incurrence,
satisfaction or discharge of any Lien on any asset or property of the Company,
other than with respect to a Permitted Lien, (iii) any waiver or compromise of
any valuable right of the Company or any Subsidiary, or the cancellation of any
material debt or material claim held by the Company or any Subsidiary, (iv) any
payment of dividends on, or other distributions with respect to, or any direct
or indirect redemption or acquisition of, any shares of the capital stock of the
Company, or any agreement or commitment therefor, (v) any mortgage, pledge,
sale, assignment or transfer of any material tangible or intangible assets of
the Company, except in the ordinary course of business, (vi) any loan or
guaranty by the Company or any Subsidiary to or for the benefit of any officer,
director, employee, consultant or stockholder, or any member of their immediate
families, or any agreement or commitment therefor, other than travel expense
advances made by the Company to its officers, directors, employees, consultants
or stockholders in the ordinary course of business, (vii) any material damage,
destruction or loss (whether or not covered by insurance) affecting the assets
of the Company or any Subsidiary, (viii) any increase, direct or indirect, in
the compensation (including salary, bonus, insurance or pension benefits) paid
or payable to or for the benefit of any officer, director, employee or
consultant of the Company or any Subsidiary other than in the ordinary course of
business, (ix) any material change to a material contract or agreement by which
the Company or any of its assets is bound or subject, or (x) any sale,
assignment or transfer of any Intellectual Property Rights or any other material
intangible or tangible assets, other than in the ordinary course of business.
(b) Except as set forth on Schedule 3.7, since December 31,
1999, neither the Company nor any of its Subsidiaries has incurred any
liabilities or obligations (whether absolute,
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accrued, fixed, contingent, liquidated, unliquidated or otherwise and whether
due or to become due) of any nature, except for liabilities, obligations or
contingencies (i) which are reflected in the unaudited balance sheet of the
Company at December 31, 1999, (ii) which were incurred in the ordinary course of
business after December 31, 1999 and consistent with past practices, (iii) which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or (iv) which arise as a result of this Agreement or the
other Documents. Since December 31, 1999, there has been no change in any
significant accounting (including tax accounting) policies, practices or
procedures of the Company or its Subsidiaries.
3.8 RIGHTS OF REGISTRATION AND VOTING RIGHTS.
Except as contemplated by the Registration Rights Agreement or as set
forth on Schedule 3.8, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity. To the
best of the Company's knowledge, except as contemplated in the Shareholders
Agreement and the Shareholders Agreement dated as of October 7, 1996 between the
Company and certain of its shareholders or as set forth on Schedule 3.8, no
shareholder of the Company has entered into any agreements with respect to the
voting of capital shares of the Company.
3.9 PRIVATE OFFERING.
Assuming the correctness of the representations and warranties set
forth in Sections 4.1, 4.2 and 4.3 hereof, the offer and sale of the Common
Shares to the Purchaser hereunder is exempt from the registration requirements
of the Securities Act. In the case of the offer or sale of the Common Shares, no
form of general solicitation or general advertising was used by the Company and
its representatives, including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
3.10 NO BROKERS.
Except for The Xxxxxxxx-Xxxxxxxx Company Ltd. ("RH"), the Company has
not engaged any broker, finder, commission agent or other such intermediary in
connection with the sale of the Common Shares and the transactions contemplated
by this Agreement and the other Documents, and the Company is under no
obligation to pay any broker's or finder's fee or commission or similar payment
in connection with such transactions, except to RH.
3.11 LITIGATION.
(a) There is no Proceeding, whether commenced, or to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or any of their respective properties or assets, except for
such Proceedings that would not reasonably be expected to have, singly or in the
aggregate, a Material Adverse Effect, and there is no Proceeding seeking to
restrain, enjoin, prevent the consummation of or otherwise challenge this
Agreement or any of the other Documents or the Transactions.
11
(b) Neither the Company nor any of its Subsidiaries is subject
to (i) any Claim, (ii) any Order or (iii) any rule or regulation of any
Governmental Authority that has had a Material Adverse Effect or that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
3.12 TAXES.
Except as otherwise disclosed in Schedule 3.12:
(a) The Company and its Subsidiaries have timely filed or will
timely file or cause to be timely filed, all material Tax Returns (or
extensions) required by Applicable Laws to be filed by any of it prior to or as
of the Closing Date. All such Tax Returns and amendments thereto are or will be
true, complete and correct in all material respects.
(b) The Company and its Subsidiaries have paid, or where
payment is not yet due, have established, or will establish or cause to be
established on or before the Closing Date, an adequate accrual for the payment
of, all material Taxes due with respect to any period ending prior to or as of
the Closing Date.
(c) To the Company's knowledge, no Audit by a Tax Authority is
pending or threatened with respect to any Tax Returns filed by, or Taxes due
from, the Company or its Subsidiaries. No issue has been raised by any Tax
Authority in any Audit of the Company or its Subsidiaries that if raised with
respect to any other period not so audited would reasonably be expected to
result in a material proposed deficiency for any period not so audited. No
deficiency or adjustment for any Taxes has been threatened, proposed, asserted
or assessed against the Company or its Subsidiaries. There are no liens for
Taxes upon the assets of the Company or its Subsidiaries, except liens for
current Taxes not yet due.
(d) Neither Company nor its Subsidiaries have given or been
requested to give any waiver of statutes of limitations relating to the payment
of Taxes or has executed powers of attorney with respect to Tax matters, which
will be outstanding as of the Closing Date.
(e) Neither the Company nor its Subsidiaries are a party to,
or are bound by any tax sharing, cost sharing or similar agreement or policy
relating to Taxes.
(f) Neither the Company nor its Subsidiaries have entered into
agreements that would result in the disallowance of any tax deductions pursuant
to Section 280G of the Code. No "consent" within the meaning of Section 341(f)
of the Code has been filed with respect to the Company or its Subsidiaries.
(g) The Company has not made any elections pursuant to the
Code (other than elections that relate solely to methods of accounting,
depreciation or amortization) that would have, individually or in the aggregate,
a Material Adverse Effect.
(h) The Company has withheld or collected from each payment
made to each of its employees, the amount of Taxes required to be withheld or
collected therefrom, and has paid the same to the proper Tax Authorities or
authorized Tax depositaries.
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3.13 INTELLECTUAL PROPERTY RIGHTS.
To the knowledge of the officers of the Company, each of the Company
and its Subsidiaries owns or possesses adequate licenses or other rights to use
all Intellectual Property Rights material to its business as currently
conducted. Neither the Company nor any of its Subsidiaries has received any
written notice of infringement of or conflict with asserted rights of others
with respect to the use of Intellectual Property Rights other than as disclosed
on Schedule 3.13. To the knowledge of the officers of the Company, all
Intellectual Property Rights material to its business as currently conducted are
valid and enforceable and the Company has performed all acts and has paid all
required fees and taxes to maintain all registrations of such Intellectual
Property Rights in full force and effect. To the knowledge of the officers of
the Company, neither the Company nor any of its Subsidiaries, in the conduct of
their business as now conducted infringes in any material respect with any right
of any third party, known to the Company. Neither the Company nor any of its
Subsidiaries is, nor will it be as a result of the execution and delivery of
this Agreement and the other Documents or the performance of any obligations
hereunder and thereunder, in material breach of any license or other agreement
relating to any Intellectual Property Rights. To the knowledge of the officers
of the Company, no third party is infringing or has infringed any Intellectual
Property Rights of the Company or its Subsidiaries.
3.14 COMPLIANCE WITH LAWS.
Each of the Company and its Subsidiaries has obtained and has
maintained in good standing any licenses, permits, consents and authorizations
required to be obtained by it under all Applicable Laws relating to its
business, the absence of which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and any such
licenses, permits, consents and authorizations remain in full force and effect.
Each of the Company and its Subsidiaries is in compliance, in all material
respects, with all Applicable Laws and there is no pending or, to the Company's
knowledge, threatened, Claim or Proceedings against either the Company or its
Subsidiaries pursuant to any Legal Requirements, other than any such Claim or
Proceedings which, if adversely determined, would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
3.15 FULL DISCLOSURE.
Neither this Agreement, the financial statements referred to in Section
3.7 nor any Document contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
ARTICLE IV:
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as of the date
hereof, as follows:
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4.1 ORGANIZATION AND STANDING.
The Purchaser is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware.
4.2 PURCHASE FOR OWN ACCOUNT.
The Purchaser is purchasing the Common Shares solely for its own
account and not as nominee or agent for any other person and not with a view to,
or for offer or sale in connection with, any current distribution thereof
(within the meaning of the Securities Act) that would cause the original
purchase of the Common Shares to be in violation of the securities laws of the
United States of America or any state thereof, without prejudice, however, to
its right at all times to sell or otherwise dispose of all or any part of such
Common Shares pursuant to a registration statement under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act, and subject, nevertheless, to the disposition of its property being at all
times within its control.
4.3 ACCREDITED INVESTOR.
The Purchaser is knowledgeable, sophisticated and experienced in
business and financial matters and in investing in privately held business
enterprises in the development stage and capable of evaluating the risks of
investment in the Common Shares; it has previously invested in securities
similar to the Common Shares, acknowledges and is aware of the risks of
investment in the Company, and it acknowledges that the Common Shares have not
been registered under the Securities Act and understands that the Common Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or such sale is permitted pursuant to an available exemption from
such registration requirement; it is able to bear the economic risk of its
investment in the Common Shares and is presently able to afford the complete
loss of such investment; and it is an "accredited investor" as defined in
Regulation D promulgated under the Securities Act.
4.4 AUTHORIZATION; CONSENTS.
(a) The Purchaser has taken all actions necessary to authorize
it (i) to execute, deliver and perform all of its obligations under this
Agreement, (ii) to execute, deliver and perform all of its obligations under the
Documents and (iii) to consummate the transactions contemplated hereby and
thereby. This Agreement, assuming the due authorization, execution and delivery
thereof by the Company, is a legally valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms, except for (a)
the effect thereon of bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting the rights of creditors generally
and (b) limitations imposed by Federal or state law or equitable principles upon
the specific enforceability of any of the remedies, covenants or other
provisions thereof and upon the availability of injunctive relief or other
equitable remedies.
(b) The execution and delivery by the Purchaser of this
Agreement and the other Documents to which the Purchaser is a party do not, and
the performance of its obligations under this Agreement and the other Documents
and the consummation of the Transactions will not, require any consent,
approval, authorization or permit of, or filing with or notification to,
14
any Governmental Body under any Laws, except for (i) required filings under the
Securities Act or state "blue sky" laws and (ii) where the failure to obtain
such consents, approvals, authorizations or permits or to make such filings or
notifications would not, individually or in the aggregate, reasonably be
expected to prevent or materially delay the consummation of the Transactions.
4.5 DISCLOSURE OF INFORMATION.
The Purchaser represents it has received all the information it
considers necessary or appropriate for deciding whether to purchase the Common
Shares. The Purchaser further represents that it has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Common Shares and the business, properties,
prospects and financial condition of the Company. The foregoing, however, does
not limit or modify the representations and warranties of the Company in Section
3 of this Agreement or the right of the Purchaser to rely thereon.
4.6 STATE OF RESIDENCE.
Purchaser conducts business in the state of New York. The decision to
purchase the Common Shares was made in such state.
ARTICLE V:
INDEMNIFICATION
5.1 INDEMNIFICATION BY COMPANY.
(a) The Company shall indemnify and hold the Purchaser and the
Purchaser's officers, directors and employees (collectively, the "Purchaser
Indemnified Parties") harmless from and against, and agree promptly to defend
each of the Purchaser Indemnified Parties from and reimburse each of the
Purchaser Indemnified Parties for, any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including, without limitation,
reasonable attorney fees and other legal costs and expenses) (collectively,
"Losses") that any of the Purchaser Indemnified Parties may at any time suffer
or incur, or become subject to, as a result of or in connection with any breach
or inaccuracy of any of the representations and warranties made by Company in or
pursuant to this Agreement.
(b) Notwithstanding any other provision to the contrary, the
Company shall not have any liability under Section 5.1(a) above unless a claim
has been asserted with respect to the matters set forth in Section 5.1(a) within
two years of the Closing Date except with respect to matters arising under
Sections 3.12, in which event the Purchaser must have asserted a claim within
the applicable statue of limitations. Notwithstanding any provision set forth in
this Agreement to the contrary, for purposes of determining whether any Losses
have occurred or the amount of any such Losses, the representations and
warranties of the Company hereunder shall be considered without regard to any
materiality or knowledge qualifications set forth therein.
15
5.2 INDEMNIFICATION BY THE PURCHASER.
(a) The Purchaser shall indemnify and hold the Company and its
directors, officers and employees (collectively, the "Company Indemnified
Parties") harmless from and against, and agree to promptly defend each of the
Company Indemnified Parties from and reimburse each of the Company Indemnified
Parties for, any and all Losses that any of the Company Indemnified Parties may
at any time suffer or incur, or become subject to, as a result of or in
connection with any breach or inaccuracy of any representations and warranties
made by Purchaser in or pursuant to this Agreement.
(b) Notwithstanding any other provision to the contrary
Purchaser shall not have any liability under Section 5.2(a) above unless a claim
has been asserted with respect to the matters set forth in Section 5.2(a) within
two years of the Closing Date. Notwithstanding any provision set forth in this
Agreement to the contrary, for purposes of determining whether any Losses have
occurred or the amount of any such Losses, the representations and warranties of
the Purchaser hereunder shall be considered without regard to any materiality or
knowledge qualifications set forth therein.
5.3 NOTIFICATION OF CLAIMS; ELECTION TO DEFEND.
(a) A party entitled to be indemnified pursuant to Section 5.1
or 5.2 hereof, as the case may be (the "Indemnified Party"), shall notify the
party liable for such indemnification (the "Indemnifying Party") in writing of
any claim or demand (a "Claim") that the Indemnified Party has determined has
given or could give rise to a right of indemnification under this Agreement.
Subject to the Indemnifying Party's right to defend in good faith third party
Claims as hereinafter provided, the Indemnifying Party shall satisfy its
obligations under this Article V within 30 days after the receipt of written
notice thereof from the Indemnified Party. Any amounts paid thereafter shall
include interest thereon for the period commencing at the later of (i) the end
of such 30-day period and (ii) the date the claim is paid by the Indemnified
Party and ending on the actual date of payment, at a rate of 15% per annum, or,
if lower, at the highest rate of interest permitted by applicable law at the
time of such payment.
(b) If the Indemnified Party shall notify the Indemnifying
Party of any Claim pursuant to Section 5.3(a) hereof, and if such Claim relates
to a Claim asserted by a third party against the Indemnified Party that the
Indemnifying Party acknowledges is a Claim for which it must indemnify or hold
harmless the Indemnified Party under Section 5.1 or 5.2 hereof, as the case may
be, the Indemnifying Party shall have the right, at its sole cost and expense,
to employ counsel of its own choosing to defend any such Claim asserted against
the Indemnified Party; provided, however, that if the Indemnified Party (i)
reasonably believes that its interests with respect to a Claim (or any material
portion thereof) are in conflict with the interests of the Indemnifying Party
with respect to such Claim (or portion thereof), and (ii) promptly notifies the
Indemnifying Party, in writing, of the nature of such conflict, then the
Indemnified Party shall be entitled to choose, at the sole cost and expense of
the Indemnifying Party, independent counsel to defend such Claim (or the
conflicting portion thereof). The Indemnified Party shall have the right to
participate in the defense of any such Claim at its own expense (except to the
extent
16
provided in the foregoing sentence), but the Indemnifying Party shall retain
control over such litigation (except as provided in the foregoing sentence). The
Indemnifying Party shall notify the Indemnified Party in writing, as promptly as
possible (but in any case before the due date for the answer or response to a
claim) after the date of the notice of claim given by the Indemnified Party to
the Indemnifying Party under Section 5.3(a) hereof of its election to defend in
good faith any such third party Claim. So long as the Indemnifying Party is
defending in good faith any such Claim asserted by a third party against the
Indemnified Party (or has been relieved of the obligation to defend such Claim
in accordance with this Section 5.3(b) as a result of a conflict of interest
between the Indemnified Party and the Indemnifying Party), the Indemnified Party
shall not settle or compromise such Claim without the prior written consent of
the Indemnifying Party. The Indemnified Party shall cooperate with the
Indemnifying Party in connection with any such defense and shall make available
to the Indemnifying Party or its agents all records and other materials in the
Indemnified Party's possession reasonably required by it for its use in
contesting any third party Claim; provided, however, that the Indemnifying Party
shall have agreed, in writing, to keep such records and other materials
confidential except to the extent required for defense of the relevant Claim.
Whether or not the Indemnifying Party elects to defend any such Claim, the
Indemnified Party shall have no obligations to do so. Within 30 days after a
final determination (including, without limitation, a settlement) has been
reached with respect to any Claim contested pursuant to this Section 5.3(b), the
Indemnifying Party shall satisfy its obligations with respect thereto. Any
amounts paid thereafter shall include interest thereon for the period commencing
at the end of such 30-day period and ending on the actual date of payment, at a
rate of 15% per annum, or, if lower, at the highest rate of interest permitted
by applicable law at the time of such payment.
5.4 LIMITS FOR RECOVERY OF LOSSES
The Company shall not be liable as the Indemnifying Party for any
Claims under this Section 5 unless and until the aggregate amount of all Claims
hereunder by Purchaser or other indemnified parties equals or exceed $75,000, in
which case the Company shall be liable for all Claims of Purchaser without
regard to such $75,000 limitation. The limitations set forth in the prior
sentence shall not apply to Claims against the Company relating to the items set
forth in Section 3.12 and the Purchaser Indemnified Persons shall be entitled to
indemnification from the Company for any Claims relating to the items set forth
in Section 3.12 without any limitation. In all cases, and notwithstanding
anything herein to the contrary, the Company shall be subject to a maximum
aggregate limit of all Claims against it equal to the aggregate purchase price
paid by the Purchaser for the Common Shares.
17
ARTICLE vi:
TRANSFER OF SECURITIES
6.1 RESTRICTION ON TRANSFER.
The Restricted Securities shall not be transferable except in
compliance with the Shareholders Agreement and the provisions of the Securities
Act in respect of the transfer thereof. Upon any such Transfer, the holder shall
give prompt written notice to the Company of such Transfer, which shall include
the identity of the transferee and the number of Restricted Securities
Transferred.
6.2 RESTRICTIVE LEGENDS.
Each certificate evidencing the Restricted Securities and each
certificate for any such securities issued to subsequent transferees of any such
certificate shall the legend set forth below and the legend as are required by
the Shareholders' Agreement.
"THESE SECURIITES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR IF REASONABLY REQUESTED BY THE COMPANY AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
ARTICLE VII:
MISCELLANEOUS
7.1 FEES, EXPENSES AND ISSUE TAXES.
(a) The Company and the Purchaser shall each pay their own
fees and expenses incurred on their behalf with respect to the Transactions
contemplated herein.
(b) The Company agrees that it will pay, and will save the
Purchaser harmless from, any and all Liability with respect to any stamp or
similar taxes which may be determined to be payable in connection with the
execution and delivery and performance of the Documents or any modification,
amendment or alteration of the terms or provisions of the Documents.
7.2 FURTHER ASSURANCES.
The Company and the Purchaser shall duly execute and deliver, or cause
to be duly executed and delivered, at its own cost and expense, such further
instruments and documents and to take all such action, in each case as may be
necessary or proper in the reasonable judgment of
18
the other party to carry out the provisions and purposes of the Agreement and
the other Documents.
7.3 SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of the Company and
the Purchaser and their respective successors, assigns, heirs and personal
representatives. Upon any transfer of the Common Shares, the transferee shall be
bound by, and entitled to the benefits of, this Agreement with respect to such
transferred Securities in the same manner as the Purchaser. The Purchaser may
freely assign its rights and obligations under this Agreement without the prior
consent of the Company to Xxxxxxx Xxxxxx & Associates, LLP, Fir Tree Partners or
any of their respective Affiliates or to any Person who purchases all or
substantially all of the assets or stock of the Purchaser or Galaxy Information
Services, LLC.
7.4 ENTIRE AGREEMENT.
This Agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and thereof and supersede all
prior and contemporaneous arrangements or understandings with respect thereto
including those provisions of the LOI that expressly relate to the transactions
contemplated hereby.
7.5 NOTICES.
All notices and other communications delivered hereunder (whether or
not required to be delivered hereunder) shall be deemed to be sufficient and
duly given if contained in a written instrument (a) personally delivered, (b)
sent by telecopier, (c) sent by nationally recognized overnight courier
guaranteeing next Business Day delivery or (d) sent by first class registered or
certified mail, postage prepaid, return receipt requested, in each case
addressed as follows:
if to the Company:
Third Millennium Communications, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx, Chairman
Telecopier number: 000-000-0000
with a copy (which shall not constitute Notice) to:
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopier number: (000) 000-0000
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if to the Purchaser:
The Official Information Company
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxx, President and CEO
Telecopier number: (000) 000-0000
with a copy (which shall not constitute Notice) to:
Xxxxxx Xxx Xxxxxxx, Esq.
Xxxxxxxxx Traurig, LLP
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopier number: (000) 000-0000
or to such other address as the party to whom such notice or other communication
is to be given may have furnished to each other party in writing in accordance
herewith. Any such notice or communication shall be deemed to have been received
(i) when delivered, if personally delivered, (ii) when sent, if sent by telecopy
on a Business Day (or, if not sent on a Business Day, on the next Business Day
after the date sent by telecopy), (iii) on the next Business Day after dispatch,
if sent by nationally recognized, overnight courier guaranteeing next Business
Day delivery, and (iv) on the fifth Business Day following the date on which the
piece of mail containing such communication is posted, if sent by mail.
7.6 AMENDMENTS, MODIFICATIONS AND WAIVERS.
The terms and provisions of this Agreement may not be modified or
amended, nor may any of the provisions hereof be waived, temporarily or
permanently, except pursuant to a written instrument executed by the Company and
Holder. Any amendment, modification or waiver effected in accordance with this
paragraph shall be binding on any subsequent Holder and the Company.
7.7 TIME IS OF THE ESSENCE: DELAYS OR OMISSIONS.
Time is of the essence of this Agreement. No delay or omission to
exercise any right, power or remedy accruing to any party under this Agreement,
upon any breach or default of any other party under this Agreement, shall impair
any such right, power or remedy of such non-breaching or non-defaulting party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
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7.8 GOVERNING LAW; WAIVER OF JURY TRIAL.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OR RULES OF CONFLICT
OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THE HOLDER'S INVESTMENT IN THE COMPANY CONTEMPLATED
HEREBY. THE SCOPE OF THIS JURY TRIAL WAIVER SHALL BE LIMITED TO DISPUTES BETWEEN
THE COMPANY AND THE HOLDER AND SHALL NOT EXTEND TO DISPUTES BETWEEN THE COMPANY
AND ANY OTHER PERSON.
7.9 NO THIRD PARTY RELIANCE.
Anything contained herein to the contrary notwithstanding, the
representations and warranties of the Company contained in this Agreement (a)
are being given by the Company as an inducement to the Purchaser to enter into
this Agreement and the other Documents (and the Company acknowledges that the
Purchaser have expressly relied thereon) and (b) are solely for the benefit of
the Purchaser. Accordingly, no third party (including, without limitation, any
holder of capital stock of the Company) or anyone acting on behalf of any
thereof other than the Purchaser, and each of them, shall be a third party or
other beneficiary of such representations and warranties and no such third party
shall have any rights of contribution against the Purchaser or the Company with
respect to such representations or warranties or any matter subject to or
arising under this Agreement or otherwise.
7.10 EXTENSION; WAIVER.
At any time prior to the Closing, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement and (c) waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party, and any such waiver shall not operate or be
construed as a waiver of any subsequent breach by the other party.
7.11 SEVERABILITY.
It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
21
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
7.12 INDEPENDENCE OF AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES.
All agreements and covenants hereunder shall be given independent
effect so that if a certain action or condition constitutes a default under a
certain agreement or covenant, the fact that such action or condition is
permitted by another agreement or covenant shall not affect the occurrence of
such default, unless expressly permitted under an exception to such initial
covenant. The exhibits and schedules attached hereto are hereby made part of
this Agreement in all respects.
7.13 COUNTERPARTS; FACSIMILE SIGNATURES.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding.
7.14 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
The representations, warranties and agreements of the Purchaser and the
Company in this Agreement shall survive the Closing until the date that is two
years from the date hereof. Notwithstanding the foregoing, the agreements
contained in this Article VII shall survive the Closing indefinitely.
7.15 DISCLOSURE OF FINANCIAL INFORMATION.
Each Holder is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of the Company or each of its Subsidiaries which may be
furnished to it hereunder or otherwise, to any other Holder, any court,
Governmental Body claiming to have jurisdiction over such Holder, to the
National Association of Insurance Commissioners or similar organization, as may
be required or appropriate in response to any summons or subpoena in connection
with any litigation, to the extent necessary to comply with any law, order,
regulation or ruling applicable to such Holder, or to any rating agency, in
order to protect its investment hereunder; provided, however, that prior to
disclosing any such information, such Holder shall provide the Company with
prompt written notice so that the Company may seek a protective order or other
appropriate remedy if the Company reasonably determines that such information
must be kept confidential.
Each Holder is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of the Company or each of its Subsidiaries which may be
furnished to it hereunder or otherwise to any person which shall, or shall have
any right or obligation to, succeed to all or any part of such Holder's interest
22
in any of the Common Shares and this Agreement or to any actual purchaser or
assignee thereof; provided, however, that no disclosure may be made unless such
other Person first executes a confidentiality agreement reasonably acceptable to
the Company with respect to any such information disclosed.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement as of the date first above written.
THE COMPANY:
THIRD MILLENNIUM COMMUNICATIONS, INC.
By:
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Name:
----------------------------------------
Title:
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PURCHASER:
THE OFFICIAL INFORMATION COMPANY
By:
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Name:
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Title:
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
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EXHIBIT B
SHAREHOLDERS AGREEMENT
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