PRIVATE EQUITY CREDIT AGREEMENT BY AND BETWEEN EAGLE BROADBAND, INC. AND BRITTANY CAPITAL MANAGEMENT LIMITED Dated January 12, 2007
Exhibit
10.23
BY
AND BETWEEN
EAGLE
BROADBAND, INC.
AND
BRITTANY
CAPITAL MANAGEMENT LIMITED
Dated
January
12, 2007
THIS
PRIVATE EQUITY CREDIT AGREEMENT is entered into as of the 12th day of January,
2007 (this “AGREEMENT”), by and between BRITTANY CAPITAL MANAGEMENT
LIMITED,
a
corporation organized and existing under the laws of the Bahamas (“INVESTOR”),
and EAGLE BROADBAND, INC., a Texas corporation (the “COMPANY”).
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
Section
1.1 DEFINED TERMS as used in this Agreement, the following terms shall have
the
following meanings specified or indicated (such meanings to be equally
applicable to both the singular and plural forms of the terms defined)
“AGREEMENT”
shall have the meaning specified in the preamble hereof.
“AVERAGE
DAILY VOLUME” shall mean the Average of the Daily Volume for the relevant
days.
“BLACKOUT
NOTICE” shall have the meaning specified in the Registration Rights
Agreement.
“BLACKOUT
SHARES” shall have the meaning specified in Section 2.6.
“BYLAWS”
shall have the meaning specified in Section 4.8.
“CERTIFICATE”
shall have the meaning specified in Section 4.8.
“CLOSING”
shall mean one of the closings of a purchase and sale of shares of Common
Stock
pursuant to Section 2.3.
“CLOSING
BID PRICE” shall mean the closing bid price of the Common Stock on the Principal
Market.
“CLOSING
DATE” shall mean, with respect to a Closing, the [seventh (7th)]
Trading Day following the Put Date related to a Closing, or such earlier
date as
the Company and Investor shall agree, provided all conditions to a Closing
have
been satisfied on or before such Trading Day.
“COMMITMENT
PERIOD” shall mean the period commencing on the Effective Date, and ending on
the earlier of (i) the date on which Investor shall have purchased Put Shares
pursuant to this Agreement for an aggregate Purchase Price of the Maximum
Commitment Amount, (ii) the date this Agreement is terminated pursuant to
Section 2.5, or (iii) the date occurring thirty-six (36) months from the
Effective Date.
“COMMON
STOCK” shall mean the Company’s common stock, $0.001 par value per share, and
any shares of any other class of common stock whether now or hereafter
authorized, having the right to participate in the distribution of dividends
(as
and when declared) and assets (upon liquidation of the Company).
“COMMON
STOCK EQUIVALENTS” shall mean any securities that are convertible into or
exchangeable for Common Stock or any options or other rights to subscribe
for or
purchase Common Stock or any such convertible or exchangeable
securities.
“COMPANY”
shall have the meaning specified in the preamble to this Agreement.
“CONDITION
SATISFACTION DATE” shall have the meaning specified in Section 7.2.
“DAMAGES”
shall mean any loss, claim, damage, liability, costs and expenses (including,
without limitation, reasonable attorneys’ fees and disbursements and costs and
expenses of expert witnesses and investigation).
“DISCOUNT”
shall mean seven percent (7%).
“DTC”
shall have the meaning specified in Section 2.3.
“DWAC”
shall have the meaning specified in Section 2.3.
“EFFECTIVE
DATE” shall mean the date on which the SEC first declares effective a
Registration Statement registering resale of the Registrable Securities as
set
forth in Section 7.2(a).
“EXCHANGE
ACT” shall mean the Securities Exchange Act of 1934, as amended and the rules
and regulations promulgated thereunder.
“FAST”
shall have the meaning specified in Section 2.3.
“INVESTMENT
AMOUNT” shall mean the aggregate dollar amount (within the range specified in
Section 2.2) to be invested by Investor to purchase Interim Put Shares and
Put
Shares with respect to any Put as notified by the Company to Investor in
accordance with Section 2.2.
“INVESTOR”
shall have the meaning specified in the preamble to this Agreement.
“LEGEND”
shall have the meaning specified in Section 8.1.
“MARKET
PRICE” in respect of given Put shall mean the lowest Closing Bid Price during
the Valuation Period.
“MATERIAL
ADVERSE EFFECT” shall mean any effect on the business, operations, properties,
prospects or financial condition of the Company that is material and adverse
to
the Company or to the Company and such other entities controlling or controlled
by the Company, and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company
to
enter into and perform its obligations under any of (a) this Agreement and
(b)
the Registration Rights Agreement.
“MAXIMUM
COMMITMENT AMOUNT” shall mean Five Million Dollars ($5,000,000).
“MAXIMUM
PUT AMOUNT” shall mean, with respect to any Put, the lesser of (a) $500,000.00,
or (b) Two Hundred (200%) percent of the product of (i) Average Daily Volume,
and (ii) the Average Closing Bid Price for the three (3) trading days
immediately preceding the Put Date.
“MINIMUM
PUT AMOUNT” shall mean, with respect to any Put, Fifty Thousand Dollars
($50,000).
“NASD”
shall mean the National Association of Securities Dealers, Inc.
“NEW
BID
PRICE” shall have the meaning specified in Section 2.6.
“OLD
BID
PRICE” shall have the meaning specified in Section 2.6.
“OUTSTANDING”
shall mean, with respect to the Common Stock, at any date as of which the
number
of shares of Common Stock is to be determined, all issued and outstanding
shares
of Common Stock, including all shares of Common Stock issuable in respect
of
outstanding convertible securities, scrip or any certificates representing
fractional interests in shares of Common Stock; provided, however, that
Outstanding shall not include any shares of Common Stock then directly or
indirectly owned or held by or for the account of the Company.
“PERSON”
shall mean an individual, a corporation, a partnership, an association, a
trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
“PRINCIPAL
MARKET” shall mean the Nasdaq National Market, the Nasdaq SmallCap Market, the
Over the Counter Bulletin Board, the American Stock Exchange or the New York
Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.
“PURCHASE
PRICE” shall mean the Market Price less the product of the Discount and the
Market Price.
“PUT”
shall mean each occasion that the Company elects to exercise its right to
tender
a Put Notice requiring Investor to purchase shares of Common Stock, subject
to
the terms and conditions of this Agreement.
“PUT
DATE” shall mean the Trading Day during the Commitment Period that a Put Notice
is deemed delivered pursuant to Section 2.2(b).
“PUT
NOTICE” shall mean a written notice, substantially in the form of Exhibit B
hereto, to Investor setting forth the Investment Amount with respect to which
the Company intends to require Investor to purchase shares of Common Stock
pursuant to the terms of this Agreement.
PUT
SHARES” shall be the number of Put Shares deliverable on a Closing Date equal to
the Investment Amount divided by the Purchase Price.
“REGISTRABLE
SECURITIES” shall mean the (a) Put Shares, (b) the Blackout Shares and (c) any
securities issued or issuable with respect to any of the foregoing by way
of
exchange, stock dividend or stock split or in connection with a combination
of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a Registration
Statement has been declared effective by the SEC and such Registrable Securities
have been disposed of pursuant to a Registration Statement, (ii) such
Registrable Securities have been sold under circumstances under which all
of the
applicable conditions of Rule 144 are met, (iii) such time as such Registrable
Securities have been otherwise transferred to holders who may trade such
shares
without restriction under the Securities Act, and the Company has delivered
a
new certificate or other evidence of ownership for such securities not bearing
a
restrictive legend or (iv) in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to Investor, such Registrable Securities
may be sold without registration under the Securities Act the need for an
exemption from any such registration requirements and without any time, volume
or manner limitations pursuant to Rule 144(k) (or any similar provision then
in
effect) under the Securities Act.
“REGISTRATION
RIGHTS AGREEMENT” shall mean the registration rights agreement in the form of
Exhibit A hereto.
“REGISTRATION
STATEMENT” shall mean a registration statement on Form S-1 (if use of such form
is then available to the Company pursuant to the rules of the SEC and, if
not,
on such other form promulgated by the SEC for which the Company then qualifies
and which counsel for the Company shall deem appropriate and which form shall
be
available for the resale of the Registrable Securities to be registered
thereunder in accordance with the provisions of this Agreement and the
Registration Rights Agreement and in accordance with the intended method
of
distribution of such securities), for the registration of the resale by Investor
of the Registrable Securities under the Securities Act.
“REGULATION
D” shall have the meaning specified in the recitals of this
Agreement.
“RULE
144” shall mean Rule 144 under the Securities Act or any similar provision then
in force under the Securities Act.
“SEC”
shall mean the Securities and Exchange Commission.
“SECTION
4(2)” shall have the meaning specified in the recitals of this
Agreement.
“SECURITIES
ACT” shall have the meaning specified in the recitals of this
Agreement.
“SEC
DOCUMENTS” shall mean, as of a particular date, all reports and other documents
file by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act
since
the beginning of the Company’s then most recently completed fiscal year as of
the time in question (provided that if the date in question is within ninety
days of the beginning of the Company’s fiscal year, the term shall include all
documents filed since the beginning of the second preceding fiscal
year).
“SUBSCRIPTION
DATE” shall mean the date on which this Agreement is executed and delivered by
the Company and Investor.
“TRADING
DAY” shall mean any day during which the Principal Market shall be open for
business.
“TRANSACTION
DOCUMENTS” means the Private Equity Credit Agreement, the Registration Rights
Agreement, and the Closing Certificate.
“TRANSFER
AGENT” shall mean the transfer agent for the Common Stock (and to any substitute
or replacement transfer agent for the Common Stock upon the Company’s
appointment of any such substitute or replacement transfer agent).
“UNDERWRITER”
shall mean any underwriter participating in any disposition of the Registrable
Securities on behalf of Investor pursuant to a Registration
Statement.
“VALUATION
EVENT” shall mean an event in which the Company at any time during a Valuation
Period takes any of the following actions:
(a)
|
subdivides
or combines the Common Stock;
|
(b)
|
pays
a dividend in shares of Common Stock or makes any other distribution
of
shares of Common Stock, except for dividends paid with respect
to the
Preferred Stock;
|
(c)
|
issues
any options or other rights to subscribe for or purchase shares
of Common
Stock other than pursuant to this Agreement and the price per share
for
which shares of Common Stock may at any time thereafter be issuable
pursuant to such options or other rights shall be less than the
Bid Price
in effect immediately prior to such
issuance;
|
(d)
|
issues
any securities convertible into or exchangeable for shares of Common
Stock
and the consideration per share for which shares of Common Stock
may at
any time thereafter be issuable pursuant to the terms of such convertible
or exchangeable securities shall be less than the Bid Price in
effect
immediately prior to such issuance;
|
(e)
|
issues
shares of Common Stock otherwise than as provided in the foregoing
subsections (a) through (d), at a price per share less, or for
other
consideration lower, than the Bid Price in effect immediately prior
to
such issuance, or without
consideration;
|
(f)
|
makes
a distribution of its assets or evidences of indebtedness to the
holders
of Common Stock as a dividend in liquidation or by way of return
of
capital or other than as a dividend payable out of earnings or
surplus
legally available for dividends under applicable law or any distribution
to such holders made in respect of the sale of all or substantially
all of
the Company’s assets (other than under the circumstances provided for in
the foregoing subsections (a) through (e);
or
|
(g)
|
takes
any action affecting the number of Outstanding Common Stock, other
than an
action described in any of the foregoing subsections (a) through
(f)
hereof, inclusive, which in the opinion of the Company’s Board of
Directors, determined in good faith, would have a materially adverse
effect upon the rights of Investor at the time of a
Put.
|
“VALUATION
PERIOD” shall mean the period of five (5) Trading Days immediately following the
date on which the applicable Put Notice is deemed to be delivered and during
which the Purchase Price of the Common Stock is valued; provided, however,
that
if a Valuation Event occurs during any Valuation Period, a new Valuation
Period
shall begin on the Trading Day immediately after the occurrence of such
Valuation Event and end on the fifth (5th) Trading Day thereafter.
ARTICLE
II
(b) FLOOR
PRICE. In
the
event that during a Valuation Period, the Closing Bid Price on any Trading
Day
falls below [seventy-five percent (75%)] of the Bid Price for the three (3)
Trading Days immediately prior to a Put Date (a “Low Bid Price”), for each such
Trading Day the Company shall be under no obligation to sell one-fifth (1/5)
of
the Investment Amount specified in the Put Notice, and the Investment Amount
shall accordingly be deemed reduced by such amount. In the event that during
a
Valuation Period there exists Low Bid Prices for any three (3) Trading Days—not
necessarily consecutive—then, unless the Company confirms in writing by the
close of business on the third such Trading Day of its desire to sell the
full
Investment Amount by waiving the Low Bid Price, the balance of each party’s
obligation for the Investment Amount under such Put Notice shall terminate
on
such third Trading Day (“Termination Day”), and the Investment Amount shall be
adjusted to include only one-fifth of the initial Investment Amount for each
Trading Day during the Valuation Period prior to the Termination Day that
the
Closing Bid Price equals or exceeds the Low Bid Price.
(b) DATE
OF
DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the
Trading Day it is received by facsimile or otherwise by Investor if such
notice
is received on or prior to 12:00 noon New York time, or (ii) the immediately
succeeding Trading Day if it is received by facsimile or otherwise after
12:00
noon New York time on a Trading Day or at anytime on a day which is not a
Trading Day.
Section
2.4 [INTENTIONALLY OMITTED]
Section
2.7 [INTENTIONALLY LEFT BLANK]
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF INVESTOR
Investor
represents and warrants to the Company that:
Section
3.2 SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as described
in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined
in
Rule 501 of Regulation D), and Investor has such experience in business and
financial matters that it is capable of evaluating the merits and risks of
an
investment in the Common Stock. Investor acknowledges that an investment
in the
Common Stock is speculative and involves a high degree of risk.
Section
3.4 NOT AN AFFILIATE. Investor is not an officer, director or “affiliate” (as
that term is defined in Rule 405 of the Securities Act) of the Company or
of
Dutchess Capital Management LLC and its affiliates.
ARTICLE
IV
The
Company represents and warrants to Investor that, except as disclosed in
the SEC
Documents:
Section
4.7 NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS TRANSACTION.
Neither the Company nor any of its affiliates nor any person acting on its
or
their behalf (a) has conducted or will conduct any general solicitation (as
that
term is used in Rule 502(c) of Regulation D) or general advertising with
respect
to any of the Put Shares or the Blackout Shares, if any, or (b) made any
offers
or sales of any security or solicited any offers to buy any security under
any
circumstances that would require registration of the Common Stock under the
Securities Act.
Section
4.11 NO UNDISCLOSED LIABILITIES. The Company has no liabilities or obligations
that are material, individually or in the aggregate, and that are not disclosed
in the SEC Documents or otherwise publicly announced, other than those incurred
in the ordinary course of the Company’s businesses since August 31, 2006 and
which, individually or in the aggregate, do not or would not have a Material
Adverse Effect on the Company.
Section
4.12 NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since August 31, 2006, no event
or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial condition, that,
under applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been
so
publicly announced or disclosed in the SEC Documents.
ARTICLE
V
ARTICLE
VI
Section
6.12 [INTENTIONALLY LEFT BLANK]
Section
6.15 CERTAIN AGREEMENTS. (i) The Company covenants and agrees that it will
not,
without the prior written consent of the Investor, enter into any subsequent
or
further private equity credit agreement similar in nature to this Agreement
for
the offer or sale of Common Stock or Common Stock Equivalents (collectively,
“New Common Stock”) with any third party from the date of this Agreement until
the Effective Date.
(ii) The
provisions of subparagraph 6.15(i) will not apply to (x) an underwritten
public
offering of shares of Common Stock or Preferred Stock; (y) an offering of
convertible Preferred Stock at market or above; or (z) the issuance of
securities (other than for cash) in connection with an acquisition, merger,
consolidation, sale of assets, disposition or the exchange of the capital
stock
for assets, stock, strategic arrangements, or other joint venture interests.
ARTICLE
VII
PUT
NOTICES AND CONDITIONS TO CLOSING
(a)
ACCURACY OF INVESTOR’S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investor shall be true and correct in all material respects
as of
the date of this Agreement and as of the date of each such Closing as though
made at each such time, except for changes which have not had a Material
Adverse
Effect.
(b)
PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied
in all respects with all covenants, agreements and conditions required by
this
Agreement to be performed, satisfied or complied with by Investor at or prior
to
such Closing.
Section
7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT NOTICE
AND
THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The right of the Company
to
deliver a Put Notice and the obligation of Investor hereunder to acquire
and pay
for the Put Shares incident to a Closing is subject to the satisfaction,
on (a)
the date of delivery of such Put Notice and (b) the applicable Closing Date
(each a “CONDITION SATISFACTION DATE”), of each of the following conditions:
(a) REGISTRATION
OF REGISTRABLE SECURITIES WITH THE SEC. As set forth in the Registration
Rights
Agreement, the Company shall have filed with the SEC the Registration Statement
with respect to the resale of the Registrable Securities by Investor and
such
Registration Statement shall have been declared effective by the SEC prior
to
the first Put Date. For the purposes of any Put Notice with respect to the
Registrable Securities other than the Registrable Securities, the Company
shall
have filed with the SEC a Registration Statement with respect to the resale
of
such Registrable Securities by Investor which shall have been declared effective
by the SEC prior to the Put Date therefore.
(b) EFFECTIVE
REGISTRATION STATEMENT. As set forth in the Registration Rights Agreement,
a
Registration Statement shall have previously become effective for the resale
by
Investor of the Registrable Securities subject to such Put Notice and such
Registration Statement shall remain effective on each Condition Satisfaction
Date and (i) neither the Company nor Investor shall have received notice
that
the SEC has issued or intends to issue a stop order with respect to such
Registration Statement or that the SEC otherwise has suspended or withdrawn
the
effectiveness of such Registration Statement, either temporarily or permanently,
or intends or has threatened to do so (unless the SEC’s concerns have been
addressed and Investor is reasonably satisfied that the SEC no longer is
considering or intends to take such action),and (ii) no other suspension
of the
use or withdrawal of the effectiveness of such Registration Statement or
related
prospectus shall exist.
(c) ACCURACY
OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company shall be true and correct in all material respects
as
of each Condition Satisfaction Date as though made at each such time (except
for
representations and warranties specifically made as of a particular date)
with
respect to all periods, and as to all events and circumstances occurring
or
existing to and including each Condition Satisfaction Date, except for any
conditions which have temporarily caused any representations or warranties
herein to be incorrect and which have been corrected with no continuing
impairment to the Company or Investor.
(d) PERFORMANCE
BY THE COMPANY. The Company shall have performed, satisfied and complied
in all
material respects with all covenants, agreements and conditions required
by this
Agreement and the Registration Rights Agreement to be performed, satisfied
or
complied with by the Company at or prior to each Condition Satisfaction
Date.
(e) NO
INJUNCTION. No statute, rule, regulation, executive order, decree, ruling
or
injunction shall have been enacted, entered, promulgated or adopted by any
court
or governmental authority of competent jurisdiction that prohibits or directly
and materially adversely affects any of the transactions contemplated by
this
Agreement, and no proceeding shall have been commenced that may have the
effect
of prohibiting or materially adversely affecting any of the transactions
contemplated by this Agreement.
(f) ADVERSE
CHANGES. Since the date of filing of the Company’s most recent SEC Document, no
event that had or is reasonably likely to have a Material Adverse Effect
has
occurred.
(g) NO
SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the
Common
Stock shall not have been suspended by the SEC, the Principal Market or the
NASD, the Common Stock shall have been approved for listing or quotation
on the
Principal Market, and shall not have been delisted or any notice in respect
thereof shall have been received from the Principal Market.
(h) LEGAL
OPINION. The Company shall have caused to be delivered to Investor and to
the
Company’s transfer agent, the first Put Notice, and an opinion of the Company’s
legal counsel in the form of Exhibit C hereto, addressed to
Investor.
(i) [INTENTIONALLY
OMITTED]
(j) FIVE
PERCENT LIMITATION. On each Closing Date, the number of Put Shares then to
be
purchased by Investor shall not exceed the number of such shares that, when
aggregated with all other shares of Registrable Securities then owned by
Investor beneficially or deemed beneficially owned by Investor, would result
in
Investor owning more than 4.99% of all of such Common Stock as would be
outstanding on such Closing Date, as determined in accordance with Section
16 of
the Exchange Act and the regulations promulgated thereunder. For purposes
of
this Section 7.2(j), in the event that the amount of Common Stock outstanding
as
determined in accordance with Section 16 of the Exchange Act and the regulations
promulgated thereunder is greater on a Closing Date than on the date upon
which
the Put Notice associated with such Closing Date is given, the amount of
Common
Stock outstanding on such Closing Date shall govern for purposes of determining
whether Investor, when aggregating all purchases of Common Stock made pursuant
to this Agreement and Blackout Shares, if any, would own more than 4.99%
of the
Common Stock following such Closing Date.
(k) TWENTY
PERCENT LIMITATION. Notwithstanding any other provision of this Agreement,
the
maximum aggregate number of Put Shares and Blackout Shares issuable to Investor
under this Agreement shall not exceed the number of such shares that, when
aggregated with all other shares of Registrable Securities then owned by
Investor beneficially or deemed beneficially owned by Investor, would result
in
Investor owning more than 19.99% of all of such Common Stock as would be
outstanding immediately prior to the execution and delivery of this Agreement
by
both parties, unless the Company has obtained all necessary approvals in
accordance with the rules and requirements of the Principal Market, which
the
Company may or may not seek in its discretion. Failure to seek or obtain
such
approval(s) will not change any other term or condition of this
Agreement.
(l) NO
KNOWLEDGE. The Company shall have no knowledge of any event more likely than
not
to have the effect of causing such Registration Statement to be suspended
or
otherwise ineffective (which event is more likely than not to occur within
the
fifteen Trading Days following the Trading Day on which such Notice is deemed
delivered).
(m) [INTENTIONALLY
OMITTED]
(n) SHAREHOLDER
VOTE. The issuance of shares of Common Stock with respect to the applicable
Closing, if any, shall not violate the shareholder approval requirements
of the
Principal Market.
(o) NO
VALUATION EVENT. No Valuation Event shall have occurred since the Put
Date.
(p)
OTHER.
On each Condition Satisfaction Date, Investor shall have received and been
reasonably satisfied with such other certificates and documents as shall
have
been reasonably requested by Investor in order for Investor to confirm the
Company’s satisfaction of the conditions set forth in this Section 7.2,
including, without limitation, a certificate in substantially the form and
substance of Exhibit D hereto, executed by an executive officer of the Company
and to the effect that all the conditions to such Closing shall have been
satisfied as at the date of each such certificate.
Section
7.3 DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.
(a) The
Company shall make available for inspection and review by Investor, advisors
to
and representatives of Investor (who may or may not be affiliated with Investor
and who are reasonably acceptable to the Company), any Underwriter, any
Registration Statement or amendment or supplement thereto or any blue sky,
NASD
or other filing, all financial and other records, all SEC Documents and other
filings with the SEC, and all other corporate documents and properties of
the
Company as may be reasonably necessary for the purpose of such review, and
cause
the Company’s officers, directors and employees to supply all such information
reasonably requested by Investor or any such representative, advisor or
Underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made
or
submitted by any of them), prior to and from time to time after the filing
and
effectiveness of such Registration.
(b) Each
of
the Company, its officers, directors, employees and agents shall in no event
disclose non-public information to Investor, advisors to or representatives
of
Investor.
(c) Nothing
herein shall require the Company to disclose non-public information to Investor
or its advisors or representatives, and the Company represents that it does
not
disseminate non-public information to any investors who purchase stock in
the
Company in a public offering, to money managers or to securities analysts;
provided, however, that notwithstanding anything herein to the contrary,
the
Company shall, as hereinabove provided, immediately notify the advisors and
representatives of Investor and any Underwriters of any event or the existence
of any circumstance(without any obligation to disclose the specific event
or
circumstance) of which it becomes aware, constituting non-public information
(whether or not requested of the Company specifically or generally during
the
course of due diligence by such persons or entities), which, if not disclosed
in
the prospectus included in a Registration Statement would cause such prospectus
to include a material misstatement or to omit a material fact required to
be
stated therein in order to make the statements therein, in light of the
circumstances in which they were made, not misleading. Nothing contained
in this
Section 7.3 shall be construed to mean that such persons or entities other
than
Investor (without the written consent of Investor prior to disclosure of
such
information) may not obtain non-public information in the course of conducting
due diligence in accordance with the terms and conditions of this Agreement
and
nothing herein shall prevent any such persons or entities from notifying
the
Company of their opinion that based on such due diligence by such persons
or
entities, any Registration Statement contains an untrue statement of a material
fact or omits a material fact required to be stated in such Registration
Statement or necessary to make the statements contained therein, in light
of the
circumstances in which they were made, not misleading.
ARTICLE
VIII
[INTENTIONALLY
OMITTED]
ARTICLE
IX
If
to the
Company: Eagle
Broadband, Inc.
000
Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxx, Xxxxx 00000
Attn:
Xxxxx Xxxxx
Tel:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Eagle
Broadband, Inc.
000
Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxx, Xxxxx 00000
Attn:
Xxxx Xxxxx
Tel:
(000) 000-0000
If
to
Investor:
Brittany
Capital Management Limited
x/x
Xxxxxxxxxx Xxxxx
00
Xxxxxxxxxx Xxxxxx
PO
Box
N-10818
Nassau,
New Providence
Bahamas
with
a
copy (which shall not constitute notice) to:
Xxxxxxx
& Xxxxxx, LLP
00
Xxxxxxxx, Xxxxx 000
Xxx
Xxxx,
Xxx Xxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Xx.
Xxxxx
Xxxxxxx
Southridge
Capital Management LLC
00
Xxxxx
Xxxxxx
Xxxxxxxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Either
party hereto may from time to time change its address or facsimile number
for
notices under this Section 9.1 by giving at least ten (10) days’ prior written
notice of such changed address or facsimile number to the other party
hereto.
(a)
In
the event any claim or demand in respect of which any person claiming
indemnification under any provision of Section 9.2 (an “INDEMNIFIED PARTY”)
might seek indemnity under Section 9.2 is asserted against or sought to be
collected from such Indemnified Party by a person other than a party hereto
or
an affiliate thereof (a “THIRD PARTY CLAIM”), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if
any,
and specifying the nature of and basis for such Third Party Claim and for
the
Indemnified Party’s claim for indemnification that is being asserted under any
provision of Section 9.2 against any person (the “INDEMNIFYING PARTY”), together
with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim (a “CLAIM NOTICE”) with
reasonable promptness to the Indemnifying Party. If the Indemnified Party
fails
to provide the Claim Notice with reasonable promptness after the Indemnified
Party receives notice of such Third Party Claim, the Indemnifying Party shall
not be obligated to indemnify the Indemnified Party with respect to such
Third
Party Claim to the extent that the Indemnifying Party’s ability to defend has
been prejudiced by such failure of the Indemnified Party. The Indemnifying
Party
shall notify the Indemnified Party as soon as practicable within the period
ending thirty (30) calendar days following receipt by the Indemnifying Party
of
either a Claim Notice or an Indemnity Notice (as defined below) (the “DISPUTE
PERIOD”) whether the Indemnifying Party disputes its liability or the amount of
its liability to the Indemnified Party under Section 9.2 and whether the
Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim.(i)If the Indemnifying Party
notifies the Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Indemnified Party with respect to the Third Party
Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall
have
the right to defend, with counsel reasonably satisfactory to the Indemnified
Party, at the sole cost and expense of the Indemnifying Party, such Third
Party
Claim by all appropriate proceedings, which proceedings shall be vigorously
and
diligently prosecuted by the Indemnifying Party to a final conclusion or
will be
settled at the discretion of the Indemnifying Party (but only with the consent
of the Indemnified Party in the case of any settlement that provides for
any
relief other than the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified Party shall not be
indemnified in full pursuant to Section 9.2). The Indemnifying Party shall
have
full control of such defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified Party may, at
the
sole cost and expense of the Indemnified Party, at any time prior to the
Indemnifying Party’s delivery of the notice referred to in the first sentence of
this clause (i), file any motion, answer or other pleadings or take any other
action that the Indemnified Party reasonably believes to be necessary or
appropriate to protect its interests; and provided further, that if requested
by
the Indemnifying Party, the Indemnified Party will, at the sole cost and
expense
of the Indemnifying Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying Party elects
to
contest. The Indemnified Party may participate in, but not control, any defense
or settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to this clause (i), and except as provided in the preceding sentence,
the Indemnified Party shall bear its own costs and expenses with respect
to such
participation. Notwithstanding the foregoing, the Indemnified Party may takeover
the control of the defense or settlement of a Third Party Claim at any time
if
it irrevocably waives its right to indemnity under Section 9.2 with respect
to
such Third Party Claim. (ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the Indemnifying Party desires
to defend the Third Party Claim pursuant to Section 9.3(a), or if the
Indemnifying Party gives such notice but fails to prosecute vigorously and
diligently or settle the Third Party Claim, or if the Indemnifying Party
fails
to give any notice whatsoever within the Dispute Period, then the Indemnified
Party shall have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings,
which
proceedings shall be prosecuted by the Indemnified Party in a reasonable
manner
and in good faith or will be settled at the discretion of the Indemnified
Party(with the consent of the Indemnifying Party, which consent will not
be
unreasonably withheld). The Indemnified Party will have full control of such
defense and proceedings, including any compromise or settlement thereof;
provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnified Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is contesting. Notwithstanding
the foregoing provisions of this clause (ii), if the Indemnifying Party has
notified the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability or the amount of its liability hereunder to
the
Indemnified Party with respect to such Third Party Claim and if such dispute
is
resolved in favor of the Indemnifying Party in the manner provided in
clause(iii) below, the Indemnifying Party will not be required to bear the
costs
and expenses of the Indemnified Party’s defense pursuant to this clause (ii) or
of the Indemnifying Party’s participation therein at the Indemnified Party’s
request, and the Indemnified Party shall reimburse the Indemnifying Party
in
full for all reasonable costs and expenses incurred by the Indemnifying Party
in
connection with such litigation. The Indemnifying Party may participate in,
but
not control, any defense or settlement controlled by the Indemnified Party
pursuant to this clause (ii), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation. (iii) If the Indemnifying
Party notifies the Indemnified Party that it does not dispute its liability
or
the amount of its liability to the Indemnified Party with respect to the
Third
Party Claim under Section 9.2 or fails to notify the Indemnified Party within
the Dispute Period whether the Indemnifying Party disputes its liability
or the
amount of its liability to the Indemnified Party with respect to such Third
Party Claim, the amount of Damages specified in the Claim Notice shall be
conclusively deemed a liability of the Indemnifying Party under Section 9.2
and
the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability
or
the amount of its liability with respect to such claim, the Indemnifying
Party
and the Indemnified Party shall proceed in good faith to negotiate a resolution
of such dispute; provided, however, that if the dispute is not resolved within
thirty (30) days after the Claim Notice, the Indemnifying Party shall be
entitled to institute such legal action as it deems appropriate.
(b)
In
the event any Indemnified Party should have a claim under Section 9.2 against
the Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver a written notification of a claim for indemnity
under Section 9.2 specifying the nature of and basis for such claim, together
with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim (an “INDEMNITY NOTICE”) with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party
to
give the Indemnity Notice shall not impair such party’s rights hereunder except
to the extent that the Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the amount of the
claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim
or
the amount of the claim described in such Indemnity Notice, the amount of
Damages specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 9.2 and the Indemnifying
Party
shall pay the amount of such Damages to the Indemnified Party on demand.
If the
Indemnifying Party has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30)
days
after the Claim Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.
(c)
The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar rights of the Indemnified Party against the Indemnifying
Party
or others, and (ii)any liabilities the Indemnifying Party may be subject
to.
ARTICLE
X
Section
10.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without
regard
to the principles of conflicts of law. Each of the Company and Investor hereby
submit to the exclusive jurisdiction of the United States Federal and state
courts located in New York with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.
Section
10.5 THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit
of
the Company and Investor and their respective successors and permitted assigns,
and is not for the benefit of, nor may any provision hereof be enforced by,
any
other person, other than as contemplated under Section 6.10.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
the
parties hereto have caused this Private Equity Credit Agreement to be executed
by the undersigned, thereunto duly authorized, as of the date first set forth
above.
EAGLE
BROADBAND, INC.
By: /s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
President and CEO
BRITTANY
CAPITAL MANAGEMENT LIMITED
By: /s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Director
EXHIBITS
EXHIBIT
A Registration
Rights Agreement
EXHIBIT
B Put
Notice
EXHIBIT
C Opinion
EXHIBIT
D Closing
Certificate
EXHIBIT
E Transfer
Agent Instructions
Schedule
4.3 Options,
Warrants