Exhibit 10.1
INFLOW, INC.
SERIES A PREFERRED
STOCK PURCHASE AGREEMENT
APRIL 5, 1999
TABLE OF CONTENTS
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Page
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1. Purchase and Sale of Stock.......................................... 1
1.1 Sale and Issuance of Series A Preferred Stock.................. 1
1.2 Closing........................................................ 1
1.3 Subsequent Sale of Series A Preferred Stock.................... 1
2. Representations and Warranties of the Company....................... 2
2.1 Organization, Good Standing, Power and Qualification........... 2
2.2 Capitalization and Voting Rights............................... 2
2.3 Subsidiaries................................................... 3
2.4 Authorization.................................................. 3
2.5 Valid Issuance of Preferred and Common Stock................... 3
2.6 Consents....................................................... 3
2.7 Offering....................................................... 4
2.8 Litigation..................................................... 4
2.9 Proprietary Information Agreements............................. 4
2.10 Patents and Trademarks......................................... 4
2.11 Compliance with Other Instruments.............................. 5
2.12 Agreements; Action............................................. 5
2.13 Related-Party Transactions..................................... 6
2.14 Financial Statements........................................... 6
2.15 Changes........................................................ 6
2.16 Tax Returns.................................................... 7
2.17 Permits........................................................ 7
2.18 Environmental and Safety Laws.................................. 8
2.19 Disclosure..................................................... 8
2.20 Registration Rights............................................ 8
2.21 Corporate Documents............................................ 8
2.22 Title to Property and Assets................................... 8
2.23 Labor Agreements and Actions................................... 9
2.24 Insurance...................................................... 9
2.25 Year 2000 Compliance........................................... 9
2.26 Governmental Regulations....................................... 9
2.27 Small Business Concern......................................... 10
3. Representations and Warranties of the Investors..................... 10
3.1 Authorization.................................................. 10
3.2 Purchase Entirely for Own Account.............................. 10
3.3 Disclosure of Information...................................... 10
3.4 Investment Experience.......................................... 10
3.5 Accredited Investor............................................ 11
3.5 Restricted Securities.......................................... 11
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3.7 Further Limitations on Disposition............................. 11
3.8 Legends........................................................ 12
3.9 Tax Advisors................................................... 12
3.10 Investor Counsel.............................................. 12
4. Conditions of Investor's Obligations at Closing..................... 12
4.1 Representations and Warranties................................. 12
4.2 Performance.................................................... 12
4.3 Compliance Certificate......................................... 12
4.4 Qualifications................................................. 13
4.5 Proceedings and Documents...................................... 13
4.6 Proprietary Information Agreements............................. 13
4.7 Board of Directors............................................. 13
4.8 Opinion of Company Counsel..................................... 13
4.9 Investors' Rights Agreement.................................... 13
4.10 Stockholders' Agreement....................................... 13
4.11 No Material Adverse Change..................................... 13
4.12 No Litigation or Other Proceedings............................. 13
4.13 SBA Documents and Information.................................. 13
5. Conditions of the Company's Obligations at Closing.................. 14
5.1 Representations and Warranties................................. 14
5.2 Payment of Purchase Price...................................... 14
5.3 Investors' Rights Agreement.................................... 14
5.4 Stockholders' Agreement........................................ 14
6. Miscellaneous....................................................... 14
6.1 Survival....................................................... 14
6.2 Successors and Assigns......................................... 14
6.3 Governing Law.................................................. 14
6.4 Titles and Subtitles........................................... 14
6.5 Notices........................................................ 14
6.6 Finder's Fee................................................... 15
6.7 Expenses....................................................... 15
6.8 Amendments and Waivers......................................... 15
6.9 Effect of Amendment or Waiver.................................. 15
6.10 Severability................................................... 15
6.11 Aggregation of Stock.......................................... 16
6.12 Entire Agreement.............................................. 16
6.13 Counterparts.................................................. 16
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SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
SCHEDULE 2.2 Post-Closing Capitalization
SCHEDULE 2.10 Intellectual Property
SCHEDULE 2.12 Material Contracts
SCHEDULE 2.22 Property
EXHIBIT A Restated Certificate of Incorporation
EXHIBIT B Investors' Rights Agreement
EXHIBIT C List of Stockholders
EXHIBIT D Opinion of Counsel for the Company
EXHIBIT E Stockholders' Agreement
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PREFERRED STOCK PURCHASE AGREEMENT
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THIS PREFERRED STOCK PURCHASE AGREEMENT is made on the fifth day of
April, 1999, by and among InFlow, Inc., a Delaware corporation (the "Company"),
and the investors listed on Schedule A hereto (each, an "Investor" and
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collectively, the "Investors").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
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1.1 Sale and Issuance of Series A Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of
State of Delaware on or before the Closing (as defined below) the Amended and
Restated Certificate of Incorporation in the form attached hereto as Exhibit A
(the "Restated Certificate"). ---------
(b) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally, to purchase at the Closing and the Company
agrees to sell and issue to each Investor at the Closing, that number of shares
of the Company's Series A Preferred Stock set forth opposite each Investor's
name on Schedule A hereto for the purchase price set forth thereon.
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1.2 Closing. The purchase and sale of the Series A Preferred
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Stock shall take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 at 10:00 a.m., on April
5, 1999, or at such other time and place as the Company and Investors acquiring
in the aggregate more than half the shares of Series A Preferred Stock sold
pursuant hereto mutually agree upon orally or in writing (which time and place
are designated as the "Closing"). At the Closing the Company shall deliver to
each Investor a certificate representing the Series A Preferred Stock that such
Investor is purchasing against payment of the purchase price therefor by check,
wire transfer, cancellation of indebtedness or any combination thereof. In the
event that payment by an Investor is made, in whole or in part, by cancellation
of indebtedness, then such Investor shall surrender to the Company for
cancellation at the Closing any evidence of such indebtedness or shall execute
an instrument of cancellation in form and substance acceptable to the Company.
In addition, at the Closing the Company shall deliver to any Investor choosing
to pay any part of the purchase price of the Series A Preferred Stock by
cancellation of indebtedness, a check in the amount of any interest accrued on
such indebtedness through the Closing.
1.3 Subsequent Sale of Series A Preferred Stock. The
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Company may sell up to the balance of the authorized number of shares of Series
A Preferred Stock not sold at the Closing to such purchasers as it shall select,
at a price not less than $3.50 per share, provided the agreement for sale is
executed not later than July 1, 1999. Any such purchaser shall become a party to
this Agreement and that certain Investors' Rights Agreement dated April 5, 1999,
by and among the Company and the Investors, the form of which is attached hereto
as Exhibit B (the "Investors' Rights Agreement") and that certain Stockholders'
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Agreement, by and among the
Company and the Investors, the form of which is attached hereto as Exhibit E
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(the "Stockholders' Agreement") and shall have the rights and obligations
hereunder and thereunder.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Investor that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished each Investor and special
counsel for the Investors prior to execution hereof and attached hereto as
Schedule B, which exceptions shall be deemed to be representations and
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warranties as if made hereunder:
2.1 Organization, Good Standing, Power and Qualification. The
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Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently, or is
currently proposed to be, engaged and has the power and authority to execute,
deliver and perform its obligations under this Agreement, the Investors' Rights
Agreement and the Stockholders' Agreement. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on the business,
assets or financial condition of the Company (an "MAE").
2.2 Capitalization and Voting Rights. (a) The authorized capital
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of the Company will consist immediately prior to the Closing of:
(i) Preferred Stock. 3,337,513 shares of Preferred Stock, par
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value $0.001 (the "Preferred Stock"), of which all such shares have been
designated Series A Preferred Stock (the "Series A Preferred Stock") and up to
37,857 shares of which will be sold at the Closing pursuant to this Agreement.
The rights, privileges and preferences of the Series A Preferred Stock will be
as stated in the Restated Certificate.
(ii) Common Stock. 15,000,000 shares of common stock, par value
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$0.001 ("Common Stock"), of which 3,060,000 are issued and outstanding.
(iii) The outstanding shares of Common Stock are owned by the
stockholders and in the numbers specified in Exhibit C hereto.
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(iv) The outstanding shares of Common Stock are all duly and validly
authorized and issued, fully paid and nonassessable, and were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.
(v) Except for (A) the conversion privileges of the Series A
Preferred Stock to be issued under this Agreement, (B) the rights provided in
Section 3 of the Stockholders' Agreement, (C) the conversion privileges of those
certain Convertible Promissory Notes held by each of Art Zeile and Xxxx Xxxx to
be converted into Series A Preferred Stock at the Closing, and (D) currently
outstanding options to purchase 230,000 shares of Common Stock granted to
employees pursuant to the Company's 1997 Stock Option Plan (the "Option Plan"),
there are no outstanding options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. In addition to the aforementioned
options, the Company has reserved an additional 414,168
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shares of its Common Stock for purchase upon exercise of options to be granted
in the future under the Option Plan. The Company is not a party or subject to
any agreement or understanding which affects or relates to the voting or giving
of written consents with respect to any security or other ownership interest in
the Company or by a director of the Company.
(b) As of the Closing and after giving effect to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company and the issued and outstanding shares thereof are as described on
Schedule 2.2.
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2.3 Subsidiaries. The Company does not presently own or control,
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directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Investors' Rights Agreement, and
the Stockholders' Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization (or, in the case of the Common
Stock, reservation for issuance), sale and issuance of the Series A Preferred
Stock being sold hereunder and the Common Stock issuable upon conversion of the
Series A Preferred Stock has been taken or will be taken prior to the Closing.
This Agreement, the Investors' Rights Agreement, and the Stockholders' Agreement
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
2.5 Valid Issuance of Preferred and Common Stock. The Series A
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Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens and other encumbrances and will be
free of restrictions on transfer, other than restrictions on transfer under this
Agreement, the Investors' Rights Agreement, the Stockholders' Agreement and
under applicable state and federal securities laws. The Common Stock issuable
upon conversion of the Series A Preferred Stock purchased under this Agreement
has been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens and other encumbrances
and will be free of restrictions on transfer, other than restrictions on
transfer under this Agreement, the Investors' Rights Agreement, the
Stockholders' Agreement and under applicable state and federal securities laws.
2.6 Consents. No consent, approval, order or authorization of, or
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registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or any individual, firm,
corporation, partnership, trust, limited liability company, incorporated or
unincorporated association, joint venture, joint stock company or other entity
of any kind (each, a "Person") on the part of the Company is required in
connection with
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the consummation of the transactions contemplated by this Agreement, except for
filings required pursuant to applicable federal and state securities laws and
blue sky laws, which filings will be effected within the required statutory
period.
2.7 Offering. No form of general solicitation or general advertising
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was used by the Company or its representatives in connection with the offer or
sale of the Series A Preferred Stock or other securities. Assuming the truth and
accuracy of each Investor's representations set forth in Section 3 of this
Agreement, the offer, sale and issuance of the Series A Preferred Stock as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Act").
2.8 Litigation. There is no action, suit, proceeding or
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investigation pending, or to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, the
Investors' Rights Agreement or the Stockholders' Agreement or the right of the
Company to enter into any of the foregoing or to consummate the transactions
contemplated hereby or thereby, or that would have, either individually or in
the aggregate, an MAE. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company currently pending or that the Company intends to initiate.
2.9 Proprietary Information Agreements. Each employee and officer of
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the Company has executed a Proprietary Information and Inventions Agreement in
substantially the form provided to special counsel to the Investors.
2.10 Patents and Trademarks. Schedule 2.10 sets forth a complete and
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accurate list of and describes all franchises, licenses, patents, patent rights,
patent applications, trademarks, trademark rights, service marks, service xxxx
rights, trade names, trade name rights, copyrights and rights with respect to
any of the foregoing (collectively, "Intellectual Property") presently owned or
held by the Company. The Company owns the right to use all of the Intellectual
Property. To the actual knowledge of the Company (without independent
investigation), the Intellectual Property is all that is necessary for the
Company to conduct its business as presently conducted. To its knowledge (but
without having conducted any special investigation or patent search), no
Intellectual Property conflicts with or infringes on the valid rights of others
and the Company has not received any notice of infringement upon or conflict
with the asserted rights of others. No event has occurred which permits, or
after notice or lapse of time would permit, the revocation or termination of any
of the Intellectual Property. The Company has a valuable body of trade secrets,
including know-how, concepts, computer programs and other technical data (the
"Proprietary Information"). To its knowledge, the Company has the right to use
the Proprietary Information free and clear of any rights, liens, encumbrances or
claims of others, except that the possibility exists that other persons may have
independently developed trade secrets or technical information similar or
identical to those of the Company. The Company is not aware of any such
independent development nor of any misappropriation of its Proprietary
Information. The Company is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the
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interests of the Company or that would conflict with the Company's business. The
Company does not believe it is or will be necessary to utilize any inventions of
any of its employees (or people it currently intends to hire) made prior to
their employment by the Company, except for inventions that have been assigned
or licensed to the Company as of the date hereof.
2.11 Compliance with Other Instruments. The Company is not in
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violation of any provision of its Restated Certificate or Bylaws or any
securities issued by the Company, indenture, credit agreement, contract,
agreement, instrument or other undertaking ("Contractual Obligations") or any
judgment, order, writ, decree or contract, statute, rule or regulation to which
the Company or its assets or property is subject ("Requirements of Law"), a
violation of which would have an MAE. The execution, delivery and performance of
this Agreement, the Investors' Rights Agreement and the Stockholders' Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation, or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
Contractual Obligation or Requirement of Law or an event that results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, impairment, forfeiture or nonrenewal of any material
permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties.
2.12 Agreements; Action. (a) Except for agreements explicitly
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contemplated hereby, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates
or any affiliate thereof.
(b) Except for this Agreement, the Investors' Rights Agreement
and the Stockholders' Agreement, Schedule 2.12 hereto sets forth a complete and
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accurate list of all material Contractual Obligations of the Company in effect
on and as of the Closing. Each such Contractual Obligation is valid and
enforceable by the Company against any other party thereto in accordance with
its terms except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, and by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies. The Company has performed and is in compliance with
all of the terms of such Contractual Obligations and all instruments and
agreements relating thereto and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on its part or on the part of any other party
thereto exists with respect to any material Contractual Obligation of the
Company. The Company has no actual knowledge that any such Contractual
Obligation contains any contractual requirement with which there is a reasonable
likelihood the Company will be unable to comply and such failure to comply would
likely result in a MAE or the Company's compliance is reasonably likely to
result in or MAE.
(c) There are no judgments, orders, writs or decrees to which
the Company is a party or by which it is bound that involve obligations
(contingent or otherwise) of, or payments to the Company, in excess of $25,000.
(d) The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital
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stock, (ii) incurred any indebtedness for money borrowed or any other
liabilities individually in excess of $25,000 or, in the case of indebtedness
and/or liabilities individually less than $10,000, in excess of $50,000 in the
aggregate, (iii) made any loans or advances to any Person, other than advances
in the ordinary course of business, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(e) For the purposes of subsections (c) and (d) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same Person (including Persons the
Company has reason to believe are affiliated therewith) shall be aggregated for
the purpose of meeting the individual minimum dollar amounts of such
subsections.
2.13 Related-Party Transactions. No employee, officer or director of
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the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, except
that employees, officers or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material Contractual
Obligation with the Company.
2.14 Financial Statements. The Company has delivered to each Investor
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its audited financial statements (balance sheet and statement of operations,
statement of stockholders' equity and statement of cash flows, including notes
thereto) at December 31, 1998 and for the fiscal year then ended and its
unaudited financial statements (balance sheet and statement of operations,
statement of stockholders' equity and statement of cash flows) at February 28,
1999 and for the two-month period then ended (the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and with each other, except that unaudited Financial Statements may
not contain all footnotes required by generally accepted accounting principles.
The Financial Statements fairly present the assets, liabilities, financial
condition and operating results of the Company as of the dates, and for the
periods, indicated therein, subject in the case of unaudited Financial
Statements to normal year-end audit adjustments. Except as set forth in the
Financial Statements, the Company has no liabilities or obligations, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to December 31, 1998 and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company and
which the Company has satisfied as they have become due. Except as disclosed in
the Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other Person. The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.
2.15 Changes. Since December 31, 1998 there has not been:
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(a) any change in the assets, liabilities, financial condition or
operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business consistent with
past practice that have not had an MAE;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results or business of the Company;
(c) any waiver by the Company of a material right or of a
material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business consistent with past practice and not material to the assets,
properties, financial condition, operating results or business of the Company;
(e) any material change or amendment to a contract or arrangement
required to be set forth on Schedule 2.12 by which the Company or any of its
assets or properties is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee; or
(g) any agreement or commitment by the Company to do any of the
things described in this Section 2.15.
2.16 Tax Returns. The Company has timely filed all federal, state,
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county, local and foreign income and other tax returns, reports and declarations
(collectively, "Returns") relating to all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, or other taxes 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) upon the Company
("Taxes") which are required by applicable law to be filed except where the
failure to do so would not be reasonably likely to have an MAE. No audits of
federal income tax Returns of the Company have been conducted at any time since
its formation and the Company has not been advised that any of its returns have
been or are being audited. The Company has paid, or where payment is not
required to be made, has made adequate provision on its books and financial
statements for the payment of, all Taxes in respect of all periods covered by
the Returns and any other taxable period ending on or before the date hereof
except where the failure to do so would not be reasonably likely to have an MAE.
No deficiencies for any Tax, assessment or governmental charge have been
asserted or assessed against the Company which have not been paid, settled or
adequately provided for and there is no basis for.
2.17 Permits. The Company (i) has all material governmental or other
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regulatory approvals, licenses, permits and other authorizations in accordance
with all Requirements of Law for it to conduct its business, each of which is in
full force and effect, is final and not subject to review on appeal and is not
the subject of any pending or, to the best of
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its knowledge, threatened attack by direct or collateral proceeding, and (ii) is
in compliance in all respects with each governmental approval, license, permit
and authorization relating to it or any of its properties under all applicable
Requirements of Law except where the failure to do so would not be reasonably
likely to have an MAE. Since its date of organization, the Company has not, to
its knowledge, been the subject of any investigation conducted by any grand
jury, administrative agency or other governmental authority. The Company has
not, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, in violation of applicable law, (i) as a
kickback or bribe to any Person or (ii) to any political organization or the
holder of, or any aspirant to, any elective or appointive office of any
governmental authority.
2.18 Environmental and Safety Laws. To its knowledge, the Company is
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not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
2.19 Disclosure. Neither this Agreement (including all the exhibits
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and schedules hereto) nor any other certificates or agreements made or delivered
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.
2.20 Registration Rights. Except as provided in the Investors' Rights
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Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.
2.21 Corporate Documents. Except for amendments necessary to satisfy
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representations and warranties or conditions contained herein (the form of which
amendments has been approved by the Investors), the Restated Certificate and
Bylaws of the Company are in the form previously provided to special counsel for
the Investors. The minute books of the Company have been made available to the
Investors for their review in connection with the purchase of the Series A
Preferred Stock; such minute books are current and contain correct and complete
copies of all minutes of meetings, resolutions and other actions and proceedings
of the board of directors and shareholders and all committees of the Company.
The record books relating to the equity interests of the Company have been made
available to the Purchasers for their review in connection with its purchase of
the Series A Preferred Stock; such record books are current, correct and
complete and reflect the issuance, sale or exchange of all of capital stock and
other ownership and equity interests in the Company.
2.22 Title to Property and Assets. Exhibit 2.22 sets forth a complete
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and accurate list of all real property and improvements (collectively "Real
Property") owned or leased by the Company. The Company has good and marketable,
indefeasible fee simple title to the Real Property described in Schedule 2.22 as
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being owned by it, and valid and subsisting leasehold rights in the Real
Property described in Schedule 2.22 as being leased by it, free and clear of all
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liens and other encumbrances. Schedule 2.22 also sets forth a complete and
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accurate list of all of the material items of equipment, machinery, computers,
chattels, tools, parts, machine tools, furniture, furnishings, fixtures and
supplies of every nature owned or leased by the Company
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in connection with its business as of December 31, 1998. The Company has good
and marketable fee simple title to such items described in Schedule 2.22 as
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being owned by it, and valid and subsisting leasehold rights in such items
described in Schedule 2.22 as being leased by it, free and clear of all liens
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and other encumbrances.
2.23 Labor Agreements and Actions. The Company is not bound by or
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subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the Company's
knowledge, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the Company's knowledge, threatened, that would have an
MAE. The Company is not aware that any officer or key employee, or that any
group of key employees, intends to terminate their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
of the foregoing. The employment of each officer and employee of the Company is
terminable at the will of the Company. The Company is not a party to or bound by
any currently effective employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation agreement. To its knowledge, the Company has complied in
all material respects with all applicable state and federal equal employment
opportunity and other laws related to employment. To its knowledge, the Company
has withheld all amounts required by law or agreement to be withheld by it from
the wages, salaries and other payments to its employees and is not liable for
any arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. There are no pending, threatened or anticipated (i) employment
discrimination charges or complaints against or involving the Company, before
any federal, state, or local board, department, commission or agency, (ii)
unfair labor practice charges or complaints, disputes or grievances affecting
the Company, or (iii) strikes, slow downs, work stoppages, or lockouts or
threats thereof affecting the Company.
2.24 Insurance. The Company maintains insurance policies (i) insuring
---------
the properties, assets and operations of the business in such amounts and
against such liabilities to the extent required by applicable law or regulations
and (ii) insuring against interruptions in its business. Such policies are in
full force and effect and have been underwritten by unaffiliated insurers. To
its knowledge, the Company has not done anything by way of action or inaction
that invalidates any of such policies in whole or in part.
2.25 Year 2000 Compliance. The Company has initiated a review of its
--------------------
operations with a view to assessing whether its business or operations will, in
the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to any significant
risk that computer hardware or software used in its business or operations will
not, in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000. Based on such review and as of the date
hereof, the Company has no reason to believe that any such risk could have an
MAE.
2.26 Governmental Regulations. The Company is not a "registered
------------------------
investment company" or an "affiliated person" or a "principal underwriter" of a
"registered
9
investment company" as such terms are defined in the Investment Company Act of
1940, as amended.
2.27 Small Business Concern. The Company, together with its
"affiliates" (as that term is defined in Title 13, Code of Federal Regulations,
(SS)121.101), is a "small business concern" within the meaning of the Small
Business Investment Act of 1958 and the regulations thereunder, including Title
13, Code of Federal Regulations, (SS)121.201. The Company does not engage in,
nor shall it hereafter engage in, any activities, nor shall the Company use
directly or indirectly the proceeds from the sale of the Series A Preferred
Stock hereunder for any purpose, for which a "small business investment company"
is prohibited from providing funds by the Small Business Investment Act of 1958
and the regulations thereunder (including Title 13, Code of Federal Regulations,
(SS)107.720).
3. Representations and Warranties of the Investors. Each Investor
severally, but not jointly, hereby represents, warrants and covenants that:
3.1 Authorization. Such Investor has full power and authority to
enter into this Agreement, the Investors' Rights Agreement and the Stockholders'
Agreement, and each such agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Investors' Rights Agreement may be
limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series A Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Preferred Stock. Such Investor 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
Series A Preferred Stock and the business, properties, prospects and financial
condition of the Company.
3.4 Investment Experience. Investor is an investor in securities of
companies in the development stage and acknowledges that it can bear the
economic risk of its
10
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Series A Preferred Stock. If other than an individual, such Investor
also represents it has not been organized for the purpose of acquiring the
Series A Preferred Stock.
3.5 Accredited Investor. Such Investor is an "accredited Investor"
-------------------
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
3.6 Restricted Securities. Such Investor understands that the
---------------------
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities (or the Common Stock issued on
conversion thereof) or an available exemption from registration under the Act,
the Series A Preferred Stock (and any Common Stock issued on conversion thereof)
must be held indefinitely. In this connection, such Investor represents that it
is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act, including without limitation
the Rule 144 condition that current information about the Company be available
to the public. Such information is not now available and the Company has no
present plans to make such information available.
3.6 Further Limitations on Disposition. Without in any way limiting
----------------------------------
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3, the Investors' Rights Agreement and the Stockholders' Agreement,
and:
(a) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and
(ii) if requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company
that such disposition will not require registration of such shares under
the Act. It is agreed that the Company will not require opinions of counsel
for transactions made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of subsections (a) and (b)
above, no such registration statement or opinion of counsel shall be
necessary for a transfer by an Investor that is a partnership to a partner
of such partnership or a retired partner of such partnership who retires
after the date hereof, or to the estate of any such partner or retired
partner or the transfer by gift, will or intestate succession of any
partner to his or her spouse or to the siblings, lineal descendants or
ancestors of such partner or his or her spouse, if the transferee
11
agrees in writing to be subject to the terms hereof to the same extent as if he
or she were an original Investor hereunder.
3.8 Legends. It is understood that the certificates evidencing the
-------
Securities may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by the Investors' Rights Agreement and
the Stockholders' Agreement.
3.9 Tax Advisors. Such Investor has reviewed with such Investor's
------------
own tax advisors the federal, state and local tax consequences of this
investment, where applicable, and the transactions contemplated by this
Agreement. With respect to matters related to the tax consequences of the
transactions contemplated by this Agreement, each such Investor is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents and understands that each such Investor (and not
the Company) shall be responsible for such Investor's own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.
3.10 Investor Counsel. Such Investor acknowledges that such Investor
----------------
has had the opportunity to review this Agreement, the exhibits and the schedules
attached hereto and the transactions contemplated by this Agreement with such
Investor's own legal counsel. Each such Investor is relying solely on such
Investor's legal counsel and not on Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, for legal
advice with respect to this investment or the transactions contemplated by this
Agreement.
4. Conditions of Investor's Obligations at Closing. The obligations of
-----------------------------------------------
each Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
thereto:
4.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
4.2 Performance. The Company shall have performed and complied with
-----------
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The President of the Company shall
----------------------
delivery to each Investor at the Closing a certificate stating that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.
12
4.4 Qualifications. All authorizations, approvals or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state or any Person that are required in connection with the consummation of
the transactions contemplated by this Agreement, including the lawful issuance
and sale of the Securities pursuant to this Agreement, shall be duly obtained
and effective as of the Closing.
4.5 Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investors' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
4.6 Proprietary Information Agreements. Each employee of the Company
----------------------------------
shall have entered into a Proprietary Information and Inventions Agreement in
the form previously provided to special counsel for the Investors.
4.7 Board of Directors. The Company shall have taken all necessary
------------------
corporate action such that immediately following the Closing, the directors of
the Company shall be Art Zeile, Xxxx Xxxx, Xxxxxxx X. Xxxxx, Xxxxx Xxxxxxx and
Xxxxx Xxxxxx.
4.8 Opinion of Company Counsel. Each Investor shall have received
--------------------------
from Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Company, an opinion, dated
as of the Closing, in the form attached hereto as Exhibit D.
---------
4.9 Investors' Rights Agreement. The Company shall have entered into
---------------------------
the Investors' Rights Agreement in the form attached as Exhibit B.
4.10 Stockholders' Agreement. The Company, Art Zeile and Xxxx Xxxx
-----------------------
shall have entered into the Stockholders' Agreement in the form attached as
Exhibit D.
---------
4.11 No Material Adverse Change. On and prior to the Closing, there
--------------------------
shall have occurred no material adverse change in the business, assets or
financial condition of the Company.
4.12 No Litigation or Other Proceedings. There shall be no pending or
----------------------------------
threatened litigation, bankruptcy, insolvency, injunction, order, suit,
investigation or claim against or affecting the Company, any of its properties
or rights, any of its executive officers or with respect to any of the
transactions contemplated by this Agreement, the Investors' Rights Agreement or
the Stockholders' Agreement which would be reasonably likely to have an MAE.
4.13 SBA Documents and Information. The Company shall have executed
-----------------------------
and delivered to First Union Capital Partners, Inc. forms and information
required by the rules and regulations of the United States Small Business
Administration, including, without limitation, a Size Status Declaration on SBA
Form 480 and an Assurance of Compliance on SBA Form 652 and information
necessary for the preparation of a Portfolio Financing Report on SBA Form 1031.
In the event such forms and information are not delivered at Closing, the
Company covenants and agrees to deliver them as soon as practicable thereafter.
13
5. Conditions of the Company's Obligations at Closing. The obligations
--------------------------------------------------
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:
5.1 Representations and Warranties. The representations and
------------------------------
warranties of the Investors contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
5.2 Payment of Purchase Price. The Investor shall have delivered the
-------------------------
purchase price specified in Section 1.2.
5.3 Investors' Rights Agreement. Each Investor shall have entered
---------------------------
into the Investors' Rights Agreement in the form attached as Exhibit B.
5.4 Stockholders' Agreement. Each Investor shall have entered into
-----------------------
the Stockholders' Agreement in the form attached as Exhibit E.
6. Miscellaneous.
-------------
6.1 Survival. The warranties, representations and covenants of the
--------
Company and Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors or the Company.
6.2 Successors and Assigns. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Colorado as applied to agreements among Colorado
residents entered into and to be performed entirely within Colorado, without
giving effect to such state's conflict of laws principles.
6.4 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.5 Notices. All notices required or permitted hereunder shall be in
-------
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the address
as set forth on the
14
signature page hereof or at such other address as such party may
designate by ten days advance written notice to the other parties hereto.
6.6 Finder's Fee. Each party represents that it neither is nor will
------------
be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
6.7 Expenses. Irrespective of whether the Closing is effected, the
--------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Closing is effected, the Company shall, at the Closing, reimburse the Investors
for all reasonable expenses of the Investors incurred in connection with the
negotiation, execution, delivery and performance of this Agreement including,
but not limited to, reasonable fees and, upon receipt of a xxxx therefor, and
out of pocket expenses of a single special counsel for all Investors. Investors
agree that every effort will be made to minimize these expenses. If any action
at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the Investors' Rights Agreement, the Stockholders' Agreement or the
Restated Certificate, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
6.8 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock not previously sold to the public that is issued
or issuable upon conversion of the Series A Preferred Stock. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities and the Company.
6.9 Effect of Amendment or Waiver. Each Investor acknowledges that
-----------------------------
by the operation of Section 6.8 hereof the holders of a majority of the Common
Stock not previously sold to the public that is issued or issuable upon
conversion of the Series A Preferred Stock will have the power to diminish or
eliminate all rights of such Investor under this Agreement.
6.10 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
15
6.11 Aggregation of Stock. All shares of the Series A Preferred Stock
--------------------
or Common Stock issued upon conversion thereof held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
6.12 Entire Agreement. This Agreement and the documents referred to
----------------
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
6.13 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE(S) TO FOLLOW]
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INFLOW, INC.
By: /s/ Art Zeile
-----------------------------------
Art Zeile, President and Chief Executive
Officer
By: /s/ Xxxx Xxxx
-----------------------------------
Xxxx Xxxx, Chief Operating Officer and
Secretary
Address: 0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
INVESTORS:
FIRST UNION CAPITAL PARTNERS, INC.
By: /s/ X. Xxxxx Xxxxxxx, III
___________________________________
Name: X. Xxxxx Xxxxxxx, III
___________________________________
Title: Senior Vice President
___________________________________
Address: 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. 00000-0000
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXXXX XXXXXXX
/s/ XXXXXXX XXXXXXX
_______________________________________
Address: 00 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXXXX X. XXXX
/s/ XXXXXXX X. XXXX
_______________________________________
Address: 0000 Xxxxx Xxxxxxxx
X.X. Xxx 0000 (X.X. Mail only)
Xxxxxx Xxxxx Xx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXXXX X. XXXXXXXXX
/s/ XXXXXXX X. XXXXXXXXX
_______________________________________
Address: 0000 Xxxxx Xxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXXX X. XXXXXXXXXXX
/s/ XXXXXX X. XXXXXXXXXXX
_______________________________________
Address: 0000 Xxxx 000xx Xxxxx
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXX X. XXXXXXXXXXX
/s/ XXXXX X. XXXXXXXXXXX
_______________________________________
Address: 000 Xxxx Xxxxxx
Xxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXX X. XXXXXXXXXX
/s/ XXXXX X. XXXXXXXXXX
_______________________________________
Address: 0000 Xxxx 00xx Xxxxxx
Xxx. 0000
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXX X. XXXXX III
/s/ XXXX X. XXXXX III
_______________________________________
Address: 000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXX X. XXXXXXXX
/s/ XXX X. XXXXXXXX
_______________________________________
Address: 00000 Xxxx 00xx Xxxxx
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXX XXX
/s/ XXXX XXX
_______________________________________
Address: 0000 Xxxx 00xx Xxxxxx
Xxx. 000
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INVESTORS:
XXXXXXX, PHLEGER & XXXXXXXX LLP
BY: /s/ Xxxxxxx X. Xxxx
______________________________________
NAME: Xxxxxxx X. Xxxx
______________________________________
TITLE: Partners
______________________________________
SCHEDULE A
----------
Name Amount Invested Number of Shares Purchased
------------------------------------------- -------------------------- ------------------------------------
-------------------------------------------------------------------------------------------------------------
Xxxxxxx, Phleger & Xxxxxxxx LLP $ 50,000 14,286
-------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 50,000 14,286
-------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxx 7,500 2,143
-------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxxx 7,500 2,143
-------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxxxx 7,500 2,143
-------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxxxxx 2,500 714
-------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxxxx 2,500 714
-------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxx, III 2,500 714
-------------------------------------------------------------------------------------------------------------
Xxx X. Xxxxxxxx 2,500 714
-------------------------------------------------------------------------------------------------------------
Xxxx Xxx 2,500 714
-------------------------------------------------------------------------------------------------------------
Totals $132,500 37,857
-------------------------------------------------------------------------------------------------------------
Exhibit C
---------
List of Stockholders
Common Stock Series A Preferred
Stock
---------------------------------------------------------------
Art Zeile 1,500,000 186,858
Xxxx Xxxx 1,500,000 187,381
Xxxxxxx X. Xxxxx 60,000
First Union Capital 2,857,143
Partners
Xxxxxxx, Xxxxxxx & 14,286
Xxxxxxxx LLP
Xxxxxxx Xxxxxxx 14,286
Xxxxxxx X. Xxxx 2,143
Xxxxxxx X. Xxxxxxxxx 2,143
Xxxxxx X. Xxxxxxxxxxx 2,143
Xxxxx X. Xxxxxxxxxxx 714
Xxxxx X. Xxxxxxxxxx 714
Xxxx X. Xxxxx, III 714
Xxx X. Xxxxxxxx 714
Xxxx Xxx 714
---------------------------------------------------------------
