EXHIBIT B
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VIE FINANCIAL GROUP, INC.
SERIES H
PREFERRED STOCK PURCHASE AGREEMENT
SEPTEMBER 30, 2003
SERIES H
PREFERRED STOCK PURCHASE AGREEMENT
This Series H Preferred Stock Purchase Agreement (the "AGREEMENT") is
entered into as of this 30th day of September, 2003, by and among Vie Financial
Group, Inc. a Delaware corporation (the "COMPANY"), and each of those entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as Exhibit A (which entities are hereinafter
collectively referred to as the "PURCHASERS" and each individually as a
"PURCHASER").
Terms defined in the text of this Agreement shall have the meanings
there set forth herein. Other capitalized terms shall have the meaning set forth
in the Definitions Addendum, which is attached and incorporated herein.
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of 35,000 shares of its Series H preferred stock, par value $0.01 per
share (the "SHARES");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
SECTION 1. AGREEMENT TO SELL AND PURCHASE
1.1 AUTHORIZATION OF SHARES. The Company has duly authorized the sale
and issuance to Purchasers of the Shares. The Shares shall have the rights,
preferences, privileges and restrictions set forth in the Certificate of
Designations of the Company, in the form attached hereto as Exhibit B (the
"CERTIFICATE"). The Company has, or before the Closing Date will have, adopted
and filed with the Secretary of State of the State of Delaware the Certificate
and will have taken all necessary corporate action for the purpose of
authorizing the issuance and sale of the Shares pursuant hereto.
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined), the Company hereby agrees to issue and
sell to each Purchaser, and each Purchaser, severally and not jointly, agrees to
purchase from the Company, the number of Shares as set forth opposite such
Purchaser's name in Exhibit A, at a purchase price per Share equal to $100.
1.3 SUBSEQUENT SALES AND FINANCINGS.
(a) During the 90-day period beginning on the date hereof, the
Company shall have the right to sell up to an additional $1.5 million of shares
of the Company's
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Series H preferred stock at the same price and on the same terms and conditions
as the Shares are being sold to the Purchasers hereby.
(b) During the 90-day period beginning on the date hereof, if the
Company completes any financing at a price and on terms and conditions more
favorable to the purchasers in such financing than the price at and the terms
and conditions under which the Shares are being sold to the Purchasers hereby,
then the Company shall make provision to provide to the Purchasers in respect of
the Shares purchased hereby such more favorable price and terms and conditions.
SECTION 2. CLOSING, DELIVERY AND PAYMENT
2.1 CLOSING. The consummation of the sale and purchase of the Shares
under this Agreement (the "CLOSING") shall take place at the offices of Xxxxxxxx
& Xxxxxxxx LLP, 0000 Xxxxxxxxxxx Xxxx, Xxxx Xxxx, XX 00000. Subject to the
fulfillment or waiver of the conditions set forth herein, the Closing shall
occur on September 30, 2003 or such date as may be agreed upon in writing by the
Company and the Purchasers (the "CLOSING DATE").
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to each Purchaser stock certificates issued in
such Purchaser's name representing the number of Shares to be purchased by such
Purchaser as specified in Exhibit A, against payment in full of the purchase
price therefor by wire transfer of US$ in immediately available funds to the
Company's account (for credit to account number 361036072 with the name "Vie
Financial Group, Inc." at Commerce Bank, NA, ABA number 000000000) or such other
bank account of the Company designated by the Company in writing no later than
the second Business Day immediately preceding the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Schedule of Exceptions attached hereto, the
Company hereby represents and warrants to each Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND POWER. Each of the Company and each
of its Subsidiaries is a corporation or a limited liability company, each duly
organized and existing, in good standing, under the laws of the jurisdiction of
its incorporation, and each has the corporate or company power to own its
property and to carry on its business as now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except for
failures to be in good standing or qualified that would not in the aggregate
have a Material Adverse Effect.
3.2 CORPORATE AUTHORITY. The Company has full corporate power and
authority to enter into this Agreement and the Series H Preferred Stock
Registration Rights Agreement, in the form attached hereto as Exhibit C (the
"REGISTRATION RIGHTS AGREEMENT"), to issue and sell the Shares and to carry out
the provisions of this Agreement, the Registration Rights Agreement, and the
Certificate. No consent or approval of stockholders or of any Governmental
Entity is required as a condition to the validity or performance by the Company
or any of its Subsidiaries of this Agreement, the Registration Rights Agreement,
or the Certificate.
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3.3 AUTHORIZATIONS. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the due authorization,
execution and delivery of this Agreement and the Registration Rights Agreement,
the performance of all obligations of the Company hereunder and thereunder and
the authorization, sale, issuance and delivery of the Shares pursuant hereto has
been taken. Except for blue sky state securities filings, all authorizations,
consents, approvals, registrations, exemptions and licenses with or from
Governmental Entities which are necessary to issue and sell the Shares and to
carry out the provisions of this Agreement, the Registration Rights Agreement,
and the Certificate have been effected or obtained and are in full force and
effect.
3.4 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of the
Company, consists of (a) 1,000,000,000 shares of Common Stock, par value $0.01
per share (the "COMMON STOCK"), 695,971,046 shares of which were issued and
outstanding on September 29, 2003, 341,014,782 shares of which are as of the
date hereof reserved for issuance pursuant to outstanding option agreements,
warrants and other convertible securities, including 14,754,239 shares of which
are as of the date hereof reserved for issuance to key employees, consultants
and others affiliated with the Company pursuant to stock grant, stock purchase
and/or option plans or any other stock incentive program, arrangement or
agreement approved by the Board of Directors of the Company, and (b) 3,000,000
shares of Preferred Stock, par value $0.01 per share (the "PREFERRED STOCK"),
250,000 of which are designated Series A Convertible PIK Preferred Stock, none
of which are issued and outstanding as of the date hereof, 590,000 shares of
which are designated Series B Convertible Preferred Stock, 24,000 of which are
issued and outstanding as of the date hereof, 105,000 shares of which are
designated Series C Convertible Preferred Stock, none of which are issued and
outstanding as of the date hereof, 10 shares of which are designated Series D
Convertible Preferred Stock, none of which are issued and outstanding as of the
date hereof, 10 shares of which are designated Series E Convertible Preferred
Stock, none of which are issued and outstanding as of the date hereof, 20,000
shares of which are designated Series F Convertible Preferred Stock, none of
which are issued and outstanding as of the date hereof, and 100,000 shares of
which are designated Series G Convertible Preferred Stock, 12,000 of which are
issued and outstanding as of the date hereof. All issued and outstanding shares
of the Company's Common Stock and Preferred Stock (i) have been duly authorized
and validly issued, (ii) are fully paid and nonassessable, and (iii) were issued
in compliance in all material respects with all applicable state and federal
laws concerning the issuance of securities. The rights, preferences, privileges
and restrictions of the Shares will be as stated in the Certificate as of the
Closing. Except as may be granted pursuant to this Agreement, except as set
forth above, and except pursuant to the Loan Agreement, dated December 30, 2002
(the "LOAN AGREEMENT"), between the Company, SOFTBANK, and Xxxxxx Xxxxxx
Jurvetson ePlanet Ventures L.P., Xxxxxx Xxxxxx Jurvetson ePlanet Partners Fund,
LLC and Xxxxxx Xxxxxx Jurvetson ePlanet Ventures GmbH & Co. KG, there are no
outstanding options, warrants, puts, calls, rights (including conversion or
preemptive rights and rights of first refusal), proxy or stockholder agreements,
or agreements of any kind for the purchase or acquisition from, sale to or
exchange with the Company or any of its Subsidiaries of any shares of any class
or series of capital stock of the Company or any of its Subsidiaries or other
restrictions on the incidents of ownership or transfer of any such shares of
capital stock created by statute (other than Federal and state securities laws),
the charter documents of the Company or any of its Subsidiaries or any agreement
to which the Company or any of its Subsidiaries is a party, by which any of them
is bound or of which any of them has knowledge. The Shares have been duly
authorized and, when issued in
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compliance with the provisions of this Agreement and the Certificate, will be
validly issued, fully paid and nonassessable and will be free of any Liens
(other than Liens created by Purchasers).
3.5 BINDING AGREEMENT. This Agreement and the Registration Rights
Agreement, when executed and delivered, will be valid and binding obligations of
the Company enforceable against the Company, in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and, as to enforcement,
to general equity principles. The sale of the Shares is not and will not be
subject to any preemptive rights or rights of first refusal that have not been
properly waived or complied with.
3.6 LITIGATION. Except as described in the 10-Q or the 10-K (as
hereinafter defined), there are no actions, suits, proceedings or investigations
pending or, to the knowledge of the executive officers of the Company,
threatened before any court or arbitrator or before or by any Governmental
Entity that questions the validity of this Agreement, the Registration Rights
Agreement or the Certificate or the right of the Company to enter into any of
such agreements, to issue the Shares with the terms specified in the Certificate
or to consummate the transactions contemplated hereby or thereby, or which, in
any one case or in the aggregate, if determined adversely to the interests of
the Company, or any of its Subsidiaries, would have a Material Adverse Effect or
result in any change in the current equity ownership of the Company or any of
its Subsidiaries, nor is the Company or any of its Subsidiaries aware that there
is any basis for the foregoing. Neither the Company nor any of its Subsidiaries
is a party or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or other Governmental Entity.
3.7 NO CONFLICTS. There is no statute, regulation, rule, order or
judgment, and no provision of any mortgage, indenture, contract or agreement
binding on the Company or any of its Subsidiaries or affecting their properties
which would prohibit, conflict with or in any way prevent the execution,
delivery, or carrying out of the terms of this Agreement, the Registration
Rights Agreement, and the Certificate.
3.8 FINANCIAL CONDITION. Except as has been described in documents
referred to in Section 6.1(c) hereof or otherwise described in writing to the
Purchasers prior to the execution and delivery of this Agreement, (i) as of the
date of each balance sheet included in the 10-K and the 10-Q, there were no
material Liabilities of the Company or any of its Subsidiaries which were not
reflected therein or in the notes thereto, and (ii) except as has been described
in the Financial Disclosure, dated the date hereof, delivered by the Company to
the Purchasers or disclosed in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2003 (the "10-K") or the Company's Quarterly Report
on 10-Q for the quarter ended June 30, 2003 (the "10-Q"), there has been no
event, occurrence, change, development or state of affairs since June 30, 2003
that had or could reasonably be expected to have a Material Adverse Effect.
3.9 COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has made
available to the Purchasers each registration statement, prospectus, report,
proxy statement or information statement prepared by it since January 1, 2003,
including the 10-Q and the 10-K in the form (including exhibits, annexes and any
amendments thereto) filed with SEC (collectively,
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including any such reports filed subsequent to the date hereof and as amended,
the "REPORTS"). As of their respective dates, the Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into the
Reports (including the related notes and schedules) fairly presents in all
material respects (subject, in the case of unaudited statements, to normal
recurring audit adjustments which are not material in amount) the consolidated
financial position of the Company and its Subsidiaries as of its date and each
of the consolidated statements of operations and statements of cash flows
included in or incorporated by reference into the Reports (including any related
notes and schedules) fairly presents in all material respects (subject, in the
case of unaudited statements, to normal recurring audit adjustments which are
not material in amount) the results of operations and cash flows, as the case
may be, of the Company and its Subsidiaries for the periods set forth therein,
in each case in accordance with GAAP consistently applied during the periods
involved, except as may be noted therein.
3.10 AGREEMENTS; ACTION. There are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company or any of its Subsidiaries is a party or to their
knowledge by which any of them is bound which include provisions restricting the
development or distribution of the products or services of the Company or any of
its Subsidiaries.
3.11 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company or any of its Subsidiaries to officers, directors, stockholders, or
employees of the Company or any of its Subsidiaries other than (a) for payment
of salary for services rendered, (b) reimbursement for reasonable expenses
incurred on behalf of the Company or any of its Subsidiaries and (c) for other
standard employee benefits made generally available to all employees (including
stock option agreements outstanding under any stock option plan approved by the
Board of Directors of the Company or the relevant Subsidiary). No officer or
director or, to the best of the Company's knowledge, any member of their
immediate families, are indebted to the Company or any of its Subsidiaries or
have any direct or indirect ownership interest in any firm or corporation with
which the Company or any of its Subsidiaries is affiliated or with which the
Company or any of its Subsidiaries has a business relationship, or any firm or
corporation which competes with the Company or any of its Subsidiaries, in each
case other than ownership of less than 1% of the outstanding stock of publicly
traded companies. No such officer or director, or, to the best of the Company's
knowledge, any member of their immediate families, is, directly or indirectly,
interested in any material contract with the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is a guarantor or indemnitor of
any indebtedness of any other Person.
3.12 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. Neither the Company
nor any of its Subsidiaries owns any real property. Each of the Company and each
of its Subsidiaries has good title to its leasehold estates and personal
property owned by the Company and each of its Subsidiaries (as the case may be),
in each case subject to no Lien other than (i) liens for taxes which have not
yet become due and (ii) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the
operations of the Company or any of its Subsidiaries. All facilities, machinery,
equipment, fixtures, vehicles and
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other properties owned, leased or used by the Company and each of its
Subsidiaries are in good operating condition and repair, except for normal wear
and tear, and are reasonably fit and usable for the purposes for which they are
being used, other than where the failure to be in good operating condition and
repair or reasonably fit and usable would not have a Material Adverse Effect.
The Company and each of its Subsidiaries is in compliance in all material
respects with the terms of each lease to which it is a party or is otherwise
bound.
3.13 PATENTS AND TRADEMARKS. Each of the Company and its Subsidiaries
owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information and other proprietary
rights and processes necessary for its business as now conducted and as
currently proposed to be conducted, without any infringement known to it of the
rights of others. There are no outstanding options, licenses or agreements of
any kind relating to the foregoing, nor is the Company bound by or a party to
any options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any other Person other
than such licenses to the Company or its Subsidiaries (i) arising from the
purchase by any of them of "off the shelf" standard products or (ii) that are
not material to the business now conducted or currently proposed to be conducted
by the Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received any communications alleging that the Company or any of
its Subsidiaries has violated or, by conducting its business as currently
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
Person. Neither the Company nor any of its Subsidiaries is aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments or any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or any of its Subsidiaries. The conduct of the
Company's and each of its Subsidiary's business as currently proposed to be
conducted, will not, to the knowledge of the Company or any of its Subsidiaries,
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any employee is now obligated. Neither the Company nor any of its Subsidiaries
believes it is or will be necessary to utilize any inventions, trade secrets or
proprietary information developed or acquired by any of its employees in the
conduct of the Company's or any of its Subsidiary's business prior to their
employment by the Company or any of its Subsidiaries, except for inventions,
trade secrets or proprietary information that have been assigned to the Company
or any of its Subsidiaries.
3.14 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS; CONSENTS; PERMITS.
Neither the Company nor any of its Subsidiaries is in violation or default of
any term of its Certificate of Incorporation or Bylaws, or of any provision of
any mortgage, indenture, contract, agreement, instrument or contract to which it
is party or by which it or any of its property is bound or of any judgment,
decree, order, writ, statute, rule or regulation applicable to the Company or
any of its Subsidiaries or their properties which, individually or in the
aggregate, would have a Material Adverse Effect. The execution, delivery, and
performance of and compliance with this Agreement and the Registration Rights
Agreement, and the issuance and sale of the Shares pursuant hereto, will not,
with or without the passage of time or giving of notice, result in any violation
or default by the Company or any of its Subsidiaries of any term of its
Certificate of Incorporation or Bylaws, or of any provision of any mortgage,
indenture,
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contract, agreement, instrument or contract to which it is party or by which it
or any of its property is bound or of any judgment, decree, order, writ, statute
rule or regulation applicable to the Company, any of its Subsidiaries or their
properties, or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its Subsidiaries or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to the Company or any of its Subsidiaries, their business or
operations or any of their assets or properties. No orders, permissions,
consents, approvals or authorizations of any Governmental Entity is required to
be obtained by the Company or any of its Subsidiaries and no application,
notification, request, registration or declaration is required to be filed with
any Governmental Entity by the Company or any of its Subsidiaries in connection
with the execution and delivery of this Agreement and the offer, issuance, sale
and delivery of the Shares, or the other transactions to be consummated at any
Closing, as contemplated in this Agreement other than blue sky state securities
filings and items which the failure by the Company to file will not have a
Material Adverse Effect. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect and can obtain, without
undue burden or expense, any similar authority necessary for the conduct of its
business as currently proposed to be conducted.
3.15 TAX RETURNS AND PAYMENTS. The Company and each of its Subsidiaries
has timely filed all tax returns (federal, state, local and foreign) required to
be filed by it. All Taxes shown to be due and payable on such returns, any
assessments imposed, and all other Taxes due and payable by the Company or any
of its Subsidiaries have been paid or will be paid prior to the time they become
delinquent. Neither the Company nor any of its Subsidiaries has been advised (i)
that any of its returns, federal, state, foreign or other, have been or are
being audited as of the date hereof, or (ii) of any deficiency in assessment or
proposed adjustment to its federal, state, foreign or other Taxes. There exists
no liability for any Tax or potential Tax to be imposed upon the properties or
assets of the Company or any of its Subsidiaries as of the date of this
Agreement that is not adequately provided for.
3.16 CONTRACTS. Neither the Company nor any of its Subsidiaries is a
party to or bound by any of the following:
(a) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease payments in
excess of $100,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year, result in a material
loss to the Company or any of its Subsidiaries if terminated, or involve
consideration in excess of $100,000;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group or related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any
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capitalized lease obligation, in excess of $100,000 or under which it has
imposed a Lien on any of its assets, tangible or intangible;
(e) any agreement concerning noncompetition other than agreements
pursuant to which a current or former employee of the Company has agreed not to
compete with the Company;
(f) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers, and employees;
(g) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $100,000 or providing severance benefits;
(h) any agreement under which it has advanced or loaned any amount
to any of its directors, officers, and employees other than advances for travel
expenses in the ordinary course of business;
(i) any agreement under which the consequences of a default or
termination would be reasonably likely to have a Material Adverse Effect; and
(j) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $250,000.
3.17 EMPLOYEES. To the knowledge of the Company and its Subsidiaries,
no employee of the Company or any of its Subsidiaries, nor any consultant with
whom the Company or any of its Subsidiaries has contracted, is in violation of
any term of any employment contract, proprietary information agreement or any
other agreement relating to the right of any such individual to be employed by,
or to contract with, the Company or any of its Subsidiaries; and to the
knowledge of the Company and each of its Subsidiaries the continued employment
by the Company and each of its Subsidiaries of their present employees, and the
performance of the contracts of the Company and each of its Subsidiaries with
its independent contractors, will not result in any such violation except for
such violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any notice alleging that any such violation has
occurred. No employee of the Company or any of its Subsidiaries has been granted
the right to continued employment by the Company or any of its Subsidiaries or
to any material compensation following termination of employment with the
Company. Neither the Company nor any of its Subsidiaries is aware that any
officer or key employee intends to terminate his or her employment with the
Company or any of its Subsidiaries, nor does the Company or any of its
Subsidiaries have a present intention to terminate the employment of any officer
or key employee.
3.18 PROPRIETARY INFORMATION AND INVENTIONS ASSIGNMENT AGREEMENTS. Each
employee, consultant and officer of the Company and each of its Subsidiaries and
any other Person developing intellectual property on behalf of the Company or
any of its Subsidiaries has executed an agreement with the Company or such
Subsidiary regarding confidentiality and
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proprietary information substantially in the form or forms delivered to the
Purchasers. Neither the Company nor any of its Subsidiaries is aware that any of
its employees or consultants is in violation thereof.
3.19 REGISTRATION RIGHTS. Except as set forth in the 10-Q and 10-K and
except as required pursuant to the Registration Rights Agreement, the Company is
not under any obligation, and has not granted any rights, to register any of the
Company's securities under the Securities Act of 1933, as amended (the
"SECURITIES ACT").
3.20 ENVIRONMENTAL AND SAFETY LAWS. Neither the Company nor any of its
Subsidiaries is in violation in any material respect of any applicable statute,
law or regulation relating to the environment or occupational health and safety,
and to their knowledge, no material expenditures are or will be required in
order to comply with any such existing statute, law or regulation.
3.21 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4 hereof, the offer, sale and
issuance of the Shares will be exempt from the registration requirements of the
Securities Act, and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws. Neither the Company nor
any agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Shares to any
person or persons so as to bring the sale of such Shares by the Company within
the registration provisions of the Securities Act or the registration or
qualification provisions of any state securities laws.
3.22 MINUTE BOOKS. The minute books of the Company and each of its
Subsidiaries made available to counsel for the Purchasers contain a fair and
accurate summary of all meetings of, and any actions taken by, the directors and
stockholders of the Company and its Subsidiaries since the date of their
incorporation.
3.23 ABSENCE OF LIABILITIES. Except as set forth in the Reports,
neither the Company nor any of its Subsidiaries has any Liability in excess of
$300,000.
3.24 DISCLOSURE. Neither this Agreement, the Registration Rights
Agreement, nor any other agreements, written statement or certificates 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.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, hereby represents and
warrants to the Company as follows:
4.1 ORGANIZATION, GOOD STANDING AND POWER. Such Purchaser is either a
limited liability company or partnership, duly formed and existing, in good
standing, under the laws of the jurisdiction of its formation.
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4.2 CORPORATE AUTHORITY. Such Purchaser has full company or
partnership, as applicable, power and authority to enter into this Agreement and
the Registration Rights Agreement and to carry out its obligations hereunder and
thereunder. This Agreement and the Registration Rights Agreement have been duly
authorized by all proper and necessary company or partnership, as applicable,
action on the part of such Purchaser. No consent or approval of any Governmental
Entity is required to be obtained by such Purchaser as a condition to the
validity or performance by Purchaser of this Agreement or the Registration
Rights Agreement.
4.3 BINDING AGREEMENT. This Agreement constitutes, and when executed
the Registration Rights Agreement will constitute, the valid and legally binding
obligations of such Purchaser, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and, as to enforcement,
to general equity principles.
4.4 PRIVATE PLACEMENT.
(a) Such Purchaser understands that (i) the offering and sale of
the Shares by the Company is intended to be exempt from registration under the
Securities Act pursuant to Section 4(2) thereof and (ii) there is no existing
public or other market for the Shares.
(b) Such Purchaser (either alone or together with its advisors)
has sufficient knowledge and experience in financial and business matters so as
to be capable of evaluating the merits and risks of its investment in the Shares
and is capable of bearing the economic risks of such investment.
(c) Such Purchaser is acquiring or will acquire the Shares to be
acquired hereunder for its own account, for investment and not with a view to
the public resale or distribution thereof, in violation of any securities law.
(d) Such Purchaser understands that the Shares will be issued in a
transaction exempt from the registration or qualification requirements of the
Securities Act and applicable state securities laws, and that such securities
must be held indefinitely unless a subsequent disposition thereof is registered
or qualified under the Securities Act and such laws or is exempt from such
registration or qualification.
(e) Such Purchaser (i) has, to its knowledge, been furnished with
or has had full access to all of the information that it considers necessary or
appropriate to make an informed investment decision with respect to the Shares
and that it has requested from the Company, (ii) has had an opportunity to
discuss with management of the Company the intended business and financial
affairs of the Company and to obtain information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to it or to which it had
access and (iii) can bear the economic risk of (1) an investment in the Shares
indefinitely and (2) a total loss in respect of such investment; it being
understood that nothing set forth in this Section 4.4(e) shall affect the
representations, warranties or other obligations of the Company, or the rights
and remedies of such Purchaser, under this Agreement or otherwise in any way
whatsoever.
11
(f) Such Purchaser qualifies as an "accredited investor" as such
term is defined under Rule 501 under the Securities Act.
4.5 LEGENDS. Such Purchaser understands that the Shares and any
securities issued in respect thereof or exchange therefor, shall bear the
following legend until such time, if any, as (A) the Shares or such securities
(i) are sold in compliance with Rule 144 under the Securities Act (or a
comparable successor provisions) or pursuant to an effective registration
statement under the Securities Act or (ii) may be resold pursuant to Rule 144(k)
under the Securities Act (or a comparable successor provision), or (B) the
Company receives an opinion of counsel reasonably acceptable to it to the effect
that such legend may be removed:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
REGISTRATION AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES."
4.6 AUTHORIZED COMMON STOCK. Such Purchaser understands that on the
Closing Date the Company will not have a sufficient number of authorized shares
of Common Stock to allow for the conversion of all of the Shares being purchased
pursuant to this Agreement into shares of Common Stock.
SECTION 5. COVENANTS
5.1 PREEMPTIVE RIGHTS.
(a) If the Company proposes to issue, grant or sell common stock,
preferred stock, other equity securities or Rights, the Company shall first give
to each Purchaser and any transferee of Shares from the Purchaser (each a
"SECURITYHOLDER") written notice setting forth in reasonable detail the price
and other terms on which such equity securities or Rights are proposed to be
issued, granted or sold, the terms of any such Rights and the amount thereof
proposed to be issued, granted or sold. Each Securityholder shall thereafter
have the preemptive right, exercisable by written notice to the Company no later
than 15 days after the Company's notice is given, to purchase such
Securityholder's Proportionate Share of the number of such equity securities or
Rights that are proposed to be issued, granted or sold. Any such purchase by any
Securityholder shall be at the price and on the other terms set forth in the
Company's notice. Any notice by a Securityholder exercising the right to
purchase equity securities or Rights pursuant to this Section 5.1 shall
constitute an irrevocable commitment to purchase from the Company the equity
securities or Rights specified in such notice, subject to the maximum set forth
in this paragraph. If the Securityholders exercise their preemptive rights set
forth in this Section 5.1(a) to the full extent of their rights set forth in
this Section 5.1(a), then the closing of the purchase of equity securities or
Rights by Securityholders shall take place on such date, no less than 10 and no
more than 60 days after the expiration of the 15-day period referred to above,
as the Company may select, and the Company shall notify the Securityholders of
such closing at least 7 days prior thereto. If all Persons entitled thereto do
not exercise their preemptive rights to
12
the full extent of such preemptive rights and, as contemplated by Section
5.1(b), the Company shall issue, grant or sell equity securities or Rights to
persons other than Securityholders, then the closing of the purchase of such
equity securities or Rights shall take place at the same time as the closing of
such issuance, grant or sale.
(b) The Company shall use its good faith and commercially
reasonable efforts to issue, grant or sell the remaining subject equity
securities or Rights on the terms set forth in its notice to Securityholders,
unless the Company is advised by its financial advisors that the remaining
number or amount is too small to be reasonably sold. From the expiration of the
15-day period first referred to in Section 5.1(a) and for a period of 90 days
thereafter, the Company may offer, issue, grant and sell to any person or entity
equity securities or Rights having the terms set forth in the Company's notice
relating to such equity securities or Rights at a price and on other terms no
less favorable to the Company, and including no less cash, than those set forth
in such notice (without deduction for reasonable underwriting, sales agency and
similar fees payable in connection therewith); provided, however, that the
Company may not issue, grant or sell equity securities or Rights pursuant to
this sentence in an amount greater than the amount set forth in such notice
minus the amount purchased or committed to be purchased by Securityholders.
(c) The provisions of this Section 5.1 shall not apply to the
following issuances of securities: (i) pursuant to an employee stock option
plan, a stock purchase plan, or a similar benefit program or agreement approved
by the Board of Directors of the Company, where the primary purpose is not to
raise additional equity capital for the Company, (ii) as direct consideration
for the acquisition by the Company of another business entity or the merger of
any business entity with or into the Company, in each case provided that the
transaction is approved by the vote of a majority of the outstanding Shares,
(iii) in connection with a stock split or dividend or a recapitalization or
reorganization of the Company, in each case provided that the transaction is
approved by the vote of a majority of the outstanding Shares, (iv) upon the
exercise of warrants or options, or upon the conversion of convertible
securities, outstanding on the date hereof or as to which Securityholders have
been previously offered the right to participate as contemplated hereby, or (v)
securities issued in an underwritten public offering registered under the
Securities Act, provided that such offering is approved by a vote of a majority
of the outstanding Shares.
5.2 FINANCIAL STATEMENTS AND REPORTS. In the event the Company ceases
to be required to file annual and quarterly reports pursuant to the Securities
Exchange Act of 1934, as amended, deliver to the Purchasers in form and detail
reasonably satisfactory to the Purchasers periodic reports as follows:
(a) MONTHLY REPORTS. The Company shall furnish to the Purchasers
as soon as practicable, and in any case within fifteen (15) days of the end of
each calendar month (except for the last month of each fiscal quarter),
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as of the close of such period and consolidated and consolidating
statements of income and expense from the beginning of such period to the close
of such period, certified by the Chief Financial Officer of the Company and
accompanied by a certificate of said officer stating that such statements were
prepared from the Company's books
13
and records and fairly present, in all material respects, the consolidated
financial position and consolidated financial results of the Company for the
month covered.
(b) QUARTERLY REPORTS. The Company shall furnish to the Purchasers
as soon as practicable, and in any case within forty five (45) days after the
end of each of the Company's fiscal quarters, consolidated and consolidating
balance sheets of the Company and its Subsidiaries as of the close of such
period and consolidated and consolidating statements of income and expense and
cash flows from the beginning of the then current fiscal year and from the
beginning of such fiscal quarter to the close of such period, certified by the
Chief Financial Officer of the Company and accompanied by a certificate of said
officer stating that such statements fairly present, in all material respects in
accordance with GAAP (except that such statements may omit footnotes and shall
be subject to normal, recurring year-end adjustments), the consolidated
financial position and consolidated financial results of the Company for the
periods covered.
(c) ANNUAL REPORTS. The Company shall furnish to the Purchasers as
soon as practicable, and in any case within ninety (90) days after the close of
each of the Company's fiscal years, a copy of the annual audit report relating
to the Company and its Subsidiaries in reasonable detail satisfactory to the
Purchasers and prepared in accordance with GAAP by independent public
accountants satisfactory to the Purchasers, together with financial statements
consisting of consolidated and consolidating balance sheets of the Company and
its Subsidiaries as of the end of such fiscal year and consolidated and
consolidating statements of income, changes in shareholders' equity and cash
flows of the Company and its Subsidiaries for such fiscal year.
5.3 COMPLIANCE WITH LAWS. The Company shall conduct its operations and
cause those of its Subsidiaries to be conducted only in compliance with all
policies of insurance and all Requirements of Law, except where any failure
could not reasonably be expected to have a Material Adverse Effect.
5.4 MAINTENANCE OF RECORDS. The Company shall maintain adequate and
complete records and books of account in accordance with GAAP, which books shall
reflect all financial transactions of the Company. The Company shall also permit
any of the Purchasers' representatives upon reasonable request and during normal
business hours to visit and inspect any of the properties of the Company, to
examine all its books of account, records, reports and other papers and to make
copies and extracts therefrom, at such Purchaser's own expense. In addition, the
Company shall also permit any of the Purchasers' representatives to discuss its
affairs, finances and accounts with its officers, employees and independent
public accountants all at such reasonable times and as often as may be
reasonably requested.
5.5 TRANSACTIONS WITH RELATED PERSONS. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly enter into any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property, the rendering of any service or the making of any loan or
advance) with any officer or director of the Company or any of its Subsidiaries
(each, a "RELATED PERSON"), unless such transaction is in the ordinary course of
business, is approved by the Board of Directors of the Company and is on terms
no less
14
favorable to the Company or such Subsidiary than those that could be obtained in
a comparable arm's length transaction with a Person that is not a Related
Person.
5.6 FURTHER ASSURANCES. The Company and the Purchasers shall use their
respective reasonable efforts at any time and from time to time prior to, at and
after the Closing Date to execute and deliver to the applicable parties such
further documents and instruments and to take all such further actions as such
other parties to this Agreement reasonably may request to consummate the
transactions contemplated by this Agreement, the Certificate and the
Registration Rights Agreement.
5.7 AUTHORIZED COMMON STOCK. The Company shall use its best efforts to
(a) increase the number of shares of Common Stock that are a part of its
authorized capital stock to 2,400,000,000 shares of Common Stock and (b) reserve
and keep available for issuance, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, a sufficient number of shares of
Common Stock to issue the Common Stock issuable upon conversion of the Shares
pursuant to Section 7 of the Certificate.
5.8 SOFTBANK VOTE FOR INCREASE IN AUTHORIZED CAPITAL STOCK OR REVERSE
STOCK SPLIT. SOFTBANK Capital Partners LP, and any of the Purchasers who are
affiliates of, associated with or designated by SOFTBANK Capital Partners LP,
shall, at the meeting of stockholders of the Company or in a written consent in
lieu thereof, vote all securities of the Company held by them in favor of (a) an
increase in the number of shares of Common Stock that are a part of the
Company's authorized capital stock to 2,400,000,000 shares of Common Stock or
(b) a reverse stock split of the shares of Common Stock, to create a sufficient
number of shares of Common Stock for the Shares to be converted into shares of
Common Stock pursuant to Section 7 of the Certificate (and which may also result
in the Company becoming a private, rather than a public, company), provided that
such reverse stock split is recommended by a special committee of the Board of
Directors of the Company composed solely of disinterested directors.
5.9 EMPLOYEE STOCK OPTIONS. Promptly following the Closing, the Company
shall reserve a total number of shares (including shares previously reserved and
issued) of Common Stock for issuance under the Company's existing stock option
plan equal to 15% of the number of shares of Common Stock outstanding on a
fully-diluted basis after giving effect to the purchase of the Shares under this
agreement and a subsequent sale of shares pursuant to Section 1.3(a), at an
exercise price no lower than 005329.
5.10 EXPENDITURES. The Company shall not make expenditures unless such
expenditures are provided for under a plan or budget approved by the Board of
Directors of the Company or are specifically approved by the Board of Directors
of the Company or a committee thereof.
SECTION 6. CONDITIONS TO CLOSING
6.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. Each
Purchaser's obligation to purchase the Shares at the Closing is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
15
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects (except that such representations and warranties that
contain materiality qualifiers shall be true in all respects) as of the date of
this Agreement and as of the Closing Date, except to the extent such
representations and warranties specifically speak as to an earlier date, in
which case they shall be true and correct as of such earlier date.
(b) PERFORMANCE OF OBLIGATIONS. The Company shall have performed
and complied in all material respects with all agreements and obligations herein
required to be performed or complied with by the Company on or before the
Closing Date.
(c) ABSENCE OF CHANGES. Except as described in the 10-Q or the
10-K or otherwise described in the Financial Disclosure, dated the date hereof,
delivered by the Company to the Purchasers (the "FINANCIAL DISCLOSURE"), since
June 30, 2003, there has been no event, occurrence, change, development or state
of affairs that had or could reasonably be expected to have a Material Adverse
Effect.
(d) LEGAL INVESTMENT; ORDERS. The sale and issuance of the Shares
to be issued and sold on the Closing Date shall be legally permitted by all laws
and regulations to which Purchasers and the Company are subject. No court or
other Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, law, ordinance, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and restrains, enjoins or otherwise prohibits
consummation of the issuance of the Shares or any of the other transactions
contemplated by this Agreement or the Registration Rights Agreement
(collectively, an "ORDER"), and no Governmental Entity or any other Person shall
have instituted any proceeding or threatened to institute any proceeding seeking
any such Order or questioning the legality, validity or appropriateness of any
such issuance or transaction.
(e) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation by it of the transactions contemplated by this Agreement and the
Registration Rights Agreement.
(f) BANKRUPTCY ETC. Neither the Company nor any of its
Subsidiaries shall have dissolved or liquidated or taken an equivalent action
nor shall an involuntary petition have been filed under any federal or state
bankruptcy, reorganization, insolvency, moratorium or similar statute against
the Company or any of its Subsidiaries, or a custodian, receiver, trustee,
assignee for the benefit of creditors or other similar official have been
appointed to take possession, custody, or control of the property of the Company
or any of its Subsidiaries; nor shall the Company or any of its Subsidiaries
have admitted in writing its inability to pay any of its debts as they mature,
or have filed any petition or action for relief relating to any bankruptcy,
reorganization, insolvency or moratorium law, or any other similar law for the
relief of, or relating to, debtors; nor shall the Company or any of its
Subsidiaries have made a general assignment for the benefit of creditors or
entered into an agreement of composition with its creditors.
16
(g) FILING OF CERTIFICATE. The Certificate shall have been filed
with the Secretary of State of the State of Delaware.
(h) REGISTRATION RIGHTS AGREEMENT. A Registration Rights
Agreement, substantially in the form attached hereto as Exhibit C, shall have
been executed and delivered by the Company and the other Purchasers.
(i) COMPLIANCE CERTIFICATE. The Chief Executive Officer of the
Company shall deliver to the Purchasers at the Closing a certificate, dated the
Closing Date, certifying that the conditions specified in Sections
6.1(a),(b),(c),(e), (g) and (l) have been fulfilled.
(j) LEGAL OPINION. The Purchasers shall have received the written
opinion or opinions of counsel for the Company, dated as of the Closing Date, in
the forms set forth as Exhibit D.
(k) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents and instruments incident to the transactions contemplated hereby shall
be reasonably satisfactory in substance and form to the Purchasers and their
counsel, and the Purchasers and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
6.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
Company's obligation to sell the Shares at the Closing is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Purchasers in Section 4 hereof shall be true and correct
in all material respects (except that such representations and warranties that
contain materiality qualifiers shall be true in all respects) as of the date of
this Agreement and as of the Closing Date, except to the extent such
representations and warranties specifically speak as to an earlier date, in
which case they shall be true and correct as of such earlier date.
(b) LEGAL INVESTMENT; ORDERS. The sale and issuance of the Shares
to be issued and sold on the Closing Date shall be legally permitted by all laws
and regulations to which Purchasers and the Company are subject. No court or
other Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered an Order, and no Governmental Entity or any
other Person shall have instituted any proceeding or threatened to institute any
proceeding seeking any such Order or questioning the legality, validity or
appropriateness of any such issuance or transaction.
(c) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation by it of the transactions contemplated by this Agreement and the
Registration Rights Agreement.
SECTION 7. REMEDIES.
17
(a) SURVIVAL OF REPRESENTATIVES AND WARRANTIES. All of the
representations and warranties of the parties contained in this Agreement shall
survive the Closing hereunder and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).
(b) INDEMNIFICATION. In the event that a Purchaser suffers an
Adverse Consequence as a result of (i) the Company's breach of (or a third party
alleging facts that, if true, would mean the Company has breached) any of the
Company's representations, warranties, and covenants contained herein or (ii)
the Company's actions or failure to act (including statements, actions or
omissions made or information provided by the Company, its agents or the Board
of Directors of the Company), then the Company agrees to indemnify each
Purchaser from and against the entirety of any such Adverse Consequence such
Purchaser may suffer through and after the date of the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).
(c) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Purchaser (the
"INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which
may give rise to a claim for indemnification against the Company (the
"INDEMNIFYING PARTY") under this Section 7, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder, (C) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(D) settlement of, or an adverse judgment with respect to, the Third Party Claim
is not, in the good faith judgment of the Indemnified Party, likely to establish
a precedential custom or practice adverse to the continuing business interests
of the Indemnified Party, and (E) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7(c)(ii) above, (A)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party, and (C) the Indemnifying Party will not
consent to the entry of any
18
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party.
(iv) In the event any of the conditions in Section 7(c)(ii)
above is or becomes unsatisfied, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (C) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Section 7.
(d) LIMITATION ON INDEMNIFICATION. Notwithstanding anything to the
contrary contained herein, a Purchaser or Indemnified Party shall not be
indemnified for any Adverse Consequences resulting primarily from such
Purchaser's or Indemnified Party's gross negligence or willful misconduct.
(e) OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any party may have with respect to
the transactions contemplated by this Agreement and any rights any party may
have under any other agreement, document or instrument, including, without
limitation, the Registration Rights Agreement.
SECTION 8. MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of New York without regard to principles of conflict of
laws.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the rights and obligations hereunder may not be assigned or delegated by
the Purchasers or the Company without the prior written consent of the other;
provided, however, that the Purchasers may assign their rights and delegate
their obligations hereunder, in whole or in part (including, without limitation,
the right to purchase any or all of the Shares and the obligation to pay all or
a part of the purchase price for the Shares), to any affiliates of Purchaser,
including, without limitation, any other partnership or other entity of which
any direct or indirect subsidiary of such Purchaser or any affiliate thereof is
a general partner or has investment discretion, or any employees of any of the
foregoing, subject to applicable securities laws; provided, further, that any
such assignee that acquires any Shares shall, as a condition to acquiring such
Shares, agree to be bound by the provisions of any agreement applicable to the
Shares. The provisions hereof shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. Subject to
applicable securities laws, a Purchaser may transfer any Shares to any Person
without the prior consent of the Company.
8.3 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Registration Rights Agreement, the Certificate and the other
documents delivered pursuant
19
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subject matter hereof and thereof.
8.4 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
8.5 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of at least a majority of the Shares
as of the date of such amendment.
(b) The obligations of the Company and the rights of the holders
of the Shares under this Agreement may be waived only with the written consent
of the holders of at least a majority of the Shares as of the date of such
waiver.
8.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any breach,
default or noncompliance by another party under this Agreement, the Registration
Rights Agreement or the Certificate shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character on any Purchaser's part of
any breach, default or noncompliance under this Agreement, the Registration
Rights Agreement or the Certificate or any waiver on such party's part of any
provisions or conditions of this Agreement, the Registration Rights Agreement or
the Certificate must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, under this Agreement, the
Registration Rights Agreement, the Certificate, by law or otherwise afforded to
any party shall be cumulative and not alternative.
8.7 NOTICES. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given: (a) on the date of
delivery if personally delivered by hand, (b) upon the third day after such
notice is (1) deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, or (2) sent by a
nationally recognized overnight express courier, or (c) by facsimile upon
written confirmation (other than the automatic confirmation that is received
from the recipient's facsimile machine) of receipt by the recipient of such
notice:
If to any Purchaser: To the address or facsimile
number of such Purchaser specified on the
signature pages hereof.
With a copy, which shall not
constitute notice, to: Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
20
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Company: Vie Financial Group, Inc.
1114 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Secretary
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy, which shall not
constitute notice, to: Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 Xxxxxx Xxxxxxxxx, 00xx xxxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided in this Section 8.7.
8.8 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.10 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 8.10 being untrue.
8.11 EXPENSES. The Company and each of the Purchasers shall pay all
costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of this Agreement and all of the transactions
contemplated herein; provided, however, that if the Purchasers consummate the
purchase of the Shares, the Company shall reimburse the reasonable legal fees
and expenses of counsel to SOFTBANK incurred in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and all of
the transactions contemplated hereby.
8.12 SPECIFIC ENFORCEMENT. Any Purchaser shall be entitled to specific
enforcement of its rights under this Agreement. The Company acknowledges that
money
21
damages would be an inadequate remedy for its breach of this Agreement and
consents to an action for specific performance or other injunctive relief in the
event of any such breach.
8.13 ATTORNEY'S FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
8.14 CONFIDENTIALITY. Except as may be required by law or to enforce
the rights and duties established hereunder, the parties hereto shall preserve
in a confidential manner all information received from the other pursuant to
this Agreement, the Registration Rights Agreement, and the Certificate, and
shall not disclose such information except to those Persons with which a
confidential relationship is maintained (including regulators, legal counsel,
accountants, agents or an assignee or a prospective assignee of any of the
Purchasers' rights hereunder).
22
IN WITNESS WHEREOF, the parties hereto have executed the SERIES H
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
VIE FINANCIAL GROUP, INC.
By: /s/ Xxxxx Xxx
-------------------------------------
Name: Xxxxx Xxx
Title: Chief Financial Officer
PURCHASERS:
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Member
Address:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
23
SOFTBANK CAPITAL LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Member
Address:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
SOFTBANK CAPITAL ADVISORS FUND LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Member
Address:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
24
DEFINITIONS ADDENDUM
This Definitions Addendum is an attachment to and part of that certain
Series H Preferred Stock Purchase Agreement (the "PURCHASE AGREEMENT") dated as
of September 30, 2003 between Vie Financial Group, Inc. and the purchasers named
therein, Softbank Capital Partners LP, Softbank Capital Advisors Fund LP,
Softbank Capital LP. Except as otherwise stated in the Purchase Agreement, the
following terms shall have the following meanings:
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses,
including indirect, consequential and punitive damages.
"BUSINESS DAY" means any day other than (i) a Saturday, Sunday or legal
holiday, or (ii) a day on which commercial banks in New York City are authorized
or required by law or executive order to close.
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally
accepted accounting principles as in effect from time to time in the United
States.
"GOVERNMENTAL ENTITY" means any governmental or regulatory authority,
agency, commission, body, court, tribunal or other governmental entity or
authority.
"LIABILITY" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.
"LIEN" or "LIENS" means, with respect to any Person, any security interest,
pledge, mortgage, charge, option, assignment, hypothecation, encumbrance,
attachment, garnishment, sequestration, forfeiture, execution or other voluntary
or involuntary lien upon or affecting the revenues of such Person or any real or
personal property in which such Person has or hereafter acquires any interest.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon the
business, financial condition, results of operations or prospects of the Company
or any of its Subsidiaries, or upon the validity or enforceability of this
Agreement, the Certificate, the Registration Rights Agreement or the Shares, or
upon the ability of the Company to perform its obligations hereunder or under
the Certificate or the Registration Rights Agreement, or upon the rights of the
Purchasers hereunder or thereunder.
"PERSON" means any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity or other entity of
any kind or nature.
"PROPORTIONATE SHARE" means, with respect to each Securityholder, a
fraction (i) the numerator of which is the total number of votes entitled to be
cast on matters as to which the holders of the Company's Common Stock are
entitled to vote, by the Shares together with shares of Common Stock owned and
the number of shares of Common Stock issuable upon exercise of Rights owned by
such Securityholder, and (ii) the denominator of which is the total number of
such votes entitled to be cast on such matters by the shares of Common Stock
outstanding, the shares of Common Stock issuable upon exercise of all Rights
outstanding and the Shares outstanding.
"REQUIREMENT OF LAW" or "REQUIREMENTS OF LAW" means, with respect to any
Person, the now or hereafter existing articles or certificate of incorporation
and bylaws, the partnership or limited liability company agreement or other
organizational or governing documents of such Person, and any law, treaty, rule,
order, judgment, decree, injunction, writ, or regulation, or a final and binding
determination of an arbitrator, mediator, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"RIGHT" means any option, warrant, security, right or other instrument
convertible into or exchangeable or exercisable for, or otherwise giving the
holder thereof the right to acquire, directly or indirectly, from the Company
any common stock, preferred stock or other equity security or any other such
option, warrant, security, right or instrument, including any instrument issued
by the Company or any Subsidiary thereof the value of which is measured by
reference to the value of the Company's Common Stock.
"SEC" means the Securities and Exchange Commission or any successor agency.
"SOFTBANK" means, collectively, SOFTBANK Capital Partners LP, SOFTBANK
Capital LP and SOFTBANK Capital Advisors Fund LP, each a Delaware limited
partnership.
"SUBSIDIARY" means, with respect to any Person, any entity, whether
incorporated or unincorporated, of which at least a majority of the securities
or ownership interests having by their terms ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
is directly or indirectly owned or controlled by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries.
"TAXES" means for any Person any federal or state tax, assessment, duty,
levy, withholding liability, impost and other charges of every nature whatsoever
imposed by any Governmental Entity on such Person or on any of its property or
because of any, revenue, income, sales, use, product, employee or franchise, and
any interest or penalty with respect to any of the foregoing.
EXHIBIT A
PURCHASER PURCHASE PRICE PREFERRED SHARES ISSUED
Softbank Capital Partners LP $1,749,930 17,499
Softbank Capital LP 1,719,865 17,199
Softbank Capital Advisors Fund LP 30,205 302
------------------ -----------------------
$3,500,000* 35,000
----------
*SOFTBANK will withhold $15,000 from the $3,500,000 due at the Closing for
payment of fees of its counsel.
A-1
EXHIBIT B
CERTIFICATE OF DESIGNATIONS
B-1
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
C-1
EXHIBIT D
FORM OF OPINION OF COUNSEL
D-1
