EXHIBIT 2.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is dated as of
November 7, 2003, among Island Pacific, Inc., a Delaware corporation (the
"COMPANY"), and the purchasers identified on the signature pages hereto (each a
"PURCHASER" and collectively the "PURCHASERS"); and
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
the Purchasers, and each Purchaser, severally and not jointly, desires to
purchase from the Company in the aggregate, up to 3,180,645 shares of Common
Stock on the Closing Date.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"ACTION" shall have the meaning ascribed to such term in
Section 3.1(j).
"AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person as such terms are used in and
construed under Rule 144. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the
same investment manager as such Purchaser will be deemed to be an
Affiliate of such Purchaser.
"BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law
or other governmental action to close.
"CLOSING" means the closing of the purchase and sale of the
Common Stock pursuant to Section 2.1(a).
"CLOSING DATE" means the date of the Closing.
"CLOSING PRICE" means on any particular date (a) the average
of the last reported closing bid and ask price per share of Common
Stock on such date on the Trading Market (as reported by Bloomberg L.P.
at 4:15 PM (New York time), or (b) if there is no such price on such
date, then the average of the closing bid and ask price on the Trading
Market on the date nearest preceding such date (as reported by
Bloomberg L.P. at 4:15 PM (New York time), or (c) if the Common Stock
is not then listed or quoted on the Trading Market and if prices for
the Common Stock are then reported in the "pink sheets" published by
the National Quotation Bureau Incorporated (or a similar organization
or agency succeeding to its functions of reporting prices), the most
recent average of the bid and ask price per share of the Common Stock
so reported, or (d) if the shares of Common Stock are not then publicly
traded the fair market value of a share of Common Stock as determined
by an appraiser selected in good faith by the Purchasers of a majority
in interest of the Shares then outstanding.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, $0.0001
par value per share, and any securities into which such common stock
may hereafter be reclassified.
"COMMON STOCK EQUIVALENTS" means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock.
"COMPANY COUNSEL" means Higham, XxXxxxxxx & Xxxxxxx, LLP.
"DISCLOSURE SCHEDULES" means the Disclosure Schedules attached
as ANNEX I hereto.
"EFFECTIVE DATE" means the date that the Registration
Statement is first declared effective by the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed
to such term in Section 3.1(o).
"LIENS" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.
"MATERIAL ADVERSE EFFECT" shall have the meaning ascribed to
such term in Section 3.1(b).
"MATERIAL PERMITS" shall have the meaning ascribed to such
term in Section 3.1(m).
"PER SHARE PURCHASE PRICE" equals $1.55, subject to adjustment
for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that
occur after the date of this Agreement.
"PERSON" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
2
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"REGISTRATION STATEMENT" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement
and covering the resale by the Purchasers of the Shares.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company
and each Purchaser, in the form of EXHIBIT A hereto.
"RULE 144," means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rules may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"SEC REPORTS" means all reports required to be filed by the
Company under the Securities Act and Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (or shorter period as the Company was required by law to file
such material), including any exhibits thereto.
"SECURITIES" means the Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock issued or issuable
to each Purchaser pursuant to this Agreement.
"SUBSCRIPTION AMOUNT" means, as to each Purchaser, the amounts
set forth below such Purchaser's signature block on the signature page
hereto, in United States dollars and in immediately available funds.
"SUBSIDIARY" shall have the meaning ascribed to such term in
Section 3.1(a).
"TRADING DAY" means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed
on a Trading Market, a day on which the Common Stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of reporting
prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
"TRADING MARKET" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the Nasdaq SmallCap Market.
3
"TRANSACTION DOCUMENTS" means this Agreement and the
Registration Rights Agreement and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
ARTICLE II.
PURCHASE AND SALE
2.1 CLOSING. At the Closing, the Purchasers shall purchase, severally
and not jointly, and the Company shall issue and sell, in the aggregate,
3,180,645 shares of Common Stock on the Closing Date. Each Purchaser shall
purchase from the Company, and the Company shall issue and sell to each
Purchaser, a whole number of Shares (rounded down to the nearest whole number)
equal to such Purchaser's Subscription Amount divided by the Per Share Purchase
Price. Upon satisfaction of the conditions set forth in Section 2.2, the Closing
shall occur at the offices of Xxxxxxx Xxxxxxxxx LLP, counsel to the placement
agent, or such other location as the parties shall mutually agree.
2.2 CLOSING CONDITIONS; DELIVERIES.
(a) CONDITIONS TO OBLIGATIONS OF PURCHASERS. At the Closing
(unless otherwise specified below) the Company shall deliver or cause
to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) instructions from the Company to the Company's
transfer agent authorizing and directing the transfer agent to
issue stock certificates for the number of Shares equal to
each Purchaser's Subscription Amount divided by the Per Share
Purchase Price (rounded down to the nearest whole number), and
such certificates shall be delivered to each Purchaser within
three Trading Days of the Closing Date and registered in the
name of such Purchaser;
(iii) the Registration Rights Agreement duly executed
by the Company; and
(iv) a legal opinion of Company Counsel,
substantially in the form of EXHIBIT B attached hereto.
(b) CONDITIONS TO OBLIGATIONS OF COMPANY. At the Closing each
Purchaser shall deliver or cause to be delivered to the Company the
following:
(i) this Agreement duly executed by such Purchaser;
(ii) such Purchaser's Subscription Amount as to such
Closing by wire transfer to the account of the Company, as
provided to such Purchaser in writing by the Company at least
two Business Days prior to the Closing Date; and
(iii) the Registration Rights Agreement duly executed
by such Purchaser.
4
(c) MUTUAL CONDITIONS. The following mutual conditions shall
be satisfied at the Closing:
(i) All representations and warranties of the
Company, on the one hand, and the Purchaser, on the other hand
contained herein shall remain true and correct as of the
Closing Date.
(ii) All obligations, covenants and agreements of the
parties required to be performed at or prior to the Closing
Date shall have been performed.
(iii) As of the Closing Date, there shall have been
no Material Adverse Effect with respect to the Company since
the date hereof.
(iv) From the date hereof to the Closing Date,
trading in the Common Stock shall not have been suspended by
the Commission, and, at any time prior to Closing Date,
trading in securities generally as reported by Bloomberg
Financial Markets shall not have been suspended or limited, or
minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading
Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in the SEC Reports or under the corresponding section of the Disclosure
Schedules delivered concurrently herewith, the Company hereby makes the
following representations and warranties as of the date hereof and as of the
Closing Date to each Purchaser and Xxxx Capital Partners, LLC:
(a) SUBSIDIARIES. The Company has the subsidiaries (each a
"Subsidiary") as set forth in the SEC Reports. The Company owns,
directly or indirectly, all of the capital stock of each Subsidiary
free and clear of any Liens, and all the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no
subsidiaries, then references in the Transaction Documents to the
Subsidiaries will be disregarded.
(b) ORGANIZATION AND QUALIFICATION. Each of the Company and
the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with
the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the
case may be, would not have or reasonably be expected to result in (i)
5
a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business, financial condition or
prospects of the Company and the Subsidiaries, taken as a whole, or
(iii) impair the Company's ability to perform in any material respect
on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT") and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.
(c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company and
no further action is required by the Company in connection therewith.
Each Transaction Document has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company 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 and (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(d) NO CONFLICTS. The execution, delivery and performance of
the Transaction Documents by the Company, the issuance and sale of the
Shares and the consummation by the Company of the other transactions
contemplated thereby do not and will not (i) conflict with or violate
any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights
of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company
or any Subsidiary is bound or affected, or (iii) conflict with or
result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected
or (iv) conflict with or violate the terms of any agreement by which
the Company or any Subsidiary is bound or to which any property or
asset of the Company or any Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii) and (iv), such as,
individually or in the aggregate, would not have or reasonably be
expected to result in a Material Adverse Effect.
6
(e) FILINGS, CONSENTS AND APPROVALS. The Company is not
required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by
the Company of the Transaction Documents, other than (a) the filing
with the Commission or other regulatory authority of the Registration
Statement, the application(s) to each Trading Market for the listing of
the Shares for trading thereon in the time and manner required thereby,
and applicable Blue Sky filings, and (b) such filings, consents and
approvals as have already been obtained or a Notice of Issuance of
Securities on Form D or such other exemptive filings as are required to
be made under applicable securities laws (collectively, the "REQUIRED
APPROVALS").
(f) ISSUANCE OF THE SECURITIES. The Securities are duly
authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The issuance of the Shares
is not subject to any preemptive or similar rights to subscribe for or
purchase securities. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement.
(g) CAPITALIZATION. The capitalization of the Company is as
described in the Company's most recent periodic report filed with the
Commission. The Company has not issued any capital stock since such
filing other than pursuant to the exercise of employee stock options
under the Company's stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company's employee stock
purchase plan and pursuant to the conversion or exercise of outstanding
Common Stock Equivalents outstanding on the date of the last day of the
period covered by such filing. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction
Documents. Except as a result of the purchase and sale of the
Securities, there are no outstanding options, warrants, script rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock. The issue and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of
any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is
required for the issuance and sale of the Shares. Except as disclosed
in the SEC Reports, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company's
capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company's stockholders.
7
(h) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
all reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) on a timely basis or
has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of
the Company and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The Company maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of
the Exchange Act.
(i) MATERIAL CHANGES. Since the date of the latest audited
financial statements included within the SEC Reports, except as
disclosed in the SEC Reports, (i) there has been no event, occurrence
or development that has had or that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any material liabilities (contingent
or otherwise) other than trade payables and accrued expenses incurred
in the ordinary course of business consistent with past practice, and
(iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash
or other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information.
(j) LITIGATION. Except as disclosed in the SEC Reports, there
is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "ACTION") which (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or
(ii) individually or in the aggregate, could, if there were an
8
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary, nor,
to the knowledge of the Company, any director or officer thereof, is or
has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach
of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or
officer of the Company. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(k) LABOR RELATIONS. No material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any of the
employees of the Company which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(l) COMPLIANCE. Except as disclosed in the SEC Reports,
neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the
Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation
of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business, except in the case of clauses (i), (ii) and
(iii) as would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.
(m) REGULATORY PERMITS. The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits would
not, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect ("MATERIAL PERMITS"), and
neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
(n) TITLE TO ASSETS. The Company and the Subsidiaries have
good and marketable title in fee simple to all real property owned by
them that is material to the business of the Company and the
Subsidiaries and good and marketable title in all personal property
owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries and Liens for the payment
of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.
9
(o) PATENTS AND TRADEMARKS. The Company and the Subsidiaries
have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or
material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have,
individually or in the aggregate, could have or reasonably be expected
to result in a Material Adverse Effect (collectively, the "INTELLECTUAL
PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has received
a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes the rights of any
Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and do not violate or infringe the Intellectual
Property Rights of others.
(p) INSURANCE. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged.
Neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.
(q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set
forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of
the Company is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or
any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of $60,000 other
than (a) for payment of salary or consulting fees for services
rendered, (b) reimbursement for expenses incurred on behalf of the
Company and (c) for other employee benefits, including stock option
agreements under any stock option plan of the Company.
(r) INTERNAL ACCOUNTING CONTROLS. The Company and each of its
Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company,
10
including its Subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which
the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
The Company's certifying officers have evaluated the effectiveness of
the Company's controls and procedures as of a date within 90 days prior
to the filing date of the most recently filed periodic report under the
Exchange Act (such date, the "EVALUATION DATE"). The Company presented
in its most recently filed Form 10-K or Form 10-Q the conclusions of
the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no significant changes
in the Company's internal controls (as such term is defined in Item
307(b) of Regulation S-K under the Exchange Act) or, to the Company's
knowledge, in other factors that could significantly affect the
Company's internal controls.
(s) PRIVATE PLACEMENT. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and
sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.
(t) INVESTMENT COMPANY. The Company is not, and is not an
Affiliate of, and, immediately after receipt of payment for the Shares,
will not be or be an Affiliate of, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"). The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company
Act.
(u) REGISTRATION RIGHTS. No Person has any right to cause the
Company to effect the registration under the Securities Act of any
securities of the Company.
(v) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common
Stock is registered pursuant to Section 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration. The Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with
all such listing and maintenance requirements.
(w) DISCLOSURE. The Company confirms that, neither the Company
nor, to the knowledge of the Company, any other Person acting on its
behalf has provided any of the Purchasers or their agents or counsel
with any information that constitutes or might constitute material,
non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. All disclosure
provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, furnished by or on behalf of the Company are true and
correct and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
11
(x) NO INTEGRATED OFFERING. Neither the Company, nor, to the
knowledge of the Company, any of its affiliates, nor any Person acting
on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable shareholder approval provisions,
including, without limitation, under the rules and regulations of any
exchange or automated quotation system on which any of the securities
of the Company are listed or designated.
(y) SOLVENCY. Based on the financial condition of the Company
as of the Closing Date, (i) the Company's fair saleable value of its
assets exceeds the amount that will be required to be paid on or in
respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) to the
knowledge of the Company, the Company's assets do not constitute
unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including
its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof and including the
proceeds from the sale of the Shares hereunder; and (iii) the current
cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay
all amounts on or in respect of its debt when such amounts are required
to be paid. The Company does not presently intend to incur debts beyond
its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt).
(z) CERTAIN FEES. Except for fees payable to Xxxx Capital
Partners, LLC for services as a placement agent, no brokerage or
finder's fees or commissions are or will be payable by the Company to
any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. The Purchasers shall have
no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions
contemplated by this Agreement.
(aa) TAXES. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary has filed all
necessary federal, state and foreign income and franchise tax returns
and has paid or accrued all taxes shown as due thereon, and the Company
has no knowledge of a tax deficiency which has been asserted or
threatened against the Company or any Subsidiary.
(bb) GENERAL SOLICITATION. Neither the Company nor, to the
knowledge of the Company, any person acting on behalf of the Company
has offered or sold any of the Shares by any form of general
solicitation or general advertising. The Company has offered the Shares
for sale only to the Purchasers and certain other "accredited
investors" within the meaning of Rule 501 under the Securities Act.
12
(cc) FOREIGN CORRUPT PRACTICES. Neither the Company, nor to
the knowledge of the Company, any agent or other person acting on
behalf of the Company, has (i) directly or indirectly, used any corrupt
funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
(dd) ACCOUNTANTS. To the Company's knowledge, Singer, Lewak,
Xxxxxxxxx & Xxxxxxxxx, LLP who the Company expects will express their
opinion with respect to the financial statements to be included in the
Company's Annual Report on Form 10-K for the year ended March 31, 2004,
are independent accountants as required by the Securities Act and the
rules and regulations promulgated thereunder.
(ee) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF SHARES.
The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm's length purchaser with respect
to the Transaction Documents and the transactions contemplated hereby.
The Company further acknowledges that no Purchaser is acting as a
financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by any Purchaser or any of
their respective representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental
to the Purchasers' purchase of the Shares. The Company further
represents to each Purchaser that the Company's decision to enter into
this Agreement has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its
representatives.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) ORGANIZATION; AUTHORITY. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement has been duly authorized by all necessary corporate or
similar action on the part of such Purchaser. Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable
13
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) insofar as indemnification and contribution provisions may be
limited by applicable law.
(b) INVESTMENT INTENT. Such Purchaser understands that the
Securities are "restricted securities" and have not been registered
under the Securities Act or any applicable state securities law and is
acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Securities or any part thereof, has no present intention
of distributing any of such Securities and has no arrangement or
understanding with any other persons regarding the distribution of such
Securities (this representation and warranty not limiting such
Purchaser's right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities hereunder
in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person
to distribute any of the Securities.
(c) PURCHASER STATUS. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Such
Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act and is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act)
of the Company.
(d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone
or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks
of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
(e) GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
(f) ACCESS TO INFORMATION. The Purchaser acknowledges that it
has had access to and the opportunity to review the SEC Reports and has
been afforded the opportunity to ask of representatives of the Company
such questions concerning the purchase of the Securities as deemed
relevant by such Purchaser.
(g) NO PRIOR SHORT SELLING. At no time during the 15 days
immediately prior to the date hereof has such Purchaser engaged in or
effected, in any manner whatsoever, directly or indirectly, in any
"short sale" (as such term is defined in Rule 3b-3 of the Exchange Act)
of the Common Stock.
14
(h) RELIANCE. The Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without
registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act and (ii)
the availability of such exemption, depends in part on, and the Company
will rely upon the accuracy and truthfulness of, the foregoing
representations and such Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that each Purchaser does not make
or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 TRANSFER RESTRICTIONS. (a) The Securities may only be disposed of
in compliance with state and federal securities laws. In connection with any
transfer of Securities other than pursuant to an effective registration
statement or Rule 144, to the Company, to an Affiliate of a Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement and the Registration Rights Agreement.
(b) The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of a legend on any of the Securities
in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a) UNDER THE SECURITIES ACT.
15
The Company acknowledges and agrees that a Purchaser may from
time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of
the Securities to a financial institution that is an "accredited
investor" as defined in Rule 501(a) under the Securities Act and, if
required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of
the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. At the appropriate
Purchaser's expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities
may reasonably request in connection with a pledge or transfer of the
Securities, including the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend
the list of Selling Stockholders thereunder.
(c) Certificates evidencing the Shares shall not contain any
legend (including the legend set forth in Section 4.1(b)), (i)
following any sale of such Shares pursuant to an effective registration
statement (including the Registration Statement) covering the resale of
such Shares under the Securities Act, or (ii) following any sale of
such Shares pursuant to Rule 144, unless otherwise required by
applicable law or (iii) if such Shares are eligible for sale under Rule
144(k), or (iv) if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the
Commission). The Company shall cause its counsel to issue a legal
opinion to the Company's transfer agent promptly after the Effective
Date if required by the Company's transfer agent to effect the removal
of the legend hereunder and appropriate under applicable law as and
when any Purchaser so requests. The Company agrees that following the
Effective Date or at such time as such legend is no longer required
under this Section 4.1(c), it will, no later than five Trading Days
following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Shares issued with a
restrictive legend (and such documents as the Company may reasonably
request to permit a sale pursuant to Rule 144, if applicable), deliver
or cause to be delivered to such Purchaser a certificate representing
such Securities that is free from all restrictive and other legends.
The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.
(d) In addition to such Purchaser's other available remedies,
the Company shall pay to a Purchaser, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Shares (based on the Closing
Price of the Common Stock on the date such Securities are submitted to
the Company's transfer agent) subject to Section 4.1(c), $5 per Trading
Day (increasing to $10 per Trading Day five (5) Trading Days after such
damages have begun to accrue) for each Trading Day after such fifth
Trading Day until such certificate is delivered. Nothing herein shall
limit such Purchaser's right to pursue actual damages for the Company's
failure to deliver certificates representing any Securities as required
by the Transaction Documents, and such Purchaser shall have the right
to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief.
16
4.2 FURNISHING OF INFORMATION. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell the Securities
under Rule 144. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.
4.3 INTEGRATION. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market.
4.4 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall, by 8:30
a.m. Eastern time on the Business Day following the Closing Date, issue a press
release or file a Current Report on Form 8-K, in each case reasonably acceptable
to each Purchaser disclosing the transactions contemplated hereby and make such
other filings and notices in the manner and time required by the Commission. The
Company and each Purchaser shall consult with each other in issuing any press
releases with respect to the transactions contemplated hereby, and neither the
Company nor any Purchaser shall issue any such press release or otherwise make
any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the Registration Rights Agreement and (ii) to the extent such disclosure is
required by law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure permitted under
subclause (i) or (ii).
4.5 NON-PUBLIC INFORMATION. The Company covenants and agrees that it
will not provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, and it
will instruct any Person acting on its behalf from doing so, unless prior
thereto such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.
4.6 USE OF PROCEEDS. Except as set forth on Schedule 4.6 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and not for the satisfaction of any
portion of the Company's debt (other than payment of trade payables in the
ordinary course of the Company's business and prior practices), to redeem any
Company equity or equity-equivalent securities or to settle any outstanding
litigation.
17
4.7 INDEMNIFICATION OF PURCHASERS. (a) The Company will indemnify and
hold the Purchasers and their directors, officers, shareholders, partners,
employees and agents (each, a "Purchaser Party") harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys' fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to: (a) any
misrepresentation, breach or inaccuracy, or any allegation by a third party
that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents; or (b) any cause of action,
suit or claim brought or made against such Purchaser Party and arising solely
out of or solely resulting from the execution, delivery, performance or
enforcement of this Agreement or any of the other Transaction Documents, other
than directly resulting from the gross negligence or willful misconduct of the
Purchasers. The Company will reimburse such Purchaser for its reasonable legal
and other expenses (including the cost of any investigation, preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred.
(b) If any Proceeding shall be brought or asserted against any
Purchaser or other Person entitled to indemnity hereunder (an "Indemnified
Party"), such Indemnified Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Company of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have prejudiced the Company.
(c) An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless: (1) the Company has agreed in writing to pay such fees
and expenses; (2) the Company shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Company, and such Indemnified Party shall reasonably believe that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Company (in which case, if such Indemnified Party
notifies the Company in writing that it elects to employ separate counsel at the
expense of the Company, the Company shall not have the right to assume the
defense thereof and the reasonable fees and expenses of one separate counsel
shall be at the expense of the Company). The Company shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. The Company shall not, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
18
(d) All reasonable fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Business Days of written notice thereof to the Company;
PROVIDED, that the Indemnified Party shall promptly reimburse the Company for
that portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based
upon the relative faults of the parties.
4.8 RESERVATION OF COMMON STOCK. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement.
4.9 LISTING OF COMMON STOCK. The Company hereby agrees to use
commercially reasonable efforts to maintain the listing (or quotation) of the
Common Stock on a Trading Market, and as soon as reasonably practicable
following the Closing (but not later than the Effective Date) to list all of the
Shares on such Trading Market. The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application the Shares, and will take such other action as is
necessary or desirable in the opinion of the Purchasers to cause all of the
Shares to be listed on such other Trading Market as promptly as possible. The
Company will take all action reasonably necessary to continue the listing (or
quotation) and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.
4.10 SHAREHOLDERS RIGHTS PLAN. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring Person" under any shareholders rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and the Purchasers.
4.11 ANTI-DILUTION PROTECTION. From the date hereof until 6 months
after the Closing Date, if the Company, any Subsidiary or any Affiliate of the
Company (which for purposes of this provision only shall include any shareholder
that holds more than 10% of the issued and outstanding Common Stock of the
Company assuming exercise in full of any Common Stock Equivalents held by such
shareholder notwithstanding any conversion or exercise limitations thereon and
notwithstanding the aforementioned holding requirement shall always include
Softline Limited and its successors and assigns) shall offer, sell, grant any
option to purchase or offer, sell or grant any right to reprice its securities,
or otherwise dispose of or issue (or announce any offer, sale, grant or any
option to purchase or other disposition) any Common Stock or Common Stock
Equivalents for an aggregate gross sales price of at least $1 million in any 30
day period (in one or more series of transactions) ("SUBSEQUENT ISSUANCE") at an
effective price per share less than 120% of the then Per Share Purchase Price
(as adjusted hereunder for any such prior Subsequent Issuances and for reverse
19
and forward stock splits, stock dividends, stock combinations and other similar
transactions and the like) (the "DISCOUNTED PURCHASE PRICE", as further defined
below), the Company shall issue to such Purchaser that number of additional
shares of Common Stock equal to (a) the actual Subscription Amount paid by such
Purchaser at the Closing divided by 83% of the Discounted Purchase Price, less
(b) the Shares previously issued to such Purchaser at the Closing and this
Section 4.11. The term "DISCOUNTED PURCHASE PRICE" shall mean the amount
actually paid by third parties for a share of Common Stock. The sale of Common
Stock Equivalents shall be deemed to have occurred at the time of the issuance
of the Common Stock Equivalents and the Discounted Purchase Price covered
thereby shall also include the actual exercise or conversion price thereof at
the time of the conversion or exercise (in addition to the consideration per
share of Common Stock underlying the Common Stock Equivalents received by the
Company upon such sale or issuance of the Common Stock Equivalents). In the case
of any Subsequent Financing involving a "VARIABLE RATE TRANSACTION" or an "MFN
TRANSACTION" (each as defined below), the Discounted Purchase Price shall be
deemed to be the lowest actual conversion or exercise price at which such
securities are converted or exercised in the case of a Variable Rate
Transaction, or the lowest adjustment price in the case of an MFN Transaction.
If shares are issued for a consideration other than cash, the per share selling
price shall be the fair value of such consideration as determined in good faith
by the Board of Directors of the Company and reasonably agreed to by the
Purchasers. The term "VARIABLE RATE TRANSACTION" shall mean a transaction in
which the Company issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (x) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities, or (y) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock. The term "MFN
TRANSACTION" shall mean a transaction in which the Company issues or sells any
securities in a capital raising transaction or series of related transactions
which grants to an investor the right to receive additional shares based upon
future transactions of the Company on terms more favorable than those granted to
the such investor in such offering. The Company may not refuse to issue a
Purchaser additional Shares hereunder based on any claim that such Purchaser or
any one associated or affiliated with such Purchaser has been engaged in any
violation of law, agreement or for any other reason, unless, an injunction from
a court, on notice, restraining and or enjoining an issuance hereunder shall
have been sought and obtained and the Company posts a surety bond for the
benefit of such Purchaser in the amount of 150% of the market value of such
Shares (based on the Closing Price of the Common Stock on the date of the event
giving rise to the Company's obligation hereunder), which is subject to the
injunction, which bond shall remain in effect until the completion of litigation
of the dispute and the proceeds of which shall be payable to the Purchaser to
the extent it obtains judgment. Nothing herein shall limit a Purchaser's right
to pursue actual damages for the Company's failure to deliver Shares hereunder
and such Purchaser shall have the right to pursue all remedies available to it
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. Notwithstanding anything to the contrary
herein, this Section 4.11 shall not apply to the following (a) the granting of
options to employees, officers, directors and consultants of the Company
20
pursuant to any stock option plan duly adopted by a majority of the non-employee
members of the Board of Directors of the Company or a majority of the members of
a committee of non-employee directors established for such purpose, or (b) the
exercise of or conversion of any convertible securities, options or warrants
issued and outstanding on the date hereof, provided such securities have not
been amended since the date hereof, or (c) acquisitions or strategic
investments, the primary purpose of which is not to raise capital, approved by a
majority of the non-employee members of the Board of Directors.
4.12 SHARE ISSUANCE LIMITATION. Notwithstanding anything herein to the
contrary, if the Company has not obtained Shareholder Approval (as defined
below), if required by the applicable rules and regulations of the Trading
Market (or any successor entity), then the Company may not issue additional
shares of Common Stock pursuant to Section 4.11 to the extent that such
issuance, when aggregated with all prior issuances pursuant to this Agreement,
is in excess of 7,600,000 shares of Common Stock or, if greater, such number of
shares of Common Stock that the Company may issue without having to obtain
shareholder approval for such issuance prior to the Closing under the applicable
rules and regulations of the Trading Market (such approval, "SHAREHOLDER
APPROVAL" and such number of shares, the "ISSUABLE MAXIMUM"). Each Holder shall
be entitled to a portion of the Issuable Maximum equal to the quotient obtained
by dividing (x) the aggregate Subscription Amount of such Purchaser at the
Closing by (y) the aggregate of all Subscription Amounts on the Closing.
4.13 EQUAL TREATMENT. No consideration shall be offered or paid to any
person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended to treat
for the Company the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.
ARTICLE V.
MISCELLANEOUS
5.1 FEES AND EXPENSES. Except for up to $20,000 for the Purchasers'
legal fees and expenses incurred in connection with review and negotiation of
the Transaction Documents which shall be paid by the Company on the Closing
Date, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities. Other than Xxxx
Capital Partners, LLC, the parties hereto represent that no brokerage or
finder's fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement.
5.2 ENTIRE AGREEMENT. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
21
5.3 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (c) the Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.
5.4. AMENDMENTS; WAIVERS. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and each Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.
5.5. CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers".
5.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7 and except
that, pursuant to the terms of the engagement letter between the Company and
Xxxx Capital Partners, LLC ("XXXX"), Xxxx is a third party beneficiary of the
representations and warranties of the Company set forth in Section 3.1.
5.8 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
22
City of San Diego. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of San Diego,
California for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or that such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto (including its affiliates,
agents, officers, directors and employees) hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of a Transaction Document, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
5.9 SURVIVAL. The representations and warranties contained herein shall
survive the Closing and delivery of the Shares for a period of two years.
5.10 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
5.11 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 REPLACEMENT OF SECURITIES. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
23
5.13 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.14 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through Xxxxxxx Xxxxxxxxx LLP. Xxxxxxx
Xxxxxxxxx LLP does not represent the Purchasers in this transaction but only
Xxxx Capital Partners, LLC, the placement agent that introduced the Company to
the Purchasers. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.
5.15 PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
(SIGNATURE PAGE FOLLOWS)
24
IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
ISLAND PACIFIC, INC.
By: /s/ Ran Xxxxxx
-------------------------------------
Name: Ran Xxxxxx
Title: Chief Financial Officer
ADDRESS FOR NOTICE:
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Attn: Ran Xxxxxx, Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Higham, XxXxxxxxx & Xxxxxxx LLP
00 Xxxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
[SIGNATURE PAGE CONTINUES]
25
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
033 GROWTH PARTNERS I, L.P.
By: 033 Asset Management, LLC,
its Investment Manager
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Chief Operating Officer
ADDRESS FOR NOTICE:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, Chief Operating Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 1,518,029
Aggregate Purchase Price of Shares: $2,352,944.95
Taxpayer ID Number, if any: 00-0000000
26
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
033 GROWTH PARTNERS II, L.P.
By: 033 Asset Management, LLC,
its Investment Manager
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Chief Operating Officer
ADDRESS FOR NOTICE:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, Chief Operating Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 365,854
Aggregate Purchase Price of Shares: $567,073.70
Taxpayer ID Number, if any: 00-0000000
27
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
OYSTER POND PARTNERS, L.P.
By: 033 Asset Management, LLC,
its Investment Manager
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Chief Operating Officer
ADDRESS FOR NOTICE:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, Chief Operating Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 170,761
Aggregate Purchase Price of Shares: $264,679.55
Taxpayer ID Number, if any: 00-0000000
28
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
033 GROWTH INTERNATIONAL FUND, LTD.
By: 033 Asset Management, LLC,
its Investment Manager
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Chief Operating Officer
ADDRESS FOR NOTICE:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx, Chief Operating Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 526,001
Aggregate Purchase Price of Shares: $815,301.55
Taxpayer ID Number, if any:
29
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
DEUTSCHE BANK AG, LONDON BRANCH
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Xxxxxx Xxxxxxx
Authorized Signatory
ADDRESS FOR NOTICE:
000 Xxxx Xxxxxx, 0xx Xxxxx Xxxx
Xxx Xxxx, XX 00000
Attn:
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 100,000
Aggregate Purchase Price of Shares: $155,000.00
Taxpayer ID Number, if any: 00-0000000
30
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
HEARTWOOD CAPITAL, LP
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: General Partner
ADDRESS FOR NOTICE:
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Tel: ( )
Fax: ( )
Number of Shares: 65,000
Aggregate Purchase Price of Shares: $100,750.00
Taxpayer ID Number, if any: 00-000-0000
31
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
BLACKSTONE PARTNERS, LP
By: /s/ Xxx Xxxxx
---------------------------------------
Name: Xxx Xxxxx
Title General Partner
ADDRESS FOR NOTICE:
000 Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxxx
Tel: ( )
Fax: ( )
Number of Shares: 35,000
Aggregate Purchase Price of Shares: $54,250.00
Taxpayer ID Number, if any: 00-0000000
32
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
PASSPORT MASTER FUND, LP
By: /s/ Xxxxx XxXxxxxxx
---------------------------------------
Name: Xxxxx XxXxxxxxx
Title: Managing Partner
ADDRESS FOR NOTICE:
c/o Passport Holdings, LLC
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: ( )
Fax: ( )
Number of Shares: 184,375
Aggregate Purchase Price of Shares: $285,781.25
Taxpayer ID Number, if any:
33
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
PASSPORT MASTER FUND 2, LP
By: /s/ Xxxxx XxXxxxxxx
---------------------------------------
Name: Xxxxx XxXxxxxxx
Title Managing Partner
ADDRESS FOR NOTICE:
c/o Passport Holdings, LLC
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: ( )
Fax: ( )
Number of Shares: 65,625
Aggregate Purchase Price of Shares: $101,718.75
Taxpayer ID Number, if any:
34
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
BURLINGAME EQUITY INVESTORS, LP
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: General Partner
ADDRESS FOR NOTICE:
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: BAM / X. Xxxxxxx
Tel: ( )
Fax: ( )
Number of Shares: 100,000
Aggregate Purchase Price of Shares: $155,000.00
Taxpayer ID Number, if any: 00-0000000
35
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
XXXXX FAMILY TRUST
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title
ADDRESS FOR NOTICE:
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attn:
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 20,000
Aggregate Purchase Price of Shares: $31,000.00
Taxpayer ID Number, if any: ###-##-####
36
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
XXXXXXX XXXXX, XXX
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title
ADDRESS FOR NOTICE:
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attn:
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 20,000
Aggregate Purchase Price of Shares: $31,000.00
Taxpayer ID Number, if any:
37
[PURCHASER SIGNATURE PAGES TO IPI SECURITIES PURCHASE AGREEMENT]
XXXX XXXXX BYPASS TRUST
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title
ADDRESS FOR NOTICE:
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares: 10,000
Aggregate Purchase Price of Shares: $15,500.00
Taxpayer ID Number, if any: 00-000-0000
38
