PREFERRED STOCK PURCHASE AGREEMENT
BETWEEN
LOGICA HOLDINGS INC.
AND
T SQUARED PARTNERS LLC
AND
T SQUARED INVESTMENTS LLC
(COLLECTIVELY "T SQUARED PARTNERS")
DATED
OCTOBER 4th, 2007
PREFERRED STOCK PURCHASE AGREEMENT
----------------------------------
This PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of the 4th day of October, 2007 between Logica Holdings Inc., a
corporation organized and existing under the laws of the State of Nevada ("LGHL"
or the "Company") and T Squared Partners LLC, a Delaware limited liability
company, and T Squared Investments LLC, a Delaware limited liability company,
(collectively "T Squared Partners" or "Investor").
PRELIMINARY STATEMENT:
----------------------
WHEREAS, the Investor wishes to purchase from the Company, upon the
terms and subject to the conditions of this Agreement, Two Hundred and Fifty
Thousand (250,000) shares of preferred stock of the Company, with such preferred
stock being as described in the Certificate of Designations, Rights and
Preferences (the "Certificate of Designations") in substantially the form
attached hereto as Exhibit A (the "Preferred Stock") for the Purchase Price set
forth in Section 1.3.12 hereof. Subject to the limitations set forth herein and
in the Certificate of Designation, the Preferred Stock shall be initially
convertible into shares of common stock of the Company at any time at a
conversion price of Forty Cents ($0.40) per share (the "Conversion Value"). In
addition, the Company will issue to the Investor Common Stock Purchase Warrants
(the "Warrants") to purchase up to an additional Three Million Six Hundred and
Fifty Thousand (3,650,000) shares of common stock of the Company at exercise
prices as stated in the Warrants; and
WHEREAS, the parties intend to memorialize the purchase and sale of
such Preferred Stock and the Warrants.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE AND DEFINITIONS
1.1 Incorporation by Reference. The foregoing recitals and the Exhibits and
Schedules attached hereto and referred to herein, are hereby acknowledged to be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent with any
other instrument or understanding among the parties governing the affairs of the
Company, shall supersede such instrument or understanding to the fullest extent
permitted by law. A copy of this Agreement shall be filed at the Company's
principal office.
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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1.3 Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
1.3.1 "1933 Act" means the Securities Act of 1933, as amended.
1.3.2 "1934 Act" means the Securities Exchange Act of 1934, as
amended.
1.3.3 "Affiliate" means a Person or Persons directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common
control with the Person(s) in question. The term "control," as used in the
immediately preceding sentence, means, with respect to a Person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50
percent of the voting rights attributable to the shares of such controlled
corporation and, with respect to a Person that is not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such controlled Person.
1.3.4 "Articles" means the Certificate of Incorporation of the Company,
as the same may be amended from time to time.
1.3.5 "Closing" shall mean the Closing of the transactions contemplated
by this Agreement on the Closing Date.
1.3.6 "Closing Date" means the date on which the payment of the Initial
Purchase Price (as defined herein) by the Investor to the company is completed
pursuant to this Agreement to purchase the Preferred Stock and Warrants, which
shall occur on or before October 4th, 2007.
1.3.7 "Common Stock" means shares of common stock of the Company, par
value $0.015 per share.
1.3.8 "Exempt Issuance" means the issuance of (a) shares of Common
Stock or options to employees, officers, advisors or directors of the Company
pursuant to any stock or 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, (b) securities upon the exercise of or conversion of any securities
issued hereunder, and (c) securities issued pursuant to acquisitions or
strategic transactions, provided any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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1.3.9 "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and affiliates, taken
as a whole and/or any condition, circumstance, or situation that would prohibit
or otherwise materially interfere with the ability of the Company to perform any
of its material obligations under this Agreement or the Registration Rights
Agreement or to perform its obligations under any other material agreement.
1.3.10 "Nevada Act" means the Nevada General Corporation Law, as
amended.
1.3.11 "Person" means an individual, partnership, firm, limited
liability company, trust, joint venture, association, corporation, or any other
legal entity.
1.3.12 "Initial Purchase Price" means the Two Hundred and Fifty
Thousand ($250,000) paid by the Investor to the Company for the Preferred Stock
and the Warrants.
1.3.13 "Registration Rights Agreement" shall mean the registration
rights agreement between the Investor and the Company attached hereto as Exhibit
B.
1.3.14 "Registration Statement" shall mean the registration statement
under the 1933 Act to be filed with the Securities and Exchange Commission for
the registration of the Shares pursuant to the Registration Rights Agreement
attached hereto as Exhibit B.
1.3.15 "SEC" means the Securities and Exchange Commission.
1.3.16 "SEC Documents" shall mean the Company's latest Form 10-K or
10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed
thereafter, and the Proxy Statement for its latest fiscal year as of the time in
question until such time as the Company no longer has an obligation to maintain
the effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.
1.3.17 "Shares" shall mean, collectively, the shares of Common Stock of
the Company issued upon conversion of the Preferred Stock subscribed for
hereunder and those shares of Common Stock issuable to the Investor upon
exercise of the Warrants.
1.3.18 "Subsequent Financing" shall mean any offer and sale of shares
of Preferred Stock or debt that is initially convertible into shares of Common
Stock or otherwise senior or superior to the Preferred Stock.
1.3.19 "Transaction Documents" shall mean this Agreement, all Schedules
and Exhibits attached hereto and all other documents and instruments to be
executed and delivered by the parties in order to consummate the transactions
contemplated hereby, including, but not limited to the documents listed in
Sections 3.2 and 3.3 hereof.
1.3.20 "Warrants" shall mean the Common Stock Purchase Warrants in the
form attached hereto Exhibit D.
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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ARTICLE II
SALE AND PURCHASE OF LOGICA HOLDINGS INC. PREFERRED STOCK AND
WARRANTS PURCHASE PRICE
2.1 Sale of Preferred Stock and Issuance of Warrants.
(a) Upon the terms and subject to the conditions set forth herein, and
in accordance with applicable law, the Company agrees to sell to the Investor,
and the Investor agrees to purchase from the Company, on the Closing Date
250,000 shares of Preferred Stock and the Warrants for the (the "Purchase
Price") of Two Hundred and Fifty Thousand Dollars ($250,000.00). The Purchase
Price shall be paid by the Investor to the Company on the Closing Date by a wire
transfer or check of the Purchase Price. The Company shall cause the Preferred
Stock and the Warrants to be issued to the Investor upon receipt of the Purchase
Price. The Company shall register the shares of Common Stock into which the
Preferred Stock is convertible pursuant to the terms and conditions of a
Registration Rights Agreement attached hereto as Exhibit B.
(b) Each share of Preferred Stock shall initially be convertible by the
Investor into Two and a half (2.5) shares of Common Stock; provided, however,
that the Investor shall not be entitled to convert the Preferred Stock into
shares of Common Stock that would result in beneficial ownership by the Investor
and its affiliates of more than 4.9% of the then outstanding number of shares of
Common Stock on such date. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.
(c) Upon execution and delivery of this Agreement and the Company's
receipt of the Initial Purchase Price, the Company shall issue to the Investor
the Warrant to purchase an aggregate of Three Million Six Hundred and Fifty
Thousand shares of Common Stock at exercise prices as stated in the Warrants,
all pursuant to the terms and conditions of the form of Warrants attached hereto
as Exhibit C; provided, however, that the Investor shall not be entitled to
exercise the Warrants and receive shares of Common Stock that would result in
beneficial ownership by the Investor and its affiliates of more than 4.9% of the
then outstanding number of shares of Common Stock on such date. For the purposes
of the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder.
2.2 Initial Purchase Price. The Initial Purchase Price shall be delivered by the
Investor in the form of a check or wire transfer made payable to the Company in
United States Dollars from the Investor on the Closing Date.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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ARTICLE III
CLOSING DATE AND DELIVERIES AT CLOSING
3.1 Closing Date. The closing of the transactions contemplated by this Agreement
(the "Closing"), unless expressly determined herein, shall be held at the
offices of the Company, at 5:00 P.M. local time, on the Closing Date or on such
other date and at such other place as may be mutually agreed by the parties,
including closing by facsimile with originals to follow.
3.2 Deliveries by the Company. In addition to and without limiting any other
provision of this Agreement, the Company agrees to deliver, or cause to be
delivered, the following:
(a) At or prior to Closing, an executed Agreement with all exhibits and
schedules attached hereto;
(b) At or prior to Closing, an executed Warrant in the name of the
Investor in the form attached hereto as Exhibit C;
(c) The executed Registration Rights Agreement;
(d) Certifications in form and substance acceptable to the Company and the
Investor from any and all brokers or agents involved in the
transactions contemplated hereby as to the amount of commission or
compensation payable to such broker or agent as a result of the
consummation of the transactions contemplated hereby and from the
Company or Investor, as appropriate, to the effect that reasonable
reserves for any other commissions or compensation that may be claimed
by any broker or agent have been set aside;
(e) Evidence of approval of the Board of Directors of the Company of the
Transaction Documents and the transactions contemplated hereby;
(f) Certificate of the President and the Secretary of the Company that the
Certificate of Designation has been adopted and filed;
(g) Certificate of Amendment to the Certificate of Incorporation of the
Company adopting the provision described in Section 6.18;
(h) Certificates of Existence or Authority to Transact Business of the
Company issued by each of the Secretaries of State for Nevada;
(i) Stock Certificate in the name of Investor evidencing the Preferred
Stock;
(j) Copies of all current executive employment agreements;
(k) All past and present financing documentation or other documentation
where stock could potentially be issued or issued as payment;
(l) All past and present litigation documents and historical financials;
and
(m) Such other documents or certificates as shall be reasonably requested
by Investor or its counsel.
3.3 Deliveries by Investor. In addition to and without limiting any other
provision of this Agreement, the Investor agrees to deliver, or cause to be
delivered, the following:
(a) A deposit in the amount of the Investor Funds;
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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(b) The executed Agreement with all Exhibits and Schedules attached
hereto;
(c) The executed Registration Rights Agreement;
(d) Such other documents or certificates as shall be reasonably requested
by the Company or its counsel.
In the event any document provided to the other party in Paragraphs 3.2 and 3.3
herein are provided by facsimile, the party shall forward an original document
to the other party within three (3) business days.
3.4 Further Assurances. The Company and the Investor shall, upon request, on or
after the Closing Date, cooperate with each other (specifically, the Company
shall cooperate with the Investor, and the Investor shall cooperate with the
Company) by furnishing any additional information, executing and delivering any
additional documents and/or other instruments and doing any and all such things
as may be reasonably required by the parties or their counsel to consummate or
otherwise implement the transactions contemplated by this Agreement.
3.5 Waiver. The Investor may waive any of the requirements of Section 3.2 of
this Agreement, and the Company at its discretion may waive any of the
provisions of Section 3.3 of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company represents and warrants to the Investor as of the date
hereof and as of Closing (which warranties and representations shall survive the
Closing regardless of what examinations, inspections, audits and other
investigations the Investor has heretofore made or may hereinafter make with
respect to such warranties and representations) as follows:
4.1 Organization and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada, and
has the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted and is duly
qualified to do business in any other jurisdiction by virtue of the nature of
the businesses conducted by it or the ownership or leasing of its properties,
except where the failure to be so qualified will not, when taken together with
all other such failures, have a Material Adverse Effect on the business,
operations, properties, assets, financial condition or results of operation of
the Company and its subsidiaries taken as a whole.
4.2 Articles of Incorporation and By-Laws. The complete and correct copies of
the Company's Articles and By-Laws, as amended or restated to date which have
been filed with the Securities and Exchange Commission are a complete and
correct copy of such document as in effect on the date hereof and as of the
Closing Date.
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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4.3 Capitalization.
4.3.1 The authorized and outstanding capital stock of the
Company is set forth in The Company's Annual Report on Form 10-K, filed on May
15, 2007 with the Securities and Exchange Commission and updated on all
subsequent SEC Documents except as provided in the table in schedule 4.3.2. All
shares of capital stock have been duly authorized and are validly issued, and
are fully paid and no assessable, and free of preemptive rights.
4.3.2 As of the date of this Agreement, the authorized capital
stock of the Company consists of 100,000,000 shares of common Stock ($0.015 par
value) and 10.000.000 shares of preferred stock ($0.015 par value), of which
approximately 14,567,198 shares of common Stock are issued and outstanding. As
of Closing, following the issuance by the Company of the Preferred Stock to the
Investor, the authorized capital stock of the Company will consist of 18,456,074
shares of Common Stock ($0.015 par value) and 250,000 shares of preferred stock
($0.015 par value). As of Closing, the stock option holders will hold options to
purchase an aggregate of 625,000 shares of Common Stock. All outstanding shares
of capital stock have been duly authorized and are validly issued, and are fully
paid and non-assessable and free of preemptive rights. All shares of capital
stock described above to be issued have been duly authorized and when issued,
will be validly issued, fully paid and non-assessable and free of preemptive
rights. Schedule 4.3.2 hereby contains all shares and derivatives currently and
potentially outstanding. The Company hereby represents that any and all shares
and current potentially dilutive events have been included in Schedule 4.3.2,
including employment agreements, acquisition, consulting agreements, debts,
payments, financing or business relationships that could be paid in equity,
derivatives or resulting in additional equity issuances that could potentially
occur.
4.3.3 Except pursuant to this Agreement and as set forth in
Schedule 4.3 hereto, and as set forth in the Company's SEC Documents, filed with
the SEC, as of the date hereof and as of the Closing Date, there are not now
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of the Company, or
agreements, understandings or arrangements to which the Company is a party, or
by which the Company is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to subscribe for, calls or
commitment of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of any class of its capital
stock. The Company agrees to inform the Investors in writing of any additional
warrants granted prior to the Closing Date.
4.3.4 The Company on the Closing Date (i) will have full
right, power, and authority to sell, assign, transfer, and deliver, by reason of
record and beneficial ownership, to the Investor, the Company Shares hereunder,
free and clear of all liens, charges, claims, options, pledges, restrictions,
and encumbrances whatsoever and other than restrictions imposed under applicable
securities ; and (ii) upon conversion of the Preferred Stock or exercise of the
Warrants, the Investor will acquire good and marketable title to such Shares,
free and clear of all liens, charges, claims, options, pledges, restrictions,
and encumbrances whatsoever other than restrictions imposed under applicable
securities except as otherwise provided in this Agreement as to the limitation
on the voting rights of such Shares in certain circumstances.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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4.4 Authority. The Company has all requisite corporate power and authority to
execute and deliver this Agreement, the Preferred Stock, and the Warrants, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company is necessary to authorize this
Agreement or to consummate the transactions contemplated hereby except as
disclosed in this Agreement. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
4.5 No Conflict; Required Filings and Consents. The execution and delivery of
this Agreement by the Company does not, and the performance by the Company of
their respective obligations hereunder will not: (i) conflict with or violate
the Articles or By-Laws of the Company; (ii) conflict with, breach or violate
any federal, state, foreign or local law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") in effect as of the date of
this Agreement and applicable to the Company; or (iii) result in any breach of,
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, give to any other entity any right of
termination, amendment, acceleration or cancellation of, require payment under,
or result in the creation of a lien or encumbrance on any of the properties or
assets of the Company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company is a party or by the Company or any of its
properties or assets is bound. Excluding from the foregoing are such violations,
conflicts, breaches, defaults, terminations, accelerations, creations of liens,
or incumbency that would not, in the aggregate, have a Material Adverse Effect.
4.6 Report and Financial Statements. The Company's Annual Report on Form 10-K,
filed on May 15, 2007 with the SEC contains the audited financial statements of
the Company. The Company has previously provided to the Investor the audited
financial statements of the Company as of December 31st, 2006, and for the six
months ended June 30th, 2007 (collectively, the "Financial Statements"). Each of
the balance sheets contained in or incorporated by reference into any such
Financial Statements (including the related notes and schedules thereto) fairly
presented the financial position of the Company, as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Financial Statements (including any related notes
and schedules thereto) fairly presents, changes in stockholders' equity and
changes in cash flows, as the case may be, of the Company, for the periods to
which they relate, in each case in accordance with United States generally
accepted accounting principles ("U.S. GAAP") consistently applied during the
periods involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements. The books and
records of the Company have been, and are being, maintained in all material
respects in accordance with U.S. GAAP and any other applicable legal and
accounting requirements and reflect only actual transaction.
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4.7 Compliance with Applicable Laws. The Company is not in violation of, or, to
the knowledge of the Company is under investigation with respect to or has been
given notice or has been charged with the violation of any Law of a governmental
agency, except for violations which individually or in the aggregate do not have
a Material Adverse Effect.
4.8 Brokers. Except as set forth on Schedule 4.8, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
4.9 SEC Documents. The Company acknowledges that the Company is a publicly held
company and has made available to the Investor after demand true and complete
copies of any requested SEC Documents. The Company has registered its Common
Stock pursuant to Section 12(d) [15(d)] of the 1934 Act, and the Common Stock is
quoted and traded on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. The Company has received no notice, either oral or
written, with respect to the continued quotation or trading of the Common Stock
on the OTC Bulletin Board. The Company has not provided to the Investor any
information that, according to applicable law, rule or regulation, should have
been disclosed publicly prior to the date hereof by the Company, but which has
not been so disclosed. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act, and rules and
regulations of the SEC promulgated thereunder and the SEC Documents did not
contain any untrue statement of a material fact or omit 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.
4.10 Litigation. To the knowledge of the Company, no litigation, claim, or other
proceeding before any court or governmental agency is pending or to the
knowledge of the Company, threatened against the Company, the prosecution or
outcome of which may have a Material Adverse Effect.
4.11 Exemption from Registration. Subject to the accuracy of the Investor's
representations in Article V, except as required pursuant to the Registration
Rights Agreement, the sale of the Common Stock and Warrants by the Company to
the Investor will not require registration under the 1933 Act. When validly
converted in accordance with the terms of the Preferred Stock, and upon exercise
of the Warrants in accordance with their terms, the Shares underlying the
Preferred Stock and the Warrants will be duly and validly issued, fully paid,
and non-assessable. The Company is issuing the Preferred Stock and the Warrants
in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D as promulgated
by the SEC under the 1933 Act, and/or Section 4(2) of the 1933 Act; provided,
however, that certain filings and registrations may be required under state
securities "blue sky" laws depending upon the residency of the Investor.
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4.12 No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its Affiliates nor, to the knowledge of the
Company, any Person acting on its or their behalf (i) has conducted or will
conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 0000 Xxx) or general
advertising with respect to the sale of the Preferred Stock or Warrants, or (ii)
made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the
Preferred Stock or Warrants, under the 1933 Act, except as required herein.
4.13 No Material Adverse Effect. Except as set forth in Schedule 4.13 attached
hereto, since August, 2007, no event or circumstance resulting in a Material
Adverse Effect has occurred or exists with respect to the Company. No material
supplier or customer has given notice, oral or written that it intends to cease
or reduce the volume of its business with the Company from historical levels.
Since June 30, 2007, no event or circumstance has occurred or exists with
respect to the Company or its businesses, properties, prospects, operations or
financial condition, that, under any applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof by the
Company but which has not been so publicly announced or disclosed in writing to
the Investor.
4.14 Material Non-Public Information. The Company has not disclosed to the
Investors any material non-public information that (i) if disclosed, would
reasonably be expected to have a material effect on the price of the Common
Stock or (ii) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
4.15 Internal Controls And Procedures. The Company maintains books and records
and internal accounting controls which provide reasonable assurance that (i) all
transactions to which the Company or any subsidiary is a party or by which its
properties are bound are executed with management's authorization; (ii) the
recorded accounting of the Company's consolidated assets is compared with
existing assets at regular intervals; (iii) access to the Company's consolidated
assets is permitted only in accordance with management's authorization; and (iv)
all transactions to which the Company or any subsidiary is a party or by which
its properties are bound are recorded as necessary to permit preparation of the
financial statements of the Company in accordance with U.S. generally accepted
accounting principles.
4.16 Full Disclosure. No representation or warranty made by the Company in this
Agreement and no certificate or document furnished or to be furnished to the
Investor pursuant to this Agreement contains or will contain any untrue
statement of a material fact, or knowingly omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
The Investor represents and warrants to the Company that:
5.1 Organization and Standing of the Investor. The Investor is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. The state in which any offer to purchase shares
hereunder was made or accepted by such Investor is the state shown as such
Investor's address. The Investor was not formed for the purpose of investing
solely in the Preferred Stock, the Warrants or the shares of Common Stock which
are the subject of this Agreement.
5.2 Authorization and Power. The Investor has the requisite power and authority
to enter into and perform this Agreement and to purchase the securities being
sold to it hereunder. The execution, delivery and performance of this Agreement
by the Investor and the consummation by the Investor of the transactions
contemplated hereby have been duly authorized by all necessary limited liability
company action where appropriate. This Agreement and the Registration Rights
Agreement have been duly executed and delivered by the Investor and at the
Closing shall constitute valid and binding obligations of the Investor
enforceable against the Investor in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
5.3 No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by the Investor of the transactions contemplated hereby or
relating hereto do not and will not (i) result in a violation of such Investor's
charter documents or bylaws where appropriate or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument to which the Investor is a party, or result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Investor or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect on such Investor). The Investor is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of such Investor's obligations under this Agreement or to
purchase the securities from the Company in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, the
Investor is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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5.4 Financial Risks. The Investor acknowledges that such Investor is able to
bear the financial risks associated with an investment in the securities being
purchased by the Investor from the Company and that it has been given full
access to such records of the Company and the subsidiaries and to the officers
of the Company and the subsidiaries as it has deemed necessary or appropriate to
conduct its due diligence investigation. The Investor is capable of evaluating
the risks and merits of an investment in the securities being purchased by the
Investor from the Company by virtue of its experience as an investor and its
knowledge, experience, and sophistication in financial and business matters and
the Investor is capable of bearing the entire loss of its investment in the
securities being purchased by the Investor from the Company.
5.5 Accredited Investor. The Investor is (i) an "accredited investor" as that
term is defined in Rule 501 of Regulation D promulgated under the 1933 Act by
reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the
kind described in this Agreement and the related documents, (iii) able, by
reason of the business and financial experience of its officers (if an entity)
and professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the securities being purchased by the Investor from the Company.
5.6 Brokers. Except as set forth in Schedule 4.8, no broker, finder or
investment banker is entitled to any brokerage, finders or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investor.
5.7 Knowledge of Company. The Investor and such Investor's advisors, if any,
have been, upon request, furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the securities being purchased by the Investor from the Company. The
Investor and such Investor's advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries.
5.8 Risk Factors. The Investor understands that such Investor's investment in
the securities being purchased by the Investor from the Company involves a high
degree of risk. The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the securities being purchased by the Investor
from the Company. The Investor warrants that such Investor is able to bear the
complete loss of such Investor's investment in the securities being purchased by
the Investor from the Company.
5.9 Full Disclosure. No representation or warranty made by the Investor in this
Agreement and no certificate or document furnished or to be furnished to the
Company pursuant to this Agreement contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading. Except as set
forth or referred to in this Agreement, Investor does not have any agreement or
understanding with any person relating to acquiring, holding, voting or
disposing of any equity securities of the Company.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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5.10 Backgrounds Checks. Background checks have been completed and none of the
Officers or Directors of the Company have previous charges against them by the
SEC or have been banned from the securities industry for any reason. None of the
Officer or Directors of the Company have ever filed a bankruptcy or have been
charged with a felony either personally or through an affiliated company.
5.11 Payment of Due Diligence Expenses. At Closing of the initial Two Hundred
and Fifty Thousand Dollars ($250,000) the Company shall disperse to the Investor
Fifteen Thousand Dollars ($15,000.00) for due diligence expenses. At Closing of
the second Two Hundred and Fifty Thousand Dollars ($250,000) the Company shall
disperse to the Investor Fifteen Thousand Dollars ($15,000.00) for due diligence
expenses..
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 Registration Rights. The Company shall use reasonable and best efforts to
maintain the Registration Rights Agreement to remain in full force and effect
according to the provisions of the Registration Rights Agreement and the Company
shall comply in all material respects with the terms thereof.
6.2 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, shares of Common Stock for the purpose of enabling the
Company to issue the shares of Common Stock underlying the Preferred Stock and
Warrants.
6.3 Compliance with Laws. The Company hereby agrees to comply in all material
respects with the Company's reporting, filing and other obligations under the
Laws.
6.4 Exchange Act Registration. The Company (a) will continue its obligation to
report to the SEC under the 1934 Act and will use its best efforts to comply in
all respects with its reporting and filing obligations under the 1934 Act, and
will not take any action or file any document (whether or not permitted by the
1934 Act or the rules thereunder) to terminate or suspend any such registration
or to terminate or suspend its reporting and filing obligations under the 1934
until the Investors have disposed of all of their Shares.
6.5 Corporate Existence; Conflicting Agreements. The Company will take all steps
reasonably necessary to preserve and continue the corporate existence of the
Company. The Company shall not enter into any agreement, the terms of which
agreement would restrict or impair the right or ability of the Company to
perform any of its obligations under this Agreement or any of the other
agreements attached as exhibits hereto.
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6.6 Listing, Securities Exchange Act of 1934 and Rule 144 Requirements. The
Company is required to maintain a listing on an exchange or the OTC Bulletin
Board and maintain their status as a Company regulated by Securities Exchange
Act of 1934 and if the Company is current currently listed on the Pink Sheets
the Company must be fully reporting per Rule 144 until such time as they are
regulated by the Securities Exchange Act of 1934. If for any time post Closing
the Company is no longer regulated by the Securities Exchange Act of 1934 and is
not a fully reporting Company, then the Company shall pay to the Investors as
liquidated damages and not as a penalty, two percent (2%) a month in cash or PIK
at the option of the Investor. Such damages shall cease at the time the Company
begins complying with the standards as mentioned above in Section 6.6.
6.7 Preferred Stock. On or prior to the Closing Date, the Company will cause to
be cancelled all outstanding preferred stock in the Company with the exceptions
of Preferred Stock issued to the Investor. For a period of two years from the
closing the Company will not issue any preferred stock of the Company below a
$1.00 per share with the exception of Preferred Stock issued to the Investor.
6.8 Convertible Debt. On or prior to the Closing Date, the Company will cause to
be cancelled all convertible debt in the Company. Except for the existing open
ended agreement at a conversion price of $0.50 with our current shareholder(s)
which does not violate any of the covenants in this agreement; for a period of
three months from the closing the Company will not issue any convertible debt
with any covenants that violate the terms of this agreement and unless the
conversion price is above One Dollar ($1.00) per share.
6.9 Reset Equity Deals. On or prior to the Closing Date, the Company will cause
to be cancelled any and all reset features related to any shares outstanding
that could result in additional shares being issued. For a period of five years
from the closing the Company will not enter into any transactions that have any
reset features that could result in additional shares being issued.
6.10 Share Issuances. The Company has no other potentially dilutive clauses in
any agreements, contracts or previous share issuances that have not been
disclosed to the Investor.
6.11 Independent Directors. Within four (4) months post closing the Company will
take action to nominate representatives that would result in an independent
board of the Company to be voted on by shareholder. If at any time after four
(4) months post Closing the board shall not have taken the steps to nominate
directors that would result in board to be voted on by shareholders, the Company
shall pay to the Investors, pro rata, as liquidated damages and not as a
penalty, an amount equal to twenty -four percent (24%) of the Purchase Price per
annum, payable monthly in cash or Preferred Stock at the option of the Investor.
The parties agree that the only damages payable for a violation of the terms of
this Agreement with respect to which liquidated damages are expressly provided
shall be such liquidated damages. Nothing shall preclude the Investor from
pursuing or obtaining specific performance or other equitable relief with
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
PAGE 14 OF 30
respect to this Agreement. The parties hereto agree that the liquidated damages
provided for in this Section 6.11 constitute a reasonable estimate of the
damages that may be incurred by the Investor by reason of the failure of the
Company to appoint at least two independent directors in accordance with the
provision hereof.
6.12 Independent Directors Become Majority of Audit and Compensation Committees.
Within four (4) months post closing the Company will take action to nominate
representatives that would result in an independent board member representing
the Audit and Compensation Committees of the board of the Company to be voted on
by shareholder. If at any time after four (4) months post Closing the Company
has not nominated board members representing the Audit and Compensation
Committees of the board of the Company to be voted on by shareholders, the
Company shall pay to the Investors, pro rata, as liquidated damages and not as a
penalty, an amount equal to twenty -four percent (24%) of the Purchase Price per
annum, payable monthly in cash or Preferred Stock at the option of the Investor.
The parties agree that the only damages payable for a violation of the terms of
this Agreement with respect to which liquidated damages are expressly provided
shall be such liquidated damages. Nothing shall preclude the Investor from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement. The parties hereto agree that the liquidated damages
provided for in this Section 6.12 constitute a reasonable estimate of the
damages that may be incurred by the Investor by reason of the failure of the
Company to appoint at least two independent directors in accordance with the
provision hereof.
6.13 Use of Proceeds. The Company will use the proceeds from the sale of the
Preferred Stock and the Warrants (excluding amounts paid by the Company for
legal and administrative fees in connection with the sale of such securities)
for general working capital and acquisitions.
6.14 Right of First Refusal. For a period two years from the date of the
Closing, the Investor shall have the right to participate in any subsequent
funding by the Company on a pro rata basis at one hundred percent (100%) of the
offering price.
6.15 Price Adjustment. From the date hereof based on the number of Preferred
Shares held at that time, until such time as the no Purchaser holds any of the
Securities the Company closes on the sale of a note or notes, shares of Common
Stock, or shares of any class of Preferred Stock at a price per share of Common
Stock, or with a conversion right to acquire Common Stock at a price per share
of Common Stock, that is less than the Conversion Price (as adjusted to the
capitalization per share as of the Closing Date, following any stock splits,
stock dividends, or the like) (collectively, the "Subsequent Conversion Price"),
the Company shall make a post-Closing adjustment in the Conversion Price of the
shares held at that time so that the effective price per share paid by the
Investor is reduced to being equivalent to such lower conversion price after
taking into account any prior conversions of the Preferred Stock and/or
exercises of the Warrant. This provision shall not apply to any Exempt
Issuances.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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6.16 Price Adjustment Based on Earnings Per Share. In the event the Company
earns between $0.154 and $0.077 (50% Decline) per share (where such earnings in
this paragraph shall always be defined as earnings on a pre tax fully diluted
basis (including dilution from any options, warrants and convertible securities)
as reported for the audited fiscal year ended December 31, 2008 from continuing
operations before any non-cash items the then current Conversion Price to the
Investor at the time the audited numbers are reported to the SEC shall be
decrease proportionately by 0% if the pre tax earnings are $0.154 per share or
greater and by 50% if the pre tax earnings are $0.077 per share (50% decrease).
For example if the earnings are $0.123 per share or less (20% Decline) then the
then current Conversion Price to the investor shall be reduced by 20%. Such
adjustment shall be made automatically within five business days of the audited
numbers being reported to the SEC. In the event the Company earns below
$0.00025, or has a loss, the warrant exercise price shall be reduced to a
maximum of 50% of the exercise price.
6.17 Insider Selling. The earliest any "Insiders" can start selling their shares
shall be one year from Closing, but can not sell below $2.00 per share for the
first two years post closing. Insiders shall include all officers and directors
of the Company. The managing members of the Investor and the Investor shall not
be considered "Insiders".
6.18 Employment Contracts. For five years after the Closing Company must have a
unanimous opinion from the Compensation Committee of the Board of Directors that
any awards other than salary are usual, appropriate and reasonable for any
officer or director holding a similar position in other fully reporting public
companies with independent majority boards with similar market capitalizations
in the same industry with securities listed on the OTCBB, ASE, NYSE or NASDAQ.
6.19 Subsequent Equity Sales. From the date hereof until five years from the
date of closing the Company shall be prohibited from effecting or entering into
an agreement to affect any Subsequent Financing involving a "Variable Rate
Transaction" or an "MFN Transaction" (each as defined below). The term "Variable
Rate Transaction" shall mean a transaction in which the Company issues or sells
(i) 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 (A) 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 (B) 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 such investor in such offering. Any Purchaser
shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect
damages. Notwithstanding the foregoing, this Section 6.18 shall not apply in
respect of an Exempt Issuance, except that no Variable Rate Transaction or MFN
Transaction shall be an Exempt Issuance. But in all cases excluding any
adjustments for stock splits, stock dividends, recapitalization and other
similar adjustments.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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6.20 Stock Splits. All forward and reverse stock splits shall affect all equity
and derivative holders proportionately.
6.21 Company Put Right. The Company has the right to force the Investor, and the
Investor has the right, to purchase an additional $250,000 in Preferred Stock
convertible the Company at $0.48 per share on October 25th, 2007. The Preferred
Stock will have the same rights, covenants and warranties as the initial
Preferred Stock. Should the Investor not remit the $250,000 on or before October
25, 2007, the Investor shall receive a ten (10) business day grace period. If by
such time, the Investor has not remitted the funds to the Company, any and all
Warrants issued or to be issued to the Investor under this Agreement shall
immediately terminate and be of no force and affect. The shares issuable upon
conversion of the Preferred Stock is to be included in the registration
statement to be filed per the Registration Rights Agreement and have the same
rights and warranties per the Registration Rights Agreement.
ARTICLE VII
COVENANTS OF THE INVESTOR
7.1 Compliance with Law. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and rules and
regulations of any public market on which the Company's Common Stock is listed.
7.2 Transfer Restrictions. The Investor's acknowledge that (1) the Preferred
Stock, Warrants and shares underlying the Preferred Stock and Warrants have not
been registered under the provisions of the 1933 Act, and may not be transferred
unless (A) subsequently registered thereunder or (B) the Investor shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Preferred Stock,
Warrants and shares underlying the Notes and Warrants to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration; and
(2) any sale of the Preferred Stock, Warrants and shares underlying the
Preferred Stock and Warrants made in reliance on Rule 144 promulgated under the
1933 Act may be made only in accordance with the terms of said Rule and further,
if said Rule is not applicable, any resale of such securities under
circumstances in which the seller, or the person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder.
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7.3 Restrictive Legend. The Investor acknowledges and agrees that the Preferred
Stock, the Warrants and the Shares underlying the Preferred Stock and Warrants,
and, until such time as the Shares underlying the Preferred Stock and Warrants
have been registered under the 1933 Act and sold in accordance with an effective
Registration Statement, certificates and other instruments representing any of
the Shares, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of any such
securities):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
S, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT."
7.4 Amendment to Certificate of Incorporation. Investor hereby agrees to vote
any shares of capital stock that it may own directly or beneficially, for the
amendment to the Certificate of Incorporation referenced in Section 6.20.
Pending adoption of such amendment, Investor hereby agrees for itself and its
successors and assigns that neither this Section 7.4 or Section 6.20 above, or
any restriction on exercise of the Warrant shall be amended, modified or waived
without the consent of the holders of a majority of the shares of Common Stock
held by Persons who are not Affiliates of the Company, or the Investor or
Affiliates of the Investor.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date, of the following conditions:
8.1 No Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.
8.2 Representations True and Correct. The representations and warranties of the
Investor contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if made
on as of the Closing Date.
8.3 Compliance with Covenants. The Investor shall have performed and complied in
all material respects with all covenants, agreements, and conditions required by
this Agreement to be performed or complied by it prior to or at the Closing
Date.
8.4 No Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed hereby.
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AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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ARTICLE IX
CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS
The obligation of the Investors to consummate the transactions
contemplated hereby shall be subject to the fulfillment, on or prior to Closing
Date unless specified otherwise, of the following conditions:
9.1 No Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.
9.2 Representations True and Correct. The representations and warranties of the
Company contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if made
on as of the Closing Date.
9.3 Compliance with Covenants . The Company shall have performed and complied in
all material respects with all covenants, agreements, and conditions required by
this Agreement to be performed or complied by it prior to or at the Closing
Date.
9.4 No Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed hereby.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date
10.1.1 by mutual written consent of the Investor and the Company;
10.1.2 by the Company upon a material breach of any representation,
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or the Investor upon a material breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company or the Investor,
respectively, shall have become untrue, in either case such that any of the
conditions set forth in Article VIII or Article IX hereof would not be satisfied
(a "Terminating Breach"), and such breach shall, if capable of cure, not have
been cured within five (5) business days after receipt by the party in breach of
a notice from the non-breaching party setting forth in detail the nature of such
breach.
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10.2 Effect of Termination. Except as otherwise provided herein, in the event of
the termination of this Agreement pursuant to Section 10.1 hereof, there shall
be no liability on the part of the Company or the Investor or any of their
respective officers, directors, agents or other representatives and all rights
and obligations of any party hereto shall cease; provided that in the event of a
Terminating Breach, the breaching party shall be liable to the non-breaching
party for all costs and expenses incurred by the non-breaching party not to
exceed $50,000.00.
10.3 Amendment. This Agreement may be amended by the parties hereto any time
prior to the Closing Date by an instrument in writing signed by the parties
hereto.
10.4 Waiver. At any time prior to the Closing Date, the Company or the Investor,
as appropriate, may: (a) extend the time for the performance of any of the
obligations or other acts of other party or; (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto which have been made to it or them; or (c) waive compliance with
any of the agreements or conditions contained herein for its or their benefit.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound hereby.
ARTICLE XI
GENERAL PROVISIONS
11.1 Transaction Costs. Except as otherwise provided herein, each of the parties
shall pay all of his or its costs and expenses (including attorney fees and
other legal costs and expenses and accountants' fees and other accounting costs
and expenses) incurred by that party in connection with this Agreement;
provided, the Company shall pay Investor such due diligence expenses as
described in section 5.10.
11.2 Indemnification. The Investor agrees to indemnify, defend and hold the
Company (following the Closing Date) and its officers and directors harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of or
result from any breach of this Agreement by such Investor or failure by such
Investor to perform with respect to any of its representations, warranties or
covenants contained in this Agreement or in any exhibit or other instrument
furnished or to be furnished under this Agreement. The Company agrees to
indemnify, defend and hold the Investor harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities or
damages, including interest, penalties and reasonable attorney's fees, that it
shall incur or suffer, which arise out of, result from or relate to any breach
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
PAGE 20 OF 30
of this Agreement or failure by the Company to perform with respect to any of
its representations, warranties or covenants contained in this Agreement or in
any exhibit or other instrument furnished or to be furnished under this
Agreement. In no event shall the Company or the Investors be entitled to recover
consequential or punitive damages resulting from a breach or violation of this
Agreement nor shall any party have any liability hereunder in the event of gross
negligence or willful misconduct of the indemnified party. In the event of a
breach of this Agreement by the Company, the Investor shall be entitled to
pursue a remedy of specific performance upon tender into the Court an amount
equal to the Purchase Price hereunder. The indemnification by the Investor shall
be limited to $50,000.00.
11.3 Headings. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.4 Entire Agreement. This Agreement (together with the Schedule, Exhibits,
Warrants and documents referred to herein) constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
11.5 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given (i) on the date they are delivered if
delivered in person; (ii) on the date initially received if delivered by
facsimile transmission followed by registered or certified mail confirmation;
(iii) on the date delivered by an overnight courier service; or (iv) on the
third business day after it is mailed by registered or certified mail, return
receipt requested with postage and other fees prepaid as follows:
If to the Company:
-----------------
00 Xxxxxx Xxxx,
Xxxxxxx,
Xxxxxxx X0X 0X0,
Xxxxxx
Attn. Xxxx Xxxxxx
If to the Investor:
------------------
T Squared Partners LLC / T Squared Investments LLC
c/o T Squared Capital LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
11.6 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
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transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
11.7 Binding Effect. All the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
11.8 Preparation of Agreement. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its preparation.
The parties acknowledge each contributed and is equally responsible for its
preparation.
11.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law.
11.10 Jurisdiction. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of New York. If any action is
brought among the parties with respect to this Agreement or otherwise, by way of
a claim or counterclaim, the parties agree that in any such action, and on all
issues, the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the Federal Courts serving
the State of New York. In the event suit or action is brought by any party under
this Agreement to enforce any of its terms, or in any appeal there from, it is
agreed that the prevailing party shall be entitled to reasonable attorneys fees
to be fixed by the arbitrator, trial court, and/or appellate court.
11.11 Preparation and Filing of Securities and Exchange Commission filings. The
Investor shall reasonably assist and cooperate with the Company in the
preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 Further Assurances, Cooperation. Each party shall, upon reasonable request
by the other party, execute and deliver any additional documents necessary or
desirable to complete the transactions herein pursuant to and in the manner
contemplated by this Agreement. The parties hereto agree to cooperate and use
their respective best efforts to consummate the transactions contemplated by
this Agreement.
11.13 Survival. The representations, warranties, covenants and agreements made
herein shall survive the Closing of the transaction contemplated hereby.
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
PAGE 22 OF 30
11.14 Third Parties. Except as disclosed in this Agreement, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
11.15 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement herein, nor shall
nay single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
11.16 Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
PREFERRED STOCK PURCHASE AGREEMENT BETWEEN LOGICA HOLDINGS INC.
AND T SQUARED PARTNERS LLC AND T SQUARED INVESTMENTS LLC
PAGE 23 OF 30
IN WITNESS WHEREOF, the Investors and the Company have as of the date
first written above executed this Agreement.
THE COMPANY:
LOGICA HOLDINGS INC.
Xxxx Xxxxxx
By: Logica Holdings Inc
Title: Chief Financial Officer
INVESTOR:
T Squared Partners LLC
By: T Squared Capital LLC, its General Partners
--------------------------------
Xxxxxx X.Xxxxx
Managing Member
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx XX 00000
INVESTOR:
T Squared Investments LLC
By: T Squared Capital LLC, its Managing Member
--------------------------------
Xxxxxx X.Xxxxx
Managing Member
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx XX 00000
Schedule A
----------
NUMBER OF SHARES
OF COMMON STOCK
AMOUNT OF INTO WHICH PREFERRED NUMBER OF SHARES
NAME AND ADDRESS INVESTMENT STOCK IS CONVERTIBLE UNDERLYING WARRANTS
---------------- ---------- -------------------- -------------------
T Squared Capital LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000 $250,000 625,000 3,650,000
Attn: Xxxxxx X. Xxxxx
Additional Investment Obligation
--------------------------------
T Squared Capital LLC $250,000 520,833
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Exhibit A
---------
Form of Certificate of Designation of Preferences, Rights and Limitations
-------------------------------------------------------------------------
Exhibit B
---------
Registration Rights Agreement
-----------------------------
Exhibit C
---------
Warrants
--------
