EXHIBIT A
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made as of the 14th day of June,
2004 by and among VitalStream Holdings, Inc., a Nevada corporation (the
"Company"), and the Investors set forth on the signature pages hereto (each an
"Investor" and collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Section 4(2) and/or Regulation D ("Regulation D"), as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended; and
B. Each of the Investors wishes to purchase from the Company, and the
Company wishes to sell and issue to each of the Investors, upon the terms and
conditions stated in this Agreement, such number of (i) shares of the Company's
Common Stock, par value $0.001 per share (the "Common Stock") and (ii) warrants
to purchase shares of Common Stock in the form attached hereto as Exhibit A (the
"Warrants") as set forth below each Investor's name on such Investor's signature
page hereto; and
C. Contemporaneous with the sale of the Common Stock and Warrants, the
parties hereto will execute and deliver a Registration Rights Agreement, in the
form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company will agree to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and applicable state securities laws; and
D. Contemporaneous with the sale of the Common Stock and Warrants, the
parties hereto and certain stockholders of the Company will execute and deliver
an Investor Rights Agreement, in the form attached hereto as Exhibit C (the
"Investor Rights Agreement"), pursuant to which the Company and such
stockholders will agree to provide for the future voting of their shares of the
Company's capital stock and certain other terms.
E. Contemporaneous with the sale of the Common Stock and Warrants, the
parties hereto and certain stockholders of the Company will execute and deliver
a Second Amended and Restated Registration Rights Agreement, in the form
attached hereto as Exhibit D (the "Second Amended Registration Rights
Agreement"), pursuant to which the Investor will be granted certain
participation rights in future registration of the Company.
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:
A-1
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such Person.
"Applied Conversion Proceeds" means, with respect to any Investor party to
the Conversion Agreement, the amount that such Investor would be entitled to
receive at the closing under the Conversion Agreement that such Investor has
authorized the Company in the Conversion Agreement to apply toward the Purchase
Price of such Investor.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in Los Angeles are open for the general transaction of business.
"Common Stock" has the meaning set forth in the Recitals.
"Company's Knowledge" means the actual knowledge of the officers (as
defined in Rule 405 under the 0000 Xxx) of the Company, after due inquiry.
"Confidential Information" means trade secrets, confidential information
and know-how (including but not limited to ideas, formulae, compositions,
processes, procedures and techniques, research and development information,
computer program code, performance specifications, support documentation,
drawings, specifications, designs, business and marketing plans, and customer
and supplier lists and related information).
"Control" (including the terms "controlling," "controlled by" or "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Conversion Agreement" means the Conversion Agreement dated as of June 14,
2004, by and among the Company, Dolphin Communications Parallel Fund II
(Netherlands), L.P. and Dolphin Communications Fund II, L. P. and the holders of
Series A Preferred party thereto.
"Intellectual Property" means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).
"Major Investor" means any Investor that purchases Shares and Warrants
with a Purchase Price of $6 million or more.
"Material Adverse Effect" means a material adverse effect on (i) the
assets, liabilities, results of operations, financial condition or business of
the Company and its Subsidiaries taken as a whole (provided, however, that the
parties agree that any event that would reasonably be expected to cause less
than a $100,000 reduction in the shareholders equity of the Company or
A-2
the net income (loss) of the Company shall not be deemed to be "material") or
(ii) the ability of the Company to perform its obligations under the Transaction
Documents.
"Nasdaq" means The Nasdaq Stock Market, Inc.
"Person" means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
"Purchase Price" means, with respect to each Investor, the Purchase Price
designated on the counterpart signature page signed by such Investor. The
Purchase Price shall be calculated based upon a purchase price of $.61332 per
unit of one Share and .3 Warrant.
"Registration Statement" shall mean any registration statement of the
Company filed under the 1933 Act that covers the resale of any of the Securities
pursuant to the provisions of the Registration Rights Agreement by and among the
Company and the Investors as of the date hereof, amendments and supplements to
such Registration Statement, including post-effective amendments, all exhibits
and all material incorporated by reference in such Registration Statement.
"SEC Filings" has the meaning set forth in Section 4.6.
"Securities" means the Shares, the Warrants and the Warrant Shares.
"Shares" means the shares of Common Stock being purchased by the Investors
hereunder.
"Subsidiary" means a Person of which the Company holds more than 40% of
the outstanding equity interests.
"Transaction Documents" means this Agreement, the Warrants, the
Registration Rights Agreement and the Investor Rights Agreement.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
"1933 Act" means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares and Warrants. Subject to the
terms and conditions of this Agreement, on the Closing Date, each of the
Investors shall severally, and not jointly, purchase, and the Company shall sell
and issue to the Investors, severally and not jointly, the Shares and Warrants
in the respective amounts set forth opposite the Investors' names on the
A-3
signature pages attached hereto in exchange for the Purchase Price as specified
in Section 3 below.
3. Closing. The Company shall deliver to ThinkEquity Partners (the
"Placement Agent"), in trust, a certificate or certificates, registered in such
name or names as the Investors may designate, representing the Shares and
Warrants, with instructions that such certificates are to be held for release to
each Investor only upon payment in full of that Investor's Purchase Price as set
forth in the signature pages of this Agreement. Upon such receipt by the
Placement Agent of the certificates, each Investor shall promptly, but no more
than one Business Day thereafter, cause a wire transfer in same-day funds to be
sent to the account of the Company set forth immediately following this
paragraph in an amount representing such Investor's Purchase Price as set forth
on the signature pages to this Agreement; provided, however, any Investor party
to the Conversion Agreement shall be required to wire transfer only the amount
by which the Purchase Price exceeds the Applied Conversion Proceeds. On the date
(the "Closing Date") the Company receives from any Investor, such Investor's
Purchase Price constituting in the aggregate the minimum amount required by
Section 6.2(d) hereof, the certificates evidencing the Shares and Warrants
purchased by such Investors shall be released to the Investors (the "Closing").
To the extent the Closing does not occur within three Business Days of the date
the Company receives from any Investor such Investor's Purchase Price, the
Company shall, by the next Business Day, return to such Investor such Investor's
Purchase Price. The Closing of the purchase and sale of the Shares and Warrants
shall take place at the offices of the Company, or at such other location and on
such other date as the Company and the Investors shall mutually agree. To the
extent permitted by Section 6, the transactions contemplated by this Agreement
may occur in more than one Closing, in which case the terms "Closing" and
"Closing Date" shall, for each Investor, refer to or be based upon the
Closing(s) in which such Investor participates.
The Purchase Price shall be wire transferred to the following account:
Alliance Bank
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Routing # 000000000
Beneficiary Account Name: VitalStream, Inc.
Beneficiary Account Number: 00000000
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):
4.1 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to carry on its business as now
conducted and to own its properties. Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property
A-4
makes such qualification or leasing necessary unless the failure to so qualify
has not and could not reasonably be expected to have a Material Adverse Effect.
The Subsidiaries are reflected on Schedule 4.1 hereto.
4.2 Authorization. The Company has full power and authority
and has taken all requisite action on the part of the Company, and its officers,
directors and stockholders necessary for (i) the authorization, execution and
delivery of the Transaction Documents, (ii) authorization of the performance of
all obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Securities. The Transaction Documents constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally.
4.3 Capitalization. Schedule 4.3 sets forth as of the date
hereof (a) the authorized capital stock of the Company; (b) the number of shares
of capital stock issued and outstanding; (c) the number of shares of capital
stock issuable pursuant to options or other rights outstanding under the
Company's stock plans; and (d) the number of shares of capital stock issuable
and reserved for issuance pursuant to securities (other than the Shares, the
Warrants and options or other rights outstanding under the Company's stock
plans) exercisable for, or convertible into or exchangeable for any shares of
capital stock of the Company. All of the issued and outstanding shares of the
Company's capital stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of pre-emptive rights and were issued in full
compliance with applicable state and federal securities law and any rights of
third parties. Except as described on Schedule 4.3, all of the issued and
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive
rights, were issued in full compliance with applicable state and federal
securities law and any rights of third parties and are owned by the Company,
beneficially and of record, subject to no lien, encumbrance or other adverse
claim. Except as described on Schedule 4.3, no Person is entitled to pre-emptive
or similar statutory or contractual rights with respect to any securities of the
Company. Except as described on Schedule 4.3, there are no outstanding warrants,
options, convertible securities or other rights, agreements or arrangements of
any character under which the Company or any of its Subsidiaries is or may be
obligated to issue any equity securities of any kind and except as contemplated
by this Agreement, neither the Company nor any of its Subsidiaries is currently
in negotiations for the issuance of any equity securities of any kind. Except as
described on Schedule 4.3 and except for the Registration Rights Agreement and
the Investor Rights Agreement, there are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them. Except as described on
Schedule 4.3, no Person has the right to require the Company to register any
securities of the Company under the 1933 Act, whether on a demand basis or in
connection with the registration of securities of the Company for its own
account or for the account of any other Person.
Except as described on Schedule 4.3, the issuance and sale of the
Securities hereunder will not obligate the Company to issue shares of Common
Stock or other securities to any other
A-5
Person (other than the Investors) and will not result in the adjustment of the
exercise, conversion, exchange or reset price of any outstanding security.
Except as described on Schedule 4.3, the Company does not have outstanding
stockholder purchase rights or a "poison pill" or any similar arrangement in
effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events.
4.4 Valid Issuance. The Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Investors),
except for restrictions on transfer set forth in the Transaction Documents or
imposed by applicable securities laws. The Warrants have been duly and validly
authorized and will be validly issued when issued in accordance with the terms
of this Agreement. Upon the due exercise of the Warrants and issuance of the
Warrants Shares in accordance with the terms of the Warrants, the Warrant Shares
will be validly issued, fully paid and nonassessable, free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investors. The Company has reserved a sufficient number
of shares of Common Stock for issuance upon the exercise of the Warrants, free
and clear of all encumbrances and restrictions, except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws and except for those created by the Investors.
4.5 Consents. The execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Securities require no consent of, action by or in respect of, or filing with,
any Person, governmental body, agency or official having jurisdiction over the
Company or any of its Affiliates that has not been obtained, including without
limitation, the OTC Bulletin Board (the "Bulletin Board") and the Company's
stockholders, other than filings that have been made pursuant to applicable
state securities laws and post-sale filings pursuant to applicable state and
federal securities laws which the Company undertakes to file within the
applicable time periods. Subject to the accuracy of the representations and
warranties of each Investor set forth in Section 5 hereof, the Company has taken
all action necessary to exempt (i) the issuance and sale of the Securities, (ii)
the issuance of the Warrant Shares upon due exercise of the Warrants, and (iii)
the other transactions contemplated by the Transaction Documents from the
provisions of any shareholder rights plan or other "poison pill" arrangement,
any anti-takeover, business combination or control share law or statute binding
on the Company or to which the Company or any of its assets and properties may
be subject and any provision of the Company's Certificate of Incorporation or
Bylaws that is or could reasonably be expected to become applicable to the
Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Securities and the ownership, disposition or
voting of the Securities by the Investors or the exercise of any right granted
to the Investors pursuant to this Agreement or the other Transaction Documents.
4.6 Delivery of SEC Filings; Business. The Company has made
available to the Investors through the XXXXX system true and complete copies of
the Company's most recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 (the "10-K"), and all
A-6
other reports filed by the Company pursuant to the 1934 Act since the filing of
the 10-K and prior to the date hereof (collectively, the "SEC Filings"). The SEC
Filings are the only filings required of the Company pursuant to the 1934 Act
for such period. The Company and its Subsidiaries are engaged in all material
respects only in the business described in the SEC Filings and, to the extent
required by rules governing the content of the SEC Filings, the SEC Filings
contain a complete and accurate description in all material respects of the
business of the Company and its Subsidiaries, taken as a whole.
4.7 Use of Proceeds. The net proceeds of the sale of the
Shares and the Warrants hereunder shall be used by the Company for working
capital and general corporate purposes, including acquisitions of complementary
businesses, products or technologies.
4.8 No Material Adverse Change. Since March 31, 2004, except
as identified and described in the SEC Filings, as expressly contemplated by
this Agreement or as described on Schedule 4.8, there has not been:
(a) any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that
reflected in the financial statements included in the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2004, except for changes in the
ordinary course of business which have not and could not reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate;
(b) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;
(c) any material damage, destruction or loss, whether
or not covered by insurance to any assets or properties of the Company or its
Subsidiaries;
(d) any waiver, not in the ordinary course of
business, by the Company or any Subsidiary of a material right or of a material
debt owed to it;
(e) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by the Company or a Subsidiary,
except in the ordinary course of business and which is not material to the
assets, properties, financial condition, operating results, business or
prospects of the Company and its Subsidiaries taken as a whole (as such business
is presently conducted);
(f) any change or amendment to the Company's
Certificate of Incorporation or Bylaws, or material change to any material
contract or arrangement by which the Company or any Subsidiary is bound or to
which any of their respective assets or properties is subject;
(g) any material labor difficulties or labor union
organizing activities with respect to employees of the Company or any
Subsidiary;
(h) any material transaction entered into by the
Company or a Subsidiary other than in the ordinary course of business;
A-7
(i) the loss of the services of any key employee, or
material change in the composition or duties of the senior management of the
Company or any Subsidiary;
(j) any material changes in compensation arrangements
with any key employee, senior management or directors;
(k) the loss or threatened loss in writing of any
customer which has had or could reasonably be expected to have a Material
Adverse Effect;
(l) any sale, assignment or exclusive license or
transfer of the Company's Intellectual Property;
(m) any material change in contingent obligations of
the Company by way of guaranty, endorsement, indemnity, warranty or otherwise;
or
(n) to the Company's Knowledge, any other event or
condition of any character that has had or could reasonably be expected to have
a Material Adverse Effect.
4.9 SEC Filings; S-2 Eligibility; Xxxxxxxx-Xxxxx Act.
(a) At the time of filing thereof, the SEC Filings
complied as to form in all material respects with the requirements of the 1934
Act and did 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 the
light of the circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment
thereto filed by the Company since April 23, 2002 pursuant to the 1933 Act, as
of the date such statement or amendment became effective, complied as to form in
all material respects with the 1933 Act and did not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein not
misleading; and each prospectus filed pursuant to Rule 424(b) under the 1933
Act, as of its issue date and as of the closing of any sale of securities
pursuant thereto did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
(c) The Company is eligible to use Form S-2 to
register the Registrable Securities (as such term is defined in the Registration
Rights Agreement) for sale by the Investors as contemplated by the Registration
Rights Agreement.
(d) The Company is in compliance in all material
respects with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 that are
applicable to it as of the date hereof.
4.10 No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Transaction Documents by the Company, the
issuance and sale of the Securities and the issuance of Warrant Shares will not
conflict with or result in a breach or
A-8
violation of any of the terms and provisions of, or constitute a default under
(i) the Company's Certificate of Incorporation or the Company's Bylaws, both as
in effect on the date hereof (true and complete copies of which have been made
available to the Investors through the XXXXX system), or (ii)(a) any statute,
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, any Subsidiary or any
of their respective assets or properties, or (b) except as set forth on Schedule
4.10, any agreement or instrument to which the Company or any Subsidiary is a
party or by which the Company or a Subsidiary is bound or to which any of their
respective assets or properties are subject.
4.11 Tax Matters. The Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown thereon or otherwise owed by it. The charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods are
adequate in all material respects, and there are no material unpaid assessments
against the Company or any Subsidiary nor, to the Company's Knowledge, any basis
for the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole. All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due, except where such failure to withhold or collect would not have a
Material Adverse Effect. There are no tax liens or claims pending or, to the
Company's Knowledge, threatened against the Company or any Subsidiary or any of
their respective assets or property. Except as described on Schedule 4.11, there
are no outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.
4.12 Title to Properties. Except as disclosed in the SEC
Filings, the Company and each Subsidiary has good and marketable title to all
real properties and all other properties and assets owned by it, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them; and except as disclosed in the SEC Filings, the Company
and each Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or currently planned to be made thereof by them.
4.13 Certificates, Authorities and Permits. The Company and
each Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
4.14 No Labor Disputes. No labor dispute with the employees of
the Company or any Subsidiary as a group exists or, to the Company's Knowledge,
is imminent.
4.15 Intellectual Property. Except as described on Schedule
4.15:
A-9
(a) No Intellectual Property of the Company or its
Subsidiaries which is necessary for the conduct of the Company's and each of its
Subsidiaries' respective businesses as currently conducted is involved in any
cancellation, dispute or litigation, and, to the Company's Knowledge, no such
action is threatened. No patent of the Company or its Subsidiaries is involved
in any interference, reissue, reexamination or opposition proceeding.
(b) All of the licenses and sublicenses and consent,
royalty or other agreements concerning Intellectual Property which are necessary
for the conduct of the Company's and each of its Subsidiaries' respective
businesses as currently conducted to which the Company or any Subsidiary is a
party or by which any of their assets are bound (other than generally
commercially available, non-custom, off-the-shelf software application programs
having a retail acquisition price of less than $10,000 per license)
(collectively, "License Agreements") are valid and binding obligations of the
Company or its Subsidiaries that are parties thereto and, to the Company's
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which constitutes a material violation or
breach of or constitutes (with or without due notice or lapse of time or both) a
default by the Company or any of its Subsidiaries under any such License
Agreement.
(c) The Company and its Subsidiaries own or have the
valid and enforceable right to use all of the Intellectual Property that is
necessary for the conduct of the Company's and each of its Subsidiaries'
respective businesses as currently conducted and for the ownership, maintenance
and operation of the Company's and its Subsidiaries' properties and assets,
which ownership or right is, except as set forth on Schedule 4.15, free and
clear of all liens, encumbrances, adverse claims or obligations to license (as
licensor) all such owned Intellectual Property, other than licenses entered into
in the ordinary course of the Company's and its Subsidiaries' businesses.
(d) To the Company's Knowledge, the conduct of the
Company's and its Subsidiaries' businesses as currently conducted does not
infringe or otherwise impair or conflict with (collectively, "Infringe") any
Intellectual Property rights of any third party or any confidentiality
obligation owed to a third party, and, to the Company's Knowledge, the
Intellectual Property and Confidential Information of the Company and its
Subsidiaries which are necessary for the conduct of the Company's and each of
its Subsidiaries' respective businesses as currently conducted are not being
Infringed by any third party. There is no litigation or order pending or
outstanding against the Company or, to the Company's Knowledge, threatened or
imminent against the Company, that seeks to limit or challenge or that concerns
the ownership, use, validity or enforceability of any Intellectual Property of
the Company and its Subsidiaries and the Company's and its Subsidiaries' use of
any Intellectual Property owned by a third party, and, to the Company's
Knowledge, there is no valid basis for the same.
(e) The consummation of the transactions contemplated
hereby and by the other Transaction Documents will not result in the alteration,
loss or impairment of or restriction on the Company's or any of its
Subsidiaries' ownership or right to use any of the
A-10
Intellectual Property or Confidential Information which is necessary for the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted.
(f) All software owned by the Company or any of its
Subsidiaries, and, to the Company's Knowledge, all software licensed from third
parties by the Company or any of its Subsidiaries, (i) is free from any material
defect, bug, virus or programming, design or documentation error; (ii) operates
and runs in a reasonable and efficient business manner; and (iii) conforms in
all material respects to the specifications and purposes thereof.
(g) The Company and its Subsidiaries have taken
reasonable steps to protect the Company's and its Subsidiaries' rights in their
Intellectual Property and Confidential Information. Each employee, consultant
and contractor who has had access to Confidential Information, the continued
confidentiality of which is necessary for the conduct of the Company's and each
of its Subsidiaries' respective businesses as currently conducted, has executed
an agreement to maintain the confidentiality of such Confidential Information
(or is subject to a fiduciary duty requiring that such confidentiality be
maintained). Except under confidentiality obligations, to the Company's
Knowledge, there has been no material disclosure by the Company of any of the
Company's or its Subsidiaries' Confidential Information to any third party.
4.16 Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"); owns or, to the
Company's Knowledge, operates any real property contaminated with any substance
that is subject to any Environmental Laws, is liable for any off-site disposal
or contamination pursuant to any Environmental Laws, and is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or
claim has had or could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate; and there is no pending or, to the Company's
Knowledge, threatened investigation that could reasonably be expected to lead to
such a claim.
4.17 Litigation. Except as described on Schedule 4.17, there
are no pending actions, suits or proceedings against or affecting the Company,
its Subsidiaries or any of its or their properties that could reasonably be
expected to have a Material Adverse Effect; and to the Company's Knowledge, no
such actions, suits or proceedings are threatened or contemplated.
4.18 Financial Statements. The financial statements included
in each SEC Filing present fairly, in all material respects, the consolidated
financial position of the Company as of the dates shown and its consolidated
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis (except as may be
disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof or as described on
A-11
Schedule 4.18, neither the Company nor any of its Subsidiaries has incurred any
liabilities, contingent or otherwise, except those incurred in the ordinary
course of business, consistent (as to amount and nature) with past practices
since the date of such financial statements, none of which individually or in
the aggregate, have had or could reasonably be expected to have a Material
Adverse Effect.
4.19 Insurance Coverage. The Company and each Subsidiary
maintains in full force and effect insurance coverage as described on Schedule
4.19 for the business being conducted and properties owned or leased by the
Company and each Subsidiary, and the Company reasonably believes such insurance
coverage to be adequate against all liabilities, claims and risks against which
it would be prudent, given the totality of the circumstances, for the Company to
insure.
4.20 Listing. The Company's Common Stock is quoted on the
Bulletin Board. The Company has not received any oral or written notice that its
Common Stock will be delisted from the Bulletin Board nor that its Common Stock
does not meet all requirements for the continuation of such quotation, and the
Company satisfies the requirements for the continued listing of its Common Stock
on the Bulletin Board.
4.21 Brokers and Finders. No Person will have, as a result of
actions or omissions of the Company in connection with the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than as
described in Schedule 4.21.
4.22 No Directed Selling Efforts or General Solicitation.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.
4.23 No Integrated Offering. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf, has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security under circumstances that would cause the offer and/or
sale of the Securities pursuant to this Agreement to be integrated with prior
offerings by the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of the Bulletin Board, or that would otherwise adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the
Securities under the 1933 Act.
4.24 Private Placement. Subject to the accuracy of the
representations and warranties of each Investor in Section 5, the offer and sale
of the Securities to the Investors as contemplated hereby is exempt from the
registration requirements of the 1933 Act and is being made pursuant to the
exemption afforded by Section 4(2) of the 1933 Act and/or Rule 506 of Regulation
D promulgated thereunder.
A-12
4.25 Questionable Payments. Neither the Company nor any of its
Subsidiaries, directors or officers, nor, to the Company's Knowledge, any of
their respective current or former stockholders, employees, agents or other
Persons acting on behalf of the Company or any Subsidiary, has on behalf of the
Company or any Subsidiary or in connection with their respective businesses: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
4.26 Transactions with Affiliates. Except as disclosed in the
SEC Filings or as disclosed on Schedule 4.26, none of the officers or directors
of the Company and, to the Company's Knowledge, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than as holders of capital stock, stock options, warrants
and/or other rights convertible into or exercisable for capital stock, and for
services as employees, officers and directors), including any contract 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 Company's
Knowledge, any entity in which any officer, director or any such employee has a
substantial interest or is an officer, director, trustee or partner.
4.27 Internal Controls. The Company and the Subsidiaries
maintain 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
generally accepted accounting principles 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 1934 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, including the Subsidiaries, is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company's most recently filed
periodic report under the 1934 Act, 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 1934 Act (such date, the
"Evaluation Date"). The Company presented in its most recently filed periodic
report under the 1934 Act 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) or, to the Company's Knowledge, in
other factors that could significantly affect the Company's internal controls.
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 1934 Act.
A-13
4.28 No Manipulation of Stock. Neither the Company, nor any of
its directors, officers or Controlling Persons (other than Persons that become
Controlling Persons as a result of the transactions contemplated by this
Agreement), has taken or will, in violation of applicable law, take, any action
designed to or that might reasonably be expected to cause or result in, or which
has constituted, stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of the Securities.
4.29 Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Securities will not be, an "investment company"
or (except to the extent one of the Investors is an "investment company") an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and (except to the extent one of the Investors is an
"investment company") shall conduct its business in a manner so that it will not
become subject to the Investment Company Act.
4.30 Contracts. The contracts described in the SEC Filings
that are currently material to the Company are in full force and effect on the
date hereof, and neither the Company nor, to the Company's Knowledge, any other
party to such contracts is in breach of or default under any of such contracts
which would have a Material Adverse Effect.
4.31 Disclosures. Other than (a) disclosures made to the Major
Investor at its request subject to a confidentiality agreement or to any other
investor that presently has (or has appointed a representative that has) a
fiduciary relationship with the Company, or (b) disclosures that the Company has
agreed, to the extent material, to make public on or before June 30, 2004 and
which disclosures are subject to a confidentiality agreement expiring June 30,
2004, neither the Company nor any Person acting on its behalf has provided the
Investors or their agents or counsel with any information that constitutes or
might constitute material, nonpublic information. The representations and
warranties of the Company contained herein, including the Disclosure Schedules,
as of the date hereof and as of the Closing Date do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of circumstances under which they were made,
not misleading.
5. Representations, Warranties and Covenants of the Investors. Each
of the Investors hereby severally, and not jointly, represents and warrants to
the Company that:
5.1 Authority. The Investor has all requisite power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by
the Investor of the Transaction Documents to which such Investor is a party have
been duly authorized and will each constitute the valid and legally binding
obligation of the Investor, enforceable against the Investor in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally.
A-14
5.3 Purchase Entirely for Own Account. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the 1933 Act, and the Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the 1933 Act. Except as disclosed in
writing on the signature page of the Investor hereto, the Investor is not a
registered broker-dealer or an entity engaged in the business of being a broker
dealer.
5.4 Investment Experience. The Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of Information. The Investor has had an
opportunity to receive all additional information related to the Company
requested by it and to ask questions of and receive answers from the Company
regarding the Company, its business and the terms and conditions of the offering
of the Securities. The Investor acknowledges receipt of copies of the SEC
Filings. Neither such inquiries nor any other due diligence investigation
conducted by the Investor shall modify, amend or affect the Investor's right to
rely on the Company's representations and warranties contained in this
Agreement.
5.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, except as provided below,
certificates evidencing the Securities may bear the following or any similar
legend:
(a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAW, (C) IN A TRANSACTION THAT DOES NOT OTHERWISE
REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW, PROVIDED THE HOLDER HAS FURNISHED TO THE COMPANY, IF REASONABLY
NECESSARY, AN OPINION OF COUNSEL TO THAT EFFECT OR (D) PURSUANT TO A
REGISTRATION STATEMENT PURSUANT TO THE U.S. SECURITIES ACT."
(b) If required by the authorities of any state in
connection with the issuance or sale of the Securities, the legend required by
such state authority.
A-15
(c) Upon the earlier of (i) registration for resale
pursuant to the Registration Rights Agreement and receipt by the Company of the
Investor's written confirmation that such Securities will not be disposed of
except in compliance with the prospectus delivery requirements of the 1933 Act
and governing state securities laws or (ii) Rule 144(k) becoming available, the
Company shall, upon an Investor's written request, promptly cause certificates
evidencing the Shares or the Warrant Shares to be replaced with certificates
which do not bear such restrictive legends, and Warrant Shares subsequently
issued upon due exercise of the Warrants shall not bear such restrictive
legends, provided the provisions of either clause (i) or clause (ii) above, as
applicable, are satisfied with respect to such Warrant Shares. When the Company
is required to cause unlegended certificates to replace previously issued
legended certificates, if unlegended certificates are not delivered to an
Investor within three (3) Business Days of submission by that Investor of
legended certificate(s) to the Company's transfer agent together with a
representation letter in customary form, the Company shall be liable to the
Investor for liquidated damages in an amount equal to .833% of the aggregate
purchase price of the Securities evidenced by such certificate(s) for each
thirty (30) day period (pro rated for any portion thereof) beyond such three (3)
Business Days that the unlegended certificates have not been so delivered.
5.8 Accredited Investor. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the 0000
Xxx.
5.9 No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.
5.10 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Investors.
5.11 Prohibited Transactions. During the last thirty (30) days
prior to the date hereof or since the date the Investor knew the Securities
might be available for purchase (whichever is earlier), no Investor has,
directly or indirectly, nor has any Investor made any recommendation or
suggestion regarding trading in the Common Stock to or known of any Person who
has, effected or agreed to effect any short sale, whether or not against the
box, established any "put equivalent position" (as defined in Rule 16a-1(h)
under the 0000 Xxx) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derives any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Securities (each, a "Prohibited
Transaction"). Each Investor acknowledges that the representations and
warranties contained in this Section 5.11 are being made for the benefit of the
Investors as well as the Company and that each of the other Investors shall have
an independent right to assert any claims against any Investor arising out of
any breach or violation of the provisions of this Section 5.11
5.12 Affiliate Status. Each of the Investors represents and
warrants that either (i) neither such Investor nor any Affiliate of such
Investor beneficially owns directly or
A-16
indirectly, or has beneficially owned directly or indirectly at any time during
the three years preceding the Closing Date, 10% or more of the voting power of
the outstanding shares of capital stock of the Company or (ii) if either such
Investor or an Affiliate of such Investor beneficially owns directly or
indirectly, or has beneficially owned directly or indirectly at any time during
the three years preceding the Closing Date, 10% or more of the voting power of
the outstanding shares of capital stock of the Company, such Investor or
Affiliate first became the beneficial owner directly or indirectly of 10% or
more of the voting power of the outstanding shares of capital stock of the
Company (A) on November 1, 2002 as a result of the execution of the Asset
Purchase Agreement dated as of November 1, 2002, by and among VitalStream,
VitalStream Broadcasting Corp., Epoch Networks, Inc. and Epoch Hosting, Inc.,
(B) on November 26, 2002, as a result of the issuance, sale and purchase of
certain notes and warrants pursuant to the Convertible Note and Warrant Purchase
Agreement dated as of November 1, 2002 among the Company and the parties
thereto, (C) on January 15, 2003 as a result of the simultaneous closing of the
transactions contemplated by the Amended and Restated Convertible Note and
Warrant Purchase Agreement dated January 15, 2003 and the Amended and Restated
Asset Purchase Agreement dated as of January 15, 2003, by and among VitalStream,
VitalStream Broadcasting Corp., Epoch Networks, Inc. and Epoch Hosting, Inc., or
(D) on April 23, 2002, as a result of the consummation of the merger
contemplated by the Merger Agreement, dated as of February 13, 2002, among the
Company, VitalStream, Inc., and VitalStream Operating Corporation.
5.13 Market Standoff Agreement. Each Investor agrees not to
sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Securities without the prior written consent of the
Company and the Major Investor (which consents, if granted, shall permit all
Investors to sell on a pro rata basis based upon the number of Shares purchased
hereunder), for a period of one hundred eighty (180) days following the Closing;
provided that (i) the executive officers of the Company who own stock in the
Company and any stockholder of the Company that has filed prior to the Closing a
Schedule 13D or 13G indicating that it beneficially owns more than 10% of the
outstanding Common Stock also agree to such restrictions and (ii) such
restrictions shall not apply to (A) bona fide gifts, provided the recipient
thereof agrees in writing to be bound by the terms of the Lock-up Agreement (as
defined in Section 7.4), (B) dispositions to any trust for the direct or
indirect benefit of the Investor and/or the immediate family of the Investor,
provided that such trust agrees in writing to be bound by the terms of the
Lock-up Agreement and (C) distributions by a corporation, a limited liability
company or a partnership to its stockholders, members or partners; provided,
however, that the transferees agree in writing to be bound by the terms of the
Lock-up Agreement.
6. Conditions to Closing.
6.1 Conditions to the Investors' Obligations. The obligation
of each of the Investors to purchase the Shares and the Warrants at the Closing
is subject to the fulfillment to the Investors' reasonable satisfaction, on or
prior to the Closing Date, of the following conditions, any of which may be
waived by an Investor (as to itself only):
(a) The representations and warranties made by the
Company in Section 4 hereof, qualified as to materiality, shall be true and
correct on the date hereof and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of a different date, in
which case such representation or warranty shall be true and correct as of such
A-17
different date, and, the representations and warranties made by the Company in
Section 4 hereof not qualified as to materiality shall be true and correct in
all material respects on the date hereof and on the Closing Date, except to the
extent any such representation or warranty expressly speaks as of a different
date, in which case such representation or warranty shall be true and correct in
all material respects as of such different date. The Company shall have
performed in all material respects all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing Date.
(b) There shall not have been any changes occurring
between the date of this Agreement and the Closing Date that had, or could
reasonably be expected to have, a Material Adverse Effect, individually or in
the aggregate, on the Company.
(c) The Company shall have obtained in a timely
fashion any and all consents, permits, approvals, and waivers necessary or
appropriate for consummation of the purchase and sale of the Securities and the
consummation of the other transactions contemplated by the Transaction
Documents, all of which shall be in full force and effect (except for filings
pursuant to Regulation D of the 1933 Act, and applicable state securities laws,
which the Company has agreed will be made in a timely manner).
(d) The Company and each other Investor shall have
executed and delivered counterpart signatures pages to the Registration Rights
Agreement and the Investor Rights Agreement. The Company, each Investor and a
sufficient number of parties to ensure its effectiveness shall have executed
counterpart signature pages to the Second Amended Registration Rights Agreement.
(e) The Company shall have delivered the certificates
representing the Shares and the Warrants to be purchased by the Investor to the
Placement Agent.
(f) No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
(g) The Company shall have delivered to the Placement
Agent, for delivery to each Investor that requests the same, a copy of a
Certificate, executed on behalf of the Company by its Chief Executive Officer or
its Chief Financial Officer, dated as of the Closing Date, certifying to the
fulfillment of the conditions specified in subsections (a), (b), (c), (f), (j)
and (k) of this Section 6.1.
(h) The Company shall have delivered to the Placement
Agent, for delivery to each Investor that requests the same, a copy of a
Certificate, executed on behalf of the Company by its Secretary, dated as of the
Closing Date, certifying the resolutions adopted by the Board of Directors of
the Company approving the transactions contemplated by this Agreement and the
other Transaction Documents and the issuance of the Securities, certifying the
current versions of the Certificate of Incorporation and Bylaws of the Company
and
A-18
certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company.
(i) The Investors shall have received an opinion from
Stoel Rives LLP, the Company's counsel, dated as of the Closing Date, in form
and substance reasonably acceptable to the Investors and in substantially the
form set forth in Exhibit E.
(j) The Holding Agent identified in the Conversion
Agreement shall have received the Securityholder Deliveries (as defined in the
Conversion Agreement) and the Company Deliveries (as defined in the Conversion
Agreement) and the parties thereto shall be prepared to close, and shall close,
the transactions described in the Conversion Agreement simultaneously with the
initial Closing. Upon the consummation of all transactions contemplated by the
Conversion Agreement, all outstanding shares of Series A Preferred Stock of the
Company will have been converted into Common Stock, and all indebtedness of the
Company to Dolphin Communications Parallel Fund II (Netherlands), L.P. and
Dolphin Communications Fund II, L.P. will have been extinguished. Immediately
following the consummation of all transactions contemplated by the Conversion
Agreement (but not including the Shares and Warrants to be issued at Closing
hereunder), the number and type of outstanding shares of capital stock of the
Company, and rights to purchase or acquire capital stock of the Company, shall
be as follows: there will be issued and outstanding (a) 41,922,174 shares of
Common Stock, (b) no shares of Series A Preferred Stock or Series B Preferred
Stock, (c) 3,940,664 options to purchase Common Stock, (d) 3,050,827 warrants to
purchase Common Stock, and (e) 1,891,867 shares of Common Stock reserved for the
future grants of options or other rights under the Company's stock incentive
plan.
(k) No stop order or suspension of trading shall have
been imposed by the SEC or any other governmental regulatory body or the
Bulletin Board with respect to public trading in the Common Stock.
(l) The Purchase Price delivered by the Investors with
respect to which the conditions set forth in subsections 6.2(a), 6.2(b) and
6.2(c) have been satisfied or waived shall be no less than $9,000,000.
6.2 Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Shares and the Warrants at the Closing to each
Investor is subject to the fulfillment to the satisfaction of the Company on or
prior to the Closing Date of the following conditions with respect to each
Investor, any of which may be waived by the Company (on an Investor by Investor
basis) other than the conditions set forth in subsection (d):
(a) The representations and warranties made by the
Investor in Section 5 hereof shall be true and correct in all material respects
when made, and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as of said
date. The Investor shall have performed in all material respects all obligations
and conditions herein required to be performed or observed by such Investor on
or prior to the Closing Date.
A-19
(b) The Investor shall have executed and delivered the
Registration Rights Agreement, the Investor Rights Agreement and the Second
Amended Registration Rights Agreement. A sufficient number of parties to ensure
its effectiveness shall have executed counterpart signature pages to the Second
Amended Registration Rights Agreement.
(c) The Investor shall have delivered the Purchase
Price payable by such Investor to the Company.
(d) The Purchase Price delivered by the Investors with
respect to which the conditions set forth in subsections (a), (b) and (c) have
been satisfied or waived shall be no less than $9,000,000.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand,
and the Investors, on the other hand, to effect the Closing shall terminate as
follows:
(i) Upon the mutual written consent of the
Company and the Investors agreeing hereunder to purchase eighty percent (80%) of
the Shares and Warrants (the "Required Investors");
(ii) By the Company with respect to all Investors
(or only Investors that have failed to satisfy the conditions set forth in
Section 6.2) if any of the conditions set forth in Section 6.2 shall not have
been satisfied by June 21, 2004, and shall not have been waived by the Company;
or
(iii) By an Investor (with respect to itself only)
if any of the conditions set forth in Section 6.1 shall not have been satisfied
by June 21, 2004;
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party's seeking to
terminate its obligation to effect the Closing.
(b) In the event of termination by the Company or any
Investor of its obligations to effect the Closing pursuant to this Section 6.3,
written notice thereof shall forthwith be given to the other Investors and the
other Investors shall have the right to terminate their obligations to effect
the Closing upon written notice to the Company and the other Investors. Nothing
in this Section 6.3 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.
7. Covenants and Agreements of the Company.
A-20
7.1 Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of providing for the exercise of the
Warrants, such number of shares of Common Stock as shall from time to time equal
the number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with their respective terms.
7.2 Reports. The Company will furnish to the Investors and/or
their assignees such information relating to the Company and its Subsidiaries as
from time to time may reasonably be requested by such Investors and/or their
assignees; provided, however, that (except for any Investor whose representative
or Affiliate occupies a seat or has observation rights with respect to the board
of directors of the Company or any of its Subsidiaries) the Company shall not
disclose material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless (a) the Company undertakes to make such
material nonpublic information public on or before June 30, 2004, or (b) prior
to disclosure of such information the Company identifies such information as
being material nonpublic information that will not be disclosed on or before
June 30, 2004 and provides the Investors, such advisors and representatives with
the opportunity to accept or refuse to accept such material nonpublic
information for review and any Investor wishing to obtain such information
enters into an appropriate confidentiality agreement with the Company with
respect thereto.
7.3 No Conflicting Agreements. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the Company's obligations to the
Investors under the Transaction Documents, including without limitation, any
action or steps that would cause the offer and/or sale of the Securities to be
integrated with other offerings. The Company will not conduct any offering other
than the transactions contemplated hereby that will be integrated with the offer
or issuance of the Securities.
7.4 Lock-Up. Within fifteen days of the initial Closing, the
Company shall have entered, and shall have caused the executive officers of the
Company not party to this Agreement who own stock in the Company and any
stockholder of the Company not party to this Agreement that has filed prior to
the Closing a Schedule 13D or 13G indicating that it beneficially owns more than
10% of the outstanding Common Stock to enter, into an agreement (the "Lock-up
Agreement") with the Major Investor and the Company not to sell or otherwise
transfer or dispose of any shares of the Company's capital stock, except as
otherwise permitted by the Lock-up Agreement, for a period of one hundred eighty
(180) days following the Closing Date.
7.5 Insurance. The Company shall not materially reduce the
insurance coverages described in Section 4.19; provided, however, if the
Company's management determines that there has been a reduction in the assets or
risk exposure of the Company, the Company may make a commensurate reduction in
such insurance coverages if the Company's management in its reasonable business
judgment believes the resulting coverages would be adequate in light of the
circumstances.
7.6 Compliance with Laws. The Company will comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
A-21
7.7 Listing of Underlying Shares and Related Matters. Promptly
following the date hereof, the Company shall take all necessary action to cause
the Shares and the Warrant Shares to be listed on each national securities
exchange, or quotation system, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and shall maintain such
listing so long as any Securities are outstanding no later than the
Effectiveness Deadline (as such term is defined in the Registration Rights
Agreement). The Company will maintain the listing of its Common Stock on the
Bulletin Board (the "Principal Market") or, in its discretion, the American
Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market System or New
York Stock Exchange and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of the
Principal Market. The Company will provide within two (2) Business Days the
Investors copies of all notices it receives notifying the Company of the
threatened and actual delisting of the Common Stock from the Principal Market.
7.8 Market Regulations. The Company shall notify the SEC, the
Principal Market and applicable state authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement and the
Transaction Documents, and shall take all other necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Securities to the Investors and promptly provide
copies thereof to Investors.
7.9 Termination of Covenants. The provisions of Sections 7.2
through 7.8 shall terminate and be of no further force and effect upon the
earlier of (i) the mutual consent of the Company and the Required Investors or
(ii) the date on which the Company's obligations under the Registration Rights
Agreement to register or maintain the effectiveness of any registration covering
the Registrable Securities (as such term is defined in the Registration Rights
Agreement) shall terminate.
7.10 Prohibited Transactions. Prior to the earliest of (i) the
termination of this Agreement, (ii) the date on which the Registration Statement
has been declared effective and (iii) the Effectiveness Deadline, no Investor
shall engage, directly or indirectly, nor shall any Person acting on behalf of
or pursuant to any understanding with any Investor engage, in a Prohibited
Transaction. Each Investor acknowledges and agrees that in order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to any of the Common Stock of each Investor or its transferee until such
time as the Registration Statement has been declared effective. Each Investor
acknowledges that the covenants contained in this Section 7.10 are being made
for the benefit of the Investors as well as the Company and that each of the
other Investors shall have an independent right to assert any claims against any
Investor arising out of any breach or violation of the provisions of this
Section 7.10.
8. Survival and Indemnification.
8.1 Survival. The representations and warranties contained in
this Agreement shall survive the Closing of the transactions contemplated by
this Agreement, to the extent the Closing occurs, for a period of one year from
the date of Closing. Unless terminated as provided in the following sentence,
the covenants and other provisions of this Agreement shall survive during the
terms set forth with respect thereto in this Agreement, and if no such term is
set forth herein, for one year from the date of Closing. With respect to all
parties if the Closing does not
A-22
occur (or with respect to affected Investors if the Closing occurs but does not
occur with respect to one or more Investors as a result of the failure of the
conditions set forth in Section 6.2 to be satisfied with respect to such
Investors), no representations, warranties, covenants or agreements shall
survive termination under Section 6.3.
8.2 Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Investor and its Affiliates and their respective directors, officers,
employees and agents from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorneys'
fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) (collectively, "Losses") to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any
such Person for all such amounts as they are incurred by such Person.
(b) Each Investor, severally and not jointly, agrees
to indemnify and hold harmless the Company and its Affiliates and its directors,
officers, employees and agents from and against any and all Losses to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of such Investor
under the Transaction Documents, and will reimburse any such Person for all such
amounts as they are incurred by such Person.
8.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any Person (the "Indemnified Person") of notice of any demand, claim
or circumstances which would or might give rise to a claim or the commencement
of any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 8.2, such Indemnified Person shall promptly notify
the person from which indemnification is sought (the "Indemnifying Person") in
writing and the Indemnifying Person shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person,
and shall assume the payment of all fees and expenses; provided, however, that
the failure of any Indemnified Person to so notify promptly the Indemnifying
Person shall not relieve the Indemnifying Person of its obligations hereunder
except to the extent, and only to the extent, that the Indemnifying Person is
materially prejudiced by such failure to notify promptly. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the retention of such counsel; or (ii) in
the reasonable judgment of counsel to such Indemnified Person representation of
both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest between them. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the
Indemnifying Person shall indemnify and hold harmless such Indemnified Person
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, the
Indemnifying Person shall not effect any settlement of any
A-23
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the Company or the
Investors, as applicable, provided, however, that an Investor may assign all of
its rights hereunder in whole or in part to an Affiliate or to a third party
acquiring at least fifty percent (50%) of its Securities in a transaction
complying with applicable securities laws and this Agreement without the prior
written consent of the Company or the other Investors, after notice duly given
by such Investor to the Company and the other Investors (and receipt by the
Company of a counterpart signature page to this Agreement executed by the
transferee), provided, that no such assignment or obligation shall affect the
obligations of such Investor hereunder. The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
9.3 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
e-mail, telex or telecopier, then such notice shall be deemed given upon receipt
of confirmation of complete transmittal, (iii) if given by mail, then such
notice shall be deemed given upon the earlier of (A) receipt of such notice by
the recipient or (B) three days after such notice is deposited in first class
mail, postage prepaid and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one business day
after delivery to such carrier. All notices shall be addressed to the party to
be notified at the address as follows, or at such other address as such party
may designate by ten days' advance written notice to the other party:
If to the Company:
VitalStream Holdings, Inc.
Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
A-24
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
email: xxxxx@xxxxxxxxxxx.xxx
With a copy to:
Stoel Rives LLP
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxx Xxxxx
Facsimile: (000) 000-0000
email: xxxxxxx@xxxxx.xxx
If to the Investors:
to the addresses set forth on the signature pages hereto.
9.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that the Company shall pay the
reasonable fees and expenses of a single counsel for all of the Investors (to be
appointed by the Major Investor), not to exceed $40,000 in the aggregate with
respect to all Transaction Documents. Such expenses shall be paid not later than
the Closing. The Company shall reimburse the Investors upon demand for all
reasonable out-of-pocket expenses incurred by the Investors, including without
limitation reimbursement of attorneys' fees and disbursements, in connection
with any amendment, modification or waiver of this Agreement or the other
Transaction Documents requested by the Company. In the event that legal
proceedings are commenced by any party to this Agreement against another party
to this Agreement in connection with this Agreement or the other Transaction
Documents, the party or parties which do not prevail in such proceedings shall
severally, but not jointly, pay their pro rata share of the reasonable
attorneys' fees and other reasonable out-of-pocket costs and expenses incurred
by the prevailing party in such proceedings.
9.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Investors. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Securities purchased under this
Agreement at the time outstanding, each future holder of all such Securities,
and the Company.
9.7 Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by the Company or the
Investors without the prior consent of the Company (in the case of a release or
announcement by the Investors) or the Major Investor and Dolphin Equity Partners
(in the case of a release or announcement by the Company) (which consents shall
not be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities market, in which case the Company or the Investors, as
the case may be, shall allow the Major
A-25
Investor, Dolphin Equity Partners and the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance.
9.8 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the Exhibits
and the Disclosure Schedules, and the other Transaction Documents constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
9.10 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of California without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the state or federal courts located in the State of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in any such court. Each
party hereto irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
[signature page follows]
A-26
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company: VITALSTREAM HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: President
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Investor: WALDENVC II, L.P.
By: WaldenVC LLC,
Its General Partner
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxx
Title: General Partner
Purchase Price: $6,000,000
Number of Shares: 9,782,821
Number of Warrants: 2,934,846
Address for Notice:
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx &
Rabkin
Three Embaradero Center, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxx.xxx
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Investor: DOLPHIN COMMUNICATIONS FUND II, L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: /s/ Xxxxxx X'Xxxxxxx
-------------------------------
Name: Xxxxxx X'Xxxxxxx
Title:
Purchase Price: $1,887,900
Number of Shares: 3,078,164
Number of Warrants: 923,449
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $1,592,227
Address for Notice:
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxx.xxx
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Investor: DOLPHIN COMMUNICATIONS PARALLEL
FUND II (NETHERLANDS), L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: /s/ Xxxxxx X'Xxxxxxx
-------------------------------
Name: Xxxxxx X'Xxxxxxx
Title:
Purchase Price: $212,100
Number of Shares: 345,823
Number of Warrants: 103,747
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $178,882
Address for Notice:
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
Citigroup Center 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxx.xxx
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Investor: ThinkEquity Investment Partners IV LLC
By: ThinkEquity Holdings, LLC, Manager
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: CFO
Purchase Price: $461,000
Number of Shares: 751,647
Number of Warrants: 255,494
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
------------------
Address for Notice:
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxxx@xxxxxxxxxxx.xxx
with a copy to:
Att: Xxxxx Xxxxxx
ThinkEquity Partners LLC
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxx@xxxxxxxxxxx.xxx
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
Investor: Newlight Associates II, L.P.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
Purchase Price: $661,400
Number of Shares: 1,078,393
Number of Warrants: 323,518
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
----------------------
Address for Notice:
Newlight Associates II, LP
000 Xxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxxxxx.xxx
with a copy to:
------------------------
------------------------
------------------------
------------------------
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
Investor: Newlight Associates II, (BVI), L.P.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
Purchase Price: $232,200
Number of Shares: 378,595
Number of Warrants: 113,579
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
-----------------------
Address for Notice:
Newlight Associates II, (BVI), LP
000 Xxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxxxxx.xxx
with a copy to:
------------------------
------------------------
------------------------
------------------------
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
Investor: Newlight Associates II-E, L.P.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
Purchase Price: $106,400
Number of Shares: 173,482
Number of Warrants: 52,045
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
Newlight Associates II-E, LP
000 Xxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxxxxx.xxx
with a copy to:
------------------------
------------------------
------------------------
------------------------
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
Investor: NanoCap Fund, LP
By: /s/ P. Xxxx Xxxxxxxx
-------------------------------------
Name: P. Xxxx Xxxxxxxx
Title: Managing Partner
Purchase Price: $290,000
Number of Shares: 472,836
Number of Warrants: 141,851
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
Xxxxxxxx Investment Management
Xxx Xxxxxxx Xx. Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx@xxxxxxxxxx.xxx
with a copy to:
Xxx Xxxx
Hedgeworks, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: SIM file
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxx.xxx
Investor: Nanocap Qualified Fund, LP
By: /s/ P. Xxxx Xxxxxxxx
-------------------------------------
Name: P. Xxxx Xxxxxxxx
Title: Managing Partner
Purchase Price: $210,000
Number of Shares: 342,399
Number of Warrants: 102,720
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
Xxxxxxxx Investment Management
Xxx Xxxxxxx Xx. Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxx@xxxxxxxxxx.xxx
with a copy to:
Xxx Xxxx
Hedgeworks, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: SIM file
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxx.xxx
Investor: RS Orphan Fund, LP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Investment Advisory General
Partner
Purchase Price: $500,000
Number of Shares: 815,236
Number of Warrants: 244,570
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
c/o RS Investments
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxxxxxx@xxxxxxxxxxxxx.xxx
xxxxxxxxx@xxxxxxxxxxxxx.xxx
with a copy to:
------------------------
------------------------
------------------------
------------------------
------------------------
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
Investor: Xxxxxxx Xxxxx, an individual
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Purchase Price: $202,000
Number of Shares: 329,355
Number of Warrants: 98,807
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
------------------------
Address for Notice:
00 Xxxxxxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxxxxx@xxxxx.xxx
[other investors]
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
The Investor: Xxxx Xxxxxxxxx, an individual
/s/ Xxxx Xxxxxxxxx
-----------------------------------------
Address for Notice:
00 Xxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Email: xxxxxxxxxxxxx@xxx.xxx
[other investors]
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
The Investors: Xxxxxx Xxxx, an individual
/s/ Xxxxxx Xxxx
-----------------------------------------
Purchase Price: $25,000
Number of Shares: 40,762
Number of Warrants: 12,229
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
00000 Xxxxx Xxxxx Xx.
Xxxxxx Xxxxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Email: x.xxxx@xxx.xxx
[other investors]
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
The Investors: Xxxx Xxxxxxxx, an individual
/s/ Xxxx Xxxxxxxx
-----------------------------------------
Purchase Price: $92,000
Number of Shares: 150,003
Number of Warrants: 45,001
Purchase Price Net of Applied
Conversion Proceeds (if applicable): $
---------------------
Address for Notice:
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Email: xx00@xxxxxxxxx.xxx
[other investors]
[SIGNATURE PAGE TO PURCHASE AGREEMENT FOR INVESTOR]
EXHIBIT A
TO
PURCHASE AGREEMENT
Form of Warrants
[see attached]
EXHIBIT B
TO
PURCHASE AGREEMENT
Form of Registration Rights Agreement
[see attached]
EXHIBIT C
TO
PURCHASE AGREEMENT
Form of Investor Rights Agreement
[see attached]
EXHIBIT D
TO
PURCHASE AGREEMENT
Form of Second Amended Registration Rights Agreement
[see attached]
EXHIBIT E
TO
PURCHASE AGREEMENT
Form of Opinion
[see attached]
EXHIBIT F
TO
PURCHASE AGREEMENT
Conversion Agreement and Exhibits
(other than Second Amended Registration Rights Agreement)
[see attached]
