EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of January 16, 2003 (this
"Agreement") is entered into by and among The 3DO Company, a Delaware
corporation (the "Company"), and the purchasers listed in Exhibit A hereto (each
a "Purchaser" and collectively the "Purchasers"). The parties, intending to be
legally bound, hereby agree as follows:
1. Sale of Common Stock. Subject to the terms and conditions of this
Agreement, Company hereby agrees to sell to each Purchaser and each Purchaser
hereby severally agree to purchase from Company the number of shares of
Company's Common Stock set forth opposite such Purchaser's name on Exhibit A
(the "Shares"), at the purchase price listed on Exhibit A. Upon the execution of
this Agreement (the "First Closing"), (A) the Company shall deliver or cause to
be delivered to each Purchaser the following: (i) this Agreement duly executed
by the Company; (ii) a certificate evidencing a number of shares of Common Stock
being purchased by such Purchaser, registered in the name of such Purchaser;
(iii) the Registration Rights Agreement duly executed by the Company and (iv)
and Warrant (the "Warrant"), registered in the name of the Purchaser in the form
attached hereto as Annex A, giving the Purchaser the right to acquire the number
of shares of Common Stock upon the exercise of the Warrant (the "Warrant
Shares") listed on Exhibit A and (B) each Purchaser shall deliver or cause to be
delivered to the Company the following: (i) this Agreement duly executed by such
Purchaser; (ii) the purchase prices for the Shares being purchased by such
Purchaser, by check, wire transfer, or any combination thereof, payable to
Company, and (iii) the Registration Rights Agreement duly executed by such
Purchaser.
2. Additional Closings. The Company may sell Common Stock and Warrants
at an additional closing or closings on or before 20 days after the First
Closing (the "Additional Closing(s)"), subject to the same procedures as
provided in Section 1. Upon delivery of an executed counterpart of this
Agreement and the Registration Rights Agreement (and an updated Exhibit A), the
purchasers in such Additional Closing(s) shall become parties to the
Registration Rights Agreement without further action by the Purchasers and the
Company.
3. Representations and Warranties of Company. Company hereby represents
and warrants to each Purchaser in the First Closing that the statements
contained in the following paragraphs of this Section 3 are all true and correct
as of the date of this Agreement and the Closing Date, and to each Purchaser in
an Additional Closing that the statements contained in the following paragraphs
of this Section 3 are all true and correct as of the date of the Additional
Closing:
(a) Organization and Standing: Articles and Bylaws. Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted.
(b) Corporate Power. Company has all requisite legal and
corporate power to enter into, execute, deliver and perform this Agreement and
the Registration Rights Agreement (the "Registration Rights Agreement") of even
date herewith between Company and Purchaser. This Agreement and the Registration
Rights Agreement (the "Transaction Documents") have been duly executed by the
Company and constitute the legal, valid and binding obligations of Company,
enforceable in accordance with their terms, except as the same may be limited by
(i) bankruptcy, insolvency, moratorium, and other laws of general application
affecting the enforcement of creditors' rights and (ii) limitations on the
enforceability of the indemnification provisions of the Registration Rights
Agreement as limited by applicable securities laws.
(c) Authorization.
(i) Corporate Action. All corporate and legal action
on the part of Company, its officers, directors and shareholders necessary for
the execution and delivery of this Agreement, the Registration Rights Agreement,
the sale and issuance of the Shares and Warrant Shares, and the performance of
Company's obligations hereunder have been taken.
(ii) Valid Issuance. The Shares and Warrant Shares,
when issued in compliance with the provisions of this Agreement and the Warrant,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all liens and encumbrances; provided, however, that the Shares, the Warrants and
the Warrant Shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein, and as may be required by future
changes in such laws.
(d) Government Consent, Etc. No consent, approval, order or
authorization of, or designation, registration, declaration or filing with, any
federal, state, local or other governmental authority on the part of Company is
required in connection with the valid execution and delivery of this Agreement,
the Registration Rights Agreement or the offer, sale or issuance of the Shares,
the Warrants and the Warrant Shares other than, if required, filings or
qualifications under the California Corporate Securities Law of 1968, as amended
(the "California Law"), or other applicable blue sky laws, which filings or
qualifications, if required, will be timely filed or obtained by Company. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby do
not and will not conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement filed (or incorporated
by reference) as an exhibit to the SEC Reports (as defined below).
(e) SEC Reports; Financial Statements. The Company has filed
all reports required to be filed by it under the Securities Exchange Act of
1934, as amended ("1934 Act"), including pursuant to Section 13(a) or 15(d)
thereof, for the twelve months preceding the date hereof (the foregoing
materials being collectively referred to herein as the "SEC Reports") on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the "1933 Act")
-2-
and the 1934 Act and the rules and regulations of the Securities and Exchange
Commission ("Commission") promulgated thereunder, and none of the SEC Reports,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
(f) Private Placement. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 4, no registration under the
1933 Act is required for the offer, issuance and sale of the Shares, the
Warrants and the Warrant Shares by the Company to the Purchasers as contemplated
hereby.
(g) Listing and Maintenance Requirements. The issuance and
sale of the Shares, the Warrants and the Warrant Shares hereunder, when taken
together with any Shares, Warrants and Warrant Shares that may be issued at
Additional Closings do not contravene the rules and regulations of the Nasdaq
National Market and no approval of the stockholders of the Company is required
for the Company to issue and deliver to the Purchasers the Shares, the Warrants
and the Warrant Shares including all Shares and Warrants issued and Warrant
Shares issuable as of the Closing and each Additional Closing. The Company is
eligible to utilize Form S-3 to register the resale of the Shares and Warrant
Shares by the Purchasers.
(h) Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(i) Disclosure. The Company confirms that neither it nor any
other person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that constitutes or might constitute
material, non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated hereby
furnished by or, to the Company's knowledge, on behalf of the Company are true
and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
4. Representations and Warranties by Purchaser. Each Purchaser,
severally and not jointly, represents and warrants to Company as of the Closing
Date (or Additional Closing Date, as applicable) as follows:
-3-
(a) Investment Intent: Authority. This Agreement is made with
Purchaser in reliance upon Purchaser's representation to Company, evidenced by
Purchaser's execution of this Agreement, that Purchaser is acquiring the Shares,
the Warrants and the Warrant Shares for investment for Purchaser's own account,
not as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the 1933 Act; provided, however, that by making the representations herein,
Purchaser does not agree to hold any of the Shares, the Warrants and the Warrant
Shares for any minimum or other specific term and reserves the right to dispose
of the Shares, the Warrants and the Warrant Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the 1933 Act.
Purchaser has the requisite right, power, authority and capacity to enter into
and perform this Agreement and the Agreement will constitute a valid and binding
obligation upon Purchaser, except as the same may be limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights.
(b) Knowledge and Experience. Purchaser (i) has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of Purchaser's prospective investment in the Shares, the
Warrants and the Warrant Shares; (ii) has the ability to bear the economic risks
of Purchaser's prospective investment; (iii) has had all questions which have
been asked by Purchaser satisfactorily answered by Company; and (iv) has not
been offered the Shares, the Warrants and the Warrant Shares by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
Purchaser represents and warrants that it is an "accredited investor" within the
meaning of Rule 501 of Regulation D of the Securities Act.
(c) Transfer Restrictions. Purchaser covenants that in no
event will it sell, transfer or otherwise dispose of any of the Shares, the
Warrants and the Warrant Shares other than in conjunction with an effective
registration statement for the Shares under the Securities Act or pursuant to an
exemption therefrom, or in compliance with Rule 144 promulgated under the
Securities Act or to a person related to or an entity affiliated with said
Purchaser and other than in compliance with the applicable securities regulation
laws of any state.
5. Registration of the Shares to be Purchased. The Company will file a
registration statement with respect to the Shares and Warrant Shares on or
before twenty (20) days after the Closing Date pursuant to the terms of the
Registration Rights Agreement.
6. Legends. Company will place the following legends on each
certificate representing Shares and Warrant Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS ("BLUE SKY LAWS"). ANY TRANSFER OF SUCH SECURITIES WILL
BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT OR AS REQUIRED
BY BLUE SKY LAWS IS IN EFFECT AS TO SUCH TRANSFER OR IN THE
-4-
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY SUCH
REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH
THE ACT OR BLUE SKY LAWS.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares and Warrant Shares
upon which it is stamped, if, unless otherwise required by state securities
laws, (i) such Shares and Warrant Shares are registered for resale under the
1933 Act, (ii) in connection with a sale transaction, such holder provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that a public sale, assignment or transfer of the Shares and Warrant
Shares may be made without registration under the 1933 Act, or (iii) such holder
provides the Company with reasonable assurances that the Shares and Warrant
Shares can be sold pursuant to Rule 144 without any restriction as to the number
of securities acquired as of a particular date that can then be immediately
sold. Such Investor acknowledges, covenants and agrees to sell Shares and
Warrant Shares represented by a certificate from which the legend has been
removed only pursuant to (i) a registration statement effective under the 1933
Act or (ii) advice of counsel that such sale is exempt from the registration
requirements of Section 5 of the 1993 Act, including, without limitation, a
transaction pursuant to Rule 144.
7. Indemnification of Purchasers. The Company will indemnify and hold
the Purchasers and their directors, officers, shareholders, partners, employees
and agents (each, a "Purchaser Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation (collectively, "Losses") that any
such Purchaser Party may suffer or incur as a result of or relating to the
failure of the representations and warranties of the Company to be true and
correct.
8. Non-Public Information. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.
9. Miscellaneous.
(a) Waivers and Amendments. The provisions of this Agreement
may only be amended or modified in a writing executed by each of Company and
Purchaser. A waiver shall not be effective unless in a writing by the party
against whom such waiver is to be enforced.
(b) Governing Law. This Agreement and all actions arising out
of or in connection with this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law provisions thereof. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
-5-
(c) Entire Agreement. This Agreement, the Registration Rights
Agreement and the Warrants constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
(d) Survival. The representations, warranties, covenants and
agreements made herein shall survive the execution and delivery of this
Agreement.
(e) Expenses. Company shall pay on demand all reasonable fees
and expenses incurred by Purchaser, including reasonable legal fees and expenses
in connection with the preparation, execution and delivery of this Agreement up
to a maximum amount of $5,000.
(f) Notices, etc. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given (i) upon receipt if personally delivered, (ii) three (3) days
after being mailed by registered or certified mail, postage prepaid, or (iii)
one day after being sent by recognized overnight courier or by facsimile, if to
Purchaser, at the address and facsimile number listed on Exhibit A, or at such
other address or number as Purchaser shall have furnished to Company in writing,
or if to Company, at 000 Xxxxxxxx Xxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 or at such
other address or number as Company shall have furnished to Purchaser in writing.
(g) Validity. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(h) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.
(i) Assignment. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. 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.
(j) Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other Transaction Documents, and it
-6-
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
(k) Remedies. Each Investor and each holder of the Securities
shall have all rights and remedies set forth in the Transaction Documents and
all rights and remedies which such holders have been granted at any time under
any other agreement or contract and all of the rights which such holders have
under any law. Any person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
-7-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date and year first written above.
THE 3DO COMPANY
a Delaware corporation
By: /s/ Xxxxx Xxxx Xxxx
-----------------------------
Name: Xxxxx Xxxx Xxxx
---------------------------
Title: Executive Vice President
--------------------------
PURCHASER:
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
-8-
EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate Warrant
Investor Address Number of Purchase Exercise
Investor's Name and Facsimile Number Number of Shares Warrant Shares Price ($) Price ($)
--------------- -------------------- ---------------- -------------- --------- ---------
Vertical Ventures, LLC 000 0xx Xxxxxx, 0xx Xxxxx 58,823 14,705 $99,999.10 $2.525
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Facsimile: (212) 259-2659
000 Xxxxxx Xxxx 235,294 58,823 399,999.80 2.525
Cranshire Capital Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Facsimile: (847) 562-9031
000 0xx Xxx. 29,411 7,352 49,998.70 2.525
Xxxxxxx Xxxxxxxx Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
0000 Xxxxxxxx Xxxxx 100,000 25,000 170,000.00 2.525
Xxxx Xxxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
