Exhibit 10.1
STOCK PURCHASE AGREEMENT
by
and among
WATTAGE MONITOR INC.,
WPG SOFTWARE FUND, L.P.,
WPG RAYTHEON SOFTWARE FUND, L.P.,
WPG INSTITUTIONAL SOFTWARE FUND, L.P.
and
XXXXXXXXXXX.XXX, INC.
Dated as of November 28, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I SALE AND PURCHASE.................................................................................... 1
Section 1.1 Issuance and Sale of the Shares........................................................... 1
Section 1.2 Delivery of the Shares at the Closing..................................................... 1
Section 1.3 Conditions to Closing..................................................................... 2
ARTICLE II REPRESENTATIONS, WARRANTIES and covenants OF THE COMPANY............................................ 2
Section 2.1 Organization.............................................................................. 2
Section 2.2 Due Authorization......................................................................... 3
Section 2.3 Non-Contravention......................................................................... 3
Section 2.4 Capitalization............................................................................ 3
Section 2.5 Legal Proceedings......................................................................... 4
Section 2.6 No Violations............................................................................. 4
Section 2.7 Governmental Permits, Etc................................................................. 4
Section 2.8 Intellectual Property..................................................................... 4
Section 2.9 Financial Statements...................................................................... 5
Section 2.10 No Material Adverse Change................................................................ 5
Section 2.11 Reporting Status.......................................................................... 5
Section 2.12 Foreign Corrupt Practices................................................................. 6
Section 2.13 No Manipulation of Stock.................................................................. 6
Section 2.14 Accountants............................................................................... 6
Section 2.15 Contracts................................................................................. 6
Section 2.16 Taxes..................................................................................... 6
Section 2.17 Transfer Taxes............................................................................ 6
Section 2.18 Investment Company........................................................................ 7
Section 2.19 Insurance................................................................................. 7
Section 2.20 Private Placement......................................................................... 7
Section 2.21 Disclosure................................................................................ 7
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS........................................ 7
Section 3.1 Representations, Warranties and Covenants of the Purchasers............................... 7
Section 3.2 Additional Covenants...................................................................... 8
Section 3.3 Further Representations, Warranties and Covenants of the Purchasers....................... 8
ARTICLE IV COMPANY COVENANTS................................................................................... 8
Section 4.1 Board of Directors........................................................................ 8
Section 4.2 Stock Option Plan......................................................................... 9
Section 4.3 Issuance of Securities.................................................................... 9
Section 4.4 Directors'and Officers'Liability Insurance................................................ 9
Section 4.5 Key Man Life Insurance.................................................................... 9
Section 4.6 Break-Up Fees............................................................................. 9
Section 4.7 Bridge Financing.......................................................................... 9
Section 4.8 Certain Stock Options..................................................................... 9
PAGE
ARTICLE V SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS...............................................10
ARTICLE VI REGISTRATION OF THE REGISTRABLE SECURITIES; COMPLIANCE WITH THE SECURITIES ACT......................10
Section 6.1 Registration Procedures...................................................................10
Section 6.2 Further Procedures........................................................................11
Section 6.3 Registration Expenses.....................................................................13
Section 6.4 Indemnification...........................................................................13
Section 6.5 Rules 144 and 144A........................................................................15
Section 6.6 Transfer of Registrable Securities After Registration.....................................16
Section 6.7 Information Available.....................................................................16
ARTICLE VII EXPENSES AND BROKER'S FEES.........................................................................16
ARTICLE VIII MISCELLANEOUS.....................................................................................17
Section 8.1 Notices...................................................................................17
Section 8.2 Changes...................................................................................18
Section 8.3 Headings..................................................................................18
Section 8.4 Severability..............................................................................18
Section 8.5 Governing Law.............................................................................18
Section 8.6 Counterparts..............................................................................18
Schedule 2.4 Capitalization
Schedule 2.5 Legal Proceedings
Exhibit A Form of Lock-Up Agreement
Exhibit B Form of Company Counsel Opinion
Appendix I Stock Certificate Questionnaire
Appendix II Registration Statement Questionnaire
Appendix III Purchaser's Certificate of Subsequent Sale
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This STOCK PURCHASE AGREEMENT (the "AGREEMENT") dated as of November
28, 2000, is made and entered into by and among Wattage Monitor Inc., a Nevada
corporation (the "COMPANY"), WPG Software Fund, L.P., WPG Raytheon Software
Fund, L.P., WPG Institutional Software Fund, L.P. (collectively, "XXXXX XXXX")
and XxxxxxxxXxx.xxx, Inc., a Nevada corporation ("PPRO" and together with Xxxxx
Xxxx, each of their affiliates and nominees, the "PURCHASERS").
WHEREAS, the Company desires to issue and sell to the Purchasers an
aggregate of 25,600,000 shares (the "SHARES") of the authorized but unissued
common stock, $0.01 par value, of the Company (the "COMMON STOCK"); and
WHEREAS, the Purchasers desire to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
SALE AND PURCHASE
Section 1.1 ISSUANCE AND SALE OF THE SHARES. Subject to the terms and
conditions herein set forth and in reliance upon the respective representations
and warranties of the parties set forth herein, the Company hereby agrees to
issue and sell to the Purchasers and the Purchasers hereby agree to purchase
from the Company for an aggregate purchase price of Six Million Nine Hundred
Sixty Three Thousand Two Hundred Dollars ($6,963,200) (the "PURCHASE PRICE"),
the number of Shares (at the purchase price per share) set forth below:
Number of Shares Price Per Share Aggregate
Name of Purchasers to be Purchased in Dollars Purchase Price
------------------------------------- -------------------- ------------------- ------------------
WPG Software Fund, L.P. 5,235,730 $0.272 $1,424,118.56
WPG Raytheon Software Fund, L.P. 9,202,838 $0.272 $2,503,171.94
WPG Institutional Software Fund, L.P. 7,484,961 $0.272 $2,035,909.39
PPRO 3,676,471 $0.272 $1,000,000.11
Section 1.2 DELIVERY OF THE SHARES AT THE CLOSING. The completion of
the purchase and sale of the Shares (the "CLOSING") shall occur as soon as
practicable following the effectiveness of the registration statement to be
filed by the Company pursuant to SECTION 6.1 (the "REGISTRATION STATEMENT") at a
place and time (the "CLOSING DATE") to be agreed upon by the Company and the
Purchasers, and in any event, no later than June 30, 2001. At the Closing, the
Company shall deliver to each Purchaser one or more stock certificates
registered in the name of such Purchaser, or in the name of such affiliates of
the Purchaser or
their nominees as may be designated by the Purchaser, representing the number of
Shares set forth in SECTION 1.1 above. The name(s) in which the stock
certificates are to be registered shall be set forth in the Stock Certificate
Questionnaire substantially in the form of APPENDIX I completed by each
Purchaser and delivered to the Company prior to the Closing Date. All of the
affiliates or nominees of a Purchaser together with the Purchaser shall be
deemed to have the rights of a Purchaser under this Agreement.
Section 1.3 CONDITIONS TO CLOSING.
(a) The Company's obligation to complete the purchase and sale
of the Shares and deliver such stock certificate(s) to the Purchasers at the
Closing shall be subject to the following conditions, any one or more of which
may be waived by the Company: (i) receipt by the Company of immediately
available funds in the full amount of the purchase price for the Shares being
purchased hereunder (less the aggregate principal amount of Bridge Loans); and
(ii) the accuracy of the representations and warranties made by the Purchasers.
(b) The Purchasers' obligation to accept delivery of such
stock certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may be waived by
the Purchasers: (i) the accuracy in all material respects of the representations
and warranties made by the Company herein as of the date hereof and the
fulfillment in all material respects of those undertakings of the Company to be
fulfilled prior to Closing; (ii) the delivery of a certificate of the Company's
Chief Executive Officer and Chief Financial Officer to the effect (A) that as of
a date not more than 10 days prior to the Closing Date the Company had a
tangible net worth of at least ($1,500,000) and (B) that the Company on and as
of the Closing Date (x) is not subject to any bankruptcy or insolvency
proceeding or (y) would not after giving effect to the sale of the Shares but
assuming the receipt of $2,500,000 only in proceeds therefrom be unable to meet
its obligations to repay indebtedness when and as it becomes due and payable or
in the ordinary course of business; (iii) each of Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx
and Xxxxxxx Xxxxx shall have entered into an agreement substantially in the form
of Exhibit A attached hereto; (iv) the Purchasers shall have received the
opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel to the Company, or
from Nevada counsel for the Company as to the matters set forth in paragraphs 1
and 5 of the form of opinion, dated as of the Closing Date and in substantially
the form of Exhibit B hereto; (v) the Registration Statement shall have been
declared and remain effective; (vi) all of the issued and outstanding shares of
Series B Convertible Preferred Stock of the Company shall have been converted to
shares of common stock of the Company; (vii) not including the Shares, no fewer
than 18,510,000 shares of common stock of the Company shall be issued and
outstanding on the Closing Date; and (viii) the accuracy in all material
respects of the representations and warranties contained in Sections 2.2, 2.4,
2.9, 2.11, 2.13, 2.17, 2.18, 2.20 and 2.21 as of the Closing Date.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to, and covenants with, the
Purchasers as follows:
Section 2.1 ORGANIZATION. The Company is duly incorporated and validly
existing and is in good standing under the laws of the jurisdiction of its
organization. The Company has full power and authority to own, operate and
occupy its properties and to conduct its business as presently conducted and is
registered or qualified to do business and is in good standing in each
jurisdiction in which it owns or
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leases property or transacts business and where the failure to be so qualified
would have a material adverse effect upon the business, financial condition,
properties or results of operations of the Company ("MATERIAL ADVERSE EFFECT"),
and no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
Section 2.2 DUE AUTHORIZATION. The Company has all requisite power and
authority to execute, deliver and perform its obligations under the Agreement,
and the Agreement has been duly authorized and validly executed and delivered by
the Company and constitutes the legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 2.3 NON-CONTRAVENTION. The execution and delivery of the
Agreement, the issuance and sale of the Shares to be sold by the Company under
the Agreement, the fulfillment of the terms of the Agreement and the
consummation of the transactions contemplated hereby will not (A) conflict with
or constitute a violation of, or default (with the passage of time or otherwise)
under, (i) any material bond, debenture, note or other evidence of indebtedness,
or any material lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the Company
is a party or by which it or its property is bound, where such conflict,
violation or default is likely to result in a Material Adverse Effect, (ii) the
charter, by-laws or other organizational documents of the Company, or (iii) any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority binding upon the Company or its property,
where such conflict, violation or default is likely to result in a Material
Adverse Effect, or (B) result in the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever upon any of the
material properties or assets of the Company or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any other agreement or instrument to which
the Company is a party or by which it is bound or to which any of the property
or assets of the Company is subject. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any regulatory
body, administrative agency, or other governmental body in the United States is
required for the execution and delivery of the Agreement and the valid issuance
and sale of the Shares to be sold pursuant to the Agreement, other than such as
have been made or obtained, and except for any securities filings required to be
made under federal or state securities laws.
Section 2.4 CAPITALIZATION. The capitalization of the Company is
described in the Company's reports, registration statements and definitive proxy
statements as filed by the Company with the Securities and Exchange Commission
(the "SEC DOCUMENTS"). The Company has not issued any capital stock since
December 31, 1999 other than pursuant to employee benefit plans disclosed in the
Company's SEC Documents. The Shares to be sold pursuant to the Agreement have
been duly authorized, and when issued and paid for in accordance with the terms
of the Agreement, will be duly and validly issued, fully paid and nonassessable.
The outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. Schedule 2.4 hereof sets forth (a) the aggregate number of
options and warrants to acquire shares of common stock of the Company
outstanding on the date hereof and (b)
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the aggregate number of options and warrants to acquire shares of common stock
of the Company reserved for issuance on the date hereof. Except as set forth in
or contemplated by this Agreement, the Company's SEC Documents or Schedule 2.4
hereof, there are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any unissued shares of capital stock or other equity
interest in the Company, or any contract, commitment, agreement, understanding
or arrangement of any kind to which the Company is a party and relating to the
issuance or sale of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options. Without
limiting the foregoing, no preemptive right, co-sale right, registration right,
right of first refusal or other similar right exists with respect to the
issuance and sale of the Shares. Except as disclosed in the Company's SEC
Documents, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party.
Section 2.5 LEGAL PROCEEDINGS. Except as set forth in Schedule 2.5
hereof, there is no material legal or governmental proceeding pending to which
the Company is a party or of which the business or property of the Company is
subject that is not disclosed in the Company's SEC Documents.
Section 2.6 NO VIOLATIONS. The Company is not in violation of its
charter, bylaws or other organizational document, or in violation of any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably likely to have
a Material Adverse Effect, or is in default (and there exists no condition
which, with the passage of time or otherwise, would constitute a default) in the
performance of any material bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company is a party or by which the Company
is bound or by which the property of the Company is bound, which would be
reasonably likely to have a Material Adverse Effect.
Section 2.7 GOVERNMENTAL PERMITS, ETC. The Company has all necessary
franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department or body
that are currently necessary for the operation of the business of the Company as
currently conducted except where the failure to currently possess could not
reasonably be expected to have a Material Adverse Effect.
Section 2.8 INTELLECTUAL PROPERTY. (a) The Company has ownership or
license or legal right to use all patent, copyright, trade secret, trademark,
customer lists, designs, manufacturing or other processes, computer software,
systems, data compilation, research results or other proprietary rights used in
the business of the Company and material to the Company (collectively,
"INTELLECTUAL PROPERTY") other than Intellectual Property generally available on
commercial terms from other sources. All of such patents, trademarks and
registered copyrights have been duly registered in, filed in or issued by the
United States Patent and Trademark Office, the United States Register of
Copyrights or the corresponding offices of other jurisdictions and have been
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations in the United States and all such jurisdictions.
(b) All material licenses or other material agreements under
which (i) the Company is granted rights in Intellectual Property, other than
Intellectual Property generally available on commercial terms from other
sources, and (ii) the Company has granted rights to others in Intellectual
Property owned
4
or licensed by the Company, are in full force and effect and, to the knowledge
of the Company, there is no material default by the Company thereto.
(c) The Company believes it has taken all steps required in
accordance with sound business practice and business judgment to establish and
preserve its ownership of all material copyright, trade secret and other
proprietary rights with respect to its products and technology.
(d) To the knowledge of the Company, the present business,
activities and products of the Company do not infringe any intellectual property
of any other person, except where such infringement would not have a Material
Adverse Effect on the Company. Except as described in the Company's SEC
Documents, no proceeding charging the Company with infringement of any adversely
held Intellectual Property has been filed. To the Company's knowledge, there
exists no unexpired patent or patent application which includes claims that
would be infringed by or otherwise have a Material Adverse Effect on the
Company. To the knowledge of the Company, the Company is not making unauthorized
use of any confidential information or trade secrets of any person. Neither the
Company nor, to the knowledge of the Company, any of its employees have any
agreements or arrangements with any persons other than the Company related to
confidential information or trade secrets of such persons or restricting any
such employee's engagement in business activities of any nature. To the
Company's knowledge, the activities of the Company or any of its employees on
behalf of the Company do not violate any such agreements or arrangements known
to the Company which any such employees have with other persons, if any.
(e) No proceedings have been instituted or are pending which
challenge in a material manner the rights of the Company in respect to the
Company's right to the use of the Intellectual Property. The Company has the
right to use, free and clear of material claims or rights of other persons, all
of its customer lists, designs, computer software, systems, data compilations,
and other information that are required for its products or its business as
presently conducted.
Section 2.9 FINANCIAL STATEMENTS. The financial statements of the
Company and the related notes contained in the Company's SEC Documents present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as disclosed in the Company's
SEC Documents.
Section 2.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the
Company's press releases or other information provided to the Investor in
writing by the Company in contemplation of this transaction, since June 30,
2000, there has not been (i) any Material Adverse Effect affecting the Company,
(ii) any obligation, direct or contingent, that is material to the Company
considered as one enterprise, incurred by the Company, except obligations
incurred in the ordinary course of business, (iii) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company, or (iv)
any loss or damage (whether or not insured) to the physical property of the
Company which has been sustained which has a Material Adverse Effect.
Section 2.11 REPORTING STATUS. The Company has filed in a timely manner
all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the 12 months
preceding the date of this Agreement. The following documents complied in
5
all material respects with the requirements of the Securities and Exchange
Commission (the "Commission") as of their respective filing dates, and the
information contained therein as of the date thereof did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1999 (the "10-K");
(b) The Company's Quarterly Reports on Form 10-Q for each of
the quarters ended March 31, 2000, June 30, 2000 and September 30, 2000; and
(c) All other documents filed by the Company with the
Commission since December 31, 1999 pursuant to the reporting requirements of the
Exchange Act.
Section 2.12 FOREIGN CORRUPT PRACTICES. Neither the Company nor, to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, have (i) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company or made by any person acting on its
behalf and of which the Company is aware in violation of law or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
Section 2.13 NO MANIPULATION OF STOCK. The Company has not taken and
will not, in violation of applicable law, take, any action outside the ordinary
course of business designed to or that might reasonably be expected to cause or
result in unlawful manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
Section 2.14 ACCOUNTANTS. Xxxxx Xxxxxxxx LLP, who has expressed their
opinion with respect to the financial statements to be incorporated by reference
from the Company's Annual Report on Form 10-K for the year ended December 31,
1999 into the Registration Statement (as defined below) and the Prospectus which
forms a part thereof, are independent accountants as required by the Securities
Act and the rules and regulations promulgated thereunder (the "RULES AND
REGULATIONS").
Section 2.15 CONTRACTS. The contracts described in the SEC Documents or
incorporated by reference therein that are 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.
Section 2.16 TAXES. The Company has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been or might be asserted or threatened against it which would have a
Material Adverse Effect.
Section 2.17 TRANSFER TAXES. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be
6
sold to the Investor hereunder will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will be or will
have been fully complied with.
Section 2.18 INVESTMENT COMPANY. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company, within the meaning of the Investment Company Act of
1940, as amended.
Section 2.19 INSURANCE. The Company maintains and will continue to
maintain insurance of the types and in the amounts that the Company reasonably
believes is adequate for its business, including, but not limited to, insurance
covering all real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect.
Section 2.20 PRIVATE PLACEMENT. The Company has not taken any action to
sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Shares, as contemplated by
this Agreement, within the provisions of Section 5 of the Securities Act, unless
such offer, issuance or sale was within the exemptions from the provisions of
Section 5 of the Securities Act.
Section 2.21 DISCLOSURE. The information contained in the SEC Documents
as of the date of such information did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE PURCHASERS
Section 3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASERS. Each Purchaser represents and warrants to, and covenants with, the
Company that: (a) such Purchaser, taking into account the personnel and
resources it can practically bring to bear on the purchase of the Shares
contemplated hereby, is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in shares
presenting an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company; (b) such
Purchaser or its counsel, accountants or other investment advisers have
requested, received, reviewed and considered all information deemed relevant by
them in making an informed decision to purchase the Shares; (c) such Purchaser
is acquiring the number of Shares set forth in SECTION 1.1 above in the ordinary
course of its business and for its own account for investment only and with no
present intention of distributing any of such Shares or any arrangement or
understanding with any other persons regarding the distribution of such Shares
(this representation and warranty not limiting the Purchaser's right to sell
pursuant to the Registration Statement or, other than with respect to any claims
arising out of a breach of this representation and warranty, the Purchaser's
right to indemnification under SECTION 6.3); (d) such Purchaser will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except in compliance with the Securities Act, and the
rules and regulations promulgated thereunder; (e) such Purchaser has, in
connection with its decision to purchase the number of Shares set forth in
SECTION 1.1 above, relied solely
7
upon the representations and warranties of the Company contained herein, as well
as any investigation of the Company completed by the Purchaser or its counsel,
accountants or other investment advisers; and (f) such Purchaser is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act.
Section 3.2 ADDITIONAL COVENANTS. Each Purchaser hereby covenants with
the Company that no resale of the Shares will be made except in compliance with
applicable securities laws. Each Purchaser hereby covenants that the information
contained in the Registration Statement Questionnaire will be true, correct and
complete as of the effective date of the Registration Statement. Each Purchaser
hereby covenants (on behalf of itself and any affiliates or nominees named in
the Registration Statement Questionnaire) not to make any sale of Shares under
the Registration Statement without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied, and such Purchaser
acknowledges and agrees that such Shares are not transferable on the books of
the Company unless the certificate submitted to the transfer agent evidencing
the Shares is accompanied by a separate officer's certificate: (a) in the form
of APPENDIX III hereto, (b) executed by an officer of, or other authorized
person designated by, the Purchaser, and (c) to the effect that (i) the Shares
have been sold in accordance with the Registration Statement and (ii) the
requirement of delivering a current prospectus has been satisfied.
Section 3.3 FURTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASERS. Each Purchaser further represents and warrants to, and covenants
with, the Company that (a) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (b) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
ARTICLE IV
COMPANY COVENANTS
The Company hereby covenants and agrees with the Purchasers that, in
consideration for the mutual covenants and agreements contained herein:
Section 4.1 BOARD OF DIRECTORS. The Company shall use its best efforts
to take all necessary corporate action to cause an election of members of the
Board of Directors of the Company (the "Board") to take place within one month
after the Closing Date, at which election a Board consisting of five directors
shall be elected. The Purchasers agree to vote their Shares for Xxxxxx Xxxxxxxx
and Xxxxxx Xxxxx at such election. So long as either Xxxxx Xxxx and its
affiliates on the one hand, or PPRO and its affiliates on the other, shall
beneficially own 3,000,000 shares of common stock of the Company in the
aggregate, such Purchaser shall have the right, but not the obligation, to
appoint an observer to attend meetings of the Board, and the Company covenants
to give the Purchasers the same notice of any such meeting as shall be given to
the members of the Board.
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Section 4.2 STOCK OPTION PLAN. On or before the Closing Date, the
Company shall have adopted an employees' stock option plan (or shall have
amended its currently existing plan) to reserve an additional 6,489,980 options
to acquire shares of common stock of the Company at an exercise price no less
than $0.272 per share. If shareholder approval for such adoption or amendment is
required by applicable law, the Company will use its best efforts to obtain such
approval from its shareholders.
Section 4.3 ISSUANCE OF SECURITIES. Except as provided by this
Agreement, from the date hereof until the Closing Date, the Company shall not
issue any capital stock or any options, warrants or other securities exercisable
for, or convertible into, or other rights to acquire the capital stock of the
Company.
Section 4.4 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company
shall maintain for so long as the Purchasers shall hold any of the Shares a
minimum aggregate amount of $5 million of directors and officers liability
insurance for the members of the Board.
Section 4.5 KEY MAN LIFE INSURANCE. The Company shall procure and
maintain for so long as the Purchasers shall hold any of the Shares, key man
life insurance for Xxxxxx Xxxxxxxx having terms and conditions acceptable to
Purchasers in the amount of $5,000,000.
Section 4.6 BREAK-UP FEES. In the event that the Closing does not occur
for any reason other than Purchasers' unexcused failure to consummate the
transaction, Xxxxx Xxxx shall be entitled to payment by the Company of a fee in
the amount of $1.2 million and PPRO shall be entitled to payment by the Company
of a fee in the amount of $0.2 million.
Section 4.7 BRIDGE FINANCING. The Company may incur up to $1,500,000 of
indebtedness to third parties for money borrowed between the date hereof and the
Closing Date and as of the date hereof the Company has incurred $272,000 of
indebtedness in order to fund current operations (all such indebtedness being
collectively referred to herein as the "BRIDGE LOANS"); provided that such
indebtedness shall not bear interest at a rate per annum greater than 12% and
shall be repayable no later than the Closing Date. In connection with the
incurrence of such indebtedness, the Company may grant to lenders rights to
purchase up to 1,102,941 shares of the common stock of the Company at an
exercise price not less than $0.272 per share.
Section 4.8 CERTAIN STOCK OPTIONS. The Company agrees that it will,
prior to the Closing Date, (i) grant to Xxxxxx Xxxxxxxx options to purchase
2,500,000 shares of common stock of the Company; (ii) grant to certain other
members of management of the Company (together with Xxxxxx Xxxxxxxx, the
"Management Optionees") options to purchase an aggregate of 250,000 shares of
common stock of the Company (together with the options granted to Xxxxxx
Xxxxxxxx, the "Management Options"); and (iii) enter into agreements with the
Management Optionees providing in substance that (x) the Management Optionees
will exercise the Management Options in full prior to the Closing Date, (y) if
any one of them shall terminate his or her employment with the Company within 48
months of the date of grant of his or her Management Options, the Company shall
have the right to purchase the Repurchase Percentage of Shares issued upon such
exercise. For purposes of this Section 4.8, the term "Repurchase Percentage"
shall mean, in respect of any Management Optionee, a fraction (expressed as a
percentage), the numerator of which shall be the difference between 48 and the
number of whole months passed since the grant of such Management Optionee's
Management Options and the denominator of which shall be 48.
9
ARTICLE V
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Purchasers herein shall survive the execution of this Agreement, the
delivery to the Purchasers of the Shares being purchased and the payment
therefor.
ARTICLE VI
REGISTRATION OF THE REGISTRABLE SECURITIES;
COMPLIANCE WITH THE SECURITIES ACT
Section 6.1 REGISTRATION PROCEDURES. (a) The Company shall, at its
cost, prepare and file no later than November 30, 2000 with the Commission, and
shall use its best efforts to cause to be declared effective as soon as
practicable, a registration statement on Form S-3 (or other appropriate form)
(the "Registration Statement") covering the offer and sale by the Purchasers of
such of the Shares and the 262,100 shares of common stock of the Company held by
affiliates of Xxxxx Xxxx on the date hereof (together with the Shares, the
"Registrable Securities") as are Transfer Restricted Securities (as defined
below) from time to time in accordance with the methods of distribution elected
by such Purchasers and set forth in the Purchasers' Registration Statement
Questionnaires and the Registration Statement and Rule 415 under the Securities
Act (such registration being hereinafter referred to as the "Shelf
Registration"). A Registrable Security shall be a "Transfer Restricted Security"
until (i) the date on which such Registrable Security has been disposed of in
accordance with the Registration Statement or (ii) the date on which such
Registrable Security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
(b) The Company shall use its best efforts to keep the
Registration Statement continuously effective, in order to permit the prospectus
included therein to be lawfully delivered by the Purchasers, until such time as
none of the Registrable Securities is a Transfer Restricted Security. The
Company shall be deemed not to have used its best efforts to keep the
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in the Purchasers not being able to offer and
sell Registrable Securities during that period, unless (i) such action is
required by applicable law or (ii) upon the occurrence of any event contemplated
by SECTION 6.2(b)(v) below, such action is taken by the Company in good faith
and for valid business reasons (not including avoidance of the Company's
obligations hereunder) and the Company thereafter complies with the requirements
of SECTION 6.2(h) below.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause (other than in respect of the information
required to be supplied by the Purchasers pursuant to this Agreement) (i) the
Registration Statement and the related prospectus and any amendment or
supplement thereto to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (ii) the Registration Statement and any amendment thereto
not to contain, when it becomes effective, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any prospectus forming a
part of the Registration Statement, and any amendment or
10
supplement to such prospectus, not to contain, as of the date of such prospectus
or amendment or supplement, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 6.2 FURTHER PROCEDURES. In connection with the Shelf
Registration contemplated by SECTION 6.1 hereof the following provisions shall
apply:
(a) The Company shall furnish to each Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement, and
each amendment thereof and each amendment or supplement, if any, to the
prospectus included therein, which shall include the information provided by the
Purchasers in their Registration Statement Questionnaires.
(b) The Company shall give written notice to the Purchasers
(which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made):
(i) when the Registration Statement or any amendment
thereto has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel
of any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the
Company to make changes to the Registration Statement or the prospectus
in order that the Registration Statement or the prospectus do not
contain an untrue statement of a material fact nor omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading, which written
notice need not provide any detail as to the nature of such event.
(c) The Company shall use best reasonable commercial efforts
to obtain the withdrawal at the earliest possible time of any order suspending
the effectiveness of the Registration Statement.
(d) The Company shall furnish to each Purchaser, without
charge, at least one copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Purchaser so requests in writing, all exhibits thereto (including those
incorporated by reference).
(e) The Company shall deliver to each Purchaser (so long as it
shall hold Registrable Securities which are Transfer Restricted Securities),
without charge, as many copies of the prospectus
11
(including each preliminary prospectus) included in the Registration Statement
and any amendment or supplement thereto as such person may reasonably request.
The Company consents, subject to the provisions of this Agreement, to the use of
the prospectus or any amendment or supplement thereto by each of the Purchasers
in connection with the offering and sale of the Registrable Securities covered
by the prospectus, or any amendment or supplement thereto, included in the
Registration Statement.
(f) Prior to any public offering of the Registrable Securities
pursuant to the Registration Statement, the Company shall register or qualify or
cooperate with the Purchasers and their respective counsel in connection with
the registration or qualification of the Registrable Securities for offer and
sale under the securities or "blue sky" laws of such states of the United States
as any Purchaser reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Registrable Securities covered by the Registration Statement.
(g) The Company, at its own expense, shall cooperate with the
Purchasers to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold pursuant to the Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as the Purchasers may request a reasonable period of
time prior to sales of the Registrable Securities pursuant to the Registration
Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of SECTION 6.2(b) above during the period for which
the Company is required to maintain an effective Registration Statement, the
Company shall as promptly as practicable prepare and file a post-effective
amendment to the Registration Statement or an amendment or supplement to the
related prospectus and any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated herein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
provided in the case of paragraph (v) of SECTION 6.2(b) the Company's
obligations pursuant to this paragraph (h) may be suspended if the Board has
determined in good faith and using reasonable judgment that disclosure of
information sufficient to ensure that the Registration Statement and related
prospectus contain no such misstatement or omission would be significantly and
materially disadvantageous to the Company's financial condition, business or
prospects. If the Company notifies the Purchasers in accordance with paragraphs
(ii) through (v) of SECTION 6.2(b) above to suspend the use of the prospectus
until the requisite changes to the prospectus have been made, then the
Purchasers shall suspend use of such prospectus for a period not to exceed 15
days; provided that the Company may not exercise this delay right more than
twice in any 12-month period. In the event of the delivery of the notice
described above by the Company, the Company shall use its best efforts to amend
such Registration Statement and/or amend or supplement the related prospectus if
necessary and to take all other actions necessary to allow the proposed sale to
take place as promptly as possible, subject, however, to the right of the
Company to delay further sales of Registrable Securities until the conditions or
circumstances referred to in the notice have ceased to exist or have been
disclosed. In the event that the Company shall fail to use its best efforts to
keep the Registration Statement effective as required by SECTION 6.1(b) hereof,
and by reason of such failure, the prospectus shall not be available for use for
a period of 30 days, or if the Company shall suspend the use of the prospectus
for a period longer than that provided by, or for more periods than permitted
by, this subsection (h), then in respect of each such separate event, each of
the Purchasers which shall at the time be holders of Transfer Restricted
Securities shall be automatically granted the right to purchase such number of
shares of common stock of the Company as shall equal one-quarter (1/4) of the
number of Shares purchased by it hereunder (as adjusted
12
for any stock splits, stock dividends, recapitalizations or other similar
actions). The exercise price for such rights shall be equal to the purchase
price per Share as set forth in SECTION 1.1 hereof (as adjusted for any stock
splits, stock dividends, recapitalizations or other similar actions).
(i) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Registration
Statement, which statement shall cover such 12-month period.
(j) The Company may require each Purchaser to deliver to the
Company promptly upon request therefor a completed Registration Statement
Questionnaire in substantially the form of APPENDIX II hereto containing such
information regarding the Purchaser and the distribution of the Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Registration Statement, and the Company may exclude from such
registration the Registrable Securities of any Purchaser that fails to furnish
such information within a reasonable time after receiving such request. Upon the
written request of a Purchaser, the Company will prepare and file with the
Commission an amendment or supplement to the prospectus which forms a part of
the Registration Statement with respect to the information contained in the
Purchaser's Registration Statement Questionnaire so that such information is
correct.
(k) The Company will cause the Registrable Securities to be
sold pursuant to the Registration Statement to be listed on the principal
securities exchange or market, if any, on which the common stock of the Company
shall then be traded.
Section 6.3 REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
SECTIONS 6.1 AND 6.2 hereof, whether or not the Registration Statement is filed
or becomes effective.
Section 6.4 INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Purchaser, its employees and each person, if any, who is an
affiliate or nominee of such Purchaser within the meaning of the Securities Act
or the Exchange Act (each Purchaser and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Registrable Securities) to which
each Indemnified Party becomes subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration, or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein not misleading,
and subject to subsection (c) below, shall reimburse, as incurred, the
Indemnified Parties for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon (x) the
13
use of any prospectus in violation of the last sentence of SECTION 6.2(h)
provided that the Company is in compliance with its obligations pursuant to such
Section, or (y) any untrue statement or omission made in the Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration made in reliance upon
and in conformity with written information pertaining to such Purchaser and
furnished to the Company by or on behalf of such Purchaser specifically for
inclusion therein.
(b) Each Purchaser, severally and not jointly, will indemnify
and hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act from and against
any losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company or any such controlling person becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement of a material fact contained in the Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration, or arise out of or are based upon
the omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission was made in reliance upon and in conformity with written
information pertaining to such Purchaser and furnished to the Company by or on
behalf of such Purchaser specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, and to subsection (c)
below, shall reimburse, as incurred, the Company for any legal or other expenses
reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Purchaser may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this
SECTION 6.4 of notice of the commencement of any action or proceeding (including
a governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this SECTION
6.4, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party, except to the
extent the indemnifying party is actually prejudiced by such failure. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party if the representation of both such parties by the same
counsel would constitute a conflict of interest). Notwithstanding the foregoing,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there exists a conflict of interest between the indemnifying party and any
indemnified party or that there may be legal defenses available to it and other
indemnified parties which are different from or additional to, and inconsistent
or in conflict with, those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this SECTION 6.4 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in accordance with the preceding
14
sentence, (ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonably time after notice of commencement of the action, or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party, and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnify could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are subject matter
of such action.
(d) If the indemnification provided for in this SECTION 6.4 is
unavailable or insufficient to hold harmless an indemnified party (including for
purposes of this SECTION 6.4(d) any Indemnified Party referred to in SECTION
6.4(a)) under subsections (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to in subsections (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and the indemnified party on the other in connection with the
statement or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Purchaser or such other indemnified party, as the case may be, on the
other, and the parties' relevant intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
SECTION 6.4(d), the Purchasers shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Purchasers from
the sale of the Registrable Securities pursuant to the Registration Statement
exceeds the amount of damages which such Purchasers have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified
party and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
(e) The agreements contained in this SECTION 6.4 shall survive
the sale of the Registrable Securities pursuant to the Registration Statement
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
Section 6.5 RULES 144 AND 144A. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and it will take such further action as any Purchaser shall
reasonably request to enable such holder to sell such securities without
registration,
15
including, without limitation, making publicly available the information
necessary to permit sales of their securities pursuant to Rules 144 and 144A.
Notwithstanding the foregoing, nothing in this SECTION 6.5 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act. The Company shall upon written request of a Purchaser deliver to such
Purchaser a written statement as to its compliance with such request.
Section 6.6 TRANSFER OF REGISTRABLE SECURITIES AFTER REGISTRATION. Each
of the Purchasers agrees that it will not effect any disposition of the
Registrable Securities or its right to purchase the Shares that would constitute
a sale within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in SECTION 6.1 or as otherwise in compliance
with applicable securities laws and that it will promptly notify the Company of
any changes in the information set forth in the Registration Statement regarding
such Purchaser or its Plan of Distribution by delivering to the Company an
amended Registration Statement Questionnaire.
Section 6.7 INFORMATION AVAILABLE. So long as the Registration
Statement is effective covering the resale of Registrable Securities owned by a
Purchaser, the Company will furnish to such Purchaser (unless such document has
been filed and is available on the Commission's XXXXX database):
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Shareholders, within 120 days after the end of
each fiscal year of the Company), one copy of (i) its Annual Report to
Shareholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted accounting principles by a firm of certified
public accountants), (ii) if not included in substance in the Annual Report to
Shareholders, its Annual Report on Form 10-K, (iii) if not included in substance
in its Quarterly Reports to Shareholders, its quarterly reports on Form 10-Q,
(iv) its Current Reports on Form 8-K, and (v) a full copy of the particular
Registration Statement covering the Registrable Securities (the foregoing, in
each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(v) of this SECTION 6.7; and
(c) upon the reasonable request of the Purchaser, an adequate
number of copies of the prospectuses to supply to any other party requiring such
prospectuses;
and the Company, upon the reasonable request of such Purchaser, will meet with
such Purchaser or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Registration Statement
and will otherwise cooperate with any Purchaser conducting an investigation for
the purpose of reducing or eliminating such Purchaser's exposure to liability
under the Securities Act, including the reasonable production of information at
the Company's headquarters. Each Purchaser agrees to keep all such information
confidential.
ARTICLE VII
EXPENSES AND BROKER'S FEES
The Company shall pay all reasonable fees and expenses of the
Purchasers (including up to $75,000 in attorneys' fees and expenses) incurred in
connection with the transactions contemplated hereby, including, without
limitation, the preparation, execution and delivery of the Agreement and
16
compliance herewith, whether or not the transactions contemplated hereby shall
be consummated. Each of the parties hereto hereby represents that, on the basis
of any actions and agreements by it, there are no brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchasers.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
(a) if to the Company, to:
Wattage Monitor Inc.
0000 Xxxxxxx Xxxx
Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, President and Chief
Executive Officer
with a copy so mailed to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and
(b) if to the Purchasers:
WPG Software Fund, L.P.
WPG Raytheon Software Fund, L.P.
WPG Institutional Software Fund, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxxxx, Managing Director
Telephone: 000-000-0000
Facsimile: 000-000-0000
XxxxxxxxXxx.xxx, Inc.
0000 X. Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
17
Attention: General Counsel
with a copy so mailed to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Financial Centre
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other person at such other place as any Purchaser shall designate to
the Company in writing.
Section 8.2 CHANGES. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchasers.
Section 8.3 HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 8.4 SEVERABILITY. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
Section 8.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
Section 8.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
WATTAGE MONITOR INC.
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
WPG SOFTWARE FUND, L.P.
By: XXXXX XXXX & XXXXX, LLC
its General Partner
By: /s/ XXXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
WPG RAYTHEON SOFTWARE FUND, L.P.
By: XXXXX XXXX & XXXXX, LLC
its General Partner
By: /s/ XXXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
19
WPG INSTITUTIONAL SOFTWARE FUND, L.P.
By: XXXXX XXXX & XXXXX, LLC
its General Partner
By: /s/ XXXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
XXXXXXXXXXX.XXX, INC.
By: /s/ XXXXXXX X. XXXXXXX, XX.
-------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman & CEO
20
EXHIBIT A - Form of Lock-Up Agreement
See Exhibit 10.3 filed herewith
A-1
[Letterhead of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.]
[Date]
WPG Software Fund, L.P.
WPG Raytheon Software Fund, L.P.
WPG Institutional Software Fund, L.P.
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxxxxxx.xxx, Inc.
0000 X. Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Re: WATTAGE MONITOR INC.
Ladies and Gentlemen:
We have acted as counsel to Wattage Monitor Inc., a Nevada corporation (the
"COMPANY"), in connection with (a) the private placement of the Company's common
stock (the "TRANSACTION") pursuant to that certain Stock Purchase Agreement,
dated as of November 28, 2000, between WPG Software Fund, L.P., WPG Raytheon
Software Fund, L.P., WPG Institutional Software Fund, L.P., and XxxxxxxxXxx.xxx,
Inc. (collectively, the "PURCHASERS") and the Company (the "AGREEMENT") and (b)
preparation of a registration statement (File No. 333 - o) on Form F-3 (the
"REGISTRATION STATEMENT"), filed with the Securities and Exchange Commission
(the "COMMISSION") under the Securities Act of 1933, as amended (the "SECURITIES
ACT"). This opinion is rendered at the request of the Company pursuant to
Section 1.3(b)(iv) of the Agreement. All capitalized terms used in this letter,
without definition, have the meanings assigned to them in the Agreement.
In connection with this letter, we have examined executed originals or
copies of executed originals of the Agreement. In addition, we have examined the
following documents (collectively, the "DUE DILIGENCE DOCUMENTS"): [insert
list].
We have examined originals or certified copies of such corporate
records of the Company and other certificates and documents of officials of the
Company, public officials and others as we have deemed appropriate for purposes
of this letter, except where a statement is qualified as to knowledge or
awareness, in which case we have made limited inquiry, as specified below. As to
various questions of fact relevant to this letter, we have relied, without
independent investigation, upon the Due Diligence Documents and certificates of
public officials, certificates of officers of the Company, and the
representations and warranties of the Company in the Agreement, all of which we
assume to be true, correct and complete. We have made no investigation or review
of any matters relating to the Company or
B-1
any other Person other than as expressly listed herein. We wish to inform you
that our knowledge is necessarily limited to our actual knowledge (with the
meaning accorded to such phrase in Paragraph B below) and by the limited scope
of our review. In addition, we have made no inquiry of the Company or any other
person or entity (including governmental authorities) regarding, and no review
of, any public records including without limitation any judgments, orders,
decrees, franchises, licenses, certificates or permits any agreements to which
the Company is a party or subject other than (1) the Good Standing Certificates,
and (2) the officer's certificate[s] described in paragraphs ___ and ___ below,
and our "knowledge" of any such matters is accordingly limited.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to authentic original
documents of all copies submitted to us as conformed, certified or reproduced
copies and that the certificates for the Shares conform to the specimen thereof
we have reviewed and have been duly countersigned by a transfer agent and duly
registered by a registrar. We have also assumed the legal capacity of natural
persons, the corporate or other power and due authorization of each person not a
natural person other than the Company to execute and deliver the Agreement and
to consummate the transactions contemplated by the Agreement, due execution and
delivery of the Agreement by all parties thereto other than the Company, and
that the Agreement constitutes the legal, valid and binding obligation of each
party thereto other than the Company, enforceable against such party in
accordance with its terms.
Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth hereinafter, we are of the opinion
that:
B-2
1. The Company is validly existing as a corporation in good standing under the
laws of the state of Nevada, the jurisdiction of its organization. The
Company has corporate power to enter into the Agreement and to own, operate
and occupy its properties and to conduct its business as presently
conducted.
2. The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Agreement, and upon its
execution and delivery and will constitute the valid and binding agreement
of the Company, enforceable against the company in accordance with its
terms.
3. The execution and delivery of the Agreement by the Company, the issuance
and sale of the Shares to be sold by the Company under the Agreement and
the consummation by the Company of its transactions contemplated by the
Agreement will not, (a) result in a violation of the Amended and Restated
Articles of Incorporation or by-laws of the Company, (b) breach or result
in a default or entitle any party to accelerate (with the passage of time
or otherwise) under any agreement or instrument included or incorporated by
reference as an exhibit to the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2000 (the "FORM 10-KSB"), or as an exhibit to
any other SEC Documents filed after December 31, 1999, (c) result in any
violation of any order, writ, judgment or decree known to us or (d) result
in any violation of any law, rule or regulation of any included law
(defined below) binding upon the Company or its property.
4. No consent, approval, authorization or other order of, registration,
qualification or filing with (each a "FILING"), any regulatory body,
administrative agency, or other governmental body is required under any of
the Included Laws for the due execution and delivery of the Agreement by
the Company and its consummation by the Company of its transactions
contemplated by the Agreement, except (i) Filings as have been obtained or
made, (ii) Filings required under Federal and state securities laws as
contemplated by the Agreement and (vii) Filings required to maintain
corporate and similar standing and existence.
5. The Shares have been duly authorized and, when issued and paid for in
accordance with the terms of the Agreement, will be duly validly issued,
fully paid and non-assessable. The outstanding shares of capital stock of
the Company have been duly authorized, validly issued and are fully paid
and nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities known to
us.
6. The Company is not an "INVESTMENT COMPANY" or an "AFFILIATED PERSON" of, or
a "PROMOTER" or a "PRINCIPAL UNDERWRITER" for an investment company, within
the meaning of the Investment Company Act of 1940, as amended.
7. Based upon the representations and warranties of the Company and the
Purchasers in the Agreement with respect to factual matters, the offer,
sale and delivery of the Shares to the Purchasers pursuant to the Agreement
are exempt from the registration requirements of the Securities Act.
B-3
8. The Registration Statement has become effective under the Securities Act,
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
prospectus forming a part thereof is in effect and no proceedings for that
purpose have been instituted or are pending.
9. The Registration Statement and the prospectus forming a part thereof (other
than the financial statements and schedules and other financial data
contained therein, as to which we express no opinion, and information
provided to the Company by the Purchasers) at the time the Registration
Statement became effective did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
B-4
The opinions and other matters in this letter are qualified in their
entirety and subject to the following:
A. We express no opinion as to the laws of any jurisdiction other than the
Included Laws. We have made no special investigation or review of any
published constitutions, treaties, laws, rules or regulations or judicial
or administrative decisions ("LAWS"), other than a review of (i) the Laws
of the State of New York, and (ii) the Federal Laws of the United States of
America. For purposes of this opinion, the term "INCLUDED LAWS" means the
items described in clauses (i) and (ii) of the preceding sentence that are,
in our experience, normally applicable to transactions of the type
contemplated in the Agreement. The term Included Laws specifically excludes
(a) Laws of any counties, cities, towns, municipalities and special
political subdivisions and any agencies thereof and (b) Laws relating to
land use, zoning and building code issues, taxes, environmental issues,
intellectual property Laws, antitrust issues, Federal Reserve Board margin
regulation issues. The term "Included Laws" specifically excludes laws,
rules and regulations relating to the regulation of the conduct of the
businesses of the Company, including, without limitation, providing
information about electric rates and services for the United States
electric market.
B. When used in this letter, the phrases "KNOWN TO US," "TO OUR KNOWLEDGE" and
similar phrases (i) mean the conscious awareness of facts or other
information by (a) the lawyer in our firm who signed this letter, (b) any
lawyer in our firm actively involved in negotiating and preparing the
Agreement and (c) solely as to information relevant to a particular
opinion, issue or confirmation regarding a particular factual matter, any
lawyer in our firm who is primarily responsible for providing the response
concerning that particular opinion, issue or confirmation, and (ii) do not
require or imply (a) any examination of this firm's, such lawyer's or any
other person's or entity's files, (b) that any inquiry be made of any
lawyer (other than the lawyers described above), or any other person or
entity other than the client, or (c) any review or examination of any
agreements, documents, certificates, instruments or other papers
(including, but not limited to, the exhibits and schedules to the Agreement
and the Due Diligence Documents and the various papers referred to in or
contemplated by the Transaction Documents and the Due Diligence Documents
and the respective exhibits and schedules thereto) other than the
Transaction Documents and the Due Diligence Documents.
C. This letter and the matters addressed herein are as of the date hereof or
such earlier date as is specified herein, and we undertake no, and hereby
disclaim any, obligation to advise you of any change in any matter set
forth herein, whether based on a change in the law, a change in any fact
relating to the Company or any other Person, or any other circumstance.
This opinion letter is limited to the matters expressly stated herein and
no opinions are to be inferred or may be implied beyond the opinions
expressly set forth herein.
D. For purposes of this letter, the phrase "TRANSACTIONS CONTEMPLATED BY THE
AGREEMENT" and similar phrases mean the Company's offer and sale of the
Shares to the Purchasers pursuant to the Agreement and the preparation and
filing of the Registration Statement under the Securities Act.
B-5
E. The opinions expressed in the first sentence of paragraph 1 herein are
given solely on the basis of certificates of the State agencies or
officials set forth in Schedule __ hereto (the "GOOD STANDING
CERTIFICATES") and speak only as of the dates indicated in such Schedule
rather than the date hereof. In determining the appropriate State agencies,
we have relied, without further inquiry, on the advice of _________________
as to those agencies from which certificates should be received. The
opinion is limited to the meaning ascribed to such certificates by each
applicable State agency and applicable law.
F. The matters expressed in this letter are subject to and qualified and
limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally; (ii) general principles of
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity); (iii) commercial reasonableness and unconscionability
and an implied covenant of good faith and fair dealing; (iv) the power of
the courts to award damages in lieu of equitable remedies; and (v) federal
and state securities Laws and public policy underlying such Laws with
respect to rights to indemnification and contribution.
G. With respect to the opinions expressed in paragraph 5 herein as to the due
authorization and valid issuance of the Shares and the outstanding shares
of capital stock of the Company, in determining the number of shares of
capital stock of the Company authorized at any time we have relied, without
any further inquiry, on a certificate of State agencies or officials set
forth in Schedule __ hereto that sets forth all charter documents of the
Company. With respect to the opinions expressed in paragraph 5 herein as to
the Shares being validly issued, fully paid and non-assessable when issued
and delivered pursuant to the terms of the Agreement, we assume that the
price per Share of such issuance will be at least equal to the par value
per share of the Shares.
H. We express no opinion with respect to the fairness of the Agreement or any
other matter, and in rendering the opinions expressed herein, we have
assumed, with your consent, that a court of competent jurisdiction would
find all such matters were entirely fair. We have assumed that no fraud,
dishonesty, forgery, coercion, duress or breach of fiduciary duty exists or
will exist with respect to any of the matters relevant to the opinions
expressed in this letter.
I. We express no opinion as to (i) the compliance of the transactions
contemplated by the Agreement with any regulations or governmental
requirements applicable to any party other than the Company; (ii) the
financial condition or solvency of the Company; (iii) the ability
(financial or otherwise) of the Company or any other party to meet their
respective obligations under the Agreement ; (iv) the compliance of the
Agreement or the transactions contemplated thereby, or as to the effect of
any of the foregoing of, antifraud provisions of the federal and state
securities laws, rules and regulations; (v) the value of any security
provided to secure the payment of obligations contemplated by the
Agreement; and (vi) the conformity of the Agreement to any term sheet or
commitment letter.
J. This letter is solely for your benefit, and no other Persons (other than
your affiliates and nominees) shall be entitled to rely upon this letter.
Without our prior written consent, this letter may not be quoted in whole
or in part or otherwise referred to in any document and may
B-6
not be furnished or otherwise disclosed to or used by any other Person,
except for (i) delivery of copies hereof to counsel for the addressees
hereof, (ii) inclusion of copies hereof in a closing file, and (iii)
use hereof in any legal proceeding arising out of the transactions
contemplated by the Agreement filed by an addressee hereof against
this law firm or in which any addressee hereof is a defendant.
K. This law firm is a registered limited liability partnership organized
under the laws of the State of Texas.
To our actual knowledge, neither the Company nor any of its
Subsidiaries is a party to any adversarial action, suit, or proceeding pending
or threatened overtly by a written communication, at law or in equity, or before
any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, which action, suit or proceeding seeks
either to enjoin the transactions contemplated by the Agreement or to recover
monetary damages from the Company in excess of $500,000 that has not been
disclosed in a SEC Document or in Schedule 2.5 to the Agreement.
We have acted as special counsel to the Company, in connection with the
preparation and filing with the Commission under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), of the Company's on Form 10-KSB that is
incorporated by reference into the Company's Registration Statement.
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial, accounting or statistical
information, and because many determinations involved in the preparation of the
Form 10-KSB are of a wholly or partially non-legal character, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Form 10-KSB and we make no
representation that we have independently verified the accuracy, completeness or
fairness of such statements.
However, in the course of our acting as special counsel to the Company
in connection with its preparation of the Form10-KSB, prior to the filing of the
Form 10-KSB, we participated in conferences and telephone conversations with
representatives of the Company, representatives of the Company's Nevada counsel
and representatives of the independent public accountants for the Company during
which conferences and conversations the contents of the Form 10-KSB and related
matters were discussed, and we reviewed certain corporate records and documents
furnished to us by the Company.
Based on our participation in such conferences and conversations, our
review of such records and documents as described above, our understanding of
the U.S. federal securities laws and the experience we have gained in our
practice thereunder, we advise you that:
(a) The Form 10-KSB (except the financial statements and other
financial and statistical data included therein as to which we express
no view), at the time it was filed with the Commission, appeared on its
face to be appropriately responsive in all material respects to the
requirements of the Exchange Act and the rules and regulations
thereunder. In addition, we do not know of any contracts or other
documents of a character required to be filed as exhibits to the
B-7
Form 10-KSB or required to be described in the Form 10-KSB that are
not filed or described as required.
(b) No information has come to our attention that causes us to
believe that the Form 10-KSB (except the financial statements and other
financial and statistical data included therein as to which we express
no view), at the time it was filed, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(c) No information has come to our attention that causes us to
believe that the Form 10-KSB (except the financial statements and other
financial and statistical data included therein as to which we express
no view), as of the date thereof or hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Very truly yours,
AKIN, GUMP, STRAUSS, XXXXX & XXXX, L.L.P.
B-8
APPENDIX I
WATTAGE MONITOR INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 1.2 of the Stock Purchase Agreement dated as of
November 28, 2000 by and among Wattage Monitor Inc., WPG Software Fund, L.P.,
WPG Raytheon Software Fund, L.P., WPG Institutional Software Fund, L.P. and
XxxxxxxxXxx.xxx, Inc. the undersigned Purchaser hereby provides the following
information:
NUMBER OF
EXACT NAME OF REGISTERED HOLDER REGISTRABLE
(A REGISTERED HOLDER MAY BE AN AFFILIATE OR SECURITIES TO BE
NOMINEE OF PURCHASER): REGISTERED: MAILING ADDRESS: TAX ID NUMBER:
------------------------------------------- ---------------- ---------------- --------------
[insert name of Purchaser]
By:
--------------------------
Name:
Title:
Appendix - I
APPENDIX II
WATTAGE MONITOR INC.
REGISTRATION STATEMENT QUESTIONNAIRE
Reference is made to Section 6.2(j) of the Stock Purchase Agreement
dated as of November 28, 2000 by and among Wattage Monitor Inc., WPG Software
Fund, L.P., WPG Raytheon Software Fund, L.P., WPG Institutional Software Fund,
L.P. and XxxxxxxxXxx.xxx, Inc. The undersigned Purchaser hereby provides:
NUMBER OF REGISTRABLE SECURITIES, IF
NUMBER OF REGISTRABLE SECURITIES ANY, WHICH WILL BE OWNED BY THE SELLING
OF THE SELLING SHAREHOLDER WHICH SHAREHOLDER AFTER COMPLETION OF SALE OF
ARE BEING INCLUDED IN THE REGISTRABLE SECURITIES INCLUDED IN
1. NAME OF SELLING SHAREHOLDER REGISTRATION STATEMENT REGISTRATION STATEMENT
--------------------------- -------------------------------- ---------------------------------------
Appendix - II-1
2. Have you or your organization held any position, office or other
material relationship within the past three years with the Company or its
affiliates?
______ Yes ______ No
If yes, please indicate the nature of any such relationships below:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3. Description of proposed plan of distribution for the sales of shares
of common stock of the Company under the Registration Statement (the "Plan of
Distribution")
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
[insert name of Purchaser]
Date: By:
--------------------------
Name:
Title:
Appendix II-2
APPENDIX III
WATTAGE MONITOR INC.
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
Reference is made to Section 3.2 of the Stock Purchase Agreement dated as
of November 28, 2000 by and among Wattage Monitor Inc., WPG Software Fund, L.P.,
WPG Raytheon Software Fund, L.P., WPG Institutional Software Fund, L.P. and
XxxxxxxxXxx.xxx, Inc. The undersigned, [an officer of, or other person duly
authorized by] [insert name of Purchaser] hereby certifies that the shares
evidenced by the attached certificate are held by it or its affiliate or
nominee, and that it (or its affiliate or nominee) sold such shares on
__________________________ in accordance with registration statement number
[date]
___________________________________ and the requirement of delivering a current
[fill in the number of or otherwise identify registration statement]
prospectus has been complied with in connection with such sale.
[insert name of Purchaser]
By:
--------------------------
Name:
Title:
Appendix III
