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EXHIBIT 4.8
SERIES B STOCK PURCHASE AGREEMENT
AGREEMENT made as of this 22nd day of December, 1998, by and among (i)
OptiMark Technologies, Inc., a Delaware corporation (the "Company"), and (ii)
the purchasers ("Purchasers") of the Company's Series B Convertible
Participating Preferred Stock, $.01 par value per share ("Series B Stock")
identified on Schedule I hereto.
SECTION 1. DEFINITIONS
In addition to other capitalized terms defined elsewhere herein, the
following terms shall have the indicated meanings:
1.1 "1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
1.2 "Affiliate" of a Person means any corporation or other entity
that is or ever would have been considered a single employer with that Person
under ERISA Section 4001(b) or part of the same "controlled group" as that
Person for purposes of ERISA Section 302(d)(8)(C).
1.3 "Audited Financial Statements" means the audited consolidated
balance sheets of the Company and its Subsidiaries as of December 31, 1996 and
December 31, 1997, and the related statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for the 12-month periods then
ended (together with the notes thereto), copies of which have been delivered to
the Purchasers.
1.4 "Board" means the board of directors of the Company as
constituted from time to time.
1.5 "BT Options" means the Common Stock Purchase Options dated July
10, 1998 in favor of BT Investment Partners, Inc. ("BT") under which General
Atlantic Partners has granted to BT the right to purchase up to 166,667 shares
of Common Stock owned by General Atlantic Partners, at an exercise price of
$10.00 per share.
1.6 "CBOE Warrant" means a Common Stock Purchase Warrant dated
December 31, 1996, pursuant to which The Chicago Board Options Exchange,
Incorporated has the right to purchase from the Company up to 1,000,000 shares
of Common Stock at an exercise price of $2.25 per share, subject to potential
adjustment as provided therein.
1.7 "Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, including the Certificate of
Designations with respect to the Series A Stock and the Certificate of
Designations with respect to the Series B Stock (as amended) attached thereto,
filed with the Delaware Secretary of State on or about May 29, 1998.
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1.8 "Code" means the Internal Revenue Code of 1986, as amended. For
purposes of this Agreement, all references to Sections of the Code shall include
any predecessor provisions to such Sections.
1.9 "Common Stock" means the voting and nonvoting common stock of
the Company, $.01 par value per share.
1.10 "Consent of the Purchasers" means the vote at a meeting or
executed written consents in lieu of a meeting of one or more Purchasers owning
at least 75% of the Series B Shares (including for such purposes, on a
proportional basis, any Conversion Shares into which any of the Series B Shares
have been converted and not sold to the public).
1.11 "Conversion Shares" means the shares of Common Stock or any
successor class of capital stock of the Company hereafter issued or issuable
upon conversion of the Series B Shares.
1.12 "Copyrights" means any foreign or United States copyright
registrations and applications for registration thereof, and any non-registered
copyrights.
1.13 "Dow Xxxxx Warrant" means a Common Stock Purchase Warrant dated
May 29, 1997, pursuant to which Dow Xxxxx & Company, Inc. has the right to
purchase from the Company up to 2,161,764 shares of Common Stock at an exercise
price of $2.75 per share, subject to potential adjustment as provided therein.
1.14 "Employee Program" means (a) all employee benefit plans within
the meaning of ERISA Section 3(3), including but not limited to multiple
employer welfare arrangements (within the meaning of ERISA Section 3(40)), plans
to which more than one unaffiliated employer contributes, and employee benefit
plans (such as foreign or excess benefit plans) which are not subject to ERISA;
and (b) all stock or cash option plans, restricted stock plans, bonus or
incentive award plans, severance pay policies or agreements, deferred
compensation agreements, supplemental income arrangements, vacation plans, and
all other employee benefit plans, agreements, and arrangements not described in
(a) above. In the case of an Employee Program funded through an organization
described in Code Section 501(c)(9), each reference to such Employee Program
shall include a reference to such organization. An entity "maintains" an
Employee Program if such entity sponsors, contributes to, or provides (or has
promised to provide) benefits under such Employee Program, or has any obligation
(by agreement or under applicable law) to contribute to or provide benefits
under such Employee Program, or if such Employee Program provides benefits to or
otherwise covers employees of such entity (or their spouses, dependents, or
beneficiaries).
1.15 "Environmental Laws" means and includes any environmental or
health and safety-related law, regulation, rule, ordinance, or by-law at the
federal, state or local level, whether existing as of the date hereof or
subsequently enacted.
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1.16 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.17 "Financial Statements" means and includes both the Audited
Financial Statements and the Unaudited Financial Statements, copies of both of
which have been delivered to the Purchasers.
1.18 "Goldman Warrants" means (i) the Common Stock Purchase Warrant
in favor of The Xxxxxxx Sachs Group, L.P. dated June 1, 1998 under which Xxxxxxx
X. Xxxxxx has granted to Xxxxxxx Sachs the right to purchase up to 500,000
shares of Common Stock owned by Xx. Xxxxxx, at an exercise price of $10.00 per
share, and (ii) the Common Stock Purchase Warrant in favor of The Xxxxxxx Sachs
Group, L.P. dated June 1, 1998 under which Xxxxxxx X. Xxxxx has granted to
Xxxxxxx Sachs the right to purchase up to 500,000 shares of Common Stock owned
by Xx. Xxxxx, at an exercise price of $10.00 per share
1.19 "Hazardous Material" means and includes any hazardous waste,
hazardous material, hazardous substance, petroleum product, oil, toxic
substance, pollutant, contaminant, or other substance which may pose a threat to
the environment or to human health or safety, as defined or regulated under any
Environmental Law.
1.20 "Intellectual Property" means and includes Copyrights, Internet
Assets, Patents, Trade Secrets, Trademarks, Software and other proprietary
rights.
1.21 "Internet Assets" means any Internet domain names and other
computer user identifiers and any rights in and to sites on the worldwide web,
including rights in and to any text, graphics, audio and video files and html or
other code incorporated in such sites.
1.22 "IPO Effectiveness Date" means the date (if any) upon which the
Company commences its initial public offering pursuant to an effective
registration statement filed with the SEC under the 0000 Xxx.
1.23 "IRS" means the Internal Revenue Service.
1.24 "Judgment" means any judgment, injunction, writ, award, decree
or order of any nature from any arbitrator, court or governmental agency.
1.25 "Liabilities" means and includes any indebtedness, liabilities,
guaranties or other obligations of any nature, whether accrued, absolute,
contingent or otherwise, known or unknown, asserted or unasserted.
1.26 "Lien" means and includes any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences), including, without
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limitation, those created by, arising under or evidenced by any conditional sale
or other title retention agreement, the interest of a lessor under a capital
lease obligation, or any financing lease having substantially the same economic
effect as any of the foregoing.
1.27 "Losses" means and includes losses, claims, damages, causes of
action, liabilities, penalties, fines and related interest and expenses,
including reasonable attorneys' fees and disbursements, and costs of
investigation, litigation, arbitration, enforcement and indemnification.
1.28 "Material Contracts" means and includes any employment contract;
stock redemption or purchase agreement; loan, capital lease or other financing
agreement; license, distributor, sales representation or OEM agreement;
agreements with any officers, directors, employees or stockholders of the
Company or any persons related to or affiliated with any such persons; leases;
agreements relating to the licensing, distribution, development or maintenance
of Software and related hardware; agreements with customers of the Company;
powers of attorney; pension, profit-sharing, retirement or stock option plans;
any other contract, obligation or commitment (whether written or oral) involving
actual or potential consideration of more than $100,000; or any contract,
obligation or commitment not entered into in the ordinary course of business.
1.29 "ML Options" means the Common Stock Purchase Options dated July
10, 1998 in favor of ML IBK Positions, Inc., Xxxxxxx Xxxxx KECALP L.P. 1997, and
Xxxxxxx Xxxxx KECALP International L.P. 1997 (altogether, "ML") under which Dow
Xxxxx & Company, Inc. and General Atlantic Partners have granted to ML the right
to purchase a total of up to 500,000 shares of Common Stock owned by Dow Xxxxx
and General Atlantic Partners, at an exercise price of $10.00 per share.
1.30 "Multiemployer Plan" means an Employer Program to which more
than one employer contributes and which is maintained pursuant to one or more
collective bargaining agreements.
1.31 "NASDAQ Warrant" means the Warrant Agreement dated September 1,
1998 pursuant to which The Nasdaq Stock Exchange Incorporated has the right to
purchase from the Company up to 11,250,000 shares of Common Stock at exercise
prices ranging from $3.00 to $7.00 per share.
1.32 "NeoVision Letter" means the letter dated April 16, 1998 from
counsel for NeoVision Hypersystems, Inc. to the Company, a copy of which is
included in Schedule 3.13 hereto.
1.33 "OptiMark(TM)" means the Company's proprietary "OptiMark(TM)"
securities trading system, which is under development.
1.34 "Outstanding Rights" means and includes (a) the rights of the
holder under the PCX Warrant, (b) the rights of the holder under the Dow Xxxxx
Warrant, (c) the rights of the holder under the NASDAQ Warrant, (d) the rights
of the holder under the CBOE
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Warrant, (e) the rights of the holder under the VSC Warrant, (f) the rights of
the holder under the TransAmerica Warrant, (g) the right of Xxxxx Xxxx to
purchase from the Company up to 40,000 shares of Common Stock at an exercise
price of $10.00 per share, (h) the right of Xxxxxx Xxxxxx Partners, L.L.C. to
purchase from the Company up to 5,000 shares of Common Stock at an exercise
price of $10.00 per share, and (i) the rights of the holders of options and
other rights to acquire Common Stock, issued and reserved for issuance as
incentives for the Company's officers, directors, employees, former employees
and consultants.
1.35 "Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
1.36 "Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, governmental agency or other entity of any
kind, and shall include any successor (by merger or otherwise) of such entity.
1.37 "PCX Warrant" means the Common Stock Purchase Warrant dated
August 27, 1996 pursuant to which The Pacific Exchange, Incorporated has the
right to purchase from the Company up to 2,104,000 shares of Common Stock at an
exercise price of $1.83 per share, subject to potential adjustment as provided
therein.
1.38 "Purchasers" includes the Purchasers and their successors and
assigns with respect to the Series B Stock and the Conversion Shares.
1.39 "Registration Rights Agreement" means the Registration Rights
Agreement dated April 23, 1998 between the Company and the Purchasers.
1.40 "Requirement of Law" means, as to any Person, any law, statute,
treaty, rule, regulation, right, privilege, qualification, license, franchise or
Judgment, in each case applicable or binding upon such Person or any of its
property or to which such Person or any of its property is subject or pertaining
to any or all of the transactions contemplated or referred to herein.
1.41 "SEC" means the United States Securities and Exchange
Commission.
1.42 "Securities Laws" means and includes the 1933 Act and all other
applicable federal, state and foreign securities laws.
1.43 "Series A Stock" means the Company's Series A Convertible
Participating Preferred Stock, $.01 par value per share, the rights, privileges,
preferences, limitations and qualifications of which are set forth in the
Certificate of Designations attached to the Company's Certificate of
Incorporation.
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1.44 "Series B Shares" means the shares of Series B Stock being sold
by the Company to the Purchasers pursuant to this Agreement.
1.45 "Series B Stock" means the Company's Series B Convertible
Participating Preferred Stock, $.01 par value per share, the rights, privileges,
preferences, limitations and qualifications of which are set forth in the
Certificate of Designations attached to the Company's Certificate of
Incorporation.
1.46 "Software" means any computer software programs, source code,
object code, data and related documentation.
1.47 "Stockholders Agreement" means the Amended and Restated
Stockholders Agreement dated April 23, 1998, among the Company, the holders of
the Series A Stock, and certain other stockholders of the Company.
1.48 "Subsidiary" means any corporation or other entity (a) a
majority of which is owned or previously was owned by the Company, or (b) which
the Company otherwise directly or indirectly controls or previously controlled.
1.49 "Taxes" means and includes all federal, state, local, foreign
and other taxes and governmental assessments and levies, including without
limitation income taxes, alternative minimum taxes, sales taxes, franchise
taxes, excise taxes, employment and payroll taxes, estimated taxes, withholding
taxes, transfer taxes, and all associated fines, penalties and interest.
1.50 "Trade Secrets" means and includes any trade secrets, research
records, processes, procedures, manufacturing formulae, technical know-how,
technology, blueprints, designs, plans, inventions (whether patentable and
whether reduced to practice), invention disclosures and improvements thereto.
1.51 "Trademarks" means and includes any foreign or United States
trademarks, service marks, trade dress, trade names, brand names, designs and
logos, corporate names, product or service identifiers, whether registered or
unregistered, and all registrations and applications for registration thereof.
1.52 "Transaction Documents" means collectively this Agreement, the
Certificate of Designations for the Series B Stock included within the
Certificate of Incorporation, and the Registration Rights Agreement.
1.53 "TransAmerica Warrant" means the Common Stock Purchase Warrant
dated June 19, 1998, issued in connection with the Company's receipt of a
$5,000,000 line of credit for equipment leasing purposes, under which
TransAmerica Business Credit Corporation has the right to purchase from the
Company up to 42,500 shares of Common Stock at a price of $10.00 per share.
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1.54 "Unaudited Financial Statements" as of any date means the most
recently available unaudited consolidated balance sheet of the Company and its
Subsidiaries as of that date, and the related statement of income of the Company
and its Subsidiaries for the year or partial year then ended.
1.55 "Voting Agreement" means the Voting Agreement dated July 17,
1996 among some of the stockholders of the Company.
1.56 "VSC Warrant" means the Common Stock Purchase Warrant dated
April 23, 1998 pursuant to which Virginia Surety Company, Inc. has the right to
purchase from the Company up to 500,000 shares of Common Stock at an exercise
price of $10.00 per share, subject to potential adjustment as provided therein.
SECTION 2. TERMS OF PURCHASE
2.1 General. The Company has authorized the issuance and sale of up
to an aggregate of eleven million (11,000,000) Series B Shares to the Purchasers
for a purchase price of Ten Dollars ($10.00) per share. The Series B Shares will
be sold in one or more closings (each, a "Closing"), beginning on or about April
23, 1998 and continuing from time to time thereafter until the earlier to occur
of (i) the sale by the Company of all eleven million (11,000,000) available
Series B Shares, or (ii) a decision by the Board to terminate the offering of
Series B Stock. The Series B Shares will be sold to such Purchasers, in such
amounts, and at such intervals, as the Company may determine. The Company has
authorized and has reserved, and covenants to continue to reserve, a sufficient
number of shares of voting Common Stock to satisfy the rights of conversion of
the holders of the Series B Shares.
2.2 Closings. At each Closing the following shall occur:
(a) The Company will execute and deliver to the relevant
Purchaser(s) certificates evidencing the Series B Shares being purchased.
(b) The Company and the relevant Purchaser(s) will mutually
execute and deliver the Registration Rights Agreement.
(c) The Company will deliver to the Purchasers an Officer's
Certificate as to (i) the due adoption and continuing effectiveness of the
resolutions of the Board, attached thereto, approving the Transaction Documents
and all transactions contemplated thereby, (ii) the accuracy and continuing
effectiveness of the Certificate of Incorporation and Bylaws of the Company
attached thereto, and (iii) the incumbency and specimen signature of each
officer executing the Transaction Documents and the other closing documents on
behalf of the Company.
(d) The Company will deliver to the Purchasers a written
opinion of counsel to the Company, in form and substance reasonably satisfactory
to the Purchasers, as to certain legal matters of potential importance to the
Purchasers.
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(e) The relevant Purchaser(s) will pay for the Series B
Shares being purchased, by wire transfer to the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
To induce the Purchasers to enter into and consummate this Agreement,
effective as of each Closing, the Company represents and warrants to the
relevant Purchasers as follows:
3.1 Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and is qualified to do business as a foreign corporation in
each jurisdiction in which the failure to qualify would have a material adverse
effect on the Company. The Company has all required corporate power and
authority to own and operate its property, to lease the property it operates as
lessee, to carry on its business as presently conducted or contemplated, to
enter into and perform the Transaction Documents and the agreements contemplated
thereby, and generally to carry out the transactions contemplated hereby and
thereby. Except as set forth on Schedule 3.1, the Company does not own or lease
property in any jurisdiction other than its jurisdiction of incorporation and
the jurisdictions in which it is qualified to do business as a foreign
corporation. The copies of the Certificate of Incorporation and Bylaws of the
Company, each as amended to date, which have been furnished to the Purchasers,
are correct and complete at the date hereof. The Company is not in violation of
any term of its Certificate of Incorporation or Bylaws.
3.2 Authorization. The Transaction Documents and all documents and
instruments executed pursuant thereto have been duly executed and delivered by
the Company and constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms. The execution,
delivery and performance of the Transaction Documents and all documents and
instruments contemplated thereby and the delivery and issuance of the Series B
Shares and, upon conversion of the Series B Shares, the Conversion Shares have
been duly authorized by all necessary corporate or other action of the Company.
Other than routine filing of a Form D with the SEC and any required filings
under state securities laws, no consent, approval or authorization of, or
designation, declaration or filing with, any Person, and no lapse of a waiting
period, is required of the Company in connection with the execution, delivery
and performance of the Transaction Documents, or the issuance and delivery by
the Company of the Series B Shares in accordance with the terms of this
Agreement and, upon conversion of the Series B Shares, the Conversion Shares, or
the performance or consummation of any other transaction contemplated thereby.
3.3 Non-Contravention. The execution, delivery and performance by
the Company of the Transaction Documents and each of the other agreements and
instruments to which it is a party and which are contemplated thereby will not
(a) conflict with or result in any default under (i) any contract, obligation or
commitment of the Company, or (ii) any provision of the Certificate of
Incorporation or Bylaws of the
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Company or any amendment thereof; (b) result in the creation of any Lien of any
nature upon any of the properties or assets of the Company; or (c) violate any
Judgment or Requirement of Law applicable to the Company. The Company has not
previously entered into any contract, obligation or commitment which is
currently in effect or by which the Company is currently bound, granting any
rights to any Person which are inconsistent with the rights to be granted by the
Company in the Transaction Documents or any of the agreements contemplated by
the Transaction Documents.
3.4 Capitalization of the Company.
(a) The authorized capital stock of the Company consists of
(i) 150,000,000 shares of Common Stock, of which 148,500,000 shares are voting
Common Stock and 1,500,000 shares are Nonvoting Common Stock, and (ii)
40,000,000 shares of Preferred Stock. No Certificate of Designation has been
filed with the Delaware Secretary of State with respect to the Company's
Preferred Stock except the Certificate of Designations for the Series A Stock
and the Certificate of Designations for the Series B Stock. Immediately prior to
the date of this Agreement, there were outstanding (x) 31,139,822 shares of
Common Stock, including 30,399,822 shares of voting Common Stock and 740,000
shares of Nonvoting Common Stock, but not including 188,000 shares of Common
Stock held by the Company in treasury, (y) 3,509,568 shares of Series A Stock,
and (z) 10,150,000 shares of Series B Stock. All outstanding shares of Preferred
Stock and Common Stock are duly and validly issued, fully paid and
nonassessable. The 3,509,568 outstanding shares of Series A Stock are
convertible into a total of 14,038,272 shares of voting Common Stock. The
10,150,000 outstanding shares of Series B Stock are convertible into a total of
10,150,000 shares of voting Common Stock. The Company has reserved an aggregate
of 11,000,000 shares of voting Common Stock for issuance upon conversion of the
Series B Shares. Except for the Series A Stock, the Series B Stock and the
Outstanding Rights, there are no outstanding warrants, options or other rights
or obligations to purchase or acquire any Common Stock or other securities of
the Company from the Company. To the Company's knowledge, except for the Goldman
Warrants, the BT Options and the ML Options, no stockholder of the Company has
granted to any Person any warrant, option or right to acquire any securities of
the Company from any such stockholder. All of the outstanding shares of capital
stock of the Company (including the Series B Shares) have been offered, issued,
sold and delivered in compliance with all applicable federal and state
securities laws. The Series B Shares have been duly and validly authorized and,
when delivered and paid for pursuant to this Agreement, will be validly issued,
fully paid and nonassessable. Assuming sale of all 11,000,000 available Series B
Shares, the Series B Shares will be convertible into 11,000,000 shares of Common
Stock which will represent approximately 14% of the Common Stock on a
fully-diluted basis after giving effect to the issuance of all shares reserved
for issuance under the Outstanding Rights. The Conversion Shares are duly
authorized and, when issued in compliance with the Company's Certificate of
Incorporation, will be validly issued, fully paid and nonassessable and will be
issued in compliance with the registration and qualification requirements of all
applicable federal and state securities laws. The Company effected a
four-for-one Common Stock split in mid-1997, and all of the numbers in this
paragraph reflect that split.
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(b) There are no preemptive rights or rights of first
refusal with respect to the issuance or sale of the Company's capital stock,
other than rights to which certain holders of the Series A Stock are entitled as
set forth in the Stockholders Agreement. There are no restrictions on the
transfer of the Company's Preferred Stock (including Series B Shares) or the
Conversion Shares other than those arising from the Securities Laws and the
Stockholders Agreement. Except for (i) the Registration Rights Agreement, (ii) a
registration rights agreement dated August 26, 1996, as amended, in favor of the
holders of the Series A Stock, (iii) a registration rights agreement in favor of
the holder of the NASDAQ Warrant, and (iv) the Voting Agreement, the Company is
not party to and is not bound by (and, to the Company's knowledge, no
stockholder of the Company is a party to or otherwise bound by) any agreement
with respect to (x) the voting of any of the Company's capital stock, or (y) the
registration of such capital stock for offering to the public pursuant to the
1933 Act.
(c) Except as otherwise set forth on Schedule 3.4, the
Company owns no Subsidiaries or investments in any other corporation or business
organization.
3.5 Financial Statements. The Financial Statements were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis, except that the Unaudited Financial Statements have been prepared without
footnote disclosures and year-end audit adjustments, which will not, in any
event, be material. All of such Financial Statements fairly represent the
financial condition of the Company and its Subsidiaries as of the date thereof,
and are true, correct and complete as of the date thereof in all material
respects. Nothing has come to the attention of the management of the Company
since such dates which would indicate that the Financial Statements were not
true and correct as of the date thereof.
3.6 Absence of Undisclosed Liabilities. Between the date of the most
recent Financial Statements and the Closing, except as and to the extent
disclosed in Schedule 3.6, the Company did not incur any Liabilities that are
(a) individually in excess of $100,000 or (b) in the aggregate in excess of
$250,000, other than (i) Liabilities fully and adequately reflected or reserved
against on the Financial Statements and (ii) Liabilities incurred in the
ordinary course of business. As of the date of the Closing, the Company has no
knowledge of any circumstance, condition, event or arrangement that may
hereafter give rise to any Liabilities of the Company except in the ordinary
course of business or as otherwise set forth on Schedule 3.6.
3.7 Absence of Certain Developments. Except as disclosed in Schedule
3.7, between the date of the most recent Financial Statements and the Closing,
there was (i) no material adverse change in the condition, financial or
otherwise, of the Company or in the assets, liabilities, business or prospects
of the Company, (ii) no declaration, setting aside or payment of any dividend or
other distribution with respect to, or any direct or indirect redemption or
acquisition of, any of the capital stock of the Company, (iii) no waiver of any
right of the Company or cancellation of any debt or claim held by the Company,
(iv) no loan by the Company to any officer, director, employee or stockholder
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of the Company, any affiliates of any of the foregoing, or any agreement or
commitment therefor, (v) no material loss, destruction or damage to any property
of the Company, whether or not insured, (vi) no labor trouble involving the
Company and no material change in the personnel of the Company or the terms and
conditions of their employment, and (vii) no acquisition or disposition of any
assets (or any contract or arrangement therefor) nor any other transaction by
the Company otherwise than for fair value in the ordinary course of business.
3.8 Accounts Receivable. Except as disclosed on Schedule 3.8, the
Company has no accounts receivable from any Person which is affiliated with the
Company or any of its directors, officers, employees or shareholders or any
affiliates of any of the foregoing.
3.9 Debt. Schedule 3.9 sets forth (a) a list of all agreements for
incurring of indebtedness for borrowed money to which the Company is a party,
(b) the amount of all indebtedness under each such agreement, (c) the Liens that
relate to such indebtedness and that encumber the assets of the Company, and (d)
the name of the lender thereof. None of the obligations pursuant to such
agreements are subject to acceleration by reason of the consummation of the
transactions contemplated hereby, nor would the execution of the Transaction
Documents or the consummation of the transactions contemplated thereby result in
any default under such agreements.
3.10 Title to Properties. The Company has good and marketable title
to all of its properties and assets (other than Intellectual Property, which is
addressed by Section 3.13 below), free and clear of all Liens, and such
properties and assets constitute all of the assets necessary for the conduct of
the Company's business as presently conducted and as presently contemplated to
be conducted. All machinery and equipment included in such properties which is
necessary to the business of the Company is in good condition and repair and all
leases of real or personal property to which the Company is a party are in full
force and effect and afford the Company peaceful and undisturbed possession of
the subject matter of the lease. The Company is not in violation of any
Requirement of Law applicable to the operation of its owned or leased
properties, nor has the Company received any written notice of violation with
which it has not complied.
3.11 Tax Matters.
(a) The Company has paid or caused to be paid all Taxes
required to be paid by it through the date hereof, whether disputed or not. All
Taxes which the Company is required to withhold or collect have been withheld
and collected and have been paid over to the proper governmental authorities.
The Company has, in accordance with applicable law, timely and properly filed
all Tax returns required to be filed by it through the date hereof, all such
returns correctly and accurately set forth the amount of any Taxes relating to
the applicable period, and any deductions from, or credits against, any Taxes or
taxable income relating to such returns are in all material respects valid and
proper items of deduction or credit.
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(b) Neither the IRS nor any other governmental authority is
now asserting or, to the knowledge of the Company, threatening to assert against
the Company any deficiency or claim for additional Taxes. No claim has ever been
made by an authority in a jurisdiction where the Company does not file reports
and returns that the Company is or may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of the Company that arose
in connection with any failure (or alleged failure) to pay any Taxes. The
Company has never entered into a closing agreement pursuant to Section 7121 of
the Code. The Company is not and never has been a "personal holding company" as
defined under Section 541 of the Code. There has not been any audit of any tax
return filed by the Company, no such audit is in progress, and the Company has
not been notified by any tax authority that any such audit is contemplated or
pending. No extension of time with respect to any date on which a tax return was
or is to be filed by the Company is in force, and no waiver or agreement by the
Company is in force for the extension of time for the assessment or payment of
any Taxes. To the best of the Company's knowledge, the Company does not have any
liability for the Taxes of any person or entity other than the Company.
3.12 Contracts and Commitments. Except as provided on Schedule 3.12,
the Company is not a party to any Material Contract. The Company does not know
of any basis for the termination, expiration or modification of any such
Material Contracts. Neither the Company nor any other party thereto is in
default under any Material Contract and, to the best knowledge of the Company,
there is no state of facts which upon notice or lapse of time or both would
constitute such a default. The Company is not a party to any contract or
arrangement which under circumstances now foreseeable is likely to have a
materially adverse effect on the assets, liabilities, business, condition,
financial or otherwise, or prospects of the Company. The Company does not have
any liability for renegotiation of any government contracts or subcontracts.
3.13 Intellectual Property.
(a) Schedule 3.13 sets forth all Patents, Trademarks and
registered Copyrights owned by, and applications for any of the above filed by,
the Company specifying as to each item, as applicable: (i) the category of
Intellectual Property; (ii) the jurisdiction in which the item is issued or
registered or in which any application for issuance or registration has been
filed, including the respective issuance, registration or application number;
(iii) the date of application, issuance or registration; and (iv) with respect
to any Trademarks, the class or classes of goods or services on which each such
Trademark is or is intended to be used. None of the Intellectual Property of the
Company is subject to any outstanding Judgment, and, except for the NeoVision
Letter and as otherwise set forth in Schedule 3.13, no action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand is pending or, to the
knowledge of the Company, threatened, which challenges the validity,
enforceability, use or ownership of the Intellectual Property of the Company,
nor does the Company know of any valid basis for any such claim, or any prior
art, or any act or omission or failure to act which may render the Intellectual
Property invalid or unenforceable.
13
(b) Schedule 3.13 sets forth all licenses, sublicenses and
other agreements under which the Company is either a licensor or licensee of any
Intellectual Property, except such licenses, sublicenses and other agreements
relating to prepackaged software used solely on the computers of the Company.
The Company has substantially performed all obligations imposed upon it
thereunder, and neither the Company nor, to the knowledge of the Company, any
other party thereto, is in breach of or default thereunder in any respect, nor
is there any event which with notice or lapse of time or both would constitute a
default thereunder. All of the licenses listed on Schedule 3.13 are valid,
enforceable and in full force and effect, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
(c) To the knowledge of the Company, none of the
Intellectual Property currently sold or licensed by the Company to any Person or
used by or licensed to the Company infringes upon or otherwise violates any
Intellectual Property rights of others. No claim is pending or, to the knowledge
of the Company, threatened which challenges the freedom of the Company to
conduct its business as presently conducted.
(d) Except for the NeoVision Letter and as otherwise set
forth on Schedule 3.13, no litigation, action, suit, proceeding, arbitration,
claim, complaint, dispute or investigation is pending or, to the knowledge of
the Company, threatened against the Company, contesting the right of the Company
to sell or license to any Person or use the Intellectual Property presently sold
or licensed to such Person or used by the Company, nor does the Company know of
any valid basis for any such claim.
(e) To the knowledge of the Company, no Person is infringing
upon or otherwise violating the Intellectual Property rights of the Company.
(f) Except as set forth on Schedule 3.13, the Company has
not agreed to indemnify any person against any charge of infringement or other
violation with respect to any Intellectual Property owned or used by the
Company.
(g) No former employer of any employee of the Company, and
no current or former client of any consultant of the Company, has made a claim
against the Company or, to the knowledge of the Company, against any other
Person, that such employee or such consultant is utilizing proprietary
information of such former employer or client.
(h) Except as set forth on Schedule 3.13, the Company is not
a party to or bound by and, upon the consummation of the transactions
contemplated by this Agreement, will not be a party to or bound by, any license
or other agreement requiring the payment of any material royalty payment,
excluding such agreements relating to prepackaged software licensed for use
solely on the computers of the Company.
14
(i) To the knowledge of the Company, no employee of the
Company is in violation of any Requirement of Law applicable to such employee's
employment, or any term of any employment agreement, patent or invention
disclosure agreement or other contract or agreement relating to the relationship
of such employee with the Company.
(j) Since January 1995, each employee and officer of the
Company who has had access to OptiMark(TM) has executed an agreement regarding
confidentiality, proprietary information and assignment of inventions to the
Company and, to the knowledge of the Company, none of such employees and
officers are in violation of such agreements.
(k) To the knowledge of the Company, none of the Trade
Secrets of the Company, the value of which is contingent upon the continued
maintenance of the confidentiality thereof, has been disclosed to any Person
other than employees, representatives and agents of the Company, except (A)
where the Company determined that such disclosure was necessary to conduct the
business of the Company, such disclosure not having a material adverse effect on
the Company, (B) as required pursuant to the filing of a Patent application by
the Company, or (C) under a confidentiality agreement.
(l) The Company has the exclusive right to file, procure and
maintain all applications and registrations for the Intellectual Property owned
by the Company.
(m) To the present knowledge of the Company, all Patents,
Trademarks and Copyrights owned by the Company are valid and subsisting. The
Company has taken commercially reasonable efforts to maintain and protect its
Intellectual Property.
(n) The Intellectual Property owned by the Company is free
and clear of all Liens.
3.14 Litigation. Except as otherwise set forth on Schedule 3.14
hereto, there is no litigation, arbitration or governmental proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, which could, if adversely determined,
(i) call into question the validity or hinder the enforceability or performance
of the Transaction Documents or the agreements and transactions contemplated
thereby or (ii) have a materially adverse effect on the assets, liabilities,
business, condition (financial or otherwise), or prospects of the Company; nor,
to the best knowledge of the Company, has there occurred any event nor does
there exist any condition on the basis of which any litigation, proceeding or
investigation might properly be instituted.
3.15 Offerees. Neither the Company nor anyone acting on its behalf
has sold, offered or solicited offers to buy any securities of the Company so as
to bring the offer, issuance or sale of the Series B Shares or the Conversion
Shares, as contemplated by this Agreement, within the provisions of Section 5 of
the 1933 Act, unless such offer,
15
issuance or sale was within the exemptions of the 1933 Act. Assuming the
accuracy of the representations of the Purchasers in Section 4 below, the
Company has complied with all Securities Laws in connection with the issuance
and sale of the Series B Shares.
3.16 Business; Compliance with Laws. The Company has all material
franchises, permits, licenses, orders, approvals and all other rights and
privileges necessary to permit it to own its property and to conduct its
business as it is presently conducted and as it is presently contemplated to be
conducted (collectively, "Permits"). Such Permits are in full force and effect.
The Company is not in violation in any respect of any Requirement of Law,
Judgment or Permit. The Company is in compliance, in all respects, with all
material federal, state and local laws and regulations (including all applicable
environmental laws and regulations, whether material or immaterial) relating to
its business as presently conducted. Neither the Company nor any officer or
director of the Company has been (a) subject to voluntary or involuntary
petition under the federal bankruptcy laws or any state insolvency law or the
appointment of a receiver, fiscal agent or similar officer by a court for its or
his business or property; (b) convicted in a criminal proceeding or named as a
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses); (c) subject to any Judgment (not subsequently reversed,
suspended or vacated) permanently or temporarily enjoining it or him from, or
otherwise imposing limits or conditions on its or his, engaging in any
securities, investment advisory, banking, insurance or other type of business or
acting as an officer or director of a public company; or (d) found by a court of
competent jurisdiction in a civil action or by the SEC or the Commodity Futures
Trading Commission to have violated any federal or state commodities, securities
or unfair trade practices law, which such judgment or finding has not been
subsequently reversed, suspended, or vacated.
3.17 Information Supplied to Purchasers. Neither the Transaction
Documents, nor the Schedules and Exhibits attached thereto or any document
referenced therein, nor any certificate, projection or statement (whether oral
or written) furnished to the Purchasers by or on behalf of the Company, contains
any untrue statement of a material fact, and none of the Transaction Documents,
the Schedules and Exhibits attached thereto or such other documents,
certificates, projections or statements referenced therein omits to state a
material fact necessary in order to make the statements contained therein not
misleading. There is no material fact directly relating to the assets,
liabilities, business, condition (financial or otherwise) or prospects of the
Company (other than facts which relate to general economic trends or conditions)
known to the Company that materially adversely affects or in the future may
reasonably be expected to be materially adversely affect the same that has not
been set forth in this Agreement or in the Schedules and Exhibits attached
hereto.
3.18 Investment Banking; Brokerage. Except for X.X. Xxxxxxxx & Co.,
L.L.C. and Xxxxx Xxxx, (a) no broker, finder, agent or similar intermediary has
acted on behalf of the Company in connection with this Agreement or the
transactions contemplated hereby, and (b) there are no brokerage commissions,
finder's fees or similar fees or commissions payable to any Person as a result
of any actions taken by the Company.
16
3.19 Environmental Matters.
(a) The Company has never generated, transported, used,
stored, treated, disposed of, or managed any Hazardous Material. No Hazardous
Material has ever been or, to the best knowledge of the Company, is threatened
to be spilled, released, or disposed of by the Company, at any site presently or
formerly owned, operated, leased, or used by the Company, or has ever come to be
located in the soil or groundwater at any such site. No Hazardous Material has
ever been transported from any site presently or formerly owned, operated,
leased, or used by the Company for treatment, storage, or disposal at any other
place. To the best knowledge of the Company, the Company presently does not own,
operate, lease, or use, nor has the Company previously owned, operated, leased,
or used, any site on which underground storage tanks are or were located. No
Lien has ever been imposed by any governmental agency on any property, facility,
machinery, or equipment owned, operated, leased, or used by the Company with the
presence of any Hazardous Material and based upon any action or inaction of the
Company.
(b) The Company has no liability under, nor has it ever
violated in any respect, any Environmental Law. The Company, any property owned,
operated, leased, or used by the Company, and any facilities and operations
thereon are presently in compliance in all respects with all applicable
Environmental Laws. The Company has never entered into or been subject to any
Judgment with respect to any environmental or health and safety matter or
received any request for information, notice, demand letter, administrative
inquiry, or formal or informal complaint or claim with respect to any
environmental or health and safety matter or the enforcement of any
Environmental Law. None of the foregoing items enumerated in this paragraph will
be forthcoming.
(c) For purposes of this Section 3.19, the term "Company"
shall include the Company, its Subsidiaries and their Affiliates, and any
predecessors of the Company, its Subsidiaries and their Affiliates.
3.20 Employee Benefit Programs.
(a) Schedule 3.20 sets forth a list of every Employee
Program that has been maintained by the Company at any time since January 1,
1995.
(b) Each Employee Program which has ever been maintained by
the Company and which has at any time been intended to qualify under Section
401(a) or Section 501(c)(9) of the Code has received a favorable determination
or approval letter from the IRS regarding its qualification under such section
and, to the best knowledge of the Company has, in fact, been continuously
qualified under the applicable section of the Code since the effective date of
such Employee Program. No event or omission has occurred which would cause any
such Employee Program to lose its qualification under the applicable Code
section.
17
(c) Each Employee Program that has ever been maintained by
the Company has been maintained in compliance with all applicable laws. With
respect to any Employee Program ever maintained by the Company, there has
occurred no "prohibited transaction," as defined in Section 406 of ERISA or
Section 4975 of the Code (for which there exists neither a statutory nor
regulatory exception), or material breach of any duty under ERISA or other
applicable law (including, without limitation, any health care continuation
requirements or any other tax law requirements, or conditions to favorable tax
treatment, applicable to such plan or to any person in regard to such plan),
which could result, directly or indirectly (including, without limitation,
through any obligation of indemnification or contribution), in any taxes,
penalties or other liability to the Company or any of its affiliates. No
litigation, arbitration, or governmental administrative proceeding (or
investigation) or other proceeding (other than those relating to routine claims
for benefits) is pending or, to the best knowledge of the Company, threatened
with respect to any such Employee Program.
(d) Neither the Company nor any Affiliate (i) has ever
maintained any Employee Program which has been subject to Title IV of ERISA or
Section 412 of the Code (including, but not limited to, any Multiemployer Plan)
or (ii) has ever provided health care or any other non-pension benefits to any
employees after their employment is terminated (other than as required by part 6
of subtitle B of Title I of ERISA) or has ever promised to provide such
post-termination benefits.
(e) With respect to each Employee Program maintained by or
on behalf of the Company or any Affiliate within the three (3) years preceding
the Closing, complete and correct copies of the following documents (if
applicable to such Employee Program) have been made available to the Purchasers:
(i) all documents embodying or governing such Employee Program, and any funding
medium for the Employee Program (including, without limitation, trust
agreements), as they may have been amended to the date hereof; (ii) the most
recent IRS determination or approval letter with respect to such Employee
Program under Code Section 401 or Section 501(c)(9), and any applications for
determination or approval subsequently filed with the IRS; (iii) the three most
recently filed IRS Forms 5500, with all applicable schedules and accountants'
opinions attached thereto; (iv) the summary plan description for such Employee
Program (or other descriptions of such Employee Program provided to employees)
and all modifications thereto; (v) any insurance policy (including any fiduciary
liability insurance policy and any excess loss policy) related to such Employee
Program; (vi) any documents evidencing any loan to an Employee Program that is a
leveraged employee stock ownership plan; and (vii) all other materials
reasonably necessary for the Company to perform any of its responsibilities with
respect to any Employee Program subsequent to the Closing (including, without
limitation, health care continuation requirements).
(f) With respect to each Employee Program maintained by the
Company or its Affiliates, no event has occurred, and there exists no condition
or set of circumstances in connection with which the Company could, directly or
indirectly (through a Commonly Controlled Entity or otherwise), be subject to
any liability under
18
ERISA, the Code or any other applicable law, except liability for benefits
claims and funding obligations payable in the ordinary course.
(g) Each Employee Program maintained by the Company or
Affiliate that is a "group health plan" (as defined in ERISA Section 607(1) or
Code Section 5001(b)(1)) has been operated at all times in compliance with the
provisions of COBRA and any applicable, similar state law.
(h) The consummation of the transactions contemplated by
this Agreement will not: (i) entitle any current or former employee to severance
pay, unemployment compensation or any similar payment; (ii) accelerate the time
of payment or vesting, or increase the amount of any compensation due to, or in
respect of, any current or former employee; (iii) result in or satisfy a
condition to the payment of compensation that would, in combination with any
other payment, result in an "excess parachute payment" within the meaning of
Code Section 280G(b); or (iv) constitute or involve a prohibited transaction (as
defined in ERISA Section 502(1)) or otherwise violate Part 4 of Subtitle B of
Title I of ERISA.
3.21 Product and Services Claims. There are no pending or, to the
best of the Company's knowledge, threatened product or service claims with
respect to any products manufactured or services provided by the Company nor are
there any facts upon which a claim of such nature could reasonably be
anticipated to be based. The Company does not have any contractual liability for
breach of warranty or service claims. No claims have been made against the
Company for renegotiation or price redetermination of any business transaction
resulting from or relating to defective products or services, and, to the best
of the Company's knowledge, there are no facts upon which any such claim should
reasonably be anticipated to be based.
3.22 Employees; Labor Matters. As of the date of this Agreement, the
Company employed a total of approximately 190 full-time employees. The Company
believes it enjoys good employer-employee relationships. The Company is not
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed to
the date hereof or amounts required to be reimbursed to such employees. The
Company does not have any policy, practice, plan or program of paying severance
pay or any form of severance compensation in connection with the termination of
employment, except as set forth in Schedule 3.22. All of the Company's programs
and arrangements in connection with the payment of commissions are described in
Schedule 3.22. To the best of the Company's knowledge, the Company is in
material compliance with all Requirements of Law respecting labor, employment,
fair employment practices, work place safety and health, terms and conditions of
employment, and wages and hours. There are no charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work, or any other concerted interference with normal operations
which are existing, pending or, to the best of the Company's knowledge,
threatened against or involving the Company. The Company has not received any
information indicating that any of its employment policies or practices is
currently being
19
audited or investigated by any federal, state or local government agency. To the
best of the Company's knowledge, the Company is, and at all times since its
incorporation has been, in material compliance with the requirements of the
Immigration Reform Control Act of 1986.
3.23 Trade Relations. To the best knowledge of the Company, there
exists no actual or threatened termination, cancellation or limitation of, or
any adverse modification or change in, the business relationship of the Company
with any customer or any group of customers whose purchases are individually or
in the aggregate material to the business of the Company, or with any material
supplier.
3.24 Corporate Records; Copies of Documents. The corporate record
books of the Company accurately record all corporate action taken by its
stockholders, Board and committees thereof. The copies of the corporate records
of the Company, as made available to the Purchasers for review, are true and
complete copies of the originals of such documents. The Company has made
available for inspection by the Purchasers true and correct copies of all
documents referred to in this Section 3.24 or in the Schedules delivered
pursuant to this Agreement.
3.25 Affiliate Transactions. Except as set forth in Schedule 3.25
hereto, neither the Company nor, to the best of the Company's knowledge, any
officer, employee or director of the Company owns or controls, directly or
indirectly, on an individual or joint basis, any interest in (excepting less
than 1% stockholding for investment purposes in securities of publicly-held
companies) or serves as an officer, director, employee, consultant, partner or
in another similar capacity of, any competitor, supplier, lessor, lessee,
distributor, sales agent or customer of or lender to or borrower from, the
Company.
3.26 Insurance. Schedule 3.26 lists all of the insurance policies
held by or on behalf of the Company as of the date of this Agreement, with the
effective date and coverage amounts indicated thereon. Except as set forth on
Schedule 3.26, such policies and binders are valid and enforceable in accordance
with their terms and are in full force and effect. None of such policies will be
affected by, or terminate or lapse by reason of, any transaction contemplated by
this Agreement or any transaction contemplated hereunder.
3.27 FIRPTA. The Company is not a "foreign person" within the meaning
of Section 1445 of the Code.
3.28 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4. INVESTOR REPRESENTATIONS
To induce the Company to enter into this Agreement, each Purchaser
hereby severally and not jointly represents to the Company as follows:
20
4.1 Authorization. The execution of this Agreement and all other
documents executed pursuant to hereto have been duly authorized by all necessary
action on the part of the Purchaser, has been duly executed and delivered, and
constitutes a valid, binding and enforceable agreement of the Purchaser.
4.2 Investment Intent. The Purchaser is acquiring the Series B
Shares for its own account, for investment, and not with a present view to any
"distribution" thereof within the meaning of the 1933 Act.
4.3 Restrictions on Transfer. The Purchaser understands that,
because the Series B Shares have not been registered under the Securities Laws,
the Purchaser cannot dispose of any or all of the Series B Shares or the
Conversion Shares unless such securities are subsequently registered under the
Securities Laws or exemptions from such registration are available. The
Purchaser understands that each certificate representing the Series B Shares and
the Conversion Shares will bear a legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO A WRITTEN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
4.4 Sophistication. The Purchaser is sufficiently knowledgeable and
experienced in the making of venture capital investments so as to be able to
evaluate the risks and merits of its investment in the Company, and is able to
bear the economic risk of loss of its investment in the Company.
4.5 No General Solicitation. The Purchaser did not learn of this
investment through any general solicitation or general advertising by the
Company, as those terms are used in Rule 502(c) under the 0000 Xxx.
4.6 Brokers. No broker, finder, agent or similar intermediary has
acted on behalf of the Purchaser in connection with this Agreement or the
transactions contemplated hereby, and there are no brokerage commissions,
finder's fees or similar fees or commissions payable in connection therewith.
4.7 Accreditation. The Purchaser is an "accredited investor" as that
term is defined under Regulation D adopted under the 0000 Xxx.
4.8 Reliance by Company. The Purchaser has been advised that the
Series B Shares have not been and are not being registered under the Securities
Laws and that in
21
issuing the Series B Shares the Company is relying upon, among other things, the
representations and warranties of the Purchasers contained in this Section 4.
SECTION 5. INDEMNIFICATION
5.1 General.
(a) The Company shall, to the full extent permitted by law,
and in addition to any such rights which any Indemnified Party (as defined
herein) may have pursuant to statute, common law, separate agreement, the
Company's Certificate of Incorporation or By-laws, or otherwise, indemnify,
defend and hold harmless each Purchaser (including its respective subsidiaries,
affiliates, directors, officers, members, partners, employees and agents, an
"Indemnified Purchaser") and each person (a "Controlling Person" and,
collectively with Indemnified Purchasers, the "Indemnified Parties") who
controls any of them within the meaning of Section 15 of the 1933 Act, from and
against any and all Losses (including Losses incurred by the Indemnified Party
in any action between the Company and the Indemnified Party or between the
Indemnified Party and any third party or otherwise) resulting from, arising out
of or relating to (i) any breach of any representation or warranty, covenant or
agreement by the Company in the Transaction Documents and/or any Certificate or
Schedule delivered by the Company pursuant thereto, including, without
limitation, any legal, administrative or other actions (including actions
brought by the Purchasers or the Company or any equity holders of the Company or
derivative actions brought by any Person claiming through or in the Company's
name), proceedings or investigations (whether formal or informal), or written
threats thereof, based upon, relating to or arising out of the Transaction
Documents and/or any Certificate or Schedule delivered by the Company pursuant
thereto, the transactions contemplated thereby, or any Indemnified Party's role
therein or in transactions contemplated thereby, (ii) by reason of their status
as a security holder, creditor, director, agent, representative or controlling
person of the Company (including, without limitation, any and all Losses under
the Securities Laws, at common law or otherwise, which relate directly or
indirectly to the registration, purchase, sale or ownership of the Securities or
to any fiduciary obligation owed with respect thereto), and (iii) the claims of
NeoVision Hypersystems, Inc. set forth in the NeoVision Letter; provided,
however, that the Company will not be liable to the extent that Losses arise
from and are based on an untrue statement or omission or alleged untrue
statement or omission in a registration statement or prospectus which is made in
reliance on and in conformity with information furnished to the Company by or on
behalf of such Indemnified Party. The indemnification and contribution provided
for in this Section 5.1 will remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Parties or any officer,
director, employee, agent or Controlling Person of the Indemnified Parties.
(b) If the indemnification provided for in this Section 5.1
is for any reason held by a court of competent jurisdiction to be unavailable to
an Indemnified Party in respect of any Losses referred to above, then the
Company, in lieu of indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by
22
such Indemnified Party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Purchasers, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Purchasers in connection with the action or
inaction which resulted in such Losses, as well as any other relevant equitable
considerations. In connection with any registration of the Company's securities,
the relative benefits received by the Company and the Purchasers shall be deemed
to be in the same respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Company and the Purchasers, in each
case as set forth in the table on the cover page of the applicable prospectus,
bear to the aggregate public offering price of the securities so offered. The
relative fault of the Company and the Purchasers 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 or the Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(c) The Company and the Purchasers agree that it would not
be just and equitable if contribution pursuant to the foregoing paragraph (b)
were determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the foregoing paragraph (b). In connection with any registration of the
Company's securities, in no event shall a Purchaser be required to contribute
any amount under this Section 5.1 in excess of the lesser of (i) that proportion
of the total of such Losses indemnified against equal to the proportion of the
total securities sold under such registration statement which is being sold by
such Purchasers or (ii) the proceeds received by such Purchaser from its sale of
securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of the Securities Laws) shall
be entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation.
5.2 Notice; Defense of Claims.
(a) Promptly after receipt by an Indemnified Party of notice
of any third party or other claim, liability or expense to which the
indemnification obligations hereunder would apply, including in connection with
any governmental proceeding, the Indemnified Party shall give notice thereof in
writing to the indemnifying party or parties, but the omission to so notify the
indemnifying party or parties promptly will not relieve the indemnifying party
or parties from any liability except to the extent that the indemnifying party
or parties shall have been materially prejudiced as a result of the failure or
delay in giving such notice. Such notice shall state the information then
available regarding the amount and nature of such claim, liability or expense
and shall specify the provision or provisions of this Agreement under which the
liability or obligation is asserted.
23
(b) In the case of any third party claim, if within twenty
(20) days after receiving the notice described in the preceding paragraph the
indemnifying party or parties (i) give written notice to the Indemnified Parties
stating that they intend to defend in good faith against such claim, liability
or expense at their own cost and expense and (ii) provide assurance and security
reasonably acceptable to such Indemnified Parties that such indemnification will
be paid fully and promptly if required and such Indemnified Parties will not
incur cost or expense during the proceeding, then counsel for the defense shall
be selected by the indemnifying party or parties (subject to the consent of such
Indemnified Parties which consent shall not be unreasonably withheld) and such
Indemnified Parties shall not be eligible for any payment with respect to such
claim, liability or expense as long as the indemnifying party or parties are
conducting a good faith and diligent defense at their own expense; provided,
however, that the assumption of defense of any such matters by the indemnifying
party or parties shall relate solely to the claim, liability or expense that is
subject or potentially subject to indemnification. If the indemnifying party or
parties assume such defense in accordance with the preceding sentence, they
shall have the right, with the consent of such Indemnified Parties, which
consent shall not be unreasonably withheld, to settle all indemnifiable matters
related to claims by third parties which are susceptible to being settled
provided the indemnifying party or parties' obligation to indemnify such
Indemnified Parties therefor will be fully satisfied and the settlement includes
a complete release of such Indemnified Parties. The indemnifying party or
parties shall keep the such Indemnified Parties apprised of the status of the
claim, liability or expense and any resulting suit, proceeding or enforcement
action, shall furnish such Indemnified Parties with all documents and
information that such Indemnified Parties shall reasonably request and shall
consult with such Indemnified Parties prior to acting on major matters,
including settlement discussions. Notwithstanding anything herein stated, such
Indemnified Parties shall at all times have the right to fully participate in
such defense at its own expense directly or through counsel; provided, however,
if the named parties to the action or proceeding include both the indemnifying
party or parties and the Indemnified Parties and representation of both parties
by the same counsel would be inappropriate under applicable standards of
professional conduct, the expense of separate counsel for such Indemnified
Parties shall be paid by the indemnifying party or parties. If no such notice of
intent to dispute and defend is given by the indemnifying party or parties, or
if such diligent good faith defense is not being or ceases to be conducted, such
Indemnified Parties shall, at the expense of the indemnifying party or parties,
undertake the defense of (with counsel selected by such Indemnified Parties),
and shall have the right to compromise or settle, such claim, liability or
expense. If such claim, liability or expense is one that by its nature cannot be
defended solely by the indemnifying party or parties, then such Indemnified
Parties shall make available all information and assistance that the
indemnifying party or parties may reasonably request and shall cooperate with
the indemnifying party or parties in such defense.
5.3 Satisfaction of Indemnification Obligations. Any indemnity
payable pursuant to this Section 5 shall be paid not later than thirty (30) days
following the later of (a) the Indemnified Party's request therefor or (b) a
final non-appealable determination of Loss, but in any event such payment shall
be made not later than ten (10) days prior to
24
the date on which the Loss upon which the indemnity is based is required to be
satisfied by the Indemnified Party, if applicable.
SECTION 6. COVENANTS OF THE COMPANY.
Until the earlier to occur of (i) August 27, 2016, or (ii) the IPO
Effectiveness Date:
6.1 Inspection. The Company will permit representatives of each
Purchaser to visit and inspect any of its properties, to examine its corporate,
financial and operating records and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with their respective
directors, officers and independent public accountants, all at such reasonable
times during normal business hours and as often as may be reasonably requested,
upon reasonable advance notice to the Company.
6.2 Financial Statements and Other Information. The Company shall
deliver to each Purchaser the following:
(a) as soon as available, but not later than sixty (60) days
after the end of each fiscal year of the Company, a copy of the audited balance
sheet of the Company as of the end of such year and the related statements of
operations and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, all in reasonable detail and
accompanied by a management summary and analysis of the operations of the
Company for such fiscal year and by the opinion of a nationally recognized
independent certified public accounting firm which report shall state without
qualification that such financial statements present fairly the financial
condition as of such date and results of operations and cash flows for the
periods indicated in conformity with GAAP applied on a consistent basis;
(b) as soon as available, but in any event not later than
thirty (30) days after the end of each of the first three fiscal quarters of
each fiscal year, the unaudited balance sheet of the Company, and the related
statements of operations and cash flows for such quarter and for the period
commencing on the first day of the fiscal year and ending on the last day of
such quarter, all certified by an appropriate officer of the Company as
presenting fairly the financial condition as of such date and results of
operations and cash flows for the periods indicated in conformity with GAAP
applied on a consistent basis, subject to normal year-end adjustments and the
absence of footnotes required by GAAP; and
(c) annual operating budgets and, from time to time, such
other financial data and information about the Company as is reasonably
available to the Company and as any of the Purchasers may reasonably request.
6.3 Management Compensation. Compensation paid by the Company to its
management will be reasonably comparable to compensation paid to management in
25
companies in the same or similar businesses of similar size and maturity and
with comparable financial performance.
6.4 Conduct of Business. The Company will (a) keep in full force and
effect (i) its corporate existence and good standing under the laws of its
jurisdiction of incorporation and (ii) all intellectual property rights useful
in its business (except such rights as the Board of Directors has reasonably
determined are not material to the Company's continuing operations), (b)
preserve and maintain in full force and effect all material rights, privileges,
qualifications, applications, licenses and franchises necessary in the normal
conduct of its business, (c) conduct its business in accordance with sound
business practices, and (d) file or cause to be filed in a timely manner all
reports, applications and licenses that shall be required by a governmental
agency or body and that, if not timely filed, could have a material adverse
effect on the Company.
6.5 Payment of Taxes, Compliance with Laws, etc. The Company will
pay and discharge all lawful taxes, assessments and governmental charges or
levies imposed upon it or upon its income or property before the same shall
become in default, as well as all lawful claims for labor, materials and
supplies which, if not paid when due, might become a lien or charge upon its
property or any part thereof; provided, however, that the Company shall not be
required to pay and discharge any such tax, assessment, charge, levy or claim so
long as the validity thereof is being contested by the Company in good faith by
appropriate proceedings and an adequate reserve therefor has been established on
its books. The Company will use its best efforts to comply with all applicable
laws and regulations in the conduct of its business, including, without
limitation, all applicable federal and state securities laws in connection with
the issuance of any shares of its capital stock.
6.6 Insurance. The Company will keep its insurable properties
insured, upon reasonable business terms, by financially sound and reputable
insurers against liability, and the perils of casualty, fire and extended
coverage in amounts of coverage at least equal to those customarily maintained
by companies in the same or similar business as the Company. The Company will
also maintain with such insurers insurance against other hazards and risks and
liability to persons and property to the extent and in the manner customary for
companies engaged in the same or similar business.
6.7 Maintenance of Properties. The Company will maintain all
properties used or useful in the conduct of its business in good repair, working
order and condition, ordinary wear and tear excepted, as necessary to permit
such business to be properly and advantageously conducted.
6.8 Affiliated Transactions. All transactions between the Company
and any director, officer or key employee of the Company shall be conducted on
an arm's-length basis, shall be on terms and conditions no less favorable to the
Company than could be obtained from nonrelated persons and shall be approved in
advance by a majority of disinterested members of the Board of Directors after
full disclosure of the terms thereof.
26
6.9 Use of Proceeds. The Company will use the first $60,000,000 of
proceeds from the sale of the Series B Shares (i) to complete development of the
Pacific Exchange application for OptiMark(TM), and (ii) to fund the role-out of
OptiMark(TM) to the expected point of positive cash flow, with (iii) any balance
being dedicated as needed to the NASDAQ, Japan and Toronto business initiatives.
The balance of the proceeds from the sale of the Series B Shares will be used as
determined by the Board of Directors.
6.10 Books and Records. The Company shall keep books of record and
account, in which accurate entries shall be made of all financial transactions
and the assets and business of the Company in accordance with GAAP consistently
applied.
6.11 Back-ups of Computer Software. The Company shall make back-ups
of all material computer software programs and databases and shall maintain such
software programs databases at a secure off-site location.
6.12 Defense of Intellectual Property. In the event the Company
discovers, either through its own investigation or through notice from any
Purchaser or other entity, that a third party may be infringing the Intellectual
Property, the Company shall commence reasonable efforts to cease such
infringement. If the third party declines to cease infringement, the Company
shall consider in good faith whether to commence and pursue legal action against
such third party. The determination of whether or not legal action shall be
commenced shall lie exclusively with the Company; provided, however, the Company
shall not unreasonably decline to commence legal action if the Company obtains
or receives reasonable evidence of infringement by a third party and said
infringement is having or may have a material impact on the Company's revenue or
other business interests. All costs of such legal action shall be born by the
Company, and the Company shall retain control over the conduct of such action,
including settlement. In the event threatened or actual legal action by the
Company results in a settlement or resolution that provides damages or other
monies to the Company, such proceeds will be the property of the Company,
provided Purchasers have incurred no legal fees or costs in connection with that
action not otherwise subject to indemnification hereunder, in which event
Purchasers' fees and costs shall first be reimbursed from such proceeds.
SECTION 7. GENERAL
7.1 Amendments; Waivers and Consents. For the purposes of this
Agreement and all agreements, documents and instruments executed pursuant
hereto, except as otherwise specifically set forth herein or therein, no course
of dealing between the Company on the one hand and any Purchaser on the other
and no delay on the part of any party hereto in exercising any rights hereunder
or thereunder shall operate as a waiver of the rights hereof and thereof. Except
as otherwise provided herein or therein, amendments in or additions to, and any
consents required by, this Agreement may be made, and compliance with any term,
covenant, condition or provision set forth herein may be omitted or waived
(either generally or in a particular instance and either retroactively or
prospectively) by a Consent of the Purchasers and (in the case of any such
amendment or addition) the Company. Any amendment or waiver effected in
27
accordance with this Section 7.1 shall be binding upon each holder of Series B
Shares and the Conversion Shares, each future holder of all such Securities, and
the Company.
7.2 Survival of Representations, Warranties and Covenants:
Assignability of Rights. All covenants, agreements, representations and
warranties of the Company made herein and in the Schedules and Exhibits
delivered or furnished by or on behalf of the Company to any Purchaser in
connection herewith shall be deemed material and to have been relied upon by
such Purchaser, and, except as otherwise provided in this Agreement, shall
survive the delivery of the Series B Shares indefinitely, regardless of any
instruction or any investigation by or on behalf of the Purchasers, and shall
not merge in the performance of any obligation and shall bind the Company's
successors, assigns and heirs, whether so expressed or not. Except as otherwise
provided in this Agreement, all such covenants, agreements, representations and
warranties shall inure to the benefit of the Purchasers' successors and assigns
and to transferees of the Series B Shares, whether so expressed or not. The
representations and warranties made by the Purchasers in Section 4 of this
Agreement shall survive the delivery of the Series B Shares and shall bind the
Purchasers' successors and assigns and shall inure to the benefit of the
Company's successors and assigns.
7.3 Governing Law. This Agreement shall be deemed to be a contract
made under, and shall be construed in accordance with, the laws of the State of
Delaware without giving effect to principles of conflicts of law.
7.4 Section Headings; Counterparts. The descriptive headings in this
Agreement have been inserted for convenience only and shall not be deemed to
limit or otherwise affect the construction of any provision thereof or hereof.
This Agreement may be executed simultaneously in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute but one and the same document.
7.5 Notices and Demands. Any notice or demand which, by any
provision of this Agreement or any agreement, document or instrument executed
pursuant hereto or thereto, except as otherwise provided therein, is required or
provided to be given shall be deemed to have been sufficiently given or served
and received for all purposes upon the earlier to occur of actual delivery or
five days after being sent by certified or registered mail, postage and charges
prepaid, return receipt requested, or by express delivery providing receipt of
delivery, to the following addresses:
(a) if to the Company, at its chief executive office, or at
any other address designated by the Company to each of the Purchasers in
writing;
(b) if to a Purchaser, at its mailing address as shown on
Schedule I hereto, or at any other address designated by such Purchaser to the
Company in writing.
7.6 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if
28
any provision of this Agreement shall be deemed prohibited or invalid under such
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Agreement.
7.7 Expenses. The Company shall pay its costs and expenses, and each
of the Purchasers shall pay its respective costs and expenses, incurred with
respect to the negotiation, execution, delivery and performance of this
Agreement and the agreements, documents and instruments contemplated hereby or
executed pursuant hereto.
7.8 Publicity. Except as may be required by applicable Requirement
of Law, (i) none of the Purchasers shall issue a publicity release or public
announcement or otherwise make any disclosure concerning the Transaction
Documents or the transactions contemplated thereby, without prior written
approval by the Company, and (ii) the Company shall not issue any publicity
release, public announcement or make any other disclosure regarding the
Transaction Documents, which disclosure directly or indirectly references the
name of any Purchaser, without prior written approval of that Purchaser;
provided, however, that nothing in this Agreement shall restrict any party to
this Agreement from disclosing information (a) that is already publicly
available; (b) to a prospective Purchaser or transferee in connection with any
contemplated sale or transfer of any of the Series B Shares or Conversion
Shares; and/or (c) to its attorneys, accountants, consultants and other advisors
to the extent necessary to obtain their services in connection with this
Agreement. If any announcement is required by law to be made by any Purchaser,
prior to making such announcement such Purchaser will deliver a draft of such
announcement to the Company and shall give the Company an opportunity to comment
thereon.
7.9 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any governmental agency or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
7.10 Integration. This Agreement together with the other Transaction
Documents, including the Schedules, Exhibits, documents and instruments referred
to herein or therein, constitutes the entire agreement, and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
29
IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument as of the day and year first above written.
Company:
OptiMark Technologies, Inc.
By: /s/ Xxxxxxx X. Xxxxx
Chief Executive Officer
Purchasers:
see signature page(s) attached hereto
Purchaser:
Virginia Surety Company, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Senior Vice President
The Xxxxxxx Sachs Group, L.P.
By: The Xxxxxxx Xxxxx Corporation,
its General Partner
By: /s/ J. Xxxxx Xxxxxx
Executive Vice President
Xxxxxxxxxx Family Partnership, L.P.
By: JAC Management LLC,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
Manager
OMK Partners, L.P.
By: JAC Management LLC,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
Manager
/s/ Xxxxxx X. Xxxxxxxxxx
Greenwich Ventures, L.P.
By: Greenwich Ventures, L.L.C.,
its General Partner
By: /s/ Xxx Xxxxxx
Managing Partner
Vantage Ventures, C.V.
By: Greenwich Ventures, L.L.C.,
its General Partner
By: /s/ Xxx Xxxxxx
Managing Partner
Big Island, LLC
By: /s/ Xxxxx X. Xxxxxx
Manager
30
Everen Capital Corporation
By: /s/ Xxxxx X. Xxxxx
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
Nihon Keizai Shimbun, Inc.
By: /s/ Xxxxx Xxxxxx
Executive Managing Director
QUICK Corp.
By: /s/
Senior Managing Director
JCB Venture Partnership IV
By: /s/ X.X. Xxxxxxxx Xx.
Commerce Partners I
By: /s/ X.X. Xxxxxxxx Xx.
/s/ Xxxxxxx X. Xxxxxx
Prairie Acorn Ventures, LLC
By: /s/
/s/ Xxxxxx X. Xxxxx
Xxxxx & Associates, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Chairman, Chief Executive Officer
Xxxxx Investment Group, LLC
By: /s/ Xxxxxxx X. Xxxxxx
President
BT Investment Partners, Inc.
By: /s/ Xxxxx Xxxxx
Managing Director
ML IBK Positions, Inc.
By: /s/ Xxxxx X. Xxxxxx
Vice President
Xxxxxxx Xxxxx KECALP L.P. 1997
By: KECALP, Inc., its General Partner
By: /s/ Xxxxxx X. Xxxxx
Vice President and Treasurer
Xxxxxxx Xxxxx KECALP International L.P. 1997
By: KECALP International, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
Treasurer
OptiMark Investors General Partnership
By: /s/ Xxxxx Xxxxxx
General Partner
Winslade Management Limited
By: /s/ Xxxxxxx Xxxxxxx
/s/ Xxxxx Blond
Credit Suisse First Boston OptiMark
Investors, Inc.
By: /s/
Managing Director
/s/ Xxxx X. Xxxxx
Xxxxx Xxxxxx Capital Inc.
By: /s/ Xxxxxxxxx Xxx
President
Xxxx Xxxxxxxx Xxxxxxx,
a Division of Xxxx Xxxxxxxx Incorporated
By: /s/
Chairman, President & Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxxxx-Xxxxxxx
31
Fremont Concentrated Equity Fund, LLC
By: /s/
Executive Vice President & Principal
Xxxx Capital Management LLC
Perth Capital, LLC
By: /s/
Orincon Technologies, Inc.
By: /s/ Xxxxxx X. X'Xxxx
Chief Financial Officer
Community Investment Partners III L.P., LLLP
By: /s/ Xxxxxx X. Xxxxxxxxx
Chairman, CIP Management, Inc.
First Union Investors, Inc.
By: /s/
Senior Vice President
J Partners
By: /s/ Xxxxxxx Xxxxxxx XX
Partner
X.X. Xxxxxxxx & Co., L.L.C.
By: /s/
Xxx and Xxxxx Xxxx Living Trust
UA DTD 5/3/95
By: /s/ Xxx Xxxx
Trustee
Xxxx Family Trust April 1, 1997
By: /s/ Xxxxx & Xxxxxxx Xxxx
Trustee
X.X. Xxxxxxxx & Co.
By: /s/ Xxx X. Xxxxxxxx
Chairman
/s/ Xxxx X. Xxxxxx
Xxxxxxx Xxxxxx Xxxxx Inc.
By: /s/ X. X. Xxxxxx
President
Xxxxxxxxxx & Co. Inc.
By: /s/
Chairman and CEO
Xxxx Family Trust
By: /s/ Xxxxx Xxxx
Trustee
O'Neil Data Systems, Inc.
By: /s/
Chairman
Haven Capital Management Inc.
Profit Sharing Plan C
By: /s/ Xxxxx X. Xxxxx
Trustee
By:/s/ Xxxxxxx Xxx
Trustee
/s/ Xxxxxxx Xxx
/s/ Xxxxx X. Xxxxx
Xxxxxxxxx & Xxxxx
By: /s/
Chief Financial Officer
AGE Investments, Inc.
By: /s/ Xxxxxx X. Xxxxxx
Sole Director
Banc Boston Capital Inc.
By: /s/ Xxxx Xxxxxx Xxxxxx
Vice President
CIBC Wood Gundy Capital Corp.
By: /s/ Xxxx Xxxxx
Managing Director
32
Schedule I
(to Series B Stock Purchase Agreement)
Xxxx.Xxxx and Address Effective Number of
No.of Purchaser Date of Purchase Shares of
--------------- ---------------- Series B
Stock
Purchased
---------
(First Closing:)
B-1 Virginia Surety Company, Inc. 4/23/98 2,000,000
000 Xxxxx Xxxxxx Xx., 00xx Xxxxx
Xxxxxxx, XX 00000
---------------
TOTAL FIRST CLOSING: 2,000,000 $20,000,000
-----------------------------------------------------------------------------------------------
(Second Closing:)
B-2 The Xxxxxxx Sachs Group, L.P. 6/1/98 1,000,000
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
B-3 Greenwich Ventures, L.P. 6/1/98 74,550
0000 Xxxxx Xxxxxx, #000
Xxxxx Xxxxxxx, XX 00000
B-4 Vantage Ventures, C.V. 6/1/98 25,450
0000 Xxxxx Xxxxxx, #000
Xxxxx Xxxxxxx, XX 00000
B-5 Xxxxxxxxxx Family Partnership, L.P. 6/1/98 31,000
0 Xxxxx Xxxxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000
B-6 OMK Partners, L.P. 6/1/98 247,800
0 Xxxxx Xxxxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000
B-7 Xxxxxx Xxxxxxxxxx 6/1/98 52,000
0 Xxxxx Xxxxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000
B-8 Big Island, LLC 6/1/98 180,000
0000 X. Xxxxxxxx Xxxxxx, Xxxxx #0
Xxxxxx, XX 00000
33
B-9 Everen Capital Corporation 6/1/98 250,000
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
B-10 Xxxxxxx X. Xxxxxx 6/1/98 40,000
00 Xxxxxxx
Xx. Xxxxx, XX 00000
B-11 Xxxxxx X. Xxxxxx 6/1/98 10,000
000 Xxxxxxxxx
Xxxxxxxx, XX 00000
---------------
TOTAL SECOND CLOSING: 1,910,800 $19,108,000
-----------------------------------------------------------------------------------------------
(Third Closing:)
B-12 Nihon Keizai Shimbun, Inc. 7/1/98 800,000
0-0-0 Xxxxxxxx
Xxxxxxx-xx
Xxxxx, XX 000-0000
Xxxxx
B-13 QUICK Corp. 7/1/98 200,000
828 Otemachi Xxxx.
0-0-0 Xxxxxxxx
Xxxxxxx-xx
Xxxxx, XX 000
Xxxxx
---------------
TOTAL THIRD CLOSING: 1,000,000 $10,000,000
-----------------------------------------------------------------------------------------------
(Fourth Closing:)
B-14 JCB Venture Partnership IV 7/10/98 10,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
B-15 Commerce Partners I 7/10/98 70,500
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
B-16 Xxxxxxx X. Xxxxxx 7/10/98 10,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
34
B-17 Prarie Acorn Ventures, LLC 7/10/98 12,000
000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
B-18 Xxxxxx X. Xxxxx 7/10/98 25,000
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
B-19 Xxxxx & Associates, Inc. 7/10/98 150,000
00000 X. Xxxxxxx Xx., Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
B-20 Xxxxx Investment Group, LLC 7/10/98 100,000
00000 X. Xxxxxxx Xx., Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
B-21 BT Investment Partners, Inc. 7/10/98 500,000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
B-22 ML IBK Positions, Inc. 7/10/98 750,000
000 Xxxxx Xx., 0xx Xxxxx
Xxx Xxxx, XX 00000
B-23 Xxxxxxx Xxxxx KECALP L.P. 1997 7/10/98 562,500
000 Xxxxx Xx., 0xx Xxxxx
Xxx Xxxx, XX 00000
B-24 Xxxxxxx Xxxxx KECALP 7/10/98 187,500
International L.P. 1997
000 Xxxxx Xx., 0xx Xxxxx
Xxx Xxxx, XX 00000
B-25 OptiMark Investors 7/10/98 66,000
General Partnership
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
---------------
TOTAL FOURTH CLOSING: 2,443,500 $24,435,000
-----------------------------------------------------------------------------------------------
(Fifth Closing:)
B-26 Winslade Management Limited 8/5/98 10,000
X.X. Xxx 000
Celtic House
00
Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxx xx Xxx
XX00 0XX
B-27 Xxxxx Blond 8/5/98 50,000
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
B-28 Credit Suisse First Boston 8/5/98 1,000,000
OptiMark Investors, Inc.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
B-29 Xxxx X. Xxxxx 8/5/98 30,000
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
B-30 Xxxxx Xxxxxx Capital, Inc. 8/5/98 1,060,000
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
X-00 Xxxx Xxxxxxxx Xxxxxxx, a 8/5/98 100,000
Division of Xxxx Xxxxxxxx
Incorporated
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
B-32 Xxxxxx X. Xxxxxxx and/or Xxxxxxx 8/5/98 10,000
Xxxxxxxx-Xxxxxxx
c/o American Century Investments
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
B-33 Fremont Concentrated 8/5/98 50,000
Equity Fund
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
B-34 Perth Capital, LLC 8/5/98 25,000
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
B-35 Orincon Technologies, Inc. 8/5/98 10,000
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
36
---------------
TOTAL FIFTH CLOSING: 2,345,000 $23,450,000
-----------------------------------------------------------------------------------------------
(Sixth Closing:)
B-36 Community Investment Partners 9/22/98 10,000
III L.P., LLLP 00000 Xxxxxxxxxx Xx.
Xx. Xxxxx, XX 00000
B-37 First Union Investors, Inc. 9/22/98 125,000
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
B-38 J Partners 9/22/98 15,000
c/o Xxxxxxx Xxxxxxx XX
000 X. 00xx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
X-00 X.X. Xxxxxxxx & Xx., X.X.X. 9/22/98 25,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
B-40 Xxx and Xxxxx Xxxx Living Trust 9/22/98 10,000
UA DTD 5/3/95
000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
B-41 Xxxx Family Trust Apr. 1 1997 9/22/98 5,000
000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxxxx Xxxxxx, XX 00000
B-42 X.X. Xxxxxxxx & Co.. 9/22/98 10,000
X.X. Xxx 0000
Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxx, XX 00000
B-43 Xxxx X. Xxxxxx 9/22/98 5,000
Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
B-44 Xxxxxxx Xxxxxx Xxxxx Inc. 9/22/98 25,000
0000 Xxxxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
37
B-45 Xxxxxxxxxx & Co. Inc. 9/22/98 15,000
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxx
B-46 Xxxx Family Trust 9/22/98 15,700
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
B-47 O'Neil Data Systems, Inc. 9/22/98 20,000
00000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
B-48 Haven Capital Management Inc. 9/22/98 15,000
Profit Sharing Plan C
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
B-49 Xxxxx Xxx 9/22/98 2,500
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
B-50 Xxxxx X. Xxxxx 9/22/98 2,500
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
---------------
TOTAL SIXTH CLOSING: 300,700 $3,007,000
-----------------------------------------------------------------------------------------------
(Seventh Closing:)
X-00 Xxxxxxxxx & Xxxxx Xxxxxxxxxx 10/13/98 25,000
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
---------------
TOTAL SEVENTH CLOSING: 25,000 $250,000
-----------------------------------------------------------------------------------------------
(Eighth Closing:)
B-52 AGE Investments, Inc. 11/4/98 50,000
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
---------------
TOTAL EIGHTH CLOSING: 50,000 $500,000
-----------------------------------------------------------------------------------------------
38
(Ninth Closing:)
B-53 BancBoston Capital Inc. 12/3/98 75,000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
TOTAL NINTH CLOSING: 75,000 $750,000
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(Tenth Closing)
B-54 CIBC Wood Gundy Capital Corp. 12/22/98 850,000 $8,500,000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
TOTAL TENTH CLOSING: 850,000 $8,500,000
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Summary
Closing Shares $
------- ------ -
1 2,000,000 $20,000,000
2 1,910,800 $19,108,000
3 1,000,000 $10,000,000
4 2,443,500 $24,435,000
5 2,345,000 $23,450,000
6 300,700 $3,007,000
7 25,000 $250,000
8 50,000 $500,000
9 75,000 $750,000
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10 850,000 $8,500,000
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Totals: 11,000,000 $110,000,000
