EXCHANGE AGREEMENT
This
Exchange Agreement (this “Agreement”)
is
dated as of September 12, 2008, by and between Juma Technology Corp., a Delaware
corporation (the “Company”),
and
Vision Opportunity Master Fund, Ltd., a holder of certain warrants issued by
the
Company (the “Holder”).
Recitals:
WHEREAS,
the Holder currently holds the specific classes and number of warrants listed
on
Exhibit
A
(collectively, the “Warrants”)
to
purchase shares of the Company’s common stock, par value $.0001 per share (the
“Common
Stock”),
issued by the Company to the Holder pursuant to a note and warrant financing
of
the Company consummated on August 16, 2007 (the
“Financing”).
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the financing documents entered into by the parties
pursuant to the Financing.
WHEREAS,
subject to the terms and conditions set forth herein, the Company and the Holder
desire to cancel and terminate the Warrants in full and exchange the Warrants
for shares of the Company’s Series B Convertible Preferred Stock, par value
$.0001 per share (the “Series
B Preferred Stock”),
at
the exchange rate set forth on Exhibit
A.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby agreed and acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT:
1. Cancellation
of the Warrants; Exchange of Warrants for Series B Preferred
Stock.
(a) In
consideration of and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, the Holder and the Company
agree to the cancellation of the Warrants and the exchange of the Warrants
into
newly issued shares of Series B Preferred Stock in the amounts set forth on
Exhibit
A
attached
hereto.
(b) The
closing under this Agreement (the “Closing”)
shall
take place at the offices of Sadis & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx,
00xx
Xxxxx,
Xxx Xxxx, XX 00000 upon the satisfaction or waiver of each of the conditions
set
forth in Sections 4 and 5 hereof (the “Closing
Date”).
At
the
Closing, the Company shall issue to the Holder the shares of Series B Preferred
Stock and
the
Holder shall deliver to the Company for cancellation the Warrants.
(c) The
designation, rights, preferences and other terms and provisions of the Series
B
Preferred Stock are set forth in the Certificate of Designation of the Relative
Rights and Preferences of the Series B Convertible Preferred Stock attached
hereto as Exhibit
B
(the
“Certificate
of Designation”).
(d) The
shares of Series B Preferred Stock issuable upon the exchange of the
Warrants and the shares of Common Stock issuable upon conversion of the Series
B
Preferred Stock are sometimes collectively referred to herein as the
“Securities”.
2. Representations,
Warranties and Covenants of the Holder.
The
Holder
hereby makes the following representations and warranties to the Company, and
covenants for the benefit of the Company:
(a)
The
Holder is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation or organization.
(b) This
Agreement has been duly authorized, validly executed and delivered by the Holder
and is a valid and binding agreement and obligation of the Holder enforceable
against the Holder in accordance with its terms, subject to limitations on
enforcement by general principles of equity and by bankruptcy or other laws
affecting the enforcement of creditors’ rights generally, and the Holder has
full power and authority to execute and deliver the Agreement and the other
agreements and documents contemplated hereby and to perform its obligations
hereunder and thereunder.
(c) The
Holder understands that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Holder set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act of 1933, as amended (the “Securities
Act”),
and
applicable state securities laws. The Holder understands that no United States
federal or state agency or any government or governmental agency has passed
upon
or made any recommendation or endorsement of the Securities.
(d) The
Holder is an “accredited investor” (as defined in Rule 501 of Regulation D), and
the Holder has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Securities.
The Holder is not required to be registered as a broker-dealer under Section
15
of the Securities Exchange Act of 1934, as amended, and the Holder is not a
broker-dealer. The Holder acknowledges that an investment in the Securities
is
speculative and involves a high degree of risk.
(e) The
Holder is acquiring the Securities solely for its own account and not with
a
view to or for sale in connection with distribution. The Holder does not have
a
present intention to sell any of the Securities, nor a present arrangement
(whether or not legally binding) or intention to effect any distribution of
any
of the Securities to or through any person or entity; provided,
however,
that by
making the representations herein, the Holder does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with Federal and state
securities laws applicable to such disposition. The Holder acknowledges that
it
(i) has such knowledge and experience in financial and business matters such
that the Holder is capable of evaluating the merits and risks of the Holder's
investment in the Company, (ii) is able to bear the financial risks associated
with an investment in the Securities and (iii) has been given full access to
such records of the Company and its subsidiaries and to the officers of the
Company and the subsidiaries as it has deemed necessary or appropriate to
conduct its due diligence investigation.
(f) The
offer
and sale of the Securities is intended to be exempt from registration under
the
Securities Act, by virtue of Section 4(2) thereof. The Holder understands that
the Securities purchased hereunder have not been, and may never be, registered
under the Securities Act and that none of the Securities can be sold or
transferred unless they are first registered under the Securities Act and such
state and other securities laws as may be applicable or the Company receives
an
opinion of counsel reasonably acceptable to the Company that an exemption from
registration under the Securities Act is available (and then the Securities
may
be sold or transferred only in compliance with such exemption and all applicable
state and other securities laws). The Holder acknowledges that it is familiar
with Rule 144 of the rules and regulations of the Commission, as amended,
promulgated pursuant to the Securities Act ("Rule
144"),
and
that the Holder has been advised that Rule 144 permits resales only under
certain circumstances. The Holder understands that to the extent that Rule
144
is not available, the Holder will be unable to sell any Securities without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.
2
(g) The
Holder has not employed any broker or finder or incurred any liability for
any
brokerage or investment banking fees, commissions, finders’ structuring fees,
financial advisory fees or other similar fees in connection with any of the
transactions contemplated by this Agreement.
(h) The
Holder acknowledges that the Securities were not offered to the Holder by means
of any form of general or public solicitation or general advertising, or
publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio,
or
(ii) any seminar or meeting to which the Holder was invited by any of the
foregoing means of communications. The Holder, in making the decision to
purchase the Securities, has relied upon independent investigation made by
it
and the representations, warranties and agreements set forth in this Agreement
and the other transaction documents and has not relied on any information or
representations made by third parties.
3. Representations,
Warranties and Covenants of the Company.
The
Company represents and warrants to the Holder, and covenants for the benefit
of
the Holder, as follows:
(a) The
Company has been duly incorporated and is validly existing and in good standing
under the laws of the State of Delaware, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration
or
qualification, except where the failure to register or qualify would not have
a
Material Adverse Effect. For purposes of this Agreement, “Material
Adverse Effect”
shall
mean any effect on the business, results of operations, prospects, assets or
financial condition of the Company that is material and adverse to the Company
and its subsidiaries and affiliates, taken as a whole and/or any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company from entering into and performing any of its
obligations under this Agreement in any material respect.
(b) The
Securities have been duly authorized by all necessary corporate action and,
when
paid for or issued in accordance with the terms hereof, the Securities shall
be
validly issued and outstanding, fully paid and nonassessable, free and clear
of
all liens, encumbrances and rights of refusal of any kind.
3
(c) This
Agreement has been duly authorized, validly executed and delivered on behalf
of
the Company and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy
or
other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver the Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
(d) The
execution and delivery of the Agreement and the consummation of the transactions
contemplated by this Agreement by the Company, will not (i) conflict with or
result in a breach of or a default under any of the terms or provisions of:
(A)
the Company’s certificate of incorporation or by-laws, or (B) of any provision
of any indenture, mortgage, deed of trust or other agreement or instrument
to
which the Company is a party or by which it or any of its properties or assets
is bound, (ii) result in a violation of any provision of any law, statute,
rule,
regulation, or any existing applicable decree, judgment or order by any court,
Federal or state regulatory body, administrative agency, or other governmental
body having jurisdiction over the Company, or any of its properties or assets
or
(iii) result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a party
or
by which any of them may be bound or to which any of their property or any
of
them is subject, except in the case of clauses (i)(B), (ii) or (iii) for any
such conflicts, breaches, or defaults or any liens, charges, or encumbrances
which would not have a Material Adverse Effect.
(e) The
delivery and issuance of the Securities in accordance with the terms of and
in
reliance on the accuracy of the Holder’s representations and warranties set
forth in this Agreement will be exempt from the registration requirements of
the
Securities Act.
(f) No
consent, approval or authorization of or designation, declaration or filing
with
any governmental authority on the part of the Company is required in connection
with the valid execution and delivery of this Agreement or the offer, sale
or
issuance of the Securities or the consummation of any other transaction
contemplated by this Agreement (other than any filings which may be required
to
be made by the Company with the Secretary of State of Delaware or the Securities
and Exchange Commission (the “Commission”)
or
pursuant to any state or “blue sky” securities laws subsequent to the
Closing).
(g) There
is
no action, suit, claim, investigation or proceeding pending or, to the knowledge
of the Company, threatened against the Company which questions the validity
of
this Agreement or the transactions contemplated hereby or any action taken
or to
be taken pursuant thereto. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of the Company, threatened, against
or
involving the Company or any subsidiary, or any of their respective properties
or assets which, if adversely determined, is reasonably likely to result in
a
Material Adverse Effect.
(h) The
Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and delivery of the
Securities hereunder. Neither the Company nor anyone acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to
buy
any of the Securities, or similar securities to, or solicit offers with respect
thereto from, or enter into any preliminary conversations or negotiations
relating thereto with, any person, or has taken or will take any action so
as to
bring the issuance and sale of any of the Securities under the registration
provisions of the Securities Act and applicable state securities laws. Neither
the Company nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection
with
the offer or sale of any of the Securities.
4
(i) The
Company has not employed any broker or finder or incurred any liability for
any
brokerage or investment banking fees, commissions, finders’ structuring fees,
financial advisory fees or other similar fees in connection with any of the
transactions contemplated by this Agreement.
4. Conditions
Precedent to the Obligation of the Company to Issue the Series B Preferred
Stock.
The
obligation hereunder of the Company to issue and deliver the Series B Preferred
Stock to the Holder is subject to the satisfaction or waiver, at or before
the
Closing Date, of each of the conditions set forth below. These conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion.
(a) The
Holder shall have executed and delivered this Agreement.
(b) The
Warrants shall have been delivered to the Company for cancellation.
(c) The
representations and warranties of the Holder shall be true and correct in all
respects as of the date when made and as of the Closing Date as though made
at
that time, except for representations and warranties that are expressly made
as
of a particular date, which shall be true and correct in all respects as of
such
date.
5. Conditions
Precedent to the Obligation of the Holder to Accept the Series B Preferred
Stock.
The
obligation hereunder of the Holder to accept the Series B Preferred Stock is
subject to the satisfaction or waiver, at or before the Closing Date, of each
of
the conditions set forth below. These conditions are for the Holder’s sole
benefit and may be waived by the Holder at any time in its sole
discretion.
(a) The
Company shall have executed and delivered this Agreement.
(b) Each
of
the representations and warranties of the Company shall be true and correct
in
all respects as of the date when made and as of the Closing Date as though
made
at that time, except for representations and warranties that speak as of a
particular date, which shall be true and correct in all respects as of such
date.
(c) No
statute, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Agreement at or prior to the Closing
Date.
(d) No
action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, shall be pending against or affecting the Company,
or
any of its properties, which questions the validity of the Agreement or the
transactions contemplated thereby or any action taken or to be taken pursuant
thereto. As of the Closing Date, no action, suit, claim or proceeding before
or
by any court or governmental agency or body, domestic or foreign, shall be
pending against or affecting the Company, or any of its properties, which,
if
adversely determined, is reasonably likely to result in a Material Adverse
Effect.
5
(e) The
certificates representing the shares of Series B Preferred Stock shall have
been
duly executed and delivered to the Holder.
(f) [reserved]
(g) The
Company shall have delivered on the Closing Date to the Holder a certified
copy
of the resolutions of the board of directors of the Company authorizing the
transactions contemplated by this Agreement.
(h) At
the
Closing, the Holder shall have received an opinion of counsel to the Company,
dated the date of the Closing, in the form of Exhibit
C
hereto.
(i) The
Company shall have received executed written consents and waivers from its
security holders, if required, consenting to the transactions contemplated
by
this Agreement and waiving any price protection such securityholders may be
entitled to as a result of the issuance of the Securities.
(j) No
Material Adverse Effect shall have occurred at or before the Closing
Date.
6. Fees
and Expenses.
Each
party shall pay the fees and expenses of its advisors, counsel, accountants
and
other experts, if any, and all other expenses, incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this
Agreement, provided,
however,
that
the Company shall pay all reasonable attorneys’ fees and expenses incurred by
the Holder in connection with the preparation, negotiation, execution and
delivery of this Agreement.
7. Company
Indemnification.
The
Company hereby
agrees to indemnify and hold harmless the Holder and its respective officers,
directors, shareholders, employees, agents, affiliates and attorneys against
any
and all losses, claims, damages, liabilities and reasonable expenses
(collectively “Claims”)
incurred by each such person in connection with defending or investigating
any
such Claims, whether or not resulting in any liability to such person, to which
any such indemnified party may become subject, insofar as such Claims arise
out
of or are based upon any breach of any representation or warranty or agreement
made by the Company in this Agreement or the Certificate of
Designation.
8. Governing
Law; Consent to Jurisdiction.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of New York without giving effect to the rules governing the conflicts
of laws. Each of the parties consents to the exclusive jurisdiction of the
Federal courts whose districts encompass any part of the County of New York
located in the City of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on
forum non conveniens,
to the
bringing of any such proceeding in such jurisdictions. Each party waives its
right to a trial by jury. Each party to this Agreement irrevocably consents
to
the service of process in any such proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to such party at its address
set forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
6
9. Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand delivery, express overnight courier, registered first
class mail, or telecopier (provided that any notice sent by telecopier shall
be
confirmed by other means pursuant to this Section 9), initially to the address
set forth below, and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section.
|
(a)
|
if
to the Company:
|
000
Xxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxx Xxxx 00000
Attention:
Chief Executive Officer
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Savage LLP
000
Xxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxx Xxxxxxxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
|
(b)
|
if
to a Holder:
|
|
|
To
the applicable address set forth on the signature page
hereto
|
with
a
copy to:
Sadis
& Xxxxxxxx LLP
000
Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx Xxxxxxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
All
such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when receipt is acknowledged, if
telecopied; or when actually received or refused if sent by other
means.
10. Entire
Agreement.
This
Agreement constitutes the entire understanding and agreement of the parties
with
respect to the subject matter hereof and supersedes all prior and/or
contemporaneous oral or written proposals or agreements relating thereto all
of
which are merged herein. This Agreement may not be amended or any provision
hereof waived in whole or in part, except by a written amendment signed by
both
of the parties.
7
11. Counterparts.
This
Agreement may be executed by facsimile signature and in counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
8
IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.
|
|
|
|
By:______________________________________
Name:
Title:
|
|
|
VISION
OPPORTUNITY MASTER FUND, LTD.
|
|
|
By:_____________________________________
Name:
Title:
|
|
Vision
Opportunity Master Fund, Ltd.
|
|
|
00
X 00xx Xx., 0xx
Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Tel.
No.: (000) 000-0000
|
|
|
Fax
No.: (000) 000-0000
|
|
|
Attention:
Antti Uusiheimala
|
9
EXHIBIT
A
|
Cancelled
Security
|
Issued
Security
|
Exchange
Rate
|
|
6,432,246
Series A Warrants
$0.72
Strike Price
Expiring
8/16/2012
|
385,935
Series B Preferred Stock
|
.60
|
10
EXHIBIT
B
FORM
OF CERTIFICATE OF DESIGNATION
11
EXHIBIT
C
FORM
OF OPINION
1. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power to own, lease and operate its properties and assets, and to carry on
its
business as presently conducted.
2. The
Company has the requisite corporate power and authority to enter into and
perform its obligations under the Exchange Agreement and to issue the Series
B
Preferred Stock and the Common Stock issuable upon conversion of the Series
B
Preferred Stock. The execution, delivery and performance of each of the
transaction documents contemplated by the Exchange Agreement by the Company
and
the consummation by it of the transactions contemplated thereby have been duly
and validly authorized by all necessary corporate action and no further consent
or authorization of the Company or its Board of Directors or stockholders is
required.
3. The
Series B Preferred Stock has been duly authorized and the shares of Common
Stock
issuable upon conversion of the Series B Preferred Stock, have been duly
authorized and reserved for issuance, and, when delivered upon conversion or
against payment in full as provided in the Certificate of Designation, will
be
validly issued, fully paid and nonassessable.
4. The
offer, issuance and sale of the Series B Preferred Stock and the offer, issuance
and sale of the shares of Common Stock issuable upon conversion of the Series
B
Preferred Stock pursuant to the Exchange Agreement and the Certificate of
Designation, are exempt from the registration requirements of the Securities
Act.
12
