Exhibit 10.1
REDEMPTION AND EXCHANGE AGREEMENT
REDEMPTION AND EXCHANGE AGREEMENT (the "Agreement"), dated as of April 3,
2001, by and among MicroStrategy Incorporated, a Delaware corporation, with
headquarters located at 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000 (the
"Company"), and the investors listed on the Schedule of Investors attached
hereto (individually, an "Investor" and collectively, the "Investors").
WHEREAS:
A. The Company, the Investors and certain other entities (the "Other
Investors") have entered into that certain Securities Purchase Agreement, dated
as of June 17, 2000 (the "Securities Purchase Agreement"), pursuant to which the
Investors and the Other Investors purchased from the Company shares of the
Company's Series A Convertible Preferred Stock (the "Series A Preferred Stock"),
which are convertible into shares of the Company's Class A common stock, par
value $0.001 per share (the "Common Stock") (as converted, the "Series A
Conversion Shares"), in accordance with the terms of the Company's Certificate
of Designations, Preferences and Rights of the Series A Preferred Stock filed
with the Secretary of State of the State of Delaware on June 19, 2000 (the
"Series A Certificate of Designations");
B. Prior to the closing of the transactions contemplated hereby, the
Company will have authorized the following new series of its preferred stock,
par value $0.001 per share: (1) the Company's Series B Convertible Preferred
Stock (the "Series B Preferred Stock"), which shall be convertible into shares
of Common Stock (as converted, the "Series B Conversion Shares"), in accordance
with the terms of the Company's Certificate of Designations, Preferences and
Rights of the Series B Preferred Stock, in the form attached hereto as Exhibit A
(the "Series B Certificate of Designations"), (2) the Company's Series C
Convertible Preferred Stock (the "Series C Preferred Stock"), which shall be
convertible into shares of Common Stock (as converted, the "Series C Conversion
Shares"), in accordance with the terms of the Company's Certificate of
Designations, Preferences and Rights of the Series C Preferred Stock, in the
form attached hereto as Exhibit B (the "Series C Certificate of Designations"),
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and (3) the Company's Series D Convertible Preferred Stock (the "Series D
Preferred Stock" and, collectively with the Series B Preferred Stock and the
Series C Preferred Stock, the "Preferred Stock"), which shall be convertible
into shares of Common Stock (as converted, the "Series D Conversion Shares" and,
collectively with the Series B Conversion Shares and the Series C Conversion
Shares, the "Conversion Shares"), in accordance with the terms of the Company's
Certificate of Designations, Preferences and Rights of the Series D Preferred
Stock, in the form attached hereto as Exhibit C (the "Series D Certificate of
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Designations" and, collectively with the Series B Certificate of Designations
and the Series C Certificate of Designations, the "Certificates of
Designations");
C. Each Investor is the holder of that number of shares of Series A
Preferred Stock (each a "Series A Preferred Share" and, collectively, the
"Series A Preferred Shares") set forth opposite its name in Column 2 on the
Schedule of Investors;
D. Upon the terms and conditions set forth in this Agreement, the Company
wishes to redeem an aggregate of 1,200 of the Series A Preferred Shares, and
each of the Investors wishes to allow the Company to redeem such Series A
Preferred Shares, for an aggregate redemption price of $12,000,000 in cash (pro
rata based on the number of Series A Preferred Shares held by each such Investor
relative to 6,000 Series A Preferred Shares);
E. The Company and each Investor wish to exchange, upon the terms and
conditions set forth in this Agreement, an aggregate of 500 of the Series A
Preferred Shares for an aggregate of 1,000,000 shares of Common Stock, as
adjusted for any stock splits, stock dividends, stock combinations or other
similar transactions (the "Common Shares"), (pro rata based on the number of
Series A Preferred Shares held by each such Investor relative to 6,000 Series A
Preferred Shares);
F. The Company and each Investor wish to exchange, upon the terms and
conditions set forth in this Agreement, an aggregate of 1,590 of the Series A
Preferred Shares for an aggregate of 1,590 shares of Series B Preferred Stock,
as adjusted for any stock splits, stock dividends, stock combinations or other
similar transactions (the "Series B Preferred Shares"), (pro rata based on the
number of Series A Preferred Shares held by each such Investor relative to 6,000
Series A Preferred Shares);
G. The Company and each Investor wish to exchange, upon the terms and
conditions set forth in this Agreement, an aggregate of 1,590 of the Series A
Preferred Shares for an aggregate of 1,590 shares of Series C Preferred Stock,
as adjusted for any stock splits, stock dividends, stock combinations or other
similar transactions (the "Series C Preferred Shares"), (pro rata based on the
number of Series A Preferred Shares held by each such Investor relative to 6,000
Series A Preferred Shares);
H. The Company and each Investor wish to exchange, upon the terms and
conditions set forth in this Agreement, an aggregate of 1,120 of the Series A
Preferred Shares for an aggregate number of shares of Series D Preferred Stock
equal to the sum of (i) 1,120 shares of Series D Preferred Stock, as adjusted
for any stock splits, stock dividends, stock combinations or other similar
transactions (the "Fixed Series D Preferred Shares"), plus (ii) the Additional
Series D Preferred Shares (as defined in Section 1(b)) (the Fixed Series D
Preferred Shares and the Additional Series D Preferred Shares are collectively
referred to as the "Series D Preferred Shares;" and the Series B Preferred
Shares, the Series C Preferred Shares and the Series D Preferred Shares are
collectively referred to as the "Preferred Shares") (pro rata based on the
number of Series A Preferred Shares held by each such Investor relative to 6,000
Series A Preferred Shares);
I. The exchange of the Series A Preferred Shares for the Common Shares
and the Preferred Shares is being made in reliance upon the exemption from
registration provided by Section 3(a)(9) of the Securities Act of 1933, as
amended (the "1933 Act"); and
J. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
in the form attached hereto as Exhibit D (the "Registration Rights Agreement")
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pursuant to which the Company has agreed
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to provide certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW THEREFORE, the Company and the Investors hereby agree as follows:
1. REDEMPTION AND EXCHANGE OF SERIES A PREFERRED SHARES.
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a. Redemption of Series A Preferred Shares. Subject to satisfaction
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(or waiver) of the conditions set forth in Sections 6 and 7, the Company shall
redeem from each Investor and each Investor shall tender to the Company for
redemption on the Closing Date (as defined below) that number of such Investor's
Series A Preferred Shares set forth opposite such Investor's name in Column 3 on
the Schedule of Investors (which number of Series A Preferred Shares in the
aggregate equals 1,200 Series A Preferred Shares) (the "Closing"). The
redemption price (the "Redemption Price") to be paid by the Company for each
Series A Preferred Share being redeemed at the Closing shall be $10,000 in cash
(such that the aggregate Redemption Price for all Series A Preferred Shares
being redeemed is $12,000,000, in the respective amounts set forth opposite each
Investor's name in Column 4 on the Schedule of Investors).
b. Exchange of Series A Preferred Shares. Subject to satisfaction
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(or waiver) of the conditions set forth in Sections 6 and 7, the Company shall
at the Closing (i) issue to each Investor, and each Investor severally agrees to
exchange that number of such Investor's Series A Preferred Shares set forth
opposite such Investor's name in Column 5 on the Schedule of Investors (which
number of Series A Preferred Shares in the aggregate equals 500 Series A
Preferred Shares) for, that number of Common Shares set forth opposite such
Investor's name in Column 6 on the Schedule of Investors (which number of Common
Shares in the aggregate equals 1,000,000 Common Shares); (ii) issue to each
Investor, and each Investor severally agrees to exchange that number of such
Investor's Series A Preferred Shares set forth opposite such Investor's name in
Column 7 on the Schedule of Investors (which number of Series A Preferred Shares
in the aggregate equals 1,590 Series A Preferred Shares) for, that number of
Series B Preferred Shares set forth opposite such Investor's name in Column 8 on
the Schedule of Investors (which number of Series B Preferred Shares in the
aggregate equals 1,590 Series B Preferred Shares); (iii) issue to each Investor,
and each Investor severally agrees to exchange that number of such Investor's
Series A Preferred Shares set forth opposite such Investor's name in Column 9 on
the Schedule of Investors (which number of Series A Preferred Shares in the
aggregate equals 1,590 Series A Preferred Shares) for, that number of Series C
Preferred Shares set forth opposite such Investor's name in Column 10 on the
Schedule of Investors (which number of Series C Preferred Shares in the
aggregate equals 1,590 Series C Preferred Shares); and (iv) issue to each
Investor, and each Investor severally agrees to exchange that number of such
Investor's Series A Preferred Shares set forth opposite such Investor's name in
Column 11 on the Schedule of Investors (which number of Series A Preferred
Shares in the aggregate equals 1,120 Series A Preferred Shares) for, that number
of Series D Preferred Shares equal to the sum of (A) the number of Fixed Series
D Preferred Shares set forth opposite such Investor's name in Column 12 on the
Schedule of Investors (which number of Fixed Series D Preferred Shares in the
aggregate equals 1,120 Fixed Series D Preferred Shares), plus (B) such
Investor's allocated percentage (set forth opposite such Investor's name in
Column 13 on the Schedule of Investors) of the Additional Series D Preferred
Shares. The "Additional Series D Preferred Shares"
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means the number of shares of Series D Preferred Stock determined according to
the following formula:
(0.07)(64/365)($60,000,000)
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(Additional Series D Preferred Share Dividend Price)(2,000)
where the "Additional Series D Preferred Share Dividend Price" means the product
of (A) 95% multiplied by (B) the arithmetic average of the Weighted Average
Price (as defined in the Series A Certificate of Designations) of the Common
Stock on each of the five (5) consecutive trading days beginning on and
including the third trading day after the date on which the Announcing Form 8-K
(as defined in Section 4(f)) is filed with the Securities and Exchange
Commission.
c. Closing Date. The date and time of the Closing (the "Closing
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Date") shall be 10:00 a.m. Central Time, on June 4, 2001, subject to
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 (or such other date as is mutually agreed to by the
Company and each Investor, but in no event later than June 15, 2001). The
Closing shall occur on the Closing Date at the offices of Xxxxxx Xxxxxx Xxxxx,
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000.
d. Form of Payment. On the Closing Date, (i) the Company (A) shall
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pay to each Investor the aggregate Redemption Price for the Series A Preferred
Shares held by such Investor which the Company is redeeming at the Closing, by
wire transfer of immediately available funds in accordance with such Investor's
written wire instructions, and (B) shall issue and deliver to each Investor
certificates representing the Common Shares and Preferred Shares being issued in
exchange for such Investor's Series A Preferred Shares not being redeemed (in
such denominations as such Investor shall request), and (ii) each Investor shall
deliver to the Company stock certificates (the "Series A Preferred Stock
Certificates") representing such number of the Series A Preferred Shares held by
such Investor (as indicated opposite such Investor's name on the Schedule of
Investors).
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2. INVESTOR'S REPRESENTATIONS AND WARRANTIES.
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Each Investor represents and warrants with respect to only itself
that:
a. Reliance on Exemptions. Such Investor understands that the
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Common Shares, the Preferred Shares, the Conversion Shares and the Dividend
Shares (as defined in each of the Series B Certificate of Designations and the
Series C Certificate of Designations) (collectively, the "Securities") are being
offered to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Investor's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
the Securities.
b. No Governmental Review. Such Investor understands that no United
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States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
c. Transfer or Resale. Such Investor understands that except as
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provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Investor shall have delivered to
the Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Investor provides the Company with reasonable assurance that such Securities can
be sold, assigned or transferred pursuant to Rule 144 promulgated under the 1933
Act (or a successor rule thereto) ("Rule 144"); (ii) any sale of the Securities
made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. Notwithstanding the foregoing, the
Securities may be pledged in connection with a bona fide margin account or other
loan secured by the Securities.
d. Information. Such Investor and its advisors, if any, have been
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furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the issuance of the Securities which
have been requested by such Investor. Such Investor and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Investor
or its advisors, if any, or its representatives shall modify, amend or affect
such Investor's right to rely on the Company's representations and warranties
contained in Sections 3 and 9(l)
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below. Such Investor understands that its investment in the Securities involves
a high degree of risk. Such Investor has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.
e. Legends. Such Investor understands that the certificates or other
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instruments representing the Preferred Shares and, until such time as the sale
of the Common Shares and the Conversion Shares have been registered under the
1933 Act as contemplated by the Registration Rights Agreement, the stock
certificates representing the Common Shares and the Conversion Shares, except as
set forth below, shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock
certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE SECURITIES.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale transaction, such holder provides the Company with an opinion of counsel
reasonably satisfactory to the Company, in a generally acceptable form, to the
effect that a public sale, assignment or transfer of the Securities may be made
without registration under the 1933 Act, or (iii) such holder provides the
Company with reasonable assurances (including, if requested by the Company,
delivering such reasonable assurances to the Company's counsel in connection
with such counsel rendering an opinion on the validity of a sale by such
Investor pursuant to Rule 144) that the Securities can be sold pursuant to Rule
144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
f. Authorization; Enforcement; Validity. This Agreement and the
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Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Investor and are valid and binding agreements of
such Investor enforceable against such Investor in accordance with their terms,
subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and
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other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
g. Residency. Such Investor is a resident of that country specified
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in its address on the Schedule of Investors.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to each of the Investors that:
a. Organization and Qualification. The Company and its
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"Subsidiaries" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns capital stock or holds an equity or
similar interest which ownership entitles the Company to elect a majority of the
board of directors or similar governing body of such entity) are corporations
duly organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate
power and authorization to own their properties and to carry on their business
as now being conducted. Each of the Company and its Subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement, "Material Adverse Effect"
means any material adverse effect on the business, properties, assets,
operations, results of operations, or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below) or any of the
Certificates of Designations. A complete list of entities in which the Company,
directly or indirectly, owns capital stock or holds an equity or similar
interest is set forth on Schedule 3(a).
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b. Authorization; Enforcement; Validity. The Company has the
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requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions (as defined in Section 5) and each of
the other agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof and to redeem the 1,200 Series A Preferred Shares being redeemed
pursuant to this Agreement. The execution and delivery of the Transaction
Documents by the Company and the execution and filing of each of the
Certificates of Designations by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
redemption and exchange of the Series A Preferred Shares, the issuance of the
Common Shares and the Preferred Shares and the reservation for issuance and the
issuance of the Conversion Shares issuable upon conversion of the Preferred
Shares, have been duly authorized by the Company's Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders (except to the extent that stockholder approval
may be required pursuant to the rules of the Nasdaq National Market for the
issuance of a number of shares of Common Stock greater
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than that number of shares of Common Stock that the Company may issue without
breaching the Company's obligations under the rules or regulations of the Nasdaq
National Market (the "Nasdaq 19.99% Rule")). The Transaction Documents have been
duly executed and delivered by the Company. The Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies. Each of
the Certificates of Designations has been filed prior to the Closing Date with
the Secretary of State of the State of Delaware and will be in full force and
effect, enforceable against the Company in accordance with its terms and shall
not have been amended unless in compliance with its terms.
c. Capitalization. As of the date hereof, the authorized capital
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stock of the Company consists of (i) 330,000,000 shares of Class A common stock,
of which as of the date hereof 30,654,653 shares are issued and outstanding,
6,842,861 shares are reserved for issuance pursuant to the Company's stock
option and purchase plans, 50,975,624 shares are reserved for issuance pursuant
to conversion of the Company's Class B common stock and 128,334 shares are
issuable and reserved for issuance pursuant to securities (other than the Series
A Preferred Stock, the Preferred Stock, stock option and purchase plans and the
Company's Class B common stock) exercisable or exchangeable for, or convertible
into, shares of Common Stock, (ii) 165,000,000 shares of Class B common stock,
of which as of the date hereof 50,975,624 shares are issued and outstanding and
(iii) 5,000,000 shares of preferred stock, of which as of the date hereof 12,500
shares of Series A Preferred Stock are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. As of the date hereof, the Company has
outstanding options to purchase 16,052,215 shares of Common Stock and
outstanding warrants to purchase 128,334 shares of Common Stock. Except as
disclosed in Schedule 3(c), (A) no shares of the Company's capital stock are
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subject to preemptive rights or any other similar rights (arising under Delaware
law, Virginia law, the Company's Certificate of Incorporation or By-laws or any
agreement or instrument to which the Company is a party) any liens or
encumbrances granted or created by the Company; (B) there are no outstanding
debt securities issued by the Company; (C) except as set forth in the third
sentence of this Section 3(c), there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries; (D) there are no outstanding securities or
instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (E) there are no securities or instruments containing anti-
dilution or similar provisions that will be triggered by the issuance of the
Securities as described in this Agreement; and (F) the Company does not have any
stock appreciation rights or "phantom stock" plans or agreements or any similar
plan or agreement. The Company has furnished to
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each Investor true and correct copies of the Company's Certificate of
Incorporation, as amended and as in effect on the date hereof (the "Certificate
of Incorporation"), and the Company's By-laws, as amended and as in effect on
the date hereof (the "By-laws"), and the terms of all securities convertible
into or exercisable or exchangeable for Common Stock and the material rights of
the holders thereof in respect thereto except for stock options granted under
any employee benefit plan or director stock option plan of the Company approved
by the board of directors of the Company.
d. Issuance of Securities. As of the Closing, the Common Shares and
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the Preferred Shares will have been duly authorized and, upon issuance in
accordance with the terms hereof, shall be (i) validly issued, fully paid and
non-assessable, (ii) free from all taxes, liens and charges with respect to the
issuance thereof and (iii) with respect to the Preferred Shares, entitled to the
rights and preferences set forth in the respective Certificates of Designations.
As of the Closing, at least 125% of that number of shares of Common Stock
issuable upon conversion of all the Preferred Shares outstanding immediately
following the Closing (without regard to any limitations on conversions, but
subject to adjustment pursuant to the Company's covenant set forth in Section
4(d) below) will have been duly authorized and reserved for issuance upon
conversion of the Preferred Shares. Upon conversion or issuance in accordance
with the applicable Certificates of Designations, the Conversion Shares and the
Dividend Shares, as the case may be, will be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. The issuance by the Company of the Securities is exempt
from registration under the 1933 Act.
e. No Conflicts. The execution, delivery and performance of the
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Transaction Documents by the Company, the performance by the Company of its
obligations under the Certificates of Designations and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the reservation for issuance and issuance of the Conversion Shares)
will not (i) result in a violation of the Certificate of Incorporation or the
By-laws; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party; (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Principal Market (as
defined below)) applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or
affected. Neither the Company nor its Subsidiaries is in violation of any term
of its Certificate of Incorporation or its By-laws or their organizational
charter or by-laws, respectively. Except as disclosed in Schedule 3(e), neither
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the Company or any of its Subsidiaries is in violation of any term of or in
default under any contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation
applicable to the Company or its Subsidiaries, except where such violations and
defaults would not result, either individually or in the aggregate, in a
Material Adverse Effect. The business of the Company and its Subsidiaries is
not being conducted, and shall not be conducted, in violation of any law,
ordinance or regulation of any governmental entity, except where such violations
would not result, either individually or in the aggregate, in a
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Material Adverse Effect. Except as specifically contemplated by this Agreement,
as required under the 1933 Act, as required by Blue Sky filings or as required
by the Nasdaq 19.99% Rule, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents or to perform its obligations under the Certificates
of Designations in accordance with the terms hereof or thereof. Except as
disclosed in Schedule 3(e), all consents, authorizations, orders, filings and
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registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company is not in violation of the
listing requirements of the Principal Market, including, without limitation, the
requirements set forth in Rule 4310(c)(25)(H)(i) of The Nasdaq Stock Market's
Marketplace Rules.
f. SEC Documents; Financial Statements. Since December 31, 1999,
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the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act")
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). A complete list of the Company's SEC Documents is set forth on
Schedule 3(f). Except as disclosed on Schedule 3(f), as of the date hereof, the
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SEC Documents, as they may have been subsequently amended by filings made by the
Company with the SEC prior to the date hereof, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents. None of the SEC
Documents, as of the date hereof and as they may have been subsequently amended
by filings made by the Company with the SEC prior to the date hereof, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except as disclosed on Schedule 3(f), as of their respective dates,
-------------
the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto. Except as
disclosed on Schedule 3(f), such financial statements have been prepared in
-------------
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Investors which is
not included in the SEC Documents, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which they are or
were made, not misleading. As of the date hereof, the Company meets the
requirements for use of Form S-3 for registration of the resale of Registrable
Securities (as defined in the Registration Rights Agreement). The Company is
not required to file and will not be required to file any
10
agreement, note, lease, mortgage, deed or other instrument entered into prior to
the date hereof and to which the Company is a party or by which the Company is
bound which has not been previously filed as an exhibit to its reports filed
with the SEC under the 1934 Act.
g. Absence of Certain Changes. Except as disclosed in Schedule 3(g)
-------------------------- -------------
or as disclosed in the Company's Annual Report on Form 10-K for the Year Ended
December 31, 2000, since December 31, 2000, there has been no change or
development that has had or could reasonably be expected to have a Material
Adverse Effect. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or any of its Subsidiaries have any knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do
so. Except as disclosed in Schedule 3(g) or as disclosed in the Company's
-------------
Annual Report on Form 10-K for the Year Ended December 31, 2000, since December
31, 2000, the Company has not declared or paid any dividends, sold any assets,
individually or in the aggregate, in excess of $500,000 outside of the ordinary
course of business or had capital expenditures, individually or in the
aggregate, in excess of $1,000,000.
h. Acknowledgment Regarding Redemption and Exchange of Investor's
--------------------------------------------------------------
Series A Preferred Shares. The Company acknowledges and agrees that each of the
-------------------------
Investors is acting solely in the capacity of an arm's length purchaser with
respect to the Transaction Documents and the Certificates of Designations and
the transactions contemplated hereby and thereby. The Company further
acknowledges that each Investor is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the Certificates of Designations and the transactions
contemplated hereby and thereby and any advice given by any of the Investors or
any of their respective representatives or agents in connection with the
Transaction Documents and the Certificates of Designations and the transactions
contemplated hereby and thereby is merely incidental to such Investor's entering
into this Agreement. The Company further represents to each Investor that the
Company's decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives.
i. No Solicitation. Neither the Company, nor any of its affiliates,
---------------
nor any person acting on its or their behalf, has paid or given, either directly
or indirectly, any commission or other remuneration to any person for soliciting
the exchange of the Series A Preferred Shares for the Common Shares or the
Preferred Shares or for any other transaction contemplated by this Agreement.
j. No Integrated Offering. Neither the Company, nor any of its
----------------------
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated (except for
the issuance of securities on the Closing Date to holders of the Series A
Preferred Stock), nor will the Company or any of its Subsidiaries take any
action or steps that would cause the offering of the Securities to be integrated
with other
11
offerings (except for the issuance of securities on the Closing Date to holders
of the Series A Preferred Stock).
k. Application of Takeover Protections. The Company and its board
-----------------------------------
of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-
takeover provision under the Certificate of Incorporation or the laws of the
state of its incorporation which is or could become applicable to the Investors
as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company's issuance of the Securities and the Investors'
ownership of the Securities.
l. Rights Agreement. The Company has not adopted a shareholder
----------------
rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.
m. No Other Agreements. The Company has not, directly or
-------------------
indirectly, made any agreements with any Investor relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
n. Information. Neither the Company nor any of its Subsidiaries
-----------
nor any of their officers, directors, employees or agents have provided the
Investors with any material, nonpublic information.
4. COVENANTS.
---------
a. Best Efforts. Each party shall use its best efforts to timely
------------
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement. Without limiting the generality of the foregoing, the
Company shall use its best efforts to obtain the consent of Foothill Capital
Corporation to the transactions contemplated by the Transaction Documents by
June 4, 2001.
b. Reporting Status. Until the later of (i) the date which is one
----------------
year after the date as of which the Investors may sell all of the Common Shares
and the Conversion Shares without restriction pursuant to Rule 144(k)
promulgated under the 1933 Act (or successor thereto) and (ii) the date which is
one (1) year after the Maturity Date (as defined in each of the Certificates of
Designations) (the "Reporting Period"), the Company shall file all reports
required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
otherwise permit such termination.
c. Financial Information. The Company agrees to send the following
---------------------
to each Investor during the Reporting Period: (i) within two (2) days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, provided that if any such report is not filed with the SEC through
XXXXX then the Company shall deliver a copy of such report to each Investor by
12
facsimile on the same day it is filed with the SEC; (ii) on the same day as the
release thereof, facsimile copies of all press releases issued by the Company or
any of its Subsidiaries; and (iii) copies of any notices and other information
made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.
d. Reservation of Shares. The Company shall take all action
---------------------
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 125% of the number of shares of Common Stock needed to
provide for the issuance of the shares of Common Stock upon conversion of all
outstanding Preferred Shares (without regard to any limitations on conversions).
e. Listing. The Company shall promptly secure the listing of all of
-------
the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents and the Certificates of
Designations. The Company shall use its best efforts to maintain the Common
Stock's authorization for quotation on the Nasdaq National Market ("NASDAQ") or
listing on The New York Stock Exchange, Inc. ("NYSE") (as applicable, the
"Principal Market"). Neither the Company nor any of its Subsidiaries shall take
any action which would be reasonably expected to result in the delisting or
suspension of the Common Stock from the Principal Market. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section 4(e).
f. Disclosure of Transactions and Other Material Information. On or
---------------------------------------------------------
before April 4, 2001 the Company shall file a Current Report on Form 8-K (the
"Announcing Form 8-K") with the SEC describing the terms of the transactions
contemplated by the Transaction Documents and by documents relating to the
issuance on the Closing Date of securities to other holders of Series A
Preferred Stock (the "Other Holder Documents") and including as exhibits to such
Current Report on Form 8-K this Agreement, each of the Certificates of
Designations, the Registration Rights Agreement and the Other Holder Documents,
in the form required by the 1934 Act. If the Closing does not occur on June 4,
2001 (or such later date as the Company and each Investor agree in writing),
then the Company shall file on June 4, 2001 (or such later date as the Company
and each Investor agree in writing), a Current Report on Form 8-K with the SEC
disclosing that the Closing did not occur. The Company has furnished to each
Investor a true and correct copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 2000 as such Form 10-K has been or will be filed
with the SEC on or prior to the date the Announcing Form 8-K is filed with the
SEC. From and after the filing of the Announcing Form 8-K with the SEC, no
Investor shall be in possession of any material nonpublic information received
from the Company, any of its Subsidiaries or any of its respective officers,
directors, employees or agents, that is not disclosed in the Announcing Form 8-
K. The Company shall not, and shall cause each of its Subsidiaries and its and
each of their respective officers, directors, employees and agents not to,
provide any Investor with any material nonpublic information regarding the
Company or any of its Subsidiaries from and after the filing of the Announcing
13
Form 8-K with the SEC without the express written consent of such Investor. In
the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, and if the Company has not publicly disclosed the material nonpublic
information within 12 hours of written notice of the breach from such Investor,
in addition to any other remedy provided herein or in the Transaction Documents,
an Investor shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material nonpublic
information without the prior approval by the Company, its Subsidiaries, or any
of its or their respective officers, directors, employees or agents. No
Investor shall have any liability to the Company, its Subsidiaries, or any of
its or their respective officers, directors, employees, shareholders or agents
for any such disclosure. Subject to the foregoing, neither the Company nor any
Investor shall issue any press releases or any other public statements with
respect to the transactions contemplated hereby or disclosing the name of any
Investor; provided, however, that the Company shall be entitled, without the
prior approval of any Investor, to make any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with
the Announcing Form 8-K and contemporaneously therewith and (ii) as is required
by applicable law and regulations (provided that in the case of clause (i) each
Investor shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release).
g. Proxy Statement. The Company shall provide each stockholder
---------------
entitled to vote at the next annual meeting of stockholders of the Company,
which meeting shall occur on or before July 31, 2001 (the "Stockholder Meeting
Deadline"), a proxy statement, which has been previously reviewed by the
Investors and a counsel of their choice, soliciting each such stockholder's
affirmative vote at such annual stockholder meeting for approval of the
Company's issuance of all of the Securities as described in this Agreement in
accordance with applicable law and the rules and regulations of the Principal
Market (such affirmative approval being referred to herein as the "Stockholder
Approval"), and the Company shall use its best efforts to solicit its
stockholders' approval of such issuance of the Securities and to cause the Board
of Directors of the Company to recommend to the stockholders that they approve
such proposal.
h. Corporate Existence. So long as an Investor beneficially owns
-------------------
any Preferred Stock, the Company shall maintain its corporate existence and
shall not sell all or substantially all of the Company's assets, except in the
event of a merger or consolidation or sale of all or substantially all of the
Company's assets, where the surviving or successor entity in such transaction
(i) assumes the Company's obligations hereunder and under the agreements and
instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose common stock is quoted on or listed for trading on Nasdaq or
NYSE.
i. Pledge of Securities. The Company acknowledges and agrees that
--------------------
the Securities may be pledged by an Investor in connection with a bona fide
margin agreement or other loan secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement, any other Transaction
Document or the Certificates of Designations, including without limitation,
Section 2(a) of this Agreement; provided that an Investor and its pledgee shall
be required to comply with the provisions of
14
Section 2(a) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.
j. Expenses. Subject to Section 9(k) below, at the Closing, the
--------
Company shall pay a nonaccountable expense allowance of $36,720 to Xxxxxx
Capital Ltd. (an Investor) or its designee(s) and $17,280 to Xxxxxxx Capital
Ltd. (an Investor) or its designee(s), by wire transfer of immediately available
funds in accordance with each such Investor's written wire instructions.
k. Limitation on Net Sales of Common Stock. So long as an Investor
---------------------------------------
holds any Preferred Shares, Conversion Shares or Common Shares, such Investor
agrees that it will not enter into, directly or indirectly, any net sales of
Common Stock on any single day (each such day is referred to as a "Limited Sales
Day") in excess of that number of shares of Common Stock equal to the sum of (i)
the product of (A) the quotient of (x) the number of Series A Preferred Shares
held by such Investor on the date of this Agreement, divided by (y) 6,000,
multiplied by (B) 2.4% of the daily trading volume for the Common Stock (as
reported by Bloomberg Financial Markets ("Bloomberg")) for that trading day
(such amount, with respect to such Limited Sales Day, is referred to as such
Investor's "Daily Sales Amount"), plus (ii) the aggregate amount of all such
Investor's Daily Sales Amounts during the period beginning on and including the
date immediately following the Closing Date and ending on and including the date
immediately preceding the Limited Sales Day with respect to which this
determination is being made, less the net sales of Common Stock made by such
Investor on each of the days during such period; provided, however, that the
restrictions on net sales set forth above shall not apply (i) on and after the
first date on which there has been any Change of Control (as defined in Section
4(b) of the Series B Certificate of Designations) or an announcement of any
pending, proposed or intended Change of Control, (ii) on and after the first
date on which there has occurred a Triggering Event (as defined in Section 3(b)
of the applicable Certificates of Designations) or an event that with the
passage of time and without being cured would constitute a Triggering Event,
(iii) if the Company is in default under any of the Certificates of Designations
for failing to effect any requested conversion or redemption of any Preferred
Shares pursuant to the applicable Certificates of Designations, (iv) on and
after any date on which the Company issues or sells or is deemed to have issued
or sold any securities with a Variable Price (as defined in the Series B
Certificate of Designations), except for the Settlement Notes (as defined in
Section 2(f)(i) of the Series B Certificate of Designations), (v) on and after
the Stockholder Meeting Deadline, if the Company fails to receive the
Stockholder Approval on or before the Stockholder Meeting Deadline, (vi) on and
after the 30/th/ trading day prior to the date which is three (3) years after
the Closing Date, or (vii) with respect to any sale of Common Stock at a price
equal to or greater than $17.50 (as adjusted for any stock splits, stock
dividends, stock combinations or other similar transactions) and any such sale
shall be ignored for all purposes of this Section 4(k).
l. Restrictions on Issuances of Preferred Shares. The Company shall
---------------------------------------------
not issue any shares of Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock to anyone other than the Investors, except on the
Closing Date concurrent with the Closing to holders of the Series A Preferred
Stock.
15
m. Supplemental Representation Regarding the Nasdaq 19.99% Rule. If
------------------------------------------------------------
the Company receives written confirmation from NASDAQ that both the Common Stock
and the Company's Class B common stock, par value $0.001 per share, are included
for purposes of the Nasdaq 19.99% Rule, then the Company shall provide to each
Investor a copy of such written confirmation from Nasdaq (provided that such
copy shall not contain any material nonpublic information).
5. TRANSFER AGENT INSTRUCTIONS.
---------------------------
The Company shall issue irrevocable instructions to its transfer agent
in the form attached hereto as Exhibit E (the "Irrevocable Transfer Agent
---------
Instructions"), and any subsequent transfer agent, to issue certificates,
registered in the name of each Investor or its respective nominee(s), for the
Conversion Shares in such amounts as specified from time to time by each
Investor to the Company upon conversion of the Preferred Shares. Prior to
registration of the Common Shares and the Conversion Shares under the 1933 Act,
all such certificates shall bear the restrictive legend specified in Section
2(b) of this Agreement. The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5 and stop
transfer instructions to give effect to Section 2(b) hereof (in the case of the
Common Shares and the Conversion Shares, prior to registration of the Common
Shares and the Conversion Shares under the 0000 Xxx) will be given by the
Company to its transfer agent and that the Securities shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement. If an
Investor provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a public sale, assignment or transfer of
Securities may be made without registration under the 1933 Act or the Investor
provides the Company with reasonable assurances (including, if requested by the
Company, delivering such reasonable assurances to the Company's counsel in
connection with such counsel rendering an opinion on the validity of a sale by
such Investor pursuant to Rule 144) that the Securities can be sold pursuant to
Rule 144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold, the Company shall permit the
transfer, and, in the case of the Common Shares and the Conversion Shares,
promptly instruct its transfer agent to issue one or more certificates in such
name and in such denominations as specified by such Investor and without any
restrictive legend. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Investors by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5, that the
Investors shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.
--------------------------------------------------
The obligation of the Company to redeem and exchange the Series A Preferred
Shares (including the issuance of the applicable number of Common Shares and
Preferred Shares to each Investor) at the Closing is subject to the
satisfaction, at or before the Closing Date, of each
16
of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion by providing each Investor with prior written notice thereof:
a. Such Investor shall have executed each of the Transaction
Documents to which it is a party and delivered the same to the Company.
b. Each of the Certificates of Designations shall have been filed
with the Secretary of State of the State of Delaware;
c. Such Investor shall have delivered to the Company the Series A
Preferred Stock Certificates representing the Series A Preferred Shares to be
redeemed or exchanged by the Company from such Investor at the Closing.
d. The representations and warranties of such Investor shall be true
and correct 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
specific date), and such Investor shall have performed, satisfied and complied
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor at or
prior to the Closing Date.
e. The Company shall have obtained the consent of Foothill Capital
Corporation to the transactions contemplated by the Transaction Documents.
f. The Company shall have entered into separate redemption and
exchange agreements relating to the Series A Preferred Stock with each of the
Other Investors and all conditions to the closings contemplated by such
agreements shall have been satisfied or waived.
7. CONDITIONS TO EACH INVESTOR'S OBLIGATIONS AT CLOSING.
----------------------------------------------------
The obligation of each Investor hereunder to tender the Series A
Preferred Shares to the Company for redemption and exchange at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Investor's
sole benefit and may be waived by such Investor at any time in its sole
discretion by providing the Company with prior written notice thereof:
a. The Company shall have executed each of the Transaction Documents
and delivered the same to such Investor.
b. Each of the Certificates of Designations shall have been filed
with the Secretary of State of the State of Delaware, and a copy of each
certified by the Secretary of State of the State of Delaware shall have been
delivered to such Investor.
c. The Company shall have delivered to such Investor the Redemption
Price for the number of Series A Preferred Shares being redeemed by the Company
from such Investor (as set forth in Section 1(a)) on the Closing Date, by wire
transfer of immediately available funds
17
pursuant to the wire instructions provided by such Investor (and, with respect
to Xxxxxx Capital Ltd. and Xxxxxxx Capital Ltd., the Company shall have
delivered the amounts set forth in Section 4(j) by wire transfer of immediately
available funds to such Investor).
d. The Company shall have executed and delivered to such Investor
the stock certificates (in such denominations as such Investor shall request)
for the Common Shares and the Preferred Shares being issued in exchange for such
Investor's Series A Preferred Shares (as set forth in Section 1(b)) at the
Closing.
e. The Common Stock (x) shall be designated for quotation or listed
on the Principal Market and (y) shall not have been suspended by the SEC or the
Principal Market from trading on the Principal Market nor shall suspension by
the SEC have been threatened in writing by the SEC; and the Common Shares and
the Conversion Shares issuable upon conversion of the Preferred Shares shall be
listed upon the Principal Market.
f. The representations and warranties of the Company shall be true
and correct 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
specific date other than the representation contained in Section 3(c) which
shall be updated as of the Closing Date), other than the representation made in
the second sentence of Section 3(c), which representation shall be true and
correct in all material respects as of the Closing Date as though made at that
time, and the Company shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date. Such Investor shall have received a certificate, executed by the Chief
Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by such
Investor, including, without limitation, an update as of the Closing Date
regarding the representation contained in Section 3(c) above.
g. Such Investor shall have received the opinion of Xxxx and Xxxx
LLP, dated as of the Closing Date, in the form of Exhibit F attached hereto.
---------
h. The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b) above and in a form reasonably
acceptable to such Investor, including, without limitation, containing a
determination by the Board of Directors of the Company that immediately prior to
the Closing the capital of the Company is not impaired (as determined in
accordance with Section 160(a)(1) of the Delaware General Corporation Law) and
that immediately following the Closing and after giving effect to the redemption
of all the shares of the Company's Series A Preferred Stock which the Company
redeemed at the Closing, whether from the Investors or from the Other Investors,
the capital of the Company would not be impaired (as determined in accordance
with Section 160(a)(1) of the Delaware General Corporation Law) (the
"Resolutions").
i. As of the Closing Date, the Company shall have reserved out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Preferred Shares, at least 125% of that number of shares
of Common Stock issuable upon
18
conversion of all the Preferred Shares outstanding immediately following the
Closing (without regard to any limitations on conversions).
j. The Irrevocable Transfer Agent Instructions, in the form of
Exhibit E attached hereto, shall have been delivered to and acknowledged in
---------
writing by the Company's transfer agent.
k. The Company shall have delivered to such Investor a certificate
evidencing the incorporation and good standing of (i) the Company and each
Subsidiary in such entity's state of incorporation or organization issued by the
Secretary of State of such state of incorporation or organization, and (ii) the
Company in Virginia issued by the Secretary of State of Virginia, each as of a
date within ten days of the Closing Date.
l. The Company shall have delivered to such Investor a certified
copy of the Certificate of Incorporation as certified by the Secretary of State
of the State of Delaware as of a date within ten days of the Closing Date.
m. The Company shall have delivered to such Investor a secretary's
certificate, dated as of the Closing Date, certifying as to (A) the Resolutions,
(B) the Certificate of Incorporation and (C) the By-laws, each as in effect at
the Closing.
n. The Company shall have delivered to such Investor a letter from
the Company's transfer agent certifying the number of shares of Common Stock
outstanding as of a date within five days of the Closing Date.
o. The Company shall have delivered to the Investor such other
documents relating to the transactions contemplated by the Transaction Documents
as the Investors or their counsel may reasonably request.
19
8. INDEMNIFICATION.
---------------
In consideration of each Investor's execution and delivery of the
Transaction Documents and in addition to all of the Company's other obligations
under the Transaction Documents and the Certificates of Designations, the
Company shall defend, protect, indemnify and hold harmless each Investor and
each other holder of the Securities and all of their stockholders, officers,
directors, employees and direct or indirect investors and any of the foregoing
persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (c) any cause of action, suit or claim brought
or made against such Indemnitee (other than a cause of action, suit or claim
which is (x) brought or made by the Company and (y) is not a shareholder
derivative suit) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, or (ii) the
status of such Investor or holder of the Securities as an investor in the
Company. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this
Section 8 shall be the same as those set forth in Sections 6(a) and (d) of the
Registration Rights Agreement, including, without limitation, those procedures
with respect to the settlement of claims and the Company's rights to assume the
defense of claims.
9. MISCELLANEOUS.
-------------
a. Governing Law; Jurisdiction; Jury Trial. All questions
---------------------------------------
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction
of the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
20
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.
b. Counterparts. This Agreement may be executed in two or more
------------
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
c. Headings. The headings of this Agreement are for convenience of
--------
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be
------------
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
e. Entire Agreement; Effect on Prior Agreements; Amendments.
--------------------------------------------------------
i. Except for the Securities Purchase Agreement, the
Registration Rights Agreement dated as of June 17, 2000 by and among the
Company, the Investors and the Other Investors (the "Series A Registration
Rights Agreement"), the Series A Certificate of Designations, the Waiver
Agreements, each executed as of January 3, 2001, among the Company and each
of the Investors, and the Irrevocable Transfer Agent Instructions (as
defined in the Securities Purchase Agreement), this Agreement, the
Certificates of Designations and each of the other Transaction Documents
supersede all other prior oral or written agreements between each Investor,
the Company, their affiliates and persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any
Investor makes any representation, warranty, covenant or undertaking with
respect to such matters.
ii. If the Closing occurs on or prior to June 4, 2001 (or such
later date as the Company and each Investor agree in writing), then
effective as of the Closing, each Investor, severally and not jointly,
permanently waives
21
the Company's compliance with its obligations under the Securities Purchase
Agreement, except for Sections 8 and 9 of the Securities Purchase
Agreement. If the Closing occurs on or prior to June 4, 2001 (or such later
date as the Company and each Investor agree in writing), then effective as
of the Closing, each Investor, severally and not joint, permanently waives
the Company's compliance with its obligations under the Series A
Registration Rights Agreement, except for Sections 5, 6 and 7 of the Series
A Registration Rights Agreement. If the Closing occurs on or prior to June
4, 2001 (or such later date as the Company and each Investor agree in
writing), then effective as of the Closing, the Company permanently waives
each Investor's compliance with its obligations under the Series A
Registration Rights Agreement, except for Sections 6 and 7 of the Series A
Registration Rights Agreement.
iii. No provision of this Agreement may be amended or waived
other than by an instrument in writing signed by the Company and the
holders of at least two-thirds (2/3) of the Common Shares and Conversion
Shares (assuming conversion of all outstanding Preferred Shares without
giving effect to any limitations on conversion) or, if prior to the Closing
Date, the Investors holding at least two-thirds (2/3) of the Series A
Preferred Shares then outstanding. No such amendment shall be effective to
the extent that it applies to less than all of the holders of the
Securities then outstanding. No consideration shall be offered or paid to
any person to amend or consent to a waiver or modification of any provision
of any of the Transaction Documents or the Certificates of Designations
unless the same consideration also is offered to all of the parties to the
Transaction Documents or holders of Securities, as the case may be.
f. Notices. Any notices, consents, waivers or other communications
-------
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a
22
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
MicroStrategy Incorporated
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Chief Financial Officer
23
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to the Transfer Agent:
American Stock Transfer & Trust Co.
00 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
If to an Investor, to it at the address and facsimile number set forth on
the Schedule of Investors, with copies to such Investor's representatives as set
forth on the Schedule of Investors, or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
g. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Securities. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least two-thirds (2/3) of the Common Shares and
Conversion Shares (assuming conversion of all outstanding Preferred Shares
without giving effect to any limitations on conversion), including by merger or
consolidation, except pursuant to a Change of Control (as defined in Section
4(b) of the Series B Certificate of Designations) with respect to which the
Company is in compliance with Section 4 of each of the Certificates of
Designations and Section 4(h) of this Agreement. An Investor may assign some or
all of its rights hereunder without the consent of the Company, provided,
however, that the transferee has agreed in writing to be bound by the applicable
provisions of this Agreement and the Company has consented to such assignment
and assumption, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained in the Transaction Documents,
the Investors shall be entitled to pledge the Securities in connection with a
bona fide margin account or other loan secured by the Securities.
24
h. No Third Party Beneficiaries. This Agreement is intended for the
----------------------------
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. Unless this Agreement is terminated under Section
--------
9(k), the representations and warranties of the Company and the Investors
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9, and the indemnification provisions set forth in Section 8,
shall survive the Closing. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
j. Further Assurances. Each party shall do and perform, or cause to
------------------
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
k. Termination. In the event that the Closing shall not have
-----------
occurred with respect to an Investor on or before June 4, 2001 due to the
Company's or such Investor's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
9(k), the Company shall remain obligated to reimburse any nonbreaching Investor
for the expenses described in Section 4(j) above.
l. Placement Agent. The Company acknowledges that it has not
---------------
engaged a placement agent in connection with the transactions contemplated by
this Agreement; however, the Company has engaged Xxxxxxxx, Xxxxxxxx & Xxxxxx,
Inc. as a financial advisor in connection with the transactions contemplated by
this Agreement. The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or brokers' commissions
relating to or arising out of the transactions contemplated hereby. The Company
shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, attorney's fees and out-of-pocket expenses)
arising in connection with any such claim.
m. No Strict Construction. The language used in this Agreement will
----------------------
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
n. Remedies. Each Investor and each holder of the Securities shall
--------
have all rights and remedies set forth in the Transaction Documents and the
Certificates of Designations and all rights and remedies which such holders have
been granted at any time under any other agreement or contract and all of the
rights which such holders have under any law. Any person
25
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.
o. Payment Set Aside. To the extent that the Company makes a
-----------------
payment or payments to any Investor hereunder or pursuant to the Registration
Rights Agreement, any of the Certificates of Designations or the Investors
enforce or exercise their rights hereunder or thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
p. Mutual General Release.
----------------------
i. In consideration of the releases set forth in Sections
9(p)(ii) and 9(p)(iii), effective as of the Closing, each Investor,
severally and not jointly, on behalf of itself and, to the extent
permitted by law, its heirs, executors, administrators, devisees,
trustees, partners, directors, officers, shareholders, employees,
consultants, representatives, predecessors, principals, agents,
parents, associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the
"Investor Releasing Persons"), hereby waives and releases, to the
fullest extent permitted by law, but subject to Section 9(p)(iv)
below, any and all claims, rights and causes of action, whether known
or unknown (collectively, the "Investor Claims"), that any of the
Investor Releasing Persons had, currently has or then has against (i)
the Company, (ii) any of the Company's current or former parents,
shareholders, affiliates, subsidiaries, predecessors or assigns, or
(iii) any of the Company's or such other persons' or entities' current
or former officers, directors, employees, agents, principals,
investors, signatories, advisors, consultants, spouses, heirs,
estates, executors, attorneys, auditors and associates and members of
their immediate families (collectively, the "Company Released
Persons"), including, without limitation, Investor Claims arising out
of or relating to the Securities Purchase Agreement, the Series A
Registration Rights Agreement and the Series A Certificate of
Designations (collectively, the "Released Documents") other than
Investor Claims arising after the Closing.
ii. In further consideration of the Investors entering into this
Agreement, effective as of the date of this Agreement, the Company on
behalf of itself and, to the extent permitted by law, its heirs,
executors, administrators, devisees, trustees, partners, directors,
officers, shareholders, employees, consultants, representatives,
predecessors, principals, agents, parents, associates,
26
affiliates, subsidiaries, attorneys, accountants, successors,
successors-in-interest and assignees (collectively, the "Company Releasing
Persons"), hereby waives and releases, to the fullest extent permitted by
law, but subject to Section 9(p)(iv) below, any and all claims, rights and
causes of action, whether known or unknown (collectively, the "Company
Claims"), that any of the Company Releasing Persons had or currently has
against (i) the Investors, (ii) any of the Investors' respective current or
former parents, shareholders, affiliates, subsidiaries, predecessors or
assigns, or (iii) any of the Investors' or such other persons' or entities'
current or former officers, directors, employees, agents, principals,
investors, signatories, advisors, consultants, spouses, heirs, estates,
executors, attorneys, auditors and associates and members of their
immediate families (collectively, the "Investor Released Persons"),
including, without limitation, any Company Claims arising out of or
relating to the Released Documents; provided, however, that if such
Investor breaches its obligations under Section 4(a), then the release set
forth in this Section 9(p)(ii) shall be null and void and of no further
force or effect.
iii. In further consideration of the Investors entering into
this Agreement, effective as of the Closing, the Company on behalf of
itself and, to the extent permitted by law, the other Company Releasing
Persons, hereby waives and releases, to the fullest extent permitted by
law, but subject to Section 9(p)(iv) below, any and all Company Claims,
that any of the Company Releasing Persons had, currently has or then has
against any of the Investor Released Persons, including, without
limitation, any Company Claims arising out of or relating to the Released
Documents.
iv. The Company and each of the Investors acknowledge that the
releases set forth in Sections 9(p)(i), 9(p)(ii) and 9(p)(iii) above do not
affect any claim which any Company Releasing Person or Investor Releasing
Person may have under this Agreement, Section 8 or Section 9(m) of the
Securities Purchase Agreement or Sections 5, 6 or 7 of the Series A
Registration Rights Agreement.
* * * * * *
27
IN WITNESS WHEREOF, the Investors and the Company have caused this
Redemption and Exchange Agreement to be duly executed as of the date first
written above.
COMPANY: INVESTORS:
MICROSTRATEGY INCORPORATED XXXXXX CAPITAL LTD.
By: /s/ Xxxxxxx X. Xxxxxx By: Xxxxxx X. Xxxxxxx
---------------------- ----------------------------------
Name: /s/ Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
----------------------------- Its: Authorized Signatory
Title:Chairman and Chief Executive Officer
------------------------------------
XXXXXXX CAPITAL LTD.
By: Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Authorized Signatory
SCHEDULE OF INVESTORS
(Page 1 of 2)
(1) (2) (3) (4) (5) (6) (7) (8)
Series A Series A
Preferred Preferred
Total Number Series A Shares Being Shares Total
of Series A Preferred Aggregate Exchanged Total Being Series B
Investor's Name, Address Preferred Shares Being Redemption for Common Common Exchanged Preferred
and Facsimile Number Shares Redeemed Price Shares Shares for Series B Shares
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Capital Ltd. 4,080 816 $8,160,000 340 680,000 1,081.2 1,081.2
c/o Citadel Investment
Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands
(Representatives)
Xxxxxx Xxxxxx Zavis
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx Capital Ltd. 1,920 384 $3,840,000 160 320,000 508.8 508.8
c/o Citadel Investment
Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands
(Representatives)
Xxxxxx Xxxxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SCHEDULE OF INVESTORS
(Page 2 of 2)
(1) (9) (10) (11) (12) (13)
Series A Series A Allocated
Preferred Shares Total Series Preferred Shares Total Fixed Percentage of the
Investor's Name, Address Being Exchanged C Preferred Being Exchanged Series D Additional Series D
and Facsimile Number for Series C Shares for Series D Preferred Shares Preferred Shares
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Capital Ltd. 1,081.2 1,081.2 761.6 761.6 68%
c/o Citadel Investment
Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands
(Representatives)
Xxxxxx Xxxxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx Capital Ltd. 508.8 508.8 358.4 358.4 32%
c/o Citadel Investment
Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands
(Representatives)
Xxxxxx Xxxxxx Zavis
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SCHEDULES
---------
Schedule 3(a) - Subsidiaries
Schedule 3(c) - Capitalization
Schedule 3(e) - Conflicts
Schedule 3(f) - SEC Documents
Schedule 3(g) - Material Changes
EXHIBITS
--------
Exhibit A - Form of Series B Certificate of Designations
Exhibit B - Form of Series C Certificate of Designations
Exhibit C - Form of Series D Certificate of Designations
Exhibit D - Form of Registration Rights Agreement
Exhibit E - Form of Irrevocable Transfer Agent Instructions
Exhibit F - Form of Company Counsel Opinion
EXHIBIT A
Form of Series B Certificate of Designations
[Filed as Exhibit 10.4 to Current Report on Form
8-K of MicroStrategy Incorporated dated April 3, 2001]
EXHIBIT B
Form of Series C Certificate of Designations
[Filed as Exhibit 10.5 to Current Report on Form
8-K of MicroStrategy Incorporated dated April 3, 2001]
EXHIBIT C
Form of Series D Certificate of Designations
[Filed as Exhibit 10.6 to Current Report on Form
8-K of MicroStrategy Incorporated dated April 3, 2001]
EXHIBIT D
Form of Registration Rights Agreement
[Filed as Exhibit 10.7 to Current Report on Form
8-K of MicroStrategy Incorporated dated April 3, 2001]
