PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the
"AGREEMENT"), dated as of June 14, 2000, by and among Wire One Technologies,
Inc., a Delaware corporation, with headquarters located at 000 Xxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "COMPANY"), and each of the purchasers set forth
on the signature pages hereto (the "BUYERS").
WHEREAS:
A. The Company and Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D ("REGULATION D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 ACT") and/or Section 4(2) of the 1933 Act;
B. The Company has authorized the issuance of 2,450 shares of its
Series A Preferred Stock, par value $.0001 per share (the "PREFERRED STOCK"),
which shall be convertible into shares of the Company's Common Stock, par value
$.0001 per share (the "COMMON STOCK") (as converted, the "CONVERSION SHARES"),
in accordance with the terms of the Company's Certificate of Designations,
Preferences and Rights of the Preferred Stock, substantially in the form
attached hereto as Exhibit A (the "CERTIFICATE OF DESIGNATIONS");
C. The Buyers wish to purchase, upon the terms and conditions
stated in this Agreement, an aggregate of up to 2,450 shares of the Preferred
Stock (the "PREFERRED SHARES") and warrants, in substantially the form attached
hereto as Exhibit B (the "WARRANTS"), to acquire 857,500 shares of Common Stock
(as exercised, collectively, the "WARRANT SHARES"); and
D. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit C (the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company has agreed 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 Buyers hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
a. Purchase of Preferred Shares. Subject to the satisfaction
(or waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to each Buyer and each Buyer agrees to purchase from the
Company such number of Preferred Shares and number of Warrants to acquire the
Warrant Shares for the aggregate purchase price (the "PURCHASE PRICE") as is set
forth immediately below such Buyer's name on the signature pages hereto (the
"CLOSING").
-1-
b. Closing Date. The date and time of the Closing (the
"CLOSING DATE") shall be 10:00 a.m. Eastern Standard Time, within three (3)
business days following the date hereof, subject to notification of satisfaction
(or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below
(or such later date as is mutually agreed to by the Company and Buyer). The
Closing shall occur on the Closing Date at the offices of Xxxxxxxx & Xxxxxxxx
LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000-0000.
c. Form of Payment. On the Closing Date, (i) each Buyer shall
pay the Purchase Price to the Company for the Preferred Shares and Warrants to
be issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with the Company's written wire instructions, and
(ii) the Company shall deliver to each Buyer, or promptly thereafter, stock
certificates (in the denominations that such Buyer shall request) (the
"PREFERRED STOCK CERTIFICATES") representing such number of the Preferred Shares
which such Buyer is then purchasing along with the Warrants such Buyer is
purchasing hereunder, duly executed on behalf of the Company and registered in
the name of each Buyer or its designee.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer severally (and not jointly) represents and warrants
to the Company solely as to such Buyer that:
a. Investment Purpose. Buyer (i) is acquiring the Preferred
Shares and the Warrants, (ii) upon conversion of the Preferred Shares, will
acquire the Conversion Shares then issuable and (iii) upon exercise of the
Warrants, will acquire the Warrant Shares issuable upon exercise thereof (the
Preferred Shares, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the "SECURITIES"), for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempt from registration under the 1933 Act; provided, however,
that by making the representations herein, Buyer does not agree to hold any of
the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
b. Accredited Investor Status. Buyer is an "accredited
investor" as that term is defined in Rule 501(a) (3) of Regulation D.
c. Reliance on Exemptions. Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of Buyer to
acquire the Securities.
d. Information. Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by Buyer. Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither
-2-
such inquiries nor any other due diligence investigations conducted by Buyer or
its advisors, if any, or its representatives shall modify, amend or affect
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. Buyer understands that its investment in the Securities
involves a high degree of risk. Buyer 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. No Governmental Review. Buyer understands that no United
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.
f. Transfer or Resale. Buyer understands that except as
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) Buyer 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) Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act, as
amended, or any 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 such securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
g. Legends. Buyer understands that the certificates or other
instruments representing the Preferred Shares and the Warrants and, until such
time as the sale of the Conversion Shares and the Warrant Shares have been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement, the stock certificates representing the Conversion Shares and the
Warrant 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 HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
-3-
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT.
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 sale under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under the 1933 Act,
or (iii) such holder provides the Company with reasonable assurances 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.
h. Validity; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of Buyer and is a valid and
binding agreement of Buyer enforceable against Buyer in accordance with its
terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Buyer that:
a. Organization and Qualification. The Company and its
"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) 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 or operations, financial condition or prospects 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). The Company has no Subsidiaries except as set forth on Schedule 3(a).
b. Authorization; Enforcement; Validity. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5), the Warrants 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
-4-
to issue the Securities in accordance with the terms hereof and thereof, (ii)
the execution and delivery of the Transaction Documents and the Certificate of
Designations by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation the issuance of
the Preferred Shares and the Warrants and the reservation for issuance and the
issuance of the Conversion Shares and the Warrant Shares issuable upon
conversion or exercise thereof, 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, (iii) the Transaction Documents have
been duly executed and delivered by the Company, (iv) 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, and (v)
prior to the Closing Date, the Certificate of Designations has been filed 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.
c. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 100,000,000 shares of Common Stock,
of which as of the date hereof, 16,572,205 shares are issued and outstanding,
5,375,322 shares are reserved for issuance pursuant to the Company's stock
option and purchase plans and 900,809 shares are issuable and reserved for
issuance pursuant to securities (other than the Preferred Shares and the
Warrants) exercisable or exchangeable for, or convertible into, shares of Common
Stock, (ii) 5,000,000 shares of preferred stock, consisting of 2,500 shares of
Series A Preferred Stock, of which as of the date hereof no shares are issued
and outstanding. All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(c), (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) none of the Company or any of its
Subsidiaries has any outstanding debt securities, (iii) 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, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except the Registration
Rights Agreement), (v) 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, (vi) there
are no securities or instruments containing antidilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement, and (vii) the Company does not have any stock appreciation rights or
stock "phantom stock" plans or agreements or any similar plan or agreement. The
Company has furnished to the Buyer true and complete copies of the Company's
Certificate of Incorporation, as amended and as in effect on the date hereof
(the
-5-
"CERTIFICATE OF INCORPORATION"), and the Company's By-laws as amended and as in
effect on the date hereof (the "BY-LAWS").
d. Issuance of Securities. The Preferred Shares have been duly
authorized and, upon issuance in accordance with the terms hereof, shall be (i)
validly issued, fully paid and nonassessable, (ii) free from all taxes, liens
and charges with respect to the issue thereof and (iii) entitled to the rights
and preferences set forth in the Certificate of Designations. 4,357,500 shares
of Common Stock (subject to adjustment pursuant to the Company's covenant set
forth in Section 4(f) below) have been duly authorized and reserved for issuance
upon conversion of the Preferred Shares and upon exercise of the Warrants. Upon
conversion or exercise in accordance with the Certificate of Designations or the
Warrants, as the case may be, the Conversion Shares and the Warrant Shares 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 Transaction Documents by the Company, the performance by the Company of its
obligations under the Certificate of Designations and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the reservation for issuance and the issuance and registration of
the Conversion Shares and the Warrant Shares) will not (i) result in a material
violation of the Certificate of Incorporation or the By-laws or (ii) materially
conflict with, or constitute a material 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, or result in a material 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 Nasdaq National
Market) 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 material violation of
any term of or in default under its Certificate of Incorporation or the By-laws
or their organizational charter or by-laws, respectively. Neither the Company
nor any of its Subsidiaries is in material 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 for such violations that
would not have a Material Adverse Effect. The business of the Company and its
Subsidiaries is not being conducted in violation of any law, ordinance or
regulation of any governmental entity, except for violations the sanctions for
which either individually or in the aggregate would not have a Material Adverse
Effect. Except as specifically contemplated by this Agreement and as required
under the 1933 Act, 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 Certificate of
Designations, in each case in accordance with the terms hereof or thereof. All
consents, authorizations, orders, filings and 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 is not in violation of the
listing requirements of the Nasdaq National Market.
-6-
f. SEC Documents; Financial Statements. Since December 31,
1999, 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"). The Company has delivered, or made available, to Buyer or its
representatives true and complete copies of the SEC Documents. As of their
respective dates, the SEC Documents 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, and none of the SEC
Documents, at the time they were filed with the SEC, 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. 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. 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). Neither the Company
nor any of its Subsidiaries or any of their officers, directors, employees or
agents have provided Buyer with any material, nonpublic information.
g. Absence of Certain Changes. Since March 31, 2000 there has
been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, results of operations or
prospects of the Company or its Subsidiaries. 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. Since March 31, 2000 the Company has not
declared or paid any dividends, sold any assets in excess of $500,000 outside of
the ordinary course of business or had capital expenditures in excess of
$1,000,000.
h. Absence of Litigation. There is no material action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company or any of the Company Subsidiaries.
i. No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists, or is contemplated to occur, with respect to the Company or its
Subsidiaries or their respective business, properties, prospects, operations or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws in a registration statement filed with the SEC
relating
-7-
to an issuance and sale by the Company of its Common Stock and which has not
been publicly announced.
j. No General Solicitation. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities.
k. 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 require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
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, nor will
the Company or any of its Subsidiaries take any action or steps that would
require registration of any of the Securities under the 1933 Act or cause the
offering of the Securities to be integrated with other offerings.
l. Intellectual Property Rights. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. Except as set forth on Schedule 3(l), none of the
Company's trademarks, trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, government authorizations, trade secrets or other intellectual
property rights have expired or terminated, or are expected to expire or
terminate within two years from the date of this Agreement. The Company and its
Subsidiaries do not have any knowledge of any infringement by the Company or its
Subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service xxxx
registrations, trade secret or other similar rights of others, or of any such
development of similar or identical trade secrets or technical information by
others and, except as set forth on Schedule 3(l), there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service xxxx registrations, trade secret or other infringement;
and the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, and the Company is not aware
of any third party making any unauthorized or infringing use of the intellectual
properties of the Company or any of its Subsidiaries.
m. Environmental Laws. The Company and its Subsidiaries (i)
are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
-8-
conduct their respective businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval except where, in any of
the three foregoing cases, the failure to so comply would not have, individually
or in the aggregate, a Material Adverse Effect.
n. Title. The Company and its Subsidiaries have good and
marketable title to all real property and good title to all personal property
owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries. Any real property and facilities held under
lease by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
o. Insurance. The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.
p. Regulatory Permits. The Company and its Subsidiaries
possess all material certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
q. Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general specific or authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
r. Taxes. The Company and each of its Subsidiaries has made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision
-9-
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
s. Transactions With Affiliates. Except as set forth on
Schedule 3(s) and in the SEC Documents filed at least ten days prior to the date
hereof and other than the grant of stock options disclosed on Schedule 3(c),
none of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company or any of its Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
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.
b. Form D and Blue Sky. The Company agrees to file, if
applicable, a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof to Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Securities for sale to Buyer at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of any such action so taken to Buyer
on or prior to the Closing Date. The Company shall make all filings and reports
relating the offer and sale of the Securities required under applicable
securities or "Blue Sky" laws of the states of the United States following the
Closing Date.
c. Reporting Status. Until the earlier of (i) the date which
is one year after the date as of which the Investor (as that term is defined in
the Registration Rights Agreement) may sell all of the Conversion Shares and the
Warrant Shares without restriction pursuant to Rule 144(k) promulgated under the
1933 Act (or successor thereto), or (ii) the date on which (A) the Investors
shall have sold all the Conversion Shares and the Warrant Shares and (B) none of
the Preferred Shares or Warrants is outstanding (the "REGISTRATION 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.
d. Use of Proceeds. The Company will use the proceeds from the
sale of the Preferred Shares for substantially the same purposes and in
substantially the same amounts as indicated in Schedule 4(d).
-10-
e. Financial Information. The Company agrees to send the
following to each Investor (as that term is defined in the Registration Rights
Agreement) during the Registration Period: (i) within ten (10) business 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,
including any amendments to such documents, and any registration statements
(other than on Form S-8) or amendments filed pursuant to the 1933 Act; and (ii)
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.
f. 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 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 and the number of shares of Common Stock needed to
provide for the issuance of the shares of Common Stock upon exercise of all
outstanding Warrants.
g. 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
Certificate of Designations. The Company shall maintain the Common Stock's
authorization for quotation on the Nasdaq National 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 on the
Nasdaq National Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(g).
h. Filing of Form 8-K. The Company shall file a Form 8-K with
the SEC describing the terms of the transactions contemplated by the Transaction
Documents in the form, and within the time period, required by the 1934 Act.
i. Expenses. Each party shall bear its own expenses in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the other agreements to be executed in
connection herewith, including, without limitation, attorneys' and consultants'
fees and expenses.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates,
registered in the name of each Buyer or its nominee(s), for the Conversion
Shares and the Warrant Shares in such amounts as specified from time to time by
each Buyer to the Company upon conversion of the Preferred Shares or exercise of
the Warrants (the "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS"). Prior to
registration of the Conversion Shares and the Warrant Shares under the 1933 Act,
all such certificates shall bear the restrictive legend specified in Section
2(g) of this Agreement. The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5,
-11-
and stop transfer instructions to give effect to Section 2(f) hereof (in the
case of the Conversion Shares and the Warrant Shares, prior to registration of
the Conversion Shares and the Warrant 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. In lieu of
delivering physical certificates representing the Common Stock issuable upon the
conversion of the Preferred Shares or exercise of the Warrants, provided the
Company's transfer agent is participating in the Depositary Trust Company
("DTC") Fast Automated Securities Transfer program, on the written request of
Buyer (who shall have previously instructed its broker to confirm such request
to the Company's transfer agent), the Company shall use commercially reasonable
efforts to cause its transfer agent to electronically transmit such Common Stock
to the Buyer by crediting the account of Buyer's prime broker with DTC through
its Deposit Withdrawal Agent Commission ("DWAC") system no later than the date
upon which the Company is required to deliver shares to the Buyer under the
terms of this Agreement. Nothing in this Section 5 shall affect in any way
Buyer's obligations and agreements set forth in Section 2(g) to comply with all
applicable prospectus delivery requirements, if any, upon resale of the
Securities. If Buyer provides the Company with an opinion of counsel, in a
generally acceptable form, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under the 1933 Act
or Buyer provides the Company with reasonable assurances 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 Conversion Shares
and the Warrant Shares, promptly instruct its transfer agent to issue one or
more certificates in such name and in such denominations as specified by Buyer
and without any restrictive legend.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the
Preferred Shares to a Buyer 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 the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:
a. The applicable Buyer shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Company.
b. The Certificate of Designations shall have been filed with
the Secretary of State of the State of Delaware.
c. The applicable Buyer shall have delivered to the Company
the Purchase Price for the Preferred Shares and the related Warrants being
purchased by such Buyer at the Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.
d. The representations and warranties of the applicable Buyer
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific
-12-
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.
7. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
The obligation of each Buyer hereunder to purchase the
Preferred Shares 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 Buyer's sole benefit and may be waived by such Buyer 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 the Buyer.
b. The Certificate of Designations shall have been filed with
the Secretary of State of the State of Delaware, and a copy thereof certified by
such Secretary of State shall have been delivered to such Buyer.
c. The Common Stock shall be authorized for quotation on the
Nasdaq National Market, trading in the Common Stock shall not have been
suspended by the SEC or the Nasdaq National Market and the Conversion Shares and
the Warrant Shares shall be listed upon the Nasdaq National Market.
d. The representations and warranties of the Company shall be
true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such representations and warranties shall be true and
correct without further qualification) 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 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. Each Buyer shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect, in the form attached here
to as Exhibit D.
e. The Company shall have executed and delivered to such Buyer
the Warrants and the Preferred Stock Certificates (in such denominations as
Buyer shall have requested) in writing for the Preferred Shares and Warrants
being purchased by such Buyer at the Closing.
f. The Board of Directors of the Company shall have adopted
resolutions authorizing the issuance of the Preferred Shares, the Warrants, the
Conversion Shares and the Warrant Shares and the other transactions provided by
this Agreement and the Transaction Documents.
-13-
g. 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 and the exercise of the Warrants, at
least 4,357,500 shares of Common Stock.
h. 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.
i. Buyer shall have received the opinion of the Company's
counsel dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to Buyer and in substantially the form of Exhibit F attached
hereto.
j. The Company shall have delivered to such Buyer a
certificate evidencing the incorporation and good standing of the Company and
each Subsidiary in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10 days of
the Closing Date.
k. The Company shall have delivered to such Buyer a certified
copy of the Certificate of Incorporation as certified by the Secretary of State
of the State of Delaware within 10 days of the Closing Date.
l. The Company shall have delivered to such Buyer a
secretary's certificate, dated as the Closing Date, as to (i) the resolutions
described in Section 7(g) and (ii) the Bylaws, each as in effect at the Closing.
m. The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate the
issuance of the Securities pursuant to this Agreement in compliance with such
laws.
n. The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel reasonably request.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction; Jury Trial. The corporate laws
of the State of Delaware shall govern all issues concerning the relative rights
of the Company and its stockholders. All other 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 jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the nonexclusive 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 proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party
-14-
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; Amendments. This Agreement supersedes all
other prior oral or written agreements between Buyers, 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 Buyers make any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least two-thirds (2/3) of the Preferred Shares
then outstanding, and no provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Preferred Shares then outstanding.
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 business day
after deposit with a 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:
-15-
If to the Company:
Wire One Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Morrision & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxxxx, Esq.
If to the Transfer Agent:
American Stock Trust & Transfer Company
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx Xxxxx
If to a Buyer: To the address set forth above immediately
below such Buyer's name the signature pages hereto
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 Preferred Shares. 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 Preferred
Shares then outstanding, including by merger or consolidation. A Buyer may
assign some or all of its rights hereunder without the consent of the Company,
provided, however, that any such assignment shall not release such Buyer from
its obligations hereunder unless such obligations are assumed by such assignee
and the Company has consented to such
-16-
assignment and assumption. Notwithstanding anything to the contrary contained in
the Transaction Documents, each Buyer shall be entitled to pledge the Securities
in connection with a bona fide margin account.
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
8(l), the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and
8 shall survive the Closing.
j. Publicity. The Company and Buyers shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of Buyers, to make any
press release or other public disclosure with respect to such transactions as is
required by applicable law and regulations (although Buyers shall be consulted
by the Company in connection with any such press release or other public
disclosure prior to its release and shall be provided with a copy thereof). The
company agrees to issue a press release with respect to the transactions
contemplated hereby within 48 hours after the Closing.
k. 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.
l. Termination. In the event that the Closing shall not have
occurred on or before five (5) business days from the date hereof due to the
Company's or such Buyer'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.
m. Placement Agent. The Company acknowledges that it has
engaged X.X. Xxxxxxxxxx & Co., Inc. as placement agent in connection with the
sale of the Preferred Shares and the related Warrants, which placement agent may
have formally or informally engaged other agents on its behalf. The Company
shall be responsible for the payment of any placement agent's fees or broker's
commissions relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold Buyers harmless against, any liability, loss or
expense (including, without limitation, attorneys' fees and out of pocket
expenses) in connection with any such claim.
n. No Strict Construction. The language used in this Agreement
will 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.
-17-
o. Remedies. Buyers and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and the
Certificate 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 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.
* * * * * *
IN WITNESS WHEREOF, the undersigned Buyers and the Company
have caused this Preferred Stock and Warrant Purchase Agreement to be duly
executed as of the date first written above.
COMPANY: BUYERS:
------- ------
WIRE ONE TECHNOLOGIES, INC. PECONIC FUND LTD.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
----------------- ------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxx Xxxxxxx
Title: President and CEO Title: General Counsel of Ramius
Capital Group, its investment
advisor
Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 715
Number of Warrants: 250,250
Aggregate Purchase Price: $5,005,000
-18-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
/s/ Xxxxxxx Xxxx
----------------
Name: Xxxxxxx Xxxx
Address: 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 25
Number of Warrants: 8,750
Aggregate Purchase Price: $875,000
/s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Address: Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 10
Number of Warrants: 3,500
Aggregate Purchase Price: $70,000
-19-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
Baystar Capital, L.P.
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
Address: 0000 X. Xxxxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 250
Number of Warrants: 87,500
Aggregate Purchase Price: $1,750,000
Baystar International, LTD.
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
Address: 0000 X. Xxxxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 107
Number of Warrants: 37,450
Aggregate Purchase Price: $749,000
-20-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
/s/ Xxxxxx Xxxx
---------------
Name: Xxxxxx Xxxx
Address: 0000 X. Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Facsimile:
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 5
Number of Warrants: 1,750
Aggregate Purchase Price: $35,000
/s/ Xxxx Xxxxxxxxx
------------------
Name: Xxxx Xxxxxxxxx
Address: 0000 Xxxxxxxx, #0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT: $350,000
Number of Shares of Preferred Stock: 50
Number of Warrants: 17,500
Aggregate Purchase Price: $350,000
-21-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
Xxxxxx Investment
By: /s/ Xxx Xxxxxxx Xxxxxx
----------------------
Name: Xxx Xxxxxxx Xxxxxx
Title:
Address: 0000 Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 60
Number of Warrants: 21,000
Aggregate Purchase Price: $420,000
Castle Creek Partners, LLC
By: /s/ Xxxx Xxxxxxx
----------------
Name: Xxxx Xxxxxxx
Title: Member
Address: 00 X. Xxxxxx Xxxxx, Xxx. 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT: $2,002,000
Number of Shares of Preferred Stock: 280
Number of Warrants: 98,000
Aggregate Purchase Price: $2,002,000
-22-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
Cranshire Capital LLP
By: /s/ Illegible
--------------------------------------
Name:
Title: President - Downsview Capital
Address: 000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 143
Number of Warrants: 50,050
Aggregate Purchase Price: $1,001,000
/s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Address: 0000 Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 40
Number of Warrants: 14,000
Aggregate Purchase Price: $280,000
-23-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
Global EuroNet Group, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Co-Chief Executive Officer
Address: 00000 Xxxxxxxx Xxxx., Xxx. 000
Xxx Xxxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 50
Number of Warrants: 17,500
Aggregate Purchase Price: $350,000
/s/ Xxxxxxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Address: 00 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 20
Number of Warrants: 7,000
Aggregate Purchase Price: $140,000
-24-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
/s/ Xxxxxxx & Xxxxx Xxxxxxx JTWROS
----------------------------------
Name: Xxxxxxx & Xxxxx Xxxxxxx
JTWROS
Address: 0000 Xxxxxx Xxxx
Xxxxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 10
Number of Warrants: 3,500
Aggregate Purchase Price: $70,000
/s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Address: 000 Xxxxxxxxx Xxx., 00xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 10
Number of Warrants: 3,500
Aggregate Purchase Price: $70,000
-25-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
The Xxxxxx Xxxxxxx Trust
By: /s/ The Xxxxxx Xxxxxxx Trust - 1993
-----------------------------------
Name: The Xxxxxx Xxxxxxx Trust-1993
Title:
Address: c/o Dragon Capital
0 Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 20
Number of Warrants: 7,000
Aggregate Purchase Price: $140,000
Polycom, Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: CFO
Address: 0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 143
Number of Warrants: 50,050
Aggregate Purchase Price: $1,001,000
-26-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
R&G Partners
By: /s/ Xxxxxxx Xxxxxxxx & Xxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx & Xxxx Xxxxxxx
Title: Partners
Address: 00000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT: $210,000
Number of Shares of Preferred Stock: 30
Number of Warrants: 10,500
Aggregate Purchase Price: $210,000
Xxxxxxxx Xxxxxxx Rev. Trust
By: /s/ Xxxxxxxx Xxxxxxx Rev. Trust
-------------------------------
Name:
Title:
Address: Xxxxxxx Xxx. 0
00000 Xxxxxxxxx Xxxxxxx
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 5
Number of Warrants: 1,750
Aggregate Purchase Price: $35,000
-27-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
/s/ Xxxx Xxxxxxx
----------------
Name: Xxxx Xxxxxxx
Address: 0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 100
Number of Warrants: 35,000
Aggregate Purchase Price: $700,000
/s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
Address: 0000 Xxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 100
Number of Warrants: 35,000
Aggregate Purchase Price: $700,000
-28-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
The dotCOM Fund, LLC
By: /s/ Xxxx Xxxx
-------------
Name: Xxxx Xxxx
Title: Manager - Minamax LLC
Address: 000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 72
Number of Warrants: 25,200
Aggregate Purchase Price: $504,000
/s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Address: 00 Xxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT: $70,000
Number of Shares of Preferred Stock: 10
Number of Warrants: 3,500
Aggregate Purchase Price: $70,000
-29-
WIRE ONE TECHNOLOGIES, INC.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Counterpart Signature Page
BUYERS:
Xxxxxx X. Xxxxxxxx Test Trust
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Trustee
Address: X.X. Xxx 000000
Xxxxxxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 190
Number of Warrants: 66,500
Aggregate Purchase Price: $1,330,000
/s/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Address: 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 5
Number of Warrants: 1,750
Aggregate Purchase Price: $35,000
Xxxxx Xxxxxxxx and Xxxxx Xxxxxxxx, trustees of
the Century Trust
By: /s/ Xxxxx Xxxxxxxx
--------------------
Name: Xxxxx Xxxxxxxx
Title: Trustee
Address: 0000 Xxxxxxx Xxxx Xxxx,
Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 10
Number of Warrants: 3,500
Aggregate Purchase Price: $70,000
/s/ Xxxxxx X. Xxxx
-----------------------
Name: Xxxxxx X. Xxxx
Address: 0000 Xx Xxxxx Xx.
Xxx Xxx, XX 00000
Facsimile: 000.000.0000
Telephone: 000.000.0000
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Shares of Preferred Stock: 30
Number of Warrants: 10,500
Aggregate Purchase Price: $210,000
-30-
SCHEDULES
Schedule 3(a) Subsidiaries
Schedule 3(c) Capitalization
Schedule 3(m) Intellectual Property
Schedule 3(s) Transactions with Affiliates
Schedule 4(d) Use of Proceeds
EXHIBITS
Exhibit A Form of Certificate of Designations, Preferences and Rights
of the Preferred Shares
Exhibit B Form of Warrant
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Officers Certificate
Exhibit E Form of Irrevocable Transfer Agent Instructions
Exhibit F Form of Company Counsel Opinion
