LATITUDE 90, INC.
SHAREHOLDERS AGREEMENT
----------------------
THIS AGREEMENT is made as of August 6, 1999, among LATITUDE 90, INC.,
a California corporation (the "Company"), the purchasers of shares of Series B
Preferred Stock of the Company (the "Purchasers") pursuant to the Series B
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") and each of the investors listed on the Schedule of Investors
attached hereto (together with the Purchasers, the "Investors"). The Investors
are sometimes collectively referred to herein as the "Shareholders" and
individually as a "Shareholder." Capitalized terms used herein are defined in
paragraph 6 hereof.
The Company and the Shareholders desire to enter into this Agreement
for the purposes, among others, of establishing the composition of the Company's
Board of Directors (the "Board") and limiting the manner and terms by which the
Shareholders' shares may be transferred. The execution and delivery of this
Agreement is a condition to the Purchasers' purchase of the Company's shares
pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Board of Directors.
------------------
(a) From and after the Closing (as defined in the Purchase Agreement)
and until the provisions of this paragraph 1 cease to be effective, each holder
of Shareholder Shares shall vote all of his Shareholder Shares (as defined in
paragraph 6 hereof) which are voting shares and any other voting securities of
the Company over which such holder has voting control and shall take all other
reasonably necessary or desirable actions within his control (whether in his
capacity as a shareholder, director, member of a board committee or officer of
the Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and execution
of written consents in lieu of meetings, to the extent not in conflict with his
fiduciary duties to the Company), and the Company shall take all necessary or
desirable actions within its control (including, without limitation, calling
special board and stockholder meetings), so that:
(i) The authorized number of directors on the Board shall be
established at seven (7) directors;
(ii) the following individuals shall be elected to the Board
(A) one (1) representative designated by the holders of the
Company's Series A Preferred Stock, determined by a vote of such holders
owning a majority of such shares (the "Series A Director");
(B) three (3) representatives, designated by the holders of
the Company's Series B Preferred Stock, determined by a vote of such
holders owning a majority of such shares (the "Series B Directors"); and
(C) three (3) representatives designated by the holders of
the Common Stock, determined by a vote of such holders owning a majority of
such shares (the "Common Directors");
(iii) the removal from the Board (with or without cause) of any
representative(s) designated pursuant to paragraphs 1(a)(ii)(A),
1(a)(ii)(B) and 1(a)(ii)(C), shall be at the holders' of the Series A
Preferred Stock, holders' of the Series B Preferred Stock and the holders'
of the Common Stock written request, respectively, but only upon such
written request and under no other circumstances (in each case, determined
on the basis of a vote of the holders of a majority of such shares held by
such groups of Persons); and
(iv) in the event that any representative(s) designated pursuant
to paragraphs 1(a)(ii)(A), 1(a)(ii)(B) and 1(a)(ii)(C) ceases to serve as a
member of the Board during his term of office, the resulting vacancy on the
Board shall be filled by a representative designated by the holders' of the
Series A Preferred Stock, holders' of the Series B Preferred Stock and the
holders' of the Common Stock respectively, as provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof.
(c) The provisions of this paragraph 1 shall terminate automatically
and be of no further force and effect upon the first to occur of (i) the tenth
anniversary of the date hereof unless extended by the parties hereto in
accordance with the laws of the State of California or (ii) a Public Offering
(as defined in paragraph 6 hereof).
(d) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this paragraph 1, the election of an
individual to such directorship shall be accomplished in accordance with the
Company's bylaws and applicable law; provided that, such person may later be
removed pursuant to paragraph 1(a)(iii) above.
2. Representations and Warranties. Each Shareholder, on its own
------------------------------
behalf and not severally or jointly, represents and warrants that (i) such
Shareholder is the record owner of
2
the number of Shareholder Shares set forth opposite its name on the Schedule of
Investors attached hereto, (ii) this Agreement has been duly authorized,
executed and delivered by such Shareholder and constitutes the valid and binding
obligation of such Shareholder, enforceable in accordance with its terms, except
as such enforceability is limited by bankruptcy, insolvency, moratorium or other
laws affecting the enforcement of creditors' rights generally, and by general
equitable principles, and (iii) such Shareholder has not granted and is not a
party to any proxy, voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement. No holder of
Shareholder Shares shall grant any proxy or become party to any voting trust or
other agreement which is inconsistent with, conflicts with or violates any
provision of this Agreement.
3. Restrictions on Transfer of Shareholder Shares.
----------------------------------------------
(a) Transfer of Shareholder Shares. No holder of Shareholder Shares
------------------------------
shall sell, transfer, assign, pledge or otherwise dispose of (whether with or
without consideration and whether voluntarily or involuntarily or by operation
of law) any interest in his Shareholder Shares (a "Transfer"), except pursuant
to the provisions of this paragraph 3 or pursuant to a Public Sale. No
Shareholder shall consummate any Transfer (other than a Public Sale) until 30
days after the delivery to the Company of such Shareholder's Offer Notice,
unless the parties to the Transfer have been finally determined pursuant to this
paragraph 3 prior to the expiration of such 30-day period (the "Election
Period").
(b) First Offer Right. At least 30 days prior to making any Transfer
-----------------
of any Shareholder Shares (other than a Public Sale or a Transfer permitted
under paragraph 3(c) below), the transferring Shareholder (the "Transferring
Shareholder") shall deliver a written notice (an "Offer Notice") to the Company.
The Offer Notice shall disclose in reasonable detail the proposed number of
Shareholder Shares to be transferred, the proposed terms and conditions of the
Transfer and the identity of the prospective transferee(s) (if known). The
Company may elect to purchase all (but not less than all) of the Shareholder
Shares specified in the Offer Notice at the price and on the terms specified
therein by delivering written notice of such election to the Transferring
Shareholder as soon as practical but in any event within ten days after the
delivery of the Offer Notice. If the Company has elected to purchase
Shareholder Shares from the Transferring Shareholder, the transfer of such
shares shall be consummated as soon as practical after the delivery of the
election notice(s) to the Transferring Shareholder, but in any event within 15
days after the expiration of the Election Period. To the extent that the
Company has not elected to purchase all of the Shareholder Shares being offered,
the Transferring Shareholder may, within 90 days after the expiration of the
Election Period, transfer such Shareholder Shares to one or more third parties
at a price no less than 95% of the price per share specified in the Offer Notice
and on other terms no more favorable to the transferees thereof than offered to
the Company in the Offer Notice. Any Shareholder Shares not transferred within
such 90-day period shall be reoffered to the Company under this paragraph 3(b)
prior to any subsequent Transfer. The purchase price specified in any Offer
Notice shall be payable solely in cash at the
3
closing of the transaction or in installments over time, and no Shareholder
Shares may be pledged.
(c) Permitted Transfers. The restrictions set forth in this paragraph
-------------------
3 shall not apply with respect to any Transfer of Shareholder Shares by any
Shareholder (i) pursuant to applicable laws of descent and distribution or among
such Shareholder's Family Group or among its Affiliates (provided that the
restrictions contained in this paragraph 3 shall continue to be applicable to
the Shareholder Shares after any such Transfer and provided further that the
transferees of such Shareholder Shares shall have agreed in writing to be bound
by the provisions of this Agreement affecting the Shareholder Shares so
transferred) and (ii) to any person set forth on the Schedule of Permitted
Transferees attached hereto (collectively, the persons to whom transfers are
permitted pursuant to this section, are referred to herein as "Permitted
Transferees"). For purposes of this Agreement, "Family Group" means a
Shareholder's spouse and descendants (whether natural or adopted) and any trust
solely for the benefit of the Shareholder and/or the Shareholder's spouse and/or
descendants, and "Affiliate" of an Investor means any other Person, directly or
indirectly controlling, controlled by or under common control with such Investor
and any partner of an Investor which is a partnership.
(d) Termination of Restrictions. The restrictions set forth in this
---------------------------
paragraph 3 shall continue with respect to each Shareholder Share until the
earlier of (i) the date on which such Shareholder Share has been transferred in
a Public Sale, (ii) the date on which such Shareholder Share has been
transferred pursuant to this paragraph 3 (other than pursuant to subparagraph
3(c)) or (iii) the consummation of a Public Offering. Notwithstanding anything
herein to the contrary, the first offer right set forth in this paragraph 3(b)
shall only be applicable to the Company's Series B Preferred Stock and not to
the Common Stock issued or issuable upon conversion of such Series B Preferred
Stock.
4. Legend. Each certificate evidencing Shareholder Shares and each
------
certificate issued in exchange for or upon the transfer of any Shareholder
Shares (if such shares remain Shareholder Shares after such transfer) shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this certificate are subject
to a Shareholders Agreement dated as of August 6, 1999,
among the issuer of such securities (the "Company") and
certain of the Company's shareholders, as amended and
modified from time to time. A copy of such Shareholders
Agreement shall be furnished without charge by the Company
to the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Shareholder
Shares outstanding as of the date hereof. The legend set forth above shall be
removed from the
4
certificates evidencing any shares which cease to be Shareholder Shares in
accordance with paragraph 6 hereof.
5. Transfer. Prior to transferring any Shareholder Shares (other
--------
than a Public Sale) to any Person, the transferring holders of Shareholder
Shares shall cause the prospective transferee to be bound by this Agreement and
to execute and deliver to the Company and the holders of Shareholder Shares a
counterpart of this Agreement.
6. Other Definitions.
-----------------
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means the Company's Series A Preferred Stock and
---------------
Series B Preferred Stock.
"Public Offering" means the sale in an underwritten public offering
---------------
registered under the Securities Act of shares of the Company's Common Stock.
"Public Sale" means any sale of Shareholder Shares to the public
-----------
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
adopted under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time.
"Shareholder Shares" means (i) any Preferred Stock or Common Stock
------------------
purchased, acquired or beneficially owned by any Shareholder, including those
shares issued or issuable upon exercise of the Warrant (as defined in the
Purchase Agreement), (ii) any Common Stock issued or issuable directly or
indirectly upon conversion of the Preferred Stock and (iii) any Preferred Stock
or Common Stock issued or issuable with respect to the securities referred to in
clauses (i) and (ii) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. For purposes of this Agreement, any Person who holds
Preferred Stock shall be deemed to be the holder of the Shareholder Shares
issuable directly or indirectly upon conversion of the Preferred Stock in
connection with the transfer thereof or otherwise and regardless of any
restriction or limitation on the conversion thereof. As to any particular
Shareholder Shares, such shares shall cease to be Shareholder Shares when they
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (b) distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act (or any similar provision then in force).
5
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.
7. Protective Provisions
---------------------
(a) The Company shall not, without the prior written consent or
affirmative vote of the holders of record of (i) at least a majority of the
outstanding Series A Preferred Stock (voting as a separate class on an as-
converted basis) and (ii) at least a majority of the outstanding Series B
Preferred Stock (voting as a separate class on an as-converted basis) effect:
(i) a merger or consolidation of the Company with or into any other
corporation or corporations, or the merger of any other corporation or
corporations into the Company, or the sale of all or substantially all of
the assets of the Company, or any other corporate reorganization;
(ii) an initial Public Offering; and
(iii) any issuance (other than (i) to The Roman Arch Fund L.P. or The
Roman Arch Fund II L.P. pursuant to the terms of the letter agreement with the
Company dated as of June 7, 1999 and (ii) for payment in kind dividends to the
holder of Series B Preferred Stock) of Series B Preferred Stock that would
result in more than 3,293,819 (subject to any stock split, stock dividend,
recapitalization or otherwise) of such shares being outstanding.
(b) The provisions of this paragraph 7 shall terminate and be of no
further force or effect upon the earlier of (i) the date on which there are no
shares of Preferred Stock and (ii) upon the closing of an initial Public
Offering.
8. Sale of the Company.
--------------------
6
(a) If the Company's board of directors (the "Board") and (i) the holders
of a majority of the shares of Series A Preferred Stock (voting as a separate
class on an as-converted basis) then outstanding and (ii) the holders of a
majority of the shares of Series B Preferred Stock (voting as a separate class
on an as-converted basis) then outstanding approve a sale of all or
substantially all of the Company's assets determined on a consolidated basis or
a sale of all or substantially all of the Company's outstanding capital stock
(whether by merger, recapitalization, consolidation, reorganization, combination
or otherwise) to any other person or entity (collectively, and "Approved Sale"),
each holder of Shareholder Shares shall vote for, consent to and raise no
objections against such Approved Sale. If the Approved Sale is structured as a
(i) merger or consolidation, each holder of Shareholder Shares shall waive any
dissenters rights, appraisal rights or similar rights in connection with such
merger or consolidation or (ii) sale of stock, each holder of Shareholder Shares
shall agree to sell all of his shares of Shareholders Shares and rights to
acquire shares of Shareholders Shares on the terms and conditions approved by
the Board, the holders of a majority of the Series A Preferred Stock then
outstanding and the holders of a majority of the Series B Preferred Stock then
outstanding. Each holder of Shareholder Shares shall take all necessary or
desirable actions in connection with the consummation of the Approved Sale as
requested by the Company.
(b) The obligations of the holders of Shareholder Shares with respect to
the Approved Sale of the Company are subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Sale, each
holder of a class of Shareholder Shares shall receive the same form of
consideration and the same amount of consideration as every other holder of such
class of Shareholder Shares as set forth in paragraph 9 below; (ii) if any
holders of a class of Shareholder Shares are given an option as to the form and
amount of consideration to be received, each holder of such class of Shareholder
Shares shall be given the same option; and (iii) each holder of then currently
exercisable rights to acquire shares of a class of Shareholder Shares shall be
given an opportunity to either (A) exercise such rights prior to the
consummation of the Approved Sale and participate in such sale as a holder of
such class of Shareholder Shares or (B) upon the consummation of the Approved
Sale, receive in exchange for such rights consideration equal to the amount
determined by multiplying (1) the same amount of consideration per share of a
class of Shareholder Shares received by holders of such class of Shareholder
Shares in connection with the Approved Sales less the exercise prices per share
of such class of Shareholder Shares of such rights to acquire such class of
Shareholder Shares by (2) the number of shares of such class of Shareholder
Shares represented by such rights.
9. Distribution upon Sale of the Company. In the event of sale or
--------------------------------------
exchange by the Shareholders of all or substantially all of the Shareholder
Shares held by the Shareholders (whether by sale, merger, recapitalization,
reorganization, consolidation, combination or otherwise), each holder of a class
of Shareholder Shares shall receive in exchange for the shares of such class of
Shareholder Shares held by such holder the same portion of the aggregate
consideration from such sale or exchange that such holder would have received if
such aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights
7
and preferences set forth in the Company's articles of incorporation as in
effect immediately prior to such sale or exchange. Each holder of Shareholder
Shares shall take all necessary or desirable actions in connection with the
distribution of the aggregate consideration from such sale or exchange as
requested by the Company.
10. Initial Public Offering. In the event that the Board and (i) the
-----------------------
holders of a majority of the shares of Series A Preferred Stock (voting as a
separate class on an as-converted basis) then outstanding and (ii) the holders
of a majority of the shares of Series B Preferred Stock (voting as a separate
class on an as-converted basis) then outstanding approve an initial Public
Offering, the holders of Shareholder Shares shall take all necessary or
desirable actions in connection with the consummation of such public offering.
In the event that the managing underwriters advise the Company in writing that
in their opinion the capital structure would adversely affect the marketability
of the offering, each holder of Shareholders Shares shall consent to an vote for
a recapitalization, reorganization and/or exchange of the Shareholder Shares
into securities that the managing underwriters, the Board, the holders of a
majority of the shares of Series A Preferred Stock then outstanding and the
holder of a majority of the shares of Series B Preferred Stock then outstanding
find acceptable and shall take all necessary or desirable actions in connections
with the consummation of the recapitalization, reorganization and/or exchange;
provided that the resulting securities reflect and are consistent with the
rights and preferences set forth in the Company's articles of incorporation as
in effect immediately prior to such public offering.
11. Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Shareholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Shareholder Shares as the owner
of such shares for any purpose.
12. Amendment and Waiver. Except as otherwise provided herein, no
--------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Shareholders unless such modification,
amendment or waiver is approved in writing by the Company or the holders of at
least a majority of the Shareholder Shares, respectively. The failure of any
party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
13. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdic-
8
tion, but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
14. Entire Agreement. Except as otherwise expressly set forth
----------------
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
15. Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Shareholders and any subsequent
holders of Shareholder Shares and the respective successors and assigns of each
of them, so long as they hold Shareholder Shares.
16. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
17. Remedies. The Company and the Investors shall be entitled to
--------
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company and any Investor may in its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond or
other security) in order to enforce or prevent any violation of the provisions
of this Agreement.
18. Notices. Any notice provided for in this Agreement shall be in
-------
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the schedules hereto and to any subsequent
holder of Shareholder Shares subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices shall be deemed to have been given hereunder when
delivered personally, three days after deposit in the U.S. mail and one day
after deposit with a reputable overnight courier service. The Company's address
is:
Latitude 90, Inc.
0000 Xxxxx Xxxxxx Xxxx.
Xxxxx 000
0
Xxxxx Xxxxxx, XX 00000
Attn: Executive Financial Officer
with a copy to:
Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
19. Governing Law. All issues and questions concerning the
-------------
construction, validity, interpretation and enforceability of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
20. Business Days. If any time period for giving notice or taking
-------------
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company's chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
21. Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
22. Arbitration. Each of the parties hereto agrees that in the event
-----------
of any dispute arising between parties arising out of or relating to this
Agreement or its breach, such dispute shall be resolved pursuant to the pre-
dispute arbitration agreement attached as Exhibit G to the Purchase Agreement.
---------
* * * *
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
LATITUDE 90, INC.
By: __________________________
Name:
Title:
INVESTORS:
By: __________________________
Name:
Title:
[Signature page to Shareholders Agreement]
LATITUDE 90, INC.
Amendment No. 1 to
------------------
Series B Preferred Stock
------------------------
Stock Purchase Agreement
------------------------
This Amendment No. 1 (the "Amendment") is made as of August __, 1999 to the
Series B Preferred Stock Purchase Agreement (the "Agreement") made and entered
into on August 6, 1999, among Latitude 90, Inc., a California corporation (the
"Company"), and the persons listed on the Schedule of Purchasers attached
thereto (the "Purchasers").
Recitals
--------
WHEREAS, the Company has entered into the Agreement, which among other
things, provided for the sale and issuance of the Company's Series B Preferred
Stock and a warrant to purchase shares of the Company's Common Stock to the
Purchasers;
WHEREAS, it was the original intention of the Company, the Purchasers and
Xxxxxxx Xxxxxxxxx to have the Company and Xxxxxxx Xxxxxxxxx enter into a
Securities Purchase Agreement (the "Xxxxxxxxx Agreement") concurrently with the
Initial Closing (as defined in the Agreement) under the Agreement;
WHEREAS, pursuant to the Xxxxxxxxx Agreement, the Company would issue and
sell a warrant (the "Xxxxxxxxx Warrant") to purchase 530,946 shares of the
Company's Common Stock at a purchase price for the Xxxxxxxxx Warrant of
$5,309.46; and
WHEREAS, in connection with the Xxxxxxxxx Agreement and the issuance of the
Xxxxxxxxx Warrant thereunder, the Company and the Purchasers have determined
that the Agreement requires certain amendments.
NOW, THEREFORE, the Company and Purchasers agree as follows:
Agreement
---------
1. Amendment to Agreement.
----------------------
(a) Effective as of the Initial Closing (as defined in the Agreement), the
parties agree that Sections 1A and 1B of the Agreement is amended and restated
in its entirety as follows:
"1A. Authorization of the Preferred Stock, Warrant and Note. The
------------------------------------------------------
Company shall authorize the issuance and sale of (i) up to 3,398,054
shares of its Series B Preferred Stock, par value $.01 per share (the
"Series B Preferred"), at a purchase price of $2.35 per share, having the
rights and preferences set forth in Exhibit A attached hereto,
---------
(ii) a warrant (the "Warrant") to purchase 530,946 shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), at a purchase
price of $0.01 per share, in the form attached hereto as Exhibit B, and
---------
(iii) a promissory note (the "Note"), in the form attached hereto as
Exhibit C. The Series B Preferred is convertible into shares of the Common
---------
Stock.
1B. Purchase and Sale of the Preferred Stock, Warrant and Note. At
----------------------------------------------------------
the applicable Closing (as defined below), the Company shall sell to each
Purchaser and, subject to the terms and conditions set forth herein, each
Purchaser shall purchase from the Company (i) the number of shares of
Series B Preferred set forth opposite such Purchaser's name on the Schedule
of Purchasers attached hereto at a cash price of $2.35, (ii) the Warrant
which shall permit such Purchaser to initially purchase a number of shares
of Common Stock set forth opposite such Purchaser's name on the Schedule of
Purchasers, at an exercise price of $3.53 per share, and (iii) the Note in
the amount set forth opposite such Purchaser's name on the Schedule of
Purchasers for the Note Closing (as defined below). The sale of the Series
B Preferred, the Warrant and the Note to each Purchaser shall constitute a
separate sale hereunder."
(b) Effective as of the Initial Closing (as defined in the
Agreement), the parties agree that the first sentence of Sections 1C(iii) of the
Agreement is amended and restated in its entirety as follows:
"At any time on or before the date ninety (90) days from the date
hereof, the Company may sell up to an additional 2,548,540 shares of Series
B Preferred for a purchase price of $2.35 per share."
2. Replacement of Attachments. Effective as of the Initial Closing (as
--------------------------
defined in the Agreement), the parties agree that the original Exhibit A,
Exhibit B and the Schedule of Purchasers for the Initial Closing attached to the
Agreement shall be replaced in their entirety by the Exhibit A, Exhibit B and
the Schedule of Purchasers for the Initial Closing attached hereto.
3. General Provisions.
------------------
(a) Governing Law. This Amendment shall be construed in accordance
-------------
with and governed by the laws of the State of Delaware.
(b) Full Force and Effect. Except as amended hereby, the Agreement
---------------------
shall remain in full force and effect.
(c) Counterparts. This Amendment may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute on instrument.
(d) Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the day and year first written above.
COMPANY:
Latitude 90, Inc.
By: ____________________
Name:
Title:
PURCHASERS:
Keystone Venture V, L.P.
By: ____________________
Name:
Title:
[Signature Page to Amendment No. 1 to
Series B Preferred Stock Purchase Agreement]
SCHEDULE OF PURCHASERS
----------------------
Initial Closing as of August 6, 1999
No. of Total Warrant
Shares Purchase for No. of Total
of Price for Shares of Purchase
Name and Series B Series B Common Price for
Addresses Preferred Preferred Stock Warrant
--------- --------- ---------- ---------- ---------
DigaComm, L.L.C. 849,514 $1,996,358 530,946 $5,309.46
000 Xxxxx Xxxxxxxx Xxx.
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
TOTAL 849,514 $1,996,358 530,946 $5,309.46
LATITUDE 90, INC.
Amendment No. 2 to
------------------
Series B Preferred Stock
------------------------
Stock Purchase Agreement
------------------------
This Amendment No. 2 (the "Amendment") is made as of September __, 1999 to
the Series B Preferred Stock Purchase Agreement (the "Agreement") made and
entered into on August 6, 1999, as amended, among Latitude 90, Inc., a
California corporation (the "Company"), and the persons listed on the Schedule
of Purchasers attached thereto (the "Purchasers").
Recitals
--------
WHEREAS, the Company has entered into the Agreement, which among other
things, provided for the sale and issuance of the Company's Series B Preferred
Stock (the "Series B Preferred") and a warrant to purchase shares of the
Company's Common Stock to the Purchasers;
WHEREAS, the Company now desires to sell and issue to additional investors
(each, a "Subsequent Sale") shares of the Series B Preferred in one or more
Subsequent Closings (as defined in the Agreement) under the Agreement;
WHEREAS, in connection with the contemplated Subsequent Sales and the
issuance of share of the Series B Preferred thereunder, the Company and the
Purchasers have determined that the Agreement requires certain amendments.
NOW, THEREFORE, the Company and Purchasers agree as follows:
Agreement
---------
1. Amendment to Agreement.
----------------------
(a) The parties agree that Section 1A of the Agreement shall be
amended and restated in its entirety as follows:
"1A. Authorization of the Preferred Stock, Warrant and Note. The
------------------------------------------------------
Company shall authorize the issuance and sale of (i) up to ________
shares of its Series B Preferred Stock, par value $.01 per share (the
"Series B Preferred"), at a purchase price of $2.35 per share, having the
rights and preferences set forth in Exhibit A attached hereto, (ii)
---------
warrants (the "Warrants") to purchase up to ________ shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), at a
purchase price of $0.01 per share, in the form attached hereto as Exhibit
-------
B, and (iii) a promissory note (the "Note"), in the form attached hereto as
-
Exhibit C. The Series B Preferred is convertible into shares of the Common
---------
Stock.
(b) The parties agree that the first sentence of Sections 1C(iii) of
the Agreement is amended and restated in its entirety as follows:
"At any time on or before the date ninety (90) days from the date
hereof, the Company may sell up to an additional _________ shares of Series
B Preferred for a purchase price of $2.35 per share."
2. General Provisions.
------------------
(a) Governing Law. This Amendment shall be construed in accordance
-------------
with and governed by the laws of the State of Delaware.
(b) Full Force and Effect. Except as amended hereby, the Agreement
---------------------
shall remain in full force and effect.
(c) Counterparts. This Amendment may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute on instrument.
(d) Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the day and year first written above.
COMPANY:
Latitude 90, Inc.
By: ____________________
Name:
Title:
PURCHASERS:
DigaComm, L.L.C.
By: ____________________
Name:
Title:
Keystone Venture V, L.P.
By: ____________________
Name:
Title:
[Signature Page to Amendment No. 2 to
Series B Preferred Stock Purchase Agreement]
L90, INC.
Amendment No. 3 to
------------------
Series B Preferred Stock
------------------------
Stock Purchase Agreement
------------------------
This Amendment No. 3 (the "Amendment") is made as of September __, 1999 to
the Series B Preferred Stock Purchase Agreement (the "Agreement") made and
entered into on August 6, 1999, as amended, among L90, Inc., a Delaware
corporation (the "Company"), and the persons listed on the Schedule of
Purchasers attached thereto (the "Purchasers").
Recitals
--------
WHEREAS, the Company has entered into the Agreement, which among other
things, provided for the sale and issuance of the Company's Series B Preferred
Stock (the "Series B Preferred") and a warrant to purchase shares of the
Company's Common Stock to the Purchasers;
WHEREAS, the Company has determined that the disclosure schedules
previously provided by it in connection with the Agreement contained certain
inaccuracies that the parties now desire to correct;
WHEREAS, as a result of the foregoing, the Company and the Purchasers have
determined that the Agreement requires certain amendments.
NOW, THEREFORE, the Company and Purchasers agree as follows:
Agreement
---------
1. Amendment to Agreement.
----------------------
(a) The parties agree that the Contracts Schedule to the Agreement
shall be amended by deleting in their entirety the items numbered 1.nnn.,
0.xxx., 0.xxx., 0.xxx., 0.xxx. and 0.xxx.
(b) The parties agree that the Developments Schedule to the Agreement
shall be amended by deleting in their entirety the items numbered 1.a. and 1.c.
[(c) The parties agree that the attachments to the Financial
Statements Schedule to the Agreement shall be amended in their entirety by
substituting in their place those items attached hereto as Exhibit A.]
---------
2. General Provisions.
------------------
(a) Governing Law. This Amendment shall be construed in accordance
-------------
with and governed by the laws of the State of Delaware.
(b) Full Force and Effect. Except as amended hereby, the Agreement
---------------------
shall remain in full force and effect.
(c) Counterparts. This Amendment may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute on instrument.
(d) Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the day and year first written above.
COMPANY:
L90, Inc.
By: ____________________
Name:
Title:
PURCHASER:
_______________________
[Signature Page to Amendment No. 3 to
Series B Preferred Stock Purchase Agreement]
