STOCK PURCHASE AGREEMENT
This
COMMON STOCK PURCHASE AGREEMENT (this “Agreement”),
dated
as of October 19, 2007, is entered into by and between Conversion Services
International, Inc., a Delaware corporation with an address at 000 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxxxxx, XX 00000 (“CSI”),
and
TAG
Virgin Islands, Inc.,
with an
address at The
Tunick Building,
0000
Xxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxxx, XXXX 00000 as agent (the “Agent”) for the
purchasers listed on the Schedule
of Purchasers
appended
hereto as Schedule
I,
which
may be amended from time to time to add additional purchasers
(collectively, the “Purchasers”).
RECITALS
WHEREAS,
the Purchasers desire to purchase and acquire, and CSI desires to issue and
sell
to the Purchasers, at each respective Closing, as defined in Section
2
below,
in accordance with the terms hereof shares of common stock, par value $0.001
(the “Common
Stock”)
of CSI
and warrants to purchase Common Stock in the form attached as Exhibit
A
hereto
(the “A Warrants”)
and/or, as provided herein, in the form attached as Exhibit
B
hereto
(the “B
Warrants,”
collectively with the A Warrants the “Warrants”
and
the
Common Stock, and the Warrants collectively, the “Securities”) as
set
forth on the
Schedule of Purchasers;
and
WHEREAS,
the parties hereto desire to enter into this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Purchase
and Sale of Common Stock; Issuance of Warrants; Registration Rights; Termination
of Agreement.
1.1 Purchase,
Sale and Issuance of Common Stock. Subject
to the terms and conditions of this Agreement, the Purchasers will purchase
from
CSI (each a “Purchase”)
and
CSI will sell to the Purchasers, from time to time, shares (the “Shares”)
of the
Securities. The period during which the Purchases will be effected will commence
on the date hereof and terminate on the earlier of December 28, 2007 or the
date
on which a Purchase is Closed, as provided in Section
2
below,
for such number of Shares as the aggregate purchase price (the “Purchase
Price”)
thereof for all Securities purchased by the Purchasers pursuant to the terms
hereof, shall then equal no less than $4,300,000 nor more than $5,000,000.
Notwithstanding the preceding, the Purchasers, Agent and CSI agree that there
shall be no minimum amount necessary for the first or any subsequent Closing.
The Purchase Price shall be determined in accordance with the terms of
Section
1.2
below.
The Agent shall determine, by notice to CSI (the “Purchase
Notice”),
when
each Purchase shall be made and when the Closing for such Purchase shall be
effected. At each Closing, the Purchasers, as provided in the
Schedule of Purchasers,
will
purchase from CSI and CSI will sell and issue to such Purchasers, the number
of
Shares and Warrants for the Purchase Price set forth in the Purchase Notice
for
such Closing. The
Schedule of Purchasers
for each
respective Closing shall be amended to reflect each of the Purchases.
1.2 Definition
of Purchase Price. For the purpose of this Agreement, “Purchase Price” for each
respective Closing shall mean the higher of $0.10 per share or the per share
closing price of the Common Stock as listed on AMEX on the day that the Purchase
is effected for the Securities to be issued on such Closing. The closing price
for each such day shall be the last reported sales price regular way or, in
case
no such reported sale takes place on such day, the closing bid price regular
way, in either case on AMEX or, if not then traded on AMEX, on the principal
national securities exchange on which the Common Stock is listed or admitted
to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price as furnished by
the
Financial Industry Regulation Authority
through
NASDAQ or similar organization if NASDAQ is no longer reporting such
information, or by the Pink Sheets, LLC or similar organization if the Common
Stock is not then quoted on an inter-dealer quotation system. If on any such
date the Common Stock is not quoted by any such organization, the fair value
of
the Common Stock on such date, as determined in good faith by CSI's Board of
Directors, shall be used.
1.3 Issuance
of A Warrants. At each Closing, subject to the provisions of Section
1.4
below,
CSI shall issue to each Purchaser purchasing Shares at the Closing, A Warrants
to purchase such number of shares of Common Stock as shall equal the number
of
Shares purchased by such Purchaser at such Closing. The A Warrants shall include
a cashless exercise option and shall be exercisable commencing immediately
for a
period of five years after the date of such Closing at a per share price,
subject to applicable anti-dilution provisions, equal to 10% above the Purchase
Price of the Shares purchased by the Purchaser at such Closing (the “Warrant
Exercise Price”).
1.4 Issuance
of B Warrants. CSI will not issue any A Warrants to the Purchasers for which
it
will not have a sufficient number of shares of Common Stock authorized and
reserved for issuance to permit it to deliver the shares of Common Stock
issuable upon the exercise of such A Warrants. In the event that when a Purchase
is made CSI will
not
have a sufficient number of shares of Common Stock authorized and reserved
to
permit it to deliver the shares of Common Stock issuable upon the exercise
of
all of the A Warrants
so
purchased at the Closing for such Purchase, CSI will deliver to the Purchasers
instead of A Warrants in accordance with Section
1.3
above,
such number of B Warrants as shall equal the number of A Warrants that CSI
is
unable to issue to the Purchasers. CSI will immediately thereafter use its
best
efforts to increase its authorized shares of Common Stock (the “Authorization
Increase”)
to a
number that will permit it to deliver the shares issuable upon the exercise
of
the B Warrants so purchased. The B Warrants shall be exercisable to purchase
1.5
times the number of shares of Common Stock that the undelivered A Warrants
would
have been exercisable for. They shall include a cashless exercise option and
be
exercisable for a period of five years after the date of the respective Closing
at the Warrant Exercise Price commencing upon the effective date of the
Authorization Increase and shall not have a cash settlement.
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1.5 Registration
Rights Agreement. As additional consideration for the Purchasers agreeing to
purchase the Shares and acquire the Warrants, CSI will enter into the
Registration
Rights Agreement
with the
Purchasers in the form appended hereto as Exhibit
C.
1.6 Termination
of Agreement. Anything to the contrary notwithstanding, the Agent may terminate
this Agreement at any time upon notice to CSI in the event that the Common
Stock
shall no longer be listed for trading on the American Stock Exchange
(“AMEX”).
1.7 Notwithstanding
Section
1.6
above,
any Securities subscribed to by the Purchasers prior to the delisting of the
Common Stock for trading on AMEX shall be non-revocable.
2. Closing.
2.1 Closing
Date. The purchase and sale of the Shares and the Warrants hereunder shall
take
place at a closing (the “Closing”),
which
shall be held at such time and place upon which CSI and the Agent shall
agree.
2.2 Actions
by CSI at the Closing. CSI shall deliver to each Purchaser a
stock
certificate or certificates for the Shares and the Warrants, registered in
the
name of such Purchaser and the executed Registration Rights Agreement.
2.3 Actions
by the Purchasers at the Closing. Each Purchaser shall deliver to CSI the
Purchase
Price for the Shares and the Warrants purchased at the Closing by such
Purchaser.
3. Representations
and Warranties of CSI.
CSI
hereby represents and warrants to the Agent and the Purchasers
that:
3.1
Organization;
Good Standing; Qualification and Corporate Power.
(a)
CSI
and
each of its subsidiaries is a corporation duly organized, validly existing
and
in good standing under the laws of its jurisdiction of incorporation and has
all
requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. CSI and each of its subsidiaries
is
duly qualified to transact business and is in good standing in each jurisdiction
in which the failure so to qualify would have a material adverse effect on
its
business or properties. True and correct copies of CSI Certificate of
Incorporation, as amended (the "Certificate
of Incorporation")
and
Bylaws have been provided to the Purchasers or made available via the SEC XXXXX
website.
(b)
CSI
has
all requisite legal and corporate power and authority to execute and deliver
this Agreement, to issue the Shares and the Warrants and to carry out and
perform its obligations under the terms of this Agreement and to consummate
the
transactions contemplated hereby and thereby. All necessary corporate action
has
been taken by CSI with respect to the execution, delivery and performance by
CSI
of this Agreement and the consummation of the transactions contemplated hereby
and thereby. The Shares, when issued in
accordance pursuant to the terms of the Agreement,
will be
legally issued, fully paid and non assessable and each Purchaser will own the
Shares purchased by such Purchaser, free and clear of all liens and
encumbrances. The Warrant, when issued in accordance with the terms of the
Agreement, will constitute the legally binding obligation of CSI in accordance
with its terms.
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3.2
Capitalization
and Voting Rights. CSI’s authorized capital consists of:
(a)
Common Stock. 200,000,000 shares of Common Stock, of which 76,777,792 shares
were issued and outstanding as of September 30, 2007. The Common Stock is
currently accepted for trading on the American Stock Exchange.
(b)
Preferred Stock. 20,000,000 shares of preferred stock (the "Preferred
Stock"),
of
which, as of the date hereof, an aggregate of 39,000 shares are issued and
outstanding, 19,000
as
Series A Convertible Preferred Stock
and
20,000 as Series B Convertible Preferred Stock.
3.3
Subsidiaries;
Interests of CSI. Except as set forth in the SEC Documents, as defined in
Section
3.5
below,
CSI does not currently own or control, directly or indirectly, any interest
in
any other partnership, limited liability company, corporation, joint stock
company, trust, estate, joint venture, association or unincorporated
organization, or any other form of business or professional entity.
3.4
Authorization.
This Agreement and all other agreements executed and delivered by CSI in
connection therewith, have been duly authorized, executed and delivered by
CSI
and constitute the legal, valid and binding obligations of CSI, enforceable
in
accordance with their respective terms, subject to (i) applicable bankruptcy,
insolvency, reorganization and moratorium laws, (ii) other laws of general
application affecting the enforcement of creditors' rights generally and general
principles of equity, (iii) the discretion of the court before which any
proceeding therefor may be brought, and (iv) as rights to indemnity may be
limited by federal or state securities laws or by public policy.
3.5 SEC
Documents. CSI has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(the “Commission”)
pursuant to the Securities Act of 1933 (the “Securities
Act”)
and
the Securities Exchange Act of 1934 (the “Exchange
Act”)
(the
“SEC
Documents”),
and
during the 12 calendar months prior to the date hereof all such SEC Documents
have been filed in a timely manner. CSI is currently eligible to use Form S-3
for stockholder registration statements under the Securities Act. The SEC
Documents have complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the Commission promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with
the
Commission, 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, to the best of CSI’s
knowledge during those respective dates, the financial statements of CSI
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 Commission with respect thereto. Such financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States as in effect from time to time (“GAAP”),
consistently applied, during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes thereto, or (b)
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 condition of CSI as of the respective dates
thereof and the results of its operations and cash flows for the respective
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the SEC Documents, CSI
has
not received notification from the Commission, the American Stock Exchange
and/or any federal or state securities bureaus that any investigation (informal
or formal), inquiry or claim is pending, threatened or in process against CSI
and/or relating to any of CSI’s securities.
4
3.6
Governmental
Consents. No consent, approval, order, or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state,
local or provincial governmental authority on the part of CSI is required in
connection with the consummation of the transactions contemplated by this
Agreement. CSI and each of its subsidiaries has obtained all federal, state,
local and foreign governmental licenses and permits material to and necessary
in
the conduct of its business, such licenses and permits are in full force and
effect, no material violations are or have been recorded in respect of any
such
licenses or permits, and no proceeding is pending or threatened to revoke or
limit any thereof. There are no consents or waivers necessary for the
consummation of the transactions contemplated by this Agreement.
3.7
Litigation.
Except as set forth in the SEC Documents, (i) there is no action, suit,
proceeding, or investigation pending or currently threatened against CSI, and
(ii) in CSI’s reasonable judgment, none of such disclosures are likely to
question the validity of this Agreement, or the right of CSI to enter into
such
agreements, or to consummate the transactions contemplated hereby or thereby,
or
which might result, either individually or in the aggregate, in any material
adverse change in the assets, condition, affairs, or property of CSI,
financially or otherwise, or any change in the current equity ownership of
CSI,
including, without limitation, actions pending or to CSI’s knowledge threatened
involving the prior employment of any of CSI’s employees, their use in
connection with CSI’s business of any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any
agreements with prior employers.
5
3.8
Compliance
with Other Instruments. CSI is not in violation or default of any provisions
of
its Certificate of Incorporation or Bylaws or of any instrument, judgment,
order, writ, decree, or contract to which it is a party or by which it is bound
or, to its knowledge, of any provision of federal or state statute, rule or
regulation, license, or permit applicable to CSI, the violation or default
of
which would have a material adverse effect on CSI. The execution, delivery,
and
performance of this Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be
in
conflict with or constitute, with or without the passage of time and giving
of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree, or material contract or an event which results in the creation
of
any lien, charge, or encumbrance upon any assets of CSI.
4. Representations
and Warranties of the Purchasers.
Each
Purchaser represents and warrants to CSI as follows:
4.1 Review
and Inspection. The Purchaser is relying on his own analysis regarding CSI’s
operations, financial condition, assets, liabilities and other relevant matters
as the Purchaser deemed necessary or desirable in order to evaluate the merits
and risks of the prospective investment contemplated herein. The
Purchaser acknowledges
that he has not relied upon any information given to the Purchaser, or any
statements made, by CSI or any officers or directors of CSI, except for the
representations and warranties of CSI expressly made herein.
4.2 Purchaser
Due Diligence. The Purchaser and his representatives are solely responsible
for
the Purchaser’s own “due diligence” investigation of CSI and its management and
business and for the Purchaser’s analysis of the financial future and viability
of CSI and desirability of the terms of this investment. The Purchaser
acknowledges that neither CSI nor any officer or director of CSI is making
any
representation or warranty regarding any financial projections previously given
to the Purchaser or the assumptions underlying such financial projections,
as
such financial projections are subject to significant business, economic and
other uncertainties and contingencies. The Purchaser acknowledges that if CSI
is
not able to operate profitably or generate positive cash flows, CSI may have
difficulty meeting its obligations and may not be able to continue to operate
its business, and the Purchaser could lose all of his investment. The Purchaser
has such knowledge and experience in financial and business matters that he
is
capable of evaluating the merits and risks of the purchase of the Shares
pursuant to the terms of this Agreement and of protecting his interest in
connection therewith.
4.3 Accredited
Investor Status.
The
Purchaser is an “Accredited Investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act and the Purchaser is able
to
bear the economic risk of the purchase of the Shares pursuant to the terms
of
this Agreement, including a complete loss of his investment in the
Shares.
4.4 Authority
for Agreement.
The
Purchaser has the full right, power and authority to enter into and perform
his
obligations under the Agreement, and the Agreement constitutes the valid and
binding obligations of the Purchaser enforceable in accordance with its terms,
subject to (i) applicable bankruptcy, insolvency, reorganization and moratorium
laws, (ii) other laws of general application affecting the enforcement of
creditors' rights generally and general principles of equity, (iii) the
discretion of the court before which any proceeding therefor may be brought,
and
(iv) as rights to indemnity may be limited by federal or state securities laws
or by public policy..
6
4.5 Governmental
Consents.
To the
Purchaser’s knowledge, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Purchaser is required in connection with the valid execution, delivery and
performance of the Agreement.
4.6 Taxes.
The
Purchaser has not relied on any statements or representations of CSI or any
of
its agents (other than the representations and warranties set forth herein)
with
respect to the federal, state, local and foreign tax consequences of this
investment and the federal, state, local and foreign tax consequences of
transactions contemplated by this Agreement. With respect to such matters,
the
Purchaser understands that he (and not CSI) shall be responsible for his own
tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.
4.7
Restricted
Securities.
The
Purchaser understands that the Shares and the Common Stock issuable upon
exercise of the Warrants have not been registered under the Securities Act
or
the laws of any state and may not be sold or transferred, or otherwise disposed
of, without registration under the Securities Act and applicable state
securities laws, or pursuant to an exemption therefrom. In the absence of an
effective registration statement or an exemption therefrom covering the Shares
and the Common Stock issuable upon exercise of the Warrants, the Purchaser
will
sell or transfer, or otherwise dispose of, the Shares to be acquired by him
only
in a manner consistent with his representations and agreements set forth herein
and any applicable federal and state securities laws.
4.8
Legends.
It is
understood that the certificates evidencing the Shares and the Warrants may
bear
the following legend:
(a)
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES EVIDENCED BY THIS
CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND
SUCH
APPLICABLE STATE SECURITIES LAWS OR, UNLESS REASONABLY REQUESTED BY THE COMPANY,
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH ACT AND SUCH APPLICABLE
STATE
SECURITIES LAWS IS NOT REQUIRED.
7
(b)
Any
legend required by the securities (“Blue Sky”) laws of any state.
The
legend referred to in clause (a) above shall be removed by CSI from any
certificate at such time as the holder of the securities represented by the
certificate delivers an opinion of counsel reasonably satisfactory to CSI to
the
effect that such legend is not required in order to establish compliance with
any provisions of the Securities Act, or at such time as the holder of such
shares satisfies the requirements of Rule 144(k) or such other substantially
similar rule promulgated under the Securities Act then in effect under the
Securities Act; provided, that CSI has received from the holder a written
representation that (i) such holder is not an affiliate of CSI and has not
been
an affiliate during the preceding three months, (ii) such holder has
beneficially owned and paid for the shares represented by the certificate for
a
period of at least two years (or the period of time then required by Rule 144(k)
or such other substantially similar rule promulgated under the Securities Act
then in effect), and (iii) such holder otherwise satisfies the requirements
of
Rule 144(k) as then in effect with respect to such shares.
4.9 No
Short
Sales. The Purchasers and their affiliates have not engaged in short sales
of
the Common Stock (as defined in applicable SEC and NASD rules) prior to the
date
hereof and will not engage in short sales of the Common Stock prior to the
registration of the Shares.
5. Representations
and warranties of the Agent.
The
Agent represents and warrants to CSI that it is authorized to act on behalf
of
the Purchasers with respect to the transactions referred to in this
Agreement.
6. Conditions
to the Obligations of the Purchasers.
The
obligation of the Purchasers to purchase the Shares at the Closing is subject
to
the fulfillment, or the written waiver, of each of the following conditions
on
or before the Closing:
6.1 Accuracy
of Representations and Warranties. Each representation and warranty of CSI
contained in Section
3
hereof
shall be true on and as of the Closing Date with the same effect as though
such
representation and warranty had been made on and as of that date.
6.2 Performance.
CSI shall have performed and complied with all covenants, agreements and
conditions contained in this Agreement and required to be performed or complied
with by CSI prior to or at the Closing.
6.3 Proceedings
and Documents. All documents and instruments incident to the transactions
contemplated at the Closing shall be reasonably satisfactory in substance and
form to each Purchaser and his counsel.
8
6.4
Share
Certificates and Warrants. Each Purchaser shall have received a certificate
or
certificates representing such number of Shares of his investment and the
Warrants registered in his name as set forth on the
Schedule of Purchasers.
6.6 Execution
of Registration Rights Agreement. CSI shall have executed and delivered to
the
Registration Rights Agreement in the form appended hereto as Exhibit
B.
7. Condition
to the Obligations of CSI.
The
obligation of CSI to sell the Shares and deliver the Warrants at the Closing
is
subject to fulfillment, or the written waiver, of each of the following
conditions on or before the Closing:
7.1 Accuracy
of Representations and Warranties. Each representation and warranty of the
Purchasers contained in Section
4
hereof
shall be true on and as of the Closing Date with the same effect as though
such
representation and warranty had been made on and as of that date.
7.2 Performance.
All covenants, agreements and conditions contained in this Agreement and
required to be performed by the Purchasers on or prior to the Closing Date
shall
have been performed or complied with in all material respects.
8.
Covenants
of CSI.
In
addition to any covenants set forth in CSI's Certificate of Incorporation,
CSI
agrees that, so long as any Purchaser and/or an affiliate thereof beneficially
owns any Shares and/or a Warrant remains outstanding:
8.1
Maintenance
of Existence. CSI shall at all times (a) preserve, renew and keep in full force
and effect its legal existence and rights and franchises with respect thereto;
and (b) maintain in full force and effect all patents, copyrights, permits,
licenses, trademarks, trade names, approvals, authorizations, leases and
contracts necessary to carry on the business as currently or proposed to be
conducted.
8.2 Payment
of Obligations. CSI shall pay and discharge at or before maturity, all of its
material obligations and liabilities, including, without limitation, tax
liabilities, except where the same may be contested in good faith by appropriate
proceedings or as waived, forgiven or modified by the creditor, and will
maintain, in accordance with generally accepted accounting principles as they
then exist, appropriate reserves for the accrual of any of the
same.
8.3 Reservation
of Shares. CSI shall at all times duly reserve for issuance the shares of Common
Stock issuable upon exercise of the A Warrants and, after the Authorization
Increase is effected, the B Warrants.
9
9.
Indemnity.
CSI
shall, with respect to the representations, warranties, covenants and agreements
made by it herein indemnify, defend and hold each Purchaser and his employees,
partners, agents, counsel and affiliates (each, an “Indemnified
Party”)
harmless from and against all liability, loss or damage, together with all
reasonable costs and expenses related thereto (including legal and accounting
fees and expenses), arising from the untruth, inaccuracy or breach of any such
representations, warranties, covenants or agreements of CSI contained in this
Agreement or the assertion of any claims relating to the foregoing. Without
limiting the generality of the foregoing, each Indemnified Party shall be deemed
to have suffered liability, loss or damage as a result of the untruth,
inaccuracy or breach of any such representations, warranties, covenants or
agreements if such liability, loss or damage shall be suffered by the
Indemnified Party as a result of, or in connection with, such untruth,
inaccuracy or breach or any facts or circumstances constituting such untruth,
inaccuracy or breach. CSI shall indemnify and hold harmless each Indemnified
Party against any losses, claims, damages or liabilities, joint or several,
to
which any of the foregoing persons may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or
are based upon any violations by CSI of the Securities Act or state Blue Sky
laws applicable to CSI relating to action or inaction required of CSI in
connection with the Securities Act or registration or qualification under such
state Blue Sky laws; and shall reimburse each such Indemnified Party for any
legal or any other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided,
however,
that no
indemnification shall be required hereunder for the gross negligence or willful
misconduct of any Indemnified Party or material breach by a Purchaser of any
of
the representations and warrants set forth in Section
4
hereof.
In case any such action is brought against an Indemnified Party, CSI will be
entitled to participate in and assume the defense thereof with counsel
reasonably satisfactory to such Indemnified Party, and after notice from CSI
to
such Indemnified Party of its election to assume the defense thereof, CSI shall
be responsible for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, provided that if any Indemnified
Party shall have reasonably concluded that there may be one or more legal
defenses available to such Indemnified Party that conflict in any material
respect with those available to CSI, or that such claims or litigation involves
or could have an effect upon matters beyond the scope of the indemnity provided
by this Section
9,
CSI
shall reimburse such Indemnified Party and shall not have the right to assume
the defense of such action on behalf of such Indemnified party and CSI shall
reimburse each such Indemnified Party and any individual, partnership, limited
liability company, corporation, joint stock company, trust, estate, joint
venture, association or unincorporated organization, or any other form of
business or professional entity (“Person”) controlling such Indemnified Party
for that portion of the reasonable fees and expenses of any counsel retained
by
the Indemnified Party. CSI shall not make any settlement of any claims
indemnified against hereunder without the written consent of the Indemnified
Party or Parties, which consent shall not be unreasonably withheld. Any claim
for indemnification under this Section
9
with
respect to representations and warranties must be made not later than the end
of
the 12-month survival period set forth in Section
10.2.
10. Miscellaneous.
10.1 Assignment.
This Agreement and all of the provisions hereof will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as provided in Section
9,
neither
this Agreement nor any of the rights, interests or obligations hereunder may
be
assigned by any party without prior written consent of the other
party.
10
10.2 Survival
of Representations and Warranties. The warranties, representations and covenants
of CSI and the Purchasers contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing for a
period of 12 months and shall in no way be affected by any investigation of
the
subject matter thereof made by or on behalf of the Purchasers or
CSI.
10.3 Notices.
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given (i) upon
personal delivery to the party to be notified, (ii) four days after deposit
with
the United States Post Office, by registered or certified mail, postage prepaid,
or (iii) one day after deposit with a reputable overnight courier service and
addressed to the party to be notified:
If
to
CSI:
Conversion
Services International, Inc.
000
Xxxxx
Xxxx Xxxxxx
Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxx
Xxxxxx, President and Chief Executive Officer
With
a
Copy to:
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxx Xxxxxxxx, Esq.
If
to the
Purchasers:
TAG
Virgin Islands, Inc.
The
Tunick Building
0000
Xxxxxxx Xxxx, Xxxxx 000
Xx.
Xxxxxx, XX 00000
Attn: Xxxxx
Xxxxxxxxxxx, President
With
a
copy to:
Xxxxx
Xxxxxx, Esq.
000
Xxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
.
10.4 Brokers.
Each Purchaser, on the one hand, and CSI, on the other hand (a) represents
and warrants to the other party that he/it has not retained any finders or
brokers in connection with the transactions contemplated by this Agreement,
and
(b) will indemnify and save the other party harmless from and against any
and all claims, liabilities or obligations with respect to brokerage or finders’
fees or commissions, or consulting fees in connection with the transactions
contemplated by this Agreement asserted by any Person on the basis of any
statement or representation alleged to have been made by him/it.
11
10.5 Expenses.
CSI and the Purchasers shall bear their own expenses incurred with respect
to
this Agreement and the transactions contemplated hereby except that CSI shall
pay the reasonable fees and expenses incurred by the Purchasers for the legal
services rendered to them with respect to this Agreement and the transactions
contemplated hereby.
10.6 Entire
Agreement. This Agreement and the other documents delivered pursuant to the
Agreement at the Closing embody the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede
all
prior agreements and understandings relating to such subject
matter.
10.7 Amendments
and Waivers. Any term of this Agreement may be amended and the observance of
any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of CSI and the Purchasers. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall
be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
10.8 Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which shall be one and the same
document.
10.9 Section
Headings. The Section headings are for the convenience of the parties and in
no
way alter, modify, amend, limit, or restrict the contractual obligations of
the
parties.
10.10 Severability.
Any part, provision, representation or warranty of this Agreement that is
prohibited or that is held to be void or unenforceable shall be ineffective
solely to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
10.11 Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware (without regard to its conflict of laws
principles). The parties hereto irrevocably consent to the exclusive personal
jurisdiction of the federal and state courts located in the New York County,
New
York, as applicable, for any matter arising out of or relating to this
Agreement.
(signature
page to follow)
12
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
CONVERSION
SERVICES INTERNATIONAL, INC.
By:
/s/
Xxxxx Xxxxxx
Name: Xxxxx
Xxxxxx
Title: President
and Chief Executive Officer
TAG
VIRGIN ISLANDS, INC.,
as
agent
for the Purchasers
By:
/s/
Xxxxx Xxxxxxxxxxx
Name: Xxxxx
Xxxxxxxxxxx
Title: President
13
SCHEDULE
I
SCHEDULE
OF PURCHASERS
AS
OF
OCTOBER
19,2007
Common
Stock Purchased at $0.20 per Share
A
Warrants Exercisable at $0.22 per Share
|
Amount
|
|
Number
of
|
|
Number
of
|
|
|||||
|
Name
of Purchaser
|
|
Invested
|
|
Shares
|
|
A
Warrants
|
||||
|
Xxxxxxx
Xxxxxx XXX
|
$
|
40,000.00
|
200,000
|
200,000
|
||||||
|
Xxxxxx
X. Xxxxxxxx
|
20,000.00
|
100,000
|
100,000
|
|||||||
|
Xxxxxx
Xxxxx
|
40,000.00
|
200,000
|
200,000
|
|||||||
|
Xxxxxx
Trop
|
24,000.00
|
120,000
|
120,000
|
|||||||
|
Xxxxx
Xxxx XXX
|
24,000.00
|
120,000
|
120,000
|
|||||||
|
Xxxxx
X Xxxxx Revocable Trust
|
24,000.00
|
120,000
|
120,000
|
|||||||
|
Non-Marital
Trust FBO
|
||||||||||
|
Xxxxxxx
Xxxxx
|
32,000.00
|
160,000
|
160,000
|
|||||||
|
Xxxxxxxx
Xxxx Deutch Rev Tr
|
37,000.00
|
185,000
|
185,000
|
|||||||
|
Xxxx
Xxxxxx Marital Trust B
|
40,000.00
|
200,000
|
200,000
|
|||||||
|
R
Xxxxxx C/F Xxxxxx Xxxxx Xxxxxx
|
4,000.00
|
20,000
|
20,000
|
|||||||
|
R
Xxxxxx C/F Xxxxx X Xxxxxx
|
4,000.00
|
20,000
|
20,000
|
|||||||
|
Xxxxx
X. Xxxxx XXX Rollover
|
24,000.00
|
120,000
|
120,000
|
|||||||
|
Xxxxxx
Living Trust
|
32,000.00
|
160,000
|
160,000
|
|||||||
|
Xxxxxxxx
Xxxxxxxx
|
30,000.00
|
150,000
|
150,000
|
|||||||
|
Total
|
$
|
375,000.00
|
1,875,000
|
1,875,000
|
||||||
14
