EXHIBIT 99.2
SECURITIES PURCHASE AGREEMENT
Among
UNIVIEW TECHNOLOGIES CORPORATION
and
THE PURCHASER LISTED ON SCHEDULE I
Dated as of March 5, 2002
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as
of March 5, 2002, between uniView Technologies Corporation, a Texas
corporation (the "Company"), and the purchaser identified and listed on
Schedule I hereto (referred to herein as the "Purchaser.")
WHEREAS, the Company and the Purchaser's predecessors in interest,
Xxxxx Xxxxxxx Strategic Growth Fund, Ltd. and Xxxxx Xxxxxxx Strategic Growth
Fund, L.P., are parties to that certain Securities Purchase Agreement, dated
June 11, 1999;
WHEREAS, the Company, on June 11, 1999, issued to the Purchaser's
predecessors in interest, Xxxxx Xxxxxxx Strategic Growth Fund, Ltd. and
Xxxxx Xxxxxxx Strategic Growth Fund, L.P., shares of the Company's Series
1999-D1 Preferred Stock;
WHEREAS, the Company and the Purchaser desires to redeem the
Series 1999-D1 Preferred Stock and enter into this Agreement upon the terms
and conditions set forth herein;
WHEREAS, the Company and the Purchaser is executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by Rule 506 under Regulation D as promulgated by the United States
Securities and Exchange Commission (the "Commission") under Section 4(2) of
the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to acquire from the Company, 240 shares of the Company's
Series 2002-G Convertible Preferred Stock, par value $1.00 per share, stated
value $25,000 per share (the "Preferred Stock"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement in the form of Exhibit A attached hereto (the "Registration
Rights Agreement") pursuant to which the Company has agreed to provide
certain registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter, the Company and the Purchaser hereby
agree as follows:
ARTICLE I.
PURCHASE AND SALE OF THE SECURITIES
1.1 Purchase and Sale.
a. Subject to the terms and conditions set forth herein, the
Company shall issue and sell to the Purchaser, and the Purchaser shall
purchase from the Company on the Closing Date (as defined below), an
aggregate of 240 shares of Preferred Stock and, in consideration thereof,
the Purchaser, as successor in interest to Xxxxx Xxxxxxx Strategic Growth
Fund, Ltd. and Xxxxx Xxxxxxx Strategic Growth Fund, L.P., shall deliver to
the Company 720 shares of the Company's Series 1999-D1 Preferred Stock, each
having a strike price of $32.00, and collectively having an aggregate face
value of $18 million.
b. The Purchaser shall purchase the principal amount of
Securities as set forth for the Purchaser on Schedule I.
c. The Securities shall have the respective rights, preferences
and privileges set forth in the Certificate of Designation (the "Certificate
of Designation"), the form of which is attached hereto as Exhibit B, which
shall be approved by the Purchaser and the Company's Board of Directors and
filed on or prior to the Closing by the Company with the Secretary of State
of Texas.
1.2 The Closing. The closing of the purchase and sale of the
Preferred Stock (the "Closing") shall take place by transmission by
facsimile and overnight courier, immediately following the execution hereof
or such later date or different method as the parties shall agree, but not
prior to the date that the conditions set forth in Section 4.1 have been
satisfied or waived by the appropriate party (the "Closing Date"). At the
Closing:
(i) The Purchaser shall deliver, as directed by the Company,
the shares of preferred stock held by the Purchaser and set forth in Section
1.1(a)(i) hereof;
(ii) The Company shall deliver to the Purchaser the
certificates representing the number of Securities purchased by the
Purchaser as set forth on Schedule I hereto; and
(iii) The parties shall execute and deliver each of the
documents referred to in Section 4.1 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to the
Purchaser:
a. Organization and Qualification. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of
the State of Texas, with the requisite corporate power and authority to own
and use its properties and assets and to carry on its business as currently
conducted. Except as set forth on Schedule 2.1(a), the Company has no
subsidiaries (collectively, the "Subsidiaries"). Each of the Subsidiaries
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns the majority of such entity's capital stock or
holds an equivalent equity or similar interest) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
full corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. Each of the Company
and the Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not, individually
or in the aggregate, (x) adversely affect the legality, validity or
enforceability of any of this Agreement or the Transaction Documents (as
defined in Section 2.1(b)) or any of the transactions contemplated hereby or
thereby, (y) have or result in a material adverse effect on the results of
operations, assets, prospects, or financial condition of the Company and its
Subsidiaries, taken as a whole or (z) impair the Company's ability to
perform fully on a timely basis its obligations under any Transaction
Document (any of (x), (y) or (z) being a "Material Adverse Effect").
b. Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement, the Certificate of Designation,
the Settlement and Mutual Release Agreement, and the Registration Rights
Agreement (collectively, the "Transaction Documents"), and otherwise to
carry out its obligations hereunder and thereunder. The execution and
delivery of each of this Agreement and the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action and
no further action is required by the Company, its Board of Directors or its
stockholders. Each of this Agreement and the Transaction Documents has been
duly executed by the Company and when delivered in accordance with the terms
hereof will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application. Neither the Company nor
any Subsidiary is in any material violation of any of the provisions of its
respective articles or certificates of incorporation, bylaws or other
charter documents such that any right of a holder of the Securities would be
affected. Prior to the Closing Date, the Certificate of Designation has
been filed with the Secretary of State of Texas and will be in full force
and effect, enforceable against the Company in accordance with the terms
thereof, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
c. Capitalization. As of the date hereof, the authorized
capital stock of the Company is as set forth in Schedule 2.1(c). All of
such outstanding shares of capital stock have been, or upon issuance will
be, validly authorized and issued, fully paid and nonassessable and were
issued in accordance with the registration or qualification provisions of
the Securities Act, or pursuant to valid exemptions therefrom. Except as
disclosed in Schedule 2.1(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, nor is any holder of the
Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of any Transaction
Document, (ii) 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 or exchangeable for, or giving any
Person (as defined below) any right to subscribe for or acquire, 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, (iii)
there are no outstanding debt securities, (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 Securities Act
(except the Registration Rights Agreement), (v) there are no outstanding
securities 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 anti-dilution or similar provisions that will be triggered by the
issuance of the shares of Common Stock as described in this Agreement, (vii)
the Company does not have any stock appreciation rights or "phantom stock"
plans or agreements or any similar plan or agreement and (viii) except as
specifically disclosed in the SEC Documents (as defined in Section 2.1(k)
hereof), no Person (as defined below) or group of related Persons
beneficially owns (as determined pursuant to Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or has
the right to acquire by agreement with or by obligation binding upon the
Company beneficial ownership of in excess of 5% of the Common Stock.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
d. Authorization and Validity; Issuance of Shares. The shares
of Common Stock issuable upon conversion of the Securities (the "Underlying
Shares") are and will continue until issuance to be duly authorized and
reserved for issuance and the shares of Common Stock issued upon conversion
of the Securities (the "Conversion Shares") will be validly issued, fully
paid and non-assessable, free and clear of all liens, encumbrances and
Company rights of first refusal, other than liens and encumbrances created
by the Purchaser (collectively, "Liens") and will not be subject to any
preemptive or similar rights.
e. No Conflicts. The execution, delivery and performance of
this Agreement and each of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby (including the issuance of the Underlying Shares) do not and will
not (i) conflict with or violate any provision of the Company's Certificate
of Incorporation, as amended and as in effect on the date hereof (the
"Certificate of Incorporation"), the Company's Bylaws, as in effect on the
date hereof (the "Bylaws") or other organizational documents of the Company
or any of the Subsidiaries, (ii) subject to obtaining the consents referred
to in Section 2.1(f), conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, patent license or
instrument (evidencing a Company or Subsidiary debt or otherwise) to which
the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the
Company or any Subsidiary is subject (including Federal and state securities
laws and regulations and the rules and regulations of the principal market
or exchange on which the Common Stock is traded or listed) applicable to the
Company or any of its Subsidiaries, or by which any material property or
asset of the Company or any Subsidiary is bound or affected.
f. Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or other federal, state, local or other governmental authority, regulatory
or self regulatory agency, or other Person in connection with the execution,
delivery and performance by the Company of this Agreement or the Transaction
Documents, other than (i) the filing of a registration statement (the
"Registration Statement') with the Commission, which shall be filed in
accordance with and in the time periods set forth in the Registration Rights
Agreement, (ii) the application(s) or any letter(s) acceptable to the Nasdaq
Stock Market ("Nasdaq") for the listing of the Underlying Shares with Nasdaq
(and with any other national securities exchange or market on which the
Common Stock is then listed), (iii) any filings, notices or registrations
under applicable state securities laws and (iv) the approval of the
Company's Board of Directors and the filings of the Certificate of
Designation with the Secretary of State of Texas, which filing and approval
shall be effected on or prior to the Closing Date.
g. Litigation; Proceedings. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any court,
governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) which (i) adversely affects or challenges
the legality, validity or enforceability of any of this Agreement or the
Transaction Documents or (ii) could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect.
h. No Default or Violation. Neither the Company nor any
Subsidiary (i) is in default under or in violation of any indenture, loan or
other credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound, (ii) is in violation
of any order of any court, arbitrator or governmental body applicable to it,
(iii) is in violation of any statute, rule or regulation of any governmental
authority to which it is subject or (iv) is in default under or in violation
of its Certificate of Incorporation, Bylaws or other organizational
documents, respectively. The business of the Company and its Subsidiaries
is not being conducted, and shall not be conducted, in violation of any law,
ordinance, rule or regulation of any governmental entity, except where such
violations have not resulted or would not reasonably result, individually or
in the aggregate, in a Material Adverse Effect. Neither the Company nor any
of its Subsidiaries is in breach of any agreement where such breach,
individually or in the aggregate, would have a Material Adverse Effect
i. Disclosure; Absence of Certain Changes. None of this
Agreement, the Schedules to this Agreement, the Transaction Documents, the
SEC Documents (as defined in the Section 2.1(k)) or any other written or
formally presented information, report, financial statement, exhibit,
schedule or document furnished by or on behalf of the Company in connection
with the negotiation of the transactions contemplated hereby contained,
contains, or will contain at the time it was or is so furnished any untrue
statement of a material fact or omitted, omits or will omit at such time to
state any material fact necessary in order to make the statements made
herein and therein, in light of the circumstances under which they were
made, not misleading. Except as disclosed in SEC Documents filed on XXXXX
at least five business days prior to the date hereof, since December 31,
2001, there has been no material adverse change and no material adverse
development in the business, properties, operations, financial condition,
liabilities or results of operations or, insofar as can reasonably be
foreseen, prospects of the Company or the 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. 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
businesses, properties, operations or financial condition or, insofar as can
reasonably be foreseen, prospects, that would be required to be disclosed by
the Company under applicable securities laws on a registration statement
(including by way of incorporation by reference) filed with the Commission,
on the date this representation is made or deemed to be made, relating to an
issuance and sale by the Company of its Common Stock and which has not been
publicly disclosed.
j. Private Offering. The Company and all Persons acting on its
behalf have not made, directly or indirectly, and will not make, offers or
sales of any securities or solicited any offers to buy any security under
circumstances that would require registration of the Securities, the
Conversion Shares or the Underlying Shares or the issuance of such
securities under the Securities Act. The offer, sale and issuance of the
Securities and the Conversion Shares to the Purchaser will not be integrated
with any other offer, sale and issuance of the Company's securities (past,
current, or future) under the Securities Act or any regulations of any
exchange or automated quotation system on which any of the securities of the
Company are listed or designated or for purposes of any stockholder approval
provision applicable to the Company or its securities. Subject to the
accuracy and completeness of the representations and warranties of the
Purchaser contained in Section 2.2 hereof, the offer, sale and issuance by
the Company to the Purchaser of the Securities and the Underlying Shares is
exempt from the registration requirements of the Securities Act.
k. SEC Documents; Financial Statements. The Common Stock of the
Company is registered pursuant to Section 12(g) of the Exchange Act. The
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission pursuant to the
reporting requirements of the Exchange Act, including pursuant to Section
13, 14 or 15(d) thereof (the foregoing materials and all exhibits included
therein and financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein being
collectively referred to herein as the "SEC Documents"), on a timely basis
or has received a valid extension of such time of filing and has filed any
such SEC Documents prior to the expiration of any such extension. As of
their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of
the SEC Documents, when filed, 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. All agreements to
which the Company or any Subsidiary is a party or to which the property or
assets of the Company or any Subsidiary are subject and which are required
to be filed as exhibits to the SEC Documents have been filed as exhibits to
the SEC Documents as required and neither the Company nor any Subsidiary is
in breach of any such agreement. As of their respective dates, the
financial statements of the Company included in the SEC Documents comply as
to form in all material respects with applicable accounting requirements and
the published rules and regulations of the Commission with respect thereto
as in effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved, except
as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position
of the Company as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial year-end audit adjustments. No other
information provided by or on behalf of the Company to the Purchaser which
is not included in the SEC Documents, including, without limitation,
information referred to in Section 2.1(i) of this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading. Neither the
Company nor any of its Subsidiaries or any of their officers, directors,
employees or agents have provided the Purchaser with any material, nonpublic
information. The Company acknowledges that the Purchaser will be trading in
the securities of the Company in reliance on the foregoing representation
and warranty.
l. Investment Company. The Company is not, and is not
controlled by or under common control with an affiliate (an "Affiliate") of
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
m. Broker's Fees. No fees or commissions or similar payments
with respect to the transactions contemplated by this Agreement or the
Transaction Documents have been paid or will be payable by the Company to
any broker, financial advisor, finder, investment banker, or bank. The
Purchaser shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section 2.1(m) that may be due in connection with the
transactions contemplated by this Agreement and the Transaction Documents.
n. Form S-3 Eligibility. The Company is, and at the Closing
Date will be, eligible to register securities (including the Underlying
Shares) for resale with the Commission under Form S-3 (or any successor
form) promulgated under the Securities Act.
o. Listing and Maintenance Requirements Compliance. The
principal market on which the Common Stock is currently traded is Nasdaq.
Except as disclosed on Schedule 2.1(o), the Company has not in the three
years preceding the date hereof received notice (written or oral) from
Nasdaq (or any stock exchange, market or trading facility on which the
Common Stock is or has been listed (or on which it has been quoted)) to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such market or exchange. Except as disclosed on Schedule
2.1(o), the Company is not in default under or in violation of any of the
listing requirements of Nasdaq as in effect on the date hereof and is not
aware of any facts which would reasonably lead to delisting or suspension of
the Common Stock by Nasdaq. After giving effect to the transactions
contemplated by this Agreement and the Transaction Documents, the Company is
and will be in compliance with all such maintenance requirements. As of the
Closing Date, Nasdaq rules do not require shareholder approval for the
transactions contemplated by this Agreement and the Transaction Documents.
p. Intellectual Property Rights. The Company and each of its
Subsidiaries own or possess adequate rights or licenses to use all
trademarks, trademark applications, trade names and service marks, whether
or not registered, and all patents, patent applications, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets
and intellectual property rights (collectively, "Intellectual Property
Rights") which are necessary for use in connection with their respective
businesses as now conducted and as described in the SEC Documents. None of
the Company's Intellectual Property Rights have expired or terminated, or
are expected to expire or terminate within two years from the date of this
Agreement. Neither the Company nor any of its Subsidiaries has infringed or
is infringing on any of the Intellectual Property Rights of any Person and
there is no claim, action or proceeding which has been made or brought
against, or to the Company's knowledge, is being made, brought or threatened
against, the Company or its Subsidiaries regarding the infringement of any
of the Intellectual Property Rights, and the Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of
the foregoing, except where any of the foregoing would not have a Material
Adverse Effect. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties.
q. Employee Relations. Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of
the Company or any of its Subsidiaries, is any such dispute threatened.
Neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that
relations with their employees are good. Since December 31, 2001 no
executive officer (as defined in Rule 501(f) under the Securities Act) has
notified the Company that such officer intends to leave the Company or
otherwise terminate such officer's employment with the Company, except for
Xxxxxxx Xxxxx, whose employment ended on February 1, 2002.
r. Registration Rights; Rights of Participation. Except as
described on Schedule 2.1(r) hereto, (i) the Company has not granted or
agreed to grant to any Person any rights (including "piggy-back"
registration rights) to have any securities of the Company registered with
the Commission or any other governmental authority which has not been
satisfied and (ii) no Person, including, but not limited to, current or
former stockholders of the Company, underwriters, brokers or agents, has any
right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by this
Agreement or any Transaction Document.
s. Title. The Company and each of its Subsidiaries have good
and marketable title in fee simple to all real property and 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, except for Liens
that do not materially adversely 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 the Subsidiaries. Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and, to the Company's best knowledge, 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 the Subsidiaries.
t. Permits. The Company and each of its Subsidiaries possess
all certificates, authorizations, licenses, easements, consents, approvals,
orders and permits necessary to own, lease and operate their respective
properties and to conduct their respective businesses as currently conducted
except where the failure to possess such permits would not, individually or
in the aggregate, have a Material Adverse Effect ("Material Permits"), and
there is no proceeding pending, or, to the knowledge of the Company,
threatened relating to the revocation, modification, suspension or
cancellation of any Material Permit. Neither the Company nor any of the
Subsidiaries is in conflict with or default or violation of any Material
Permit.
u. 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
any reason to believe that it will not be able to renew its existing
insurance coverages 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.
v. Internal Accounting Controls. The Company and each of the
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 United States generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific
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.
w. Tax Status; Firpta. 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 it books provisions
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. The Company is not a "United States real property
holding corporation" within the meaning of Section 847(c)(2) of the Internal
Revenue Code of 1986, as amended.
x. Transactions With Affiliates. Other than the grant of stock
options and warrants disclosed on Schedule 2.1(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 entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
y. Application to Takeover Protection. The Company and its
Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination or
other similar anti-takeover provision under the Certificate of
Incorporation, Bylaws or the laws of the State of Texas which is or could
become applicable to the Purchaser or the Transaction Documents as a result
of the transactions contemplated by this Agreement or the Transaction
Documents. None of the transactions contemplated by this Agreement or the
Transaction Documents, including the conversion of the Securities, will
trigger any poison pill provisions of any of the Company's stockholders'
rights or similar agreements.
z. 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 conduct their respective businesses and (iii) are in compliance with
all terms and conditions of any such permits, licenses or other approvals
except where the failure of any of the foregoing would not result in a
Material Adverse Effect.
aa. Foreign Corrupt Practices. Neither the Company, nor any of
its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any of its Subsidiaries has, in the
course of its actions for, or on behalf of, the Company used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
form corporate funds; violated or is in violation of any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any
unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
bb. Solicitation Materials; Certain Information. The Company has
not (i) distributed any offering materials in connection with the offering
and sale of the Securities, other than the SEC Documents, the Schedules to
this Agreement, any amendments and supplements thereto, or (ii) solicited
any offer to buy or sell the Securities by means of any form of general
solicitation or advertising. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has engaged or
will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection
with the offer or sale of the Securities. The Company acknowledges that the
Purchaser will be trading in the securities of the Company in reliance on
the foregoing representation and warranty.
cc. Acknowledgement of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Conversion Shares upon conversion of the Securities. The
Company further acknowledges that its obligation to issue the Conversion
Shares upon conversion of the Securities in accordance with this Agreement
and the Certificate of Designation is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.
dd. Acknowledgement Regarding the Purchaser's Purchase of
Securities. The Company acknowledges and agrees that the Purchaser is
acting solely in the capacity of an arm's length purchaser with respect to
this Agreement and the transactions contemplated hereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any statement made by
any Purchaser or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Purchaser'
purchase of the securities. The Company further represents to the Purchaser
that the Company's decision to enter into this Agreement has been based
solely on the independent evaluation of the transactions contemplated
hereunder by the Company and its representatives.
ee. Solvency. The Company (both before and after giving effect
to the transactions contemplated by this Agreement) is solvent (i.e., its
assets have a fair market value in excess of the amount required to pay its
probable liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would lead it to
reasonably conclude that the Company would not have the ability to, nor does
it intend to take any action that would impair its ability to, pay its debts
from time to time incurred in connection therewith as such debts mature.
The Company does not anticipate or know of any basis upon which its auditors
might issue a qualified opinion in respect of its current fiscal year.
ff. Other Agreements. The Company has not, directly or
indirectly, made any agreements with the Purchaser relating to the terms and
conditions of the transactions contemplated by the Transaction Documents
except as set forth in the Transaction Documents.
2.2 Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
a. Organization; Authority. The Purchaser is a corporation or a
limited duration company or a limited liability company or limited
partnership duly formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation with the
requisite power and authority, corporate or otherwise, to enter into and to
consummate the transactions contemplated hereby and by the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The purchase by the Purchaser of the Securities hereunder has
been duly authorized by all necessary action on the part of the Purchaser.
Each of this Agreement and the Registration Rights Agreement has been duly
executed and delivered by the Purchaser and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
b. Investment Intent. The Purchaser is acquiring the Securities
for its own account and not with a present view to or for distributing or
reselling the Securities or the Conversion Shares or any part thereof or
interest therein in violation of the Securities Act; provided, however, that
by making the representations herein, the Purchaser does not agree to hold
any of the Securities or the Conversion Shares 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 Securities Act.
c. Purchaser Status. At the time the Purchaser was offered the
Securities and at the Closing Date, (i) it was and will be an "accredited
investor" as defined in Rule 501 under the Securities Act and (ii) the
Purchaser, either alone or together with its representatives, had and will
have such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Securities and the Conversion Shares.
d. Reliance. The Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to the Purchaser without
registration under the Securities Act in a private placement that is exempt
from the registration provisions of the Securities Act under Section 4(2) of
the Securities Act or Regulation D promulgated thereunder or other
applicable federal and state securities laws and (ii) the availability of
such exemptions depends in part on, and the Company will rely upon the
accuracy and truthfulness of, the representations set forth in this Section
2.2 and the Purchaser hereby consents to such reliance.
e. Information. The Purchaser 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 the Purchaser or its advisors.
The Purchaser and its advisors, if any, have been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other due
diligence investigation conducted by the Purchaser or any of its advisors or
representatives shall modify, amend or affect Purchaser's right to rely on
the Company's representations and warranties contained in Section 2.1 above
or representations and warranties of the Company contained in any other
Transaction Document. The Purchaser understands that its investment in the
Securities involves a significant degree of risk.
f. Governmental Review. The Purchaser understands that no
United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or
endorsement of the Securities.
g. Residency. The Purchaser is a resident of the jurisdiction
set forth immediately below the Purchaser's name on Schedule II hereto.
The Company acknowledges and agrees that the Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III.
OTHER AGREEMENTS
3.1 Transfer Restrictions.
a. If the Purchaser should decide to dispose of the Securities
or the Conversion Shares held by it, the Purchaser understands and agrees
that it may do so only (i) pursuant to an effective registration statement
under the Securities Act, (ii) to the Company or (iii) pursuant to an
available exemption from the registration requirements of the Securities Act
or Rule 144 promulgated under the Securities Act ("Rule 144"). The Company
shall announce any material non-public information that it legally is
required to announce on or prior to the Effectiveness Date (as defined in
the Registration Rights Agreement) of the Registration Statement filed
pursuant to the Registration Rights Agreement and shall not enter into any
subsequent non-disclosure agreements that would prevent it from announcing
any such information that otherwise legally could have been announced on or
prior to the Effectiveness Date, unless confidential treatment for such
information is granted by the Commission. In connection with any transfer
of any Securities or Conversion Shares other than pursuant to an effective
registration statement, Rule 144(k) or to the Company, the Company may
require the transferor thereof to provide to the Company a written opinion
of counsel experienced in the area of United States securities laws selected
by the transferor, the form and substance of which opinion shall be
customary for opinions of counsel in comparable transactions, to the effect
that such transfer does not require registration of such transferred
securities under the Securities Act; provided, however, that if the
Securities or Conversion Shares may be sold pursuant to Rule 144(k), no
written opinion of counsel shall be required from the Purchaser if the
Purchaser provides reasonable assurances that such security can be sold
pursuant to Rule 144(k). Notwithstanding the foregoing, the Company hereby
consents to and agrees to register any transfer by the Purchaser to an
Affiliate of the Purchaser, provided that the transferee certifies to the
Company that it is an "accredited investor" as defined in Rule 501(a) under
the Securities Act. Any such transferee shall agree in writing to be bound
by the terms of this Agreement and shall have the rights of the Purchaser
under this Agreement and the Transaction Documents. If the Purchaser
provides the Company with an opinion of counsel, the form and substance of
which opinion shall be customary for opinions of counsel in comparable
transactions, to the effect that a public sale, assignment or transfer of
the Securities and the Conversion Shares may be made without registration
under the Securities Act or the Purchaser provides the Company with
reasonable assurances that the Securities and the Conversion Shares can be
sold pursuant to Rule 144(k) 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, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by the
Purchaser and without any restrictive legend. Notwithstanding the foregoing
or anything else contained herein to the contrary, the securities may be
pledged as collateral in connection with a bona fide margin account or other
lending arrangement.
b. The Purchaser agrees to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Securities
and the Conversion Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Neither the Securities nor the Conversion Shares shall contain the
legend set forth above (or any other legend) (i) at any time while a
registration statement is effective under the Securities Act covering such
security, (ii) if in the written opinion of counsel to the Company
experienced in the area of United States securities laws (the form and
substance of which opinion shall be customary for opinions of counsel in
comparable transactions), such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) or (iii) if such
Securities or Conversion Shares may be sold pursuant to Rule 144(k). The
Company agrees that it will provide the Purchaser, upon request, with a
certificate or certificates representing Securities or Conversion Shares,
free from such legend at such time as such legend is no longer required
hereunder. If such certificate or certificates had previously been issued
with such a legend or any other legend, the Company shall, upon request,
receive such certificate or certificates free of any legend.
c. The Purchaser hereby acknowledges and agrees that it only shall sell
the Conversion Shares in accordance with the following:
On any day when the Common Stock trades fewer than 50,001 shares,
the Purchaser may sell up to fifteen percent (15%) of the daily
volume (on a net basis, i.e., including sales and purchases) as
traded on the NASDAQ or a Subsequent Market as defined in the
Certificate of Designation (the "Daily Volume");
On any day when the Common Stock trades between 50,001 and 75,000
shares, the Purchaser may sell up to twenty percent (20%) of the
Daily Volume (on a net basis);
On any day when the Common Stock trades between 75,001 and 150,000
shares, the Purchaser may sell up to twenty-five percent (25%) of
the Daily Volume (on a net basis); and
On any day when the Common Stock trades more than 150,000 shares,
the Purchaser may sell up to forty percent (40%) of the Daily Volume
(on a net basis).
3.2 Stop Transfer Instruction. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company
which enlarge the restrictions on transfer set forth in Section 3.1.
3.3 Furnishing of Information. As long as the Purchaser owns the
Securities or the Conversion Shares, the Company will cause the Common Stock
to continue at all times to be registered under Section 12(g) of the
Exchange Act, will timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13, 14 or 15(d) of the
Exchange Act and promptly furnish, but in no event later than two (2)
business days after the filing thereof with the Commission, the Purchaser
with true and complete copies of all such filings, and will not take any
action or file any document (whether or not permitted by the Exchange Act or
the rules thereunder) to terminate or suspend such reporting and filing
obligations. As long as the Purchaser owns the Securities or the Conversion
Shares, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Purchaser and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required
thereby, in the time period that such filings would have been required to
have been made under the Exchange Act. The Company further covenants that
it will take such further action as any holder of the Securities or the
Conversion Shares may reasonably request, all to the extent required from
time to time to enable such Person to sell the Securities or the Conversion
Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act,
including the legal opinion referenced above in Section 3.1(b), and that it
will, as promptly as possible, but in no event later than three (3) Business
Days after the date of receipt or mailing, as the case may be, provide the
Holders true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement. Upon the request of any
such Person, the Company shall deliver to such Person a written
certification of a duly authorized officer as to whether it has complied
with such requirements.
3.4 Blue Sky Laws. In accordance with the Registration Rights
Agreement, the Company shall (i) qualify the Conversion Shares under the
securities or "blue sky" laws of such jurisdictions as the Purchaser may
request (or to obtain an exemption from such qualification), (ii) shall
provide evidence of any such action so taken to the Purchaser on or prior to
the Closing Date and (iii) shall continue such qualification at all times
through the resale of all Conversion Shares, but in any event not past the
fourth anniversary of the Closing Date.
3.5 Integration. The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities or the Conversion Shares in a manner
that would require the registration under the Securities Act of the sale of
the Securities or the Conversion Shares to the Purchaser or cause the
offering of such securities to be integrated with any other offering of
securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.
3.6 Listing and Reservation of Conversion Shares.
a. The Company shall (i) not later than three (3) business days
after the Closing Date prepare and file with Nasdaq (as well as any other
national securities exchange or market on which the Common Stock is then
listed) an additional shares listing application or a letter acceptable to
Nasdaq covering and listing a number of shares of Common Stock which is at
least equal to 100% of the maximum number of Underlying Shares then
issuable, (ii) take all steps necessary to cause the Underlying Shares to be
approved for listing on Nasdaq (as well as on any other national securities
exchange or market on which the Common Stock is then listed) as soon as
possible thereafter, (iii) maintain, so long as any other shares of Common
Stock shall be so listed, such listing of all such Underlying Shares, and
(iv) provide to the Purchaser evidence of such listing. Neither the Company
nor any of its Subsidiaries shall take any action which may result in the
delisting or suspension of the Common Stock on Nasdaq. The Company shall
promptly provide to the Purchaser copies of any notices it receives from
Nasdaq regarding the continued eligibility of the Common Stock for listing
on such automated quotation system, so long as such notice does not include
material, nonpublic information. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section
3.6(a).
b. The Company at all times shall reserve a sufficient number of
shares of its authorized but unissued Common Stock to provide for 100% of
the full conversion of the outstanding Securities. If at any time the
number of shares of Common Stock authorized and reserved for issuance is
insufficient to cover 100% of the number of Conversion Shares issuable upon
conversion of the Securities (based on the Conversion Price (as defined in
the Certificate of Designation) in effect from time to time) without regard
to any limitation on conversions or exercises, the Company will promptly
take all corporate action necessary to authorize and reserve 100% of such
shares pursuant to Section 3(b) of the Registration Rights Agreement,
including, without limitation, calling a special meeting of stockholders to
authorize additional shares to meet the Company's obligations under this
Section 3.6(b), in the case of an insufficient number of authorized shares,
and using its best efforts to obtain stockholder approval of an increase in
such authorized number of shares.
3.7 Notice of Breaches.
a. The Company and the Purchaser shall give prompt written
notice to the other of any breach by it of any representation, warranty or
other agreement contained in this Agreement or in the Transaction Documents,
as well as any events or occurrences arising after the date hereof and prior
to the applicable Closing Date, which would reasonably be likely to cause
any representation or warranty or other agreement of such party, as the case
may be, contained herein to be incorrect or breached as of the applicable
Closing Date provided such notice will not constitute material non-public
information. However, no disclosure by either party pursuant to this
Section 3.7 shall be deemed to cure any breach of any representation,
warranty or other agreement contained herein or in the Transaction
Documents.
b. Notwithstanding the generality of Section 3.7(a), the Company
shall promptly notify, provided such notification will not constitute
material non-public information, the Purchaser of any notice or claim
(written or oral) that it receives from any lender of the Company or any
Subsidiary to the effect that the consummation of the transactions
contemplated hereby and by the Registration Rights Agreement violates or
would violate any written agreement or understanding between such lender and
the Company or any Subsidiary, and the Company shall promptly furnish by
facsimile to the Purchaser a copy of any written statement in support of or
relating to such claim or notice.
3.8 Form D. The Company agrees to file a Form D with respect to the
Securities as required by Rule 506 under Regulation D and to provide a copy
thereof to the Purchaser promptly after such filing.
3.9 Future Financings.
a. Except for (i) issuance of the Underlying Shares; (ii) shares
of Common Stock deemed to have been issued by the Company in connection with
any plan which has been approved by the Board of Directors of the Company
prior to the date hereof, pursuant to which the Company's securities may be
issued to any employee, officer, director or consultant of the Company;
(iii) shares of Common Stock issuable upon the exercise of any options or
warrants outstanding on the date hereof and listed in Schedule 2.1(c)
hereto; or (iv) shares of Common Stock issued or deemed to have been issued
as consideration for an acquisition by the Company of a division, assets or
business (or stock constituting any portion thereof) from another Person, if
the Company agrees to issue shares of Common Stock or other securities
convertible into or exchangeable or exercisable for Common Stock (the "New
Security") while any Securities are outstanding at (a) an effective price
per share which is less or may be less (including, without limitation, any
security which is convertible into or exchangeable or exercisable for Common
Stock at a price which may change with the market price of the Common Stock)
than the Conversion Price (as defined in the Certificate of Designation) of
the Securities as of the date thereof or (b) an effective price per share
greater than the Conversion Price but less than the Average Per Share Market
Value (as defined in the Certificate of Designation) on the date of such
issuance or sale (either of (a) or (b) a "Future Financing"), the Company
shall provide to the Purchaser by 5:00 p.m. (New York time) on or before the
third (3rd) Trading Day (as defined below) after the decision to issue the
New Security has been made, written notice of the Future Financing
containing in reasonable detail (i) the proposed terms of the Future
Financing, (ii) the amount of the proceeds that will be raised and (iii) the
Person with whom such Future Financing shall be effected, and attached to
which shall be a term sheet or similar document relating thereto (the
"Future Financing Notice"). Upon receiving the Future Financing Notice, the
Purchaser shall have the right to purchase, on the same terms as the Future
Financing, an amount of New Securities having a purchase price which shall
not exceed the sum of the then outstanding principal amount of the
Purchaser's Securities (valued at the greater of the Conversion Price or the
Average Per Share Market Price (as such terms are defined in the Certificate
of Designation) on the date of the Future Financing Notice). In the event
the Purchaser desires to exercise the right granted under this Section 3.9,
the Purchaser must notify the Company on or prior to the fifth (5th) Trading
Day after the Purchaser has received the Future Financing Notice. In the
event the terms and conditions of a proposed Future Financing are amended in
any respect after delivery of the Future Financing Notice but prior to the
closing of the proposed Future Financing to which such Future Financing
Notice relates, the Company shall deliver a new notice to the Purchaser
describing the amended terms and conditions of the proposed Future Financing
and the Purchaser thereafter shall have an option during the five (5)
Trading Days period following delivery of such new notice to purchase New
Securities being offered on the same terms as contemplated by such proposed
Future Financing, as amended. The foregoing sentence shall apply to
successive amendments to the terms and conditions of any proposed Future
Financing. If the Purchaser desires to purchase additional shares of Common
Stock, it must notify the Company of its intention to do so within five (5)
Trading Days after the Company has informed the Purchaser of its right to
purchase additional shares of Common Stock. Within five (5) Trading Days of
the termination of the final notice period, the transactions contemplated by
this Section 3.9 shall close, subject to the completion of mutually
satisfactory documentation, and the Company shall tender to the Purchaser
certificates representing the New Securities that it agreed to purchase and
the Purchaser shall make payment for the entire purchase price in
immediately available funds at the closing of such sale. "Trading Day"
shall mean a day on which the Nasdaq (or in the event the Common Stock is
not traded on Nasdaq, such other securities market on which the Common Stock
is listed) is open for trading.
3.10 Use of Proceeds. Intentionally omitted.
3.11 Transactions with Affiliates. So long as any Securities are
outstanding the Company shall not, and shall cause each of its Subsidiaries
not to, enter into, amend, modify or supplement, or permit any Subsidiary to
enter into, amend, modify or supplement, any agreement, transaction,
commitment or arrangement with any of its or any Subsidiary's officers,
directors or persons who were officers or directors at any time during the
previous two years, stockholders who beneficially own 5% or more of the
Common Stock, or Affiliates or any individual related by blood, marriage or
adoption to any such individual or with any entity in which any such entity
or individual owns a 5% or more beneficial interest (each a "Related
Party"), except for (a) customary employment arrangements and benefit
programs on reasonable terms, (b) any agreement, transaction, commitment or
arrangement on an arms-length basis on terms no less favorable than terms
which would have been obtainable from a Person other than such Related Party
or (c) any agreement, transaction, commitment or arrangement which is
approved by a majority of the disinterested directors of the Company. For
purposes hereof, any director who is also an officer of the Company or any
Subsidiary of the Company shall not be a disinterested director with respect
to any such agreement, transaction, commitment or arrangement. "Affiliate"
for purposes of this section only means, with respect to any person or
entity, another person or entity that, directly or indirectly, (i) has a 5%
or more equity interest in that person or entity, (ii) has 5% or more common
ownership with that person or entity, (iii) controls that person or entity
or (iv) shares common control with that person or entity. "Control" or
"Controls" for purposes of this section means that a person or entity has
the power, direct or indirect, to conduct or govern the policies of another
person or entity.
3.12 Transfer Agent Instructions. At the Closing the Company shall
issue irrevocable instructions to its transfer agent (and shall issue to any
subsequent transfer agent as required), to issue certificates, registered in
the name of the Purchaser or its respective nominee(s), for the Conversion
Shares in such amounts as specified from time to time by the Purchaser to
the Company in a form acceptable to the Purchaser (the "Irrevocable Transfer
Agent Instructions"). So long as required pursuant to Section 3.1(b), all
such certificates shall bear the restrictive legend specified in Section
3.1(b) of this Agreement. The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section
3.12, and stop transfer instructions to give effect to Section 3.1 hereof
(in the case of the Conversion Shares, prior to registration of the
Conversion Shares under the Securities Act) will be given by the Company to
its transfer agent and that the Securities and the Conversion Shares shall
otherwise be freely transferable on the books and records of the Company as
and to the extent provided in this Agreement and the Transaction Documents.
If the Purchaser provides the Company with an opinion of counsel, the form
and substance of which opinion shall be customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Securities and the Conversion Shares may be made without
registration under the Securities Act or the Purchaser provides the Company
with reasonable assurances that the Conversion Shares can be sold pursuant
to Rule 144(k) 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, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by the
Purchaser and without any restrictive legend. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to
the Purchaser by violating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 3.12 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 3.12, that the Purchaser shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any
bond or other security being required.
3.13 Press Release; Filing of Form 8-K. Subject to the provisions of
Section 6.10 hereof, prior to the opening of Nasdaq on March 8, 2002, the
Company shall file a press release in form and substance acceptable to the
Purchaser. On or before the 10th business day following the applicable
Closing Date, the Company shall file a Form 8-K with the Commission
describing the terms of the transaction contemplated by this Agreement and
the Transaction Documents in the form required by the Exchange Act.
3.14 Financial Information. The Company agrees to send the following
to the Purchaser prior to and during the Effectiveness Period (as defined in
the Registration Rights Agreement): (i) within three (3) business days
after the filing thereof with the Commission, a copy of its Annual Reports
on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on
Form 8-K and any registration statements or amendments (other than on Form
S-8) filed pursuant to the Securities Act, (ii) on the same day as the
release thereof, facsimile copies of all press releases issued by the
Company or any of its Subsidiaries, and (iii) copies of any notices and
other information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to
the stockholders.
3.15 Ordinary Course Brokerage and Trading. Subject to compliance with
all applicable securities laws and Nasdaq regulations, the Purchaser shall
not be prohibited from engaging in its ordinary course brokerage and trading
activities in respect of the Company's Common Stock; provided that the
personnel engaged in such activities have not been involved with the
transactions contemplated hereby and have not been provided with
confidential information with respect to the Company.
3.16 Best Efforts. Each of the parties hereto shall use its best
efforts to satisfy each of the conditions to be satisfied by it as provided
in Article IV of this Agreement.
3.17 Corporate Existence. Until such time as the Purchaser provides
the Company with written notice that it does not beneficially own any
Securities, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company's assets, except in the event
of a merger or consolidation or sale of all or substantially all of the
Company's assets, where the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose common stock is listed for trading on the
Nasdaq, the New York Stock Exchange or the American Stock Exchange.
3.18 No Violation of Applicable Law. Notwithstanding any provision of
this Agreement to the contrary, if the redemption of Securities or
Underlying Shares otherwise required under this Agreement, any applicable
Certificate of Designations or the Registration Rights Agreement would be
prohibited by the relevant provisions of the Business Corporation Law of the
State of Texas, such redemption shall be effected as soon as it is permitted
under such law; provided, however, that from the fifth (5th) day after such
redemption notice until such redemption price is paid in full, interest on
any such unpaid amount shall accrue and be payable at the rate of 15% per
annum in accordance with the applicable Certificate of Designation.
3.19 Seniority; Exclusivity. The Preferred Stock shall be senior to
all other classes of equity securities of the Company in right of dividends
or other payment, whether upon liquidation, dissolution or otherwise. The
Company represents and warrants to the Purchaser that currently outstanding
obligations of the Company owed to commercial and equipment lenders does not
exceed $100,000. The Company shall not issue and sell any Securities, other
than to the Purchaser pursuant to this Agreement, without the prior written
consent of the Purchaser.
3.20 Conversion Obligations of the Company. The Company covenants to
convert the Securities and to deliver the Underlying Shares in accordance
with terms, conditions and time periods set forth in the respective
Certificate of Designation.
3.21 Subsequent Registrations. Other than Underlying Shares and other
Registrable Securities (as defined in the Registration Rights Agreement) to
be registered in accordance with the Registration Rights Agreement, and
except as shown on Schedule 2.1(r), the Company shall not, for a period of
not less than 90 Trading Days after the date that the Registration Statement
is declared effective by the Commission, without the prior written consent
of the Purchaser, (i) issue or sell any of its or any of its Affiliates'
equity or equity-equivalent securities unless such issuance or sale is equal
to or at a premium to the Per Share Market Price (as defined in the
Registration Rights Agreement) on the date such issuance or sale, (ii)
register for resale any securities of the Company or (iii) have a
registration statement declared effective covering an issuance by the
Company of any of its securities. Any days that the Purchaser is unable to
sell Underlying Shares under a registration statement shall be added to such
90 Trading Day period for the purposes of (i), (ii) and (iii) above.
ARTICLE IV.
CONDITIONS
4.1 Closing Conditions.
a. Conditions Precedent to the Obligation of the Company to Sell
the Preferred Stock. The obligation of the Company to sell the Securities
hereunder is subject to the satisfaction or waiver (with prior written
notice to the Purchaser) by the Company, at or before the Closing Date, of
each of the following conditions:
(i) Accuracy of the Purchaser's Representations and
Warranties. The representations and warranties of the Purchaser in this
Agreement shall be true and correct in all material respects as of the date
when made (except for representations and warranties that speak as of a
specific date) and as of the Closing Date;
(ii) Performance by the Purchaser. The Purchaser shall have
performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Purchaser at or prior to the
Closing; and
(iii) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Transaction Documents.
b. Conditions Precedent to the Obligation of the Purchaser to
Purchase the Preferred Stock. The obligation of the Purchaser hereunder to
acquire and pay for the Securities is subject to the satisfaction or waiver
(with prior written notice to the Company) by the Purchaser, at or before
the Closing, of each of the following conditions:
(i) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company set forth in
this Agreement shall be true and correct in all respects as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date);
(ii) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Closing;
(iii) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement and the Transaction Documents;
(iv) No Suspensions of Trading in Common Stock. The trading
in the Common Stock shall not have been suspended by the Commission or on
Nasdaq (except for any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company);
(v) Listing of Common Stock. The Common Stock shall be
listed for trading on Nasdaq;
(vi) Required Approvals. All Required Approvals shall have
been obtained and copies thereof delivered to the Purchaser;
(vii) Shares of Common Stock. The Company shall have
duly reserved the number of Underlying Shares required by this Agreement and
the Transaction Documents to be reserved for issuance upon conversion of the
Securities;
(viii) Change of Control. No Change of Control shall have
occurred between the date hereof and the Closing Date. "Change of Control"
means the occurrence of any of (i) an acquisition after the date hereof by
an individual or legal entity or "group" (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act), other than the Purchaser or any of its
Affiliates, of in excess of 33% of the voting securities of the Company,
(ii) a replacement of more than one-half of the members of the Company's
Board of Directors which is not approved by those individuals who are
members of the Board of Directors on the date hereof in one or a series of
related transactions, (iii) the merger of the Company with or into another
entity, (iv) the consolidation or sale of all or substantially all of the
assets of the Company in one or a series of related transactions, or (v) the
execution by the Company of an agreement to which the Company is a party or
by which it is bound, providing for any of the events set forth above in
(i), (ii) , (iii), (iv) or (v);
(ix) Transfer Agent Instructions. The Irrevocable Transfer
Agent Instructions, in a form acceptable to the Purchaser, shall have been
delivered to and acknowledged in writing by the Company's transfer agent
with a copy forwarded to the Purchaser; and
(x) Resolutions. The Board of Directors of the Company
shall have adopted resolutions consistent with Section 2.1(b) and in a form
reasonably acceptable to the Purchaser (the "Resolutions").
c. Documents and Certificates. At the Closing, the Company
shall have delivered to the Purchaser the following in form and substance
reasonably satisfactory to the Purchaser:
(i) Opinion. An opinion of the Company's legal counsel in
the form attached hereto as Exhibit C dated as of the Closing Date;
(ii) Security. A Security(ies) representing the principal
amount of Securities purchased by the Purchaser as set forth on Schedule I,
registered in the name of the Purchaser, each in form satisfactory to the
Purchaser;
(iii) Registration Rights. The Company shall have
executed and delivered the Registration Rights Agreement;
(iv) Officer's Certificate. An Officer's Certificate dated
the Closing Date and signed by an executive officer of the Company
confirming the accuracy of the Company's representations, warranties and
covenants as of the Closing Date and confirming the compliance by the
Company with the conditions precedent set forth in this Section 4.1 as of
the Closing Date;
(v) Secretary's Certificate. Within ten (10) Business Days
of the Closing, a Secretary's Certificate dated the Closing Date and signed
by the Secretary or Assistant Secretary of the Company certifying (A) that
attached thereto is a true and complete copy of the Certificate of
Incorporation of the Company, as in effect on the Closing Date, (B) that
attached thereto is a true and complete copy of the By-laws of the Company,
as in effect on the Closing Date and (C) that attached thereto is a true and
complete copy of the Resolutions duly adopted by the Board of Directors of
the Company authorizing the execution, delivery and performance of this
Agreement and of the Transaction Documents, and that such Resolutions have
not been modified, rescinded or revoked;
(vi) Certificates of Incorporation. Within ten (10) Business
Days of the Closing, the Company shall deliver to each of the Purchaser a
copy of 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 ten days of the Closing Date. The Company shall have delivered to
each of the Purchaser a copy of its Certificate of Incorporation as
certified by the Secretary of State of the State of Texas within ten days of
the Closing Date;
(vii) Certificates of Designation. The Certificate of
Designation covering the Preferred Stock shall have been duly approved by
the Company's Board of Directors and filed with the Secretary of State of
Texas, and the Company shall have delivered a copy thereof to the Purchaser
certified as filed by the office of the Secretary of State of Texas;
(viii) Transfer Agent Letter. The Company shall have
delivered to the Purchaser a letter from the Company's transfer agent
certifying the number of shares of Common Stock outstanding as of a date
within five days of the Closing Date;
(ix) Lockup Letters. Each of the directors and executive
officers of the Company shall have delivered to the Purchaser a letter in
the form of Exhibit D hereto pursuant to which he or she agrees not to offer
or sell shares of Common Stock he or she beneficially owns during any time
period when the Purchaser is unable to freely offer for sale or to sell any
Underlying shares pursuant to an effective registration statement; and
(x) Other Documents. The Company shall have delivered to
the Purchaser such other documents relating to the transactions contemplated
by the Transaction Documents as the Purchaser or its counsel may reasonably
request.
ARTICLE V.
INDEMNIFICATION
5.1 Indemnification. Except to the extent that matters which could be
covered by this Section 5 are covered by Section 5 of the Registration
Rights Agreement, in consideration of the Purchaser execution and delivery
of this Agreement and the Transaction Documents and acquiring the Securities
and the Conversion Shares thereunder and in addition to all of the Company's
other obligations under this Agreement and the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless the Purchaser,
its past and present Affiliates and their successors and assigns (in
accordance with the provisions of Section 6.5 hereof), each other holder of
the Underlying Shares and all of their stockholders, officers, directors,
employees and direct or indirect investors and any of the foregoing Person's
agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions,
causes of action, suits, claims, losses, proceedings, costs (as incurred),
penalties, fees (including legal fees and expenses), liabilities and
damages, and expenses in connection therewith (irrespective of whether any
such Indemnitee is a party to the action for which indemnification hereunder
is sought), and including interest, penalties and attorneys' fees and
disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as
a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this
Agreement or in the Transaction Documents, or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement
or the Transaction Documents, or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit or
claim brought or made, other than by the Company, against such Indemnitee
and arising out of or resulting from (i) the execution, delivery,
performance or enforcement of this Agreement or the Transaction Documents,
(ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities
or (iii) solely the status of the Purchaser or holder of the Securities or
the Conversion Shares as an investor in the Company. The indemnification
obligations of the Company under this paragraph shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same
terms and conditions to any Affiliate of the Purchaser and partners,
directors, agents, employees and controlling Persons (if any), as the case
may be, of the Purchaser and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchaser and any such Affiliate and any
such Person. The Company also agrees that neither the Purchaser nor any
such Affiliates, partners, directors, agents, employees or controlling
Persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company in connection with or as a
result of the consummation of this Agreement or any of the Transaction
Documents except to the extent that any losses, claims, damages, liabilities
or expenses incurred by the Company result from the gross negligence or
willful misconduct of the Purchaser or entity in connection with the
transactions contemplated by this Agreement or the Transaction Documents.
To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
ARTICLE VI.
MISCELLANEOUS
6.1 Entire Agreement. This Agreement, together with the Exhibits and
Schedules hereto and the Transaction Documents contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect to such matters.
6.2 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 (if received by 7:00 p.m. EST where such
notice is received) or the first business day following such delivery (if
received after 7:00 p.m. EST where such notice is received); 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:
If to the Company:
uniView Technologies Corp.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, CEO
With a copy to:
uniView Technologies Corp.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, General Counsel
If to the Transfer Agent:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
If to Xxxxx Xxxxxxx Partners I, Ltd. to:
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Each party shall provide written notice to the other party of any change in
address or facsimile number in accordance with the provisions hereof.
6.3 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an
amendment, by both the Company and each of the Purchaser or, in the case of
a waiver, by the party against whom enforcement of any such waiver is
sought. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any
right hereunder in any manner impair the exercise of any such right accruing
to it thereafter. Notwithstanding the foregoing, no such amendment shall be
effective to the extent that it applies to less than all of the holders of
the Securities outstanding.
6.4 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
6.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each of the
Purchaser. The Purchaser may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company,
provided, that any assignees must make the representations and warranties
set forth in Section 2.2 and otherwise comply with the terms of this
Agreement otherwise applicable to its assignor. This provision shall not
limit the Purchaser's right to transfer securities in accordance with all of
the terms of this Agreement or the Transaction Documents.
6.6 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.
6.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without regard to the principles of conflicts of law thereof. 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 improper. 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.
6.8 Survival. The representations and warranties of the Company and
the Purchaser contained in Sections 2.1 and 2.2, the agreements and
covenants set forth in Section 3, and the indemnification provisions set
forth in Section 5, shall survive the Closing and any conversion of the
Securities regardless of any investigation made by or on behalf of the
Purchaser or by or on behalf of the Company, except that, in the case of
representations and warranties such survival shall be limited to the period
of six (6) years following the Closing Date on which they were made or
deemed to have been made (other than with respect to any claim by a third
party against the party to this Agreement who seeks to assert a claim based
on such representations and warranties). This section shall have no effect
on the survival of the indemnification provisions of the Registration Rights
Agreement.
6.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together 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, it being understood
that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect
as if such facsimile signature page were an original thereof.
6.10 Publicity. The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and neither party shall
issue any such press release or otherwise make any such public statement
without the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing party shall provide the other party with prior notice of such
public statement. The Company shall not publicly or otherwise disclose the
names of the Purchaser without the Purchaser's prior written consent. The
Purchaser and its affiliated companies shall, without further cost, have the
right to use in its advertising, marketing or other similar materials, the
Company's logo and trademarks and all or parts of the Company's press
releases that focus on the Transaction forming the subject matter of this
Agreement or which make reference to the Transaction. The Purchaser
understands that this grant by the Company only waives objections that the
Company might have to the use of such materials by the Purchaser and in no
way constitutes a representation by the Company that references in such
materials to the activities of third-parties have been cleared or constitute
a fair use.
6.11 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
6.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the
Purchaser will be entitled to specific performance of the obligations of the
Company under this Agreement or the Transaction Documents without the
showing of economic loss and without any bond or other security being
required. Each of the Company and the Purchaser agree that monetary damages
would not be adequate compensation for any loss incurred by reason of any
breach of its obligations described in the foregoing sentence and hereby
agree to waive in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
6.13 Payment Set Aside. To the extent that the Company makes a payment
or payments to the Purchaser hereunder or pursuant to the Transaction
Documents or the Purchaser enforce or exercise its rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a
trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.
6.14 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.
6.15 Fees and Expenses. Except as set forth in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the
Conversion Shares pursuant hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
persons as of the date first indicated above.
UNIVIEW TECHNOLOGIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXX XXXXXXX PARTNERS I, LTD.,
successor in interest to Xxxxx Xxxxxxx
Strategic Growth Fund, Ltd. and Xxxxx Xxxxxxx
Strategic Growth Fund, L.P.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
Schedule I
Name of Purchaser Face Amount of Number of Securities
Securities
Xxxxx Xxxxxxx Partners I, Ltd. $6,000,000 240
Schedule II
Name of Purchaser Address
Xxxxx Xxxxxxx Partners I, Ltd. 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
Residence: New York, New York
Exhibit A
[Registration Rights Agreement]
Exhibit B
[Form of Certificate of Designation]
Exhibit C
[Company's Legal Opinion]
Exhibit D
[Form of Lock-up letter]
