SECURITIES PURCHASE AGREEMENT UNITS
EXECUTED
UNITS
This
Securities Purchase Agreement - Units (the “Agreement”),
is
made as of the date set forth on the signature page by and among THE XXX
XXXXXX
CORPORATION, a Texas corporation (the “Company”),
and
the purchaser whose name appears on the signature page (the “Purchaser”).
RECITALS
WHEREAS,
the Company proposes to offer (the “Offering”)
and
sell an aggregate of $300,000 of units (the “Units”),
each
Unit offered at $1,000 and consisting of 1,000 shares of common stock, $0.001
par value (the “Common
Stock”),
and
9,000 shares of Series B Convertible Preferred Stock, $0.001 par value (the
“Series
B Preferred Stock”),
the
terms of the Series B Preferred Stock being as set forth in the Certificate
of
Designation attached to the Memorandum (the “Series
B Certificate of Designation”);
and
WHEREAS,
the Units will be offered and sold to the Purchaser, pursuant to the terms
set
out in the Confidential Private Placement Memorandum dated October 19, 2005
(the
“Memorandum”)
without being registered under the Securities Act of 1933, as amended, and
the
rules and regulations of the Securities and Exchange Commission thereunder,
in
reliance upon Section 4(2) thereof and/or Regulation D thereunder.
The
parties hereby agree as follows:
1. Purchase
and Sale of Units.
1.1. Sale
and Issuance of Units.
(a) Subject
to the terms and conditions of this Agreement, the Purchaser agrees to purchase
at the Closing, and the Company agrees to sell and issue to the Purchaser
at the
Closing, the number of Units set forth on the signature page for a purchase
price of $1,000.00 per Unit (the “Purchase
Price”).
The
shares of Common Stock issued to the Purchaser pursuant to this Agreement
shall
be referred to as the “Common
Shares”,
the
shares of Series B Preferred Stock issued to the Purchasers pursuant to
this Agreement shall be referred to in this Agreement as the “Preferred
Shares”
and
the
Common Shares and Preferred Shares, collectively, shall be referred to as
the
“Shares”.
(b) The
Purchaser shall deliver this Agreement, fully executed, along with a completed
and executed Investor Questionnaire and a check payable to “Xxxxxxx X. Xxxxxxx,
Esq.” in the full amount of the Purchase Price to Xxxxxxx X. Xxxxxxx (the
“Escrow
Agent”)
to be
held until Closing.
1.2. Closing;
Delivery.
(a) The purchase
and sale of the Shares shall take place remotely via the exchange of documents
and signatures, at such time as the Company shall have received not less
than
$300,000 in subscription proceeds from the offer and sale of Units (which
time
is designated as the “Closing”),
but
not later than December 31, 2005 unless the Company, in its sole discretion,
shall extend the closing to a date not later than March 31, 2006 (the
“Offering
Termination Date”).
(b) At
the
Closing, the Company shall deliver to the Purchaser certificates representing
the Shares being purchased by the Purchaser and the Escrow Agent shall deliver
to the Company the Purchase Price.
(c) In
the
event that the Closing has not occurred on or before the Offering Termination
Date or the Offering is terminated by the Company prior to the Closing, the
Escrow Agent shall promptly return to the Purchaser the full Purchase Price
without interest thereon or deduction therefrom.
1
1.3. Defined
Terms Used in this Agreement.
In
addition to the terms defined above, the following terms used in this Agreement
shall be construed to have the meanings set forth or referenced
below.
“Affiliate”
means
with respect to any person or entity (a “Person”)
any
Person which, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including, without limitation, any partner,
officer, director, or member of such Person.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Investor
Rights Agreement”
means
the agreement between the Company and the Purchaser dated as of the date
of the
Closing, in the form attached to the Memorandum.
“Key
Employee”
means
any executive-level employee (including division director and Vice President
level positions) as well as any employee who either alone or in concert with
others develops, invents, programs or designs any Company Intellectual Property
(as defined in Section
2.8).
“Material
Adverse Effect”
means
a
material adverse effect on the business, assets (including intangible assets),
liabilities, financial condition, property, prospects or
results of operations of the Company.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Transaction
Agreements”
means
this Agreement and the Investor Rights Agreement.
2.
Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchaser that the following
representations are true and complete as of the date of the Closing.
For
purposes of these representations and warranties, the phrase “to the Company’s
knowledge” shall mean the actual knowledge after reasonable investigation of the
following officers: Xxxx Xxxxxxx and Xxxx Xxxxx.
In
addition, for purposes of these representations and warranties (other than
those
in Sections
2.2, 2.3, 2.4, 2.5 and 2.6),
the
term “the Company” shall include any subsidiaries of the Company, unless
otherwise noted herein.
2.1. Organization,
Good Standing, Corporate Power and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has all requisite corporate power
and
authority to carry on its business as presently conducted and as proposed
to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have
a
Material Adverse Effect.
2.2. Capitalization.
The
authorized capital of the Company consists, immediately prior to the Closing,
of:
(a) 100,000,000
shares of Common Stock, $0.001 par value, 21,000,000 shares of which are
issued
and outstanding immediately prior to the Closing. All of the outstanding
shares
of Common Stock have been duly authorized, are fully paid and nonassessable
and
were issued in compliance with all applicable federal and state securities
laws.
The Company holds no treasury stock.
(b) 20,000,000
shares of Preferred Stock, $0.001 par value, of which 6,000,000 shares have
been
designated Series A Preferred Stock, 6,000,000 of which are issued and
outstanding immediately prior to the Closing, and 2,700,000 shares have been
designated Series B Preferred Stock, none of
which
are issued and outstanding immediately prior to the Closing. The rights,
privileges and preferences of the Preferred Stock are as stated in the Amended
and Restated Articles of Incorporation, the Series A Certificate of Designation
and the Series B Certificate of Designation, each of which is an exhibit
to the
Memorandum, and as provided by the general corporation law of the jurisdiction
of the Company’s formation.
2
(c) The
Company has reserved 1,000,000 shares of Common Stock for issuance to officers,
directors, employees and consultants of the Company pursuant to its 2005
Stock
Option Plan duly adopted by the Board of Directors and approved by the Company
stockholders (the “Stock
Plan”).
Of
such reserved shares of Common Stock, no shares have been issued pursuant
to
restricted stock purchase agreements, no options to purchase shares have
been
granted and are currently outstanding, and 1,000,000 shares of Common Stock
remain available for issuance to officers, directors, employees and consultants
pursuant to the Stock Plan.
(d) Except
for (A) the conversion privileges of the outstanding Series A Preferred Stock
and the Series B Preferred Shares to be issued under this Agreement, and
(B) the
rights provided in the Investor Rights Agreement, there are no outstanding
options, warrants, rights (including conversion or preemptive rights and
rights
of first refusal or similar rights) or agreements, orally or in writing,
to
purchase or acquire from the Company any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common
Stock.
(e) None
of
the Company’s stock purchase agreements or stock option documents contains a
provision for acceleration of vesting (or lapse of a repurchase right) upon
the
occurrence of any event or combination of events. The Company has never adjusted
or amended the exercise price of any stock options previously awarded, whether
through amendment, cancellation, replacement grant, repricing, or any other
means.
2.3. Subsidiaries.
The
Company does not currently own or control, directly or indirectly, any interest
in any other corporation, partnership, trust, joint venture, limited liability
company, association, or other business entity.
2.4. Authorization.
All
corporate action required to be taken by the Company’s Board of Directors and
stockholders in order to authorize the Company to enter into the Transaction
Agreements, and to issue the Shares at the Closing and the Common Stock issuable
upon conversion of the Series B Preferred Shares, has been taken or will
be
taken prior to the Closing. All action on the part of the officers of the
Company necessary for the execution and delivery of the Transaction Agreements,
the performance of all obligations of the Company under the Transaction
Agreements to be performed as of the Closing, and the issuance and delivery
of
the Shares has been taken or will be taken prior to the Closing. The Transaction
Agreements, when executed and delivered by the Company, shall constitute
valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or other laws of general application relating to or affecting
the
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, or (iii) to the extent the indemnification provisions contained
in the Investor Rights Agreement may be limited by applicable federal or
state
securities laws.
2.5. Valid
Issuance of Shares.
The
Shares, when issued, sold and delivered in accordance with the terms and
for the
consideration set forth in this Agreement, will be validly issued, fully
paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under this Agreement, the Investor Rights Agreement, applicable
state and federal securities laws and liens or encumbrances created by or
imposed by the Purchaser. Assuming the accuracy of the representations of
the
Purchasers in Section
3
of this
Agreement and subject to the filings described in Section 2.6(ii)
below,
the Shares will be issued in compliance with all applicable federal and state
securities laws. The Common Stock issuable upon conversion of the Series
B
Preferred Shares has been duly reserved for issuance, and upon issuance in
accordance with the terms of the Series B Certificate of Designation, will
be
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under the Transaction Agreements,
applicable federal and state securities laws and liens or encumbrances created
by or imposed by the Purchaser. Based in part upon the representations of
the
Purchaser in Section
3
of this
Agreement, and subject to Section
2.6
below,
the Common Stock issuable upon conversion of the Series B Preferred Shares
will
be issued in compliance with all applicable federal and state securities
laws.
3
2.6. Governmental
Consents and Filings.
Assuming the accuracy of the representations made by the Purchasers in
Section
3
of this
Agreement, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state
or
local governmental authority is required on the part of the Company in
connection with the consummation of the transactions contemplated by this
Agreement, except for (i) the filing of the Series B Certificate of Designation,
which will have been filed as of the Closing, and (ii) filings pursuant to
Regulation D of the Securities Act, and applicable state securities laws,
which have been made or will be made in a timely manner.
2.7. Litigation.
There
is no claim, action, suit, proceeding, arbitration, complaint, charge or
investigation pending or to the Company’s knowledge, currently threatened (i)
against the Company or any officer, director or Key Employee of the Company;
or
(ii) that questions the validity of the Transaction Agreements or the right
of
the Company to enter into them, or to consummate the transactions contemplated
by the Transaction Agreements; or (iii) to the Company’s knowledge, that would
reasonably be expected to have, either individually or in the aggregate,
a
Material Adverse Effect. Neither the Company nor, to the Company’s knowledge,
any of its officers or directors, is a party or is named as subject to the
provisions of any order, writ, injunction, judgment or decree of any court
or
government agency or instrumentality. There is no action, suit, proceeding
or
investigation by the Company pending or which the Company intends to initiate.
The foregoing includes, without limitation, actions, suits, proceedings or
investigations pending or threatened in writing (or any basis therefor known
to
the Company) involving the prior employment of any of the Company’s employees,
their services provided in connection with the Company’s business, or any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior
employers.
2.8. Intellectual
Property.
The
Company owns or possesses sufficient legal rights to (i) all trademarks,
service
marks, tradenames, copyrights, trade secrets, licenses, information and
proprietary rights and processes and (ii) to the Company’s knowledge, all
patents and patent right, (such rights are collectively referred to herein
as
the “Company
Intellectual Property”)
as are
necessary to the conduct of the Company’s business as now conducted and as
presently proposed to be conducted,
without
any known conflict with, or infringement of, the rights of others. To
the
Company’s knowledge, no product or service marketed or sold (or proposed to be
marketed or sold) by the Company violates or will violate any license or
infringe any intellectual property rights of any other party. Other than
with
respect to commercially available software products under standard end-user
object code license agreements, there are no outstanding options, licenses,
agreements, claims, encumbrances or shared ownership interests of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity.
The
Company has not received any communications alleging that the Company has
violated or, by conducting its business, would violate any of the patents,
trademarks, service marks, tradenames, copyrights, trade secrets or other
proprietary rights or processes of any other person or entity. The Company
has
obtained and possesses valid licenses to use all of the software programs
present on the computers and other software-enabled electronic devices that
it
owns or leases or that it has otherwise provided to its employees for their
use
in connection with the Company’s business. To the Company’s knowledge, it will
not be necessary to use any inventions of any of its employees (or persons
it
currently intends to hire) made prior to their employment by the Company.
Each
Key Employee has assigned to the Company all intellectual property rights
he or
she owns that are related to the Company’s business as now conducted. The
Company has not embedded any open source, copyleft or community source code
in
any of its products generally available or in development, including but
not
limited to any libraries or code licensed under any General Public License,
Lesser General Public License or similar license arrangement. For purposes
of
this Section
2.8,
the
Company shall be deemed to have knowledge of a patent right if the Company
has
actual knowledge of the patent right or would be found to be on notice of
such
patent right as determine by reference to United States patent
laws.
2.9. Compliance
with Other Instruments.
The
Company is not in violation or default (i) of any provisions of its Restated
Articles of Incorporation or Bylaws, (ii) of any instrument, judgment, order,
writ or decree, (iii) under any note, indenture or mortgage, or (iv) under
any
lease, agreement, contract or purchase order to which it is a party or by
which
it is bound, or
of any
provision of federal or state statute, rule or regulation applicable to the
Company, the violation of which would have a Material Adverse Effect. The
execution, delivery and performance of the Transaction Agreements and the
consummation of the transactions contemplated by the Transaction Agreements
will
not result in any such violation or be in conflict with or constitute, with
or
without the passage of time and giving of notice, either (i) a default under
any
such provision, instrument, judgment, order, writ, decree, contract or agreement
or (ii) an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company or the suspension, revocation,
forfeiture, or nonrenewal of any material permit or license applicable to
the
Company.
4
2.10. Memorandum.
The
Memorandum did not as of its date, and will not as of the Closing Date, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2.11. Changes.
Since
the date of Memorandum there
has
not been:
(a) any
change in the assets, liabilities, financial condition or operating results
of
the Company from that reflected in the financial statements included in the
Memorandum, except changes in the ordinary course of business that have not
caused, in the aggregate, a Material Adverse Effect;
(b) any
damage, destruction or loss, whether or not covered by insurance, that would
have a Material Adverse Effect;
(c) any
waiver or compromise by the Company of a valuable right or of a material
debt
owed to it;
(d) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of
any
obligation by the Company, except in the ordinary course of business and
the
satisfaction or discharge of which would not have a Material Adverse
Effect;
(e) any
material change to a material contract or agreement by which the Company
or any
of its assets is bound or subject;
(f) any
material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;
(g) any
resignation or termination of employment of any officer or Key Employee of
the
Company;
(h) any
mortgage, pledge, transfer of a security interest in, or lien, created by
the
Company, with respect to any of its material properties or assets, except
liens
for taxes not yet due or payable and liens that arise in the ordinary course
of
business and do not materially impair the Company’s ownership or use of such
property or assets;
(i) any
loans
or guarantees made by the Company to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other
than
travel advances and other advances made in the ordinary course of its
business;
(j) any
declaration, setting aside or payment or other distribution in respect of
any of
the Company’s capital stock, or any direct or indirect redemption, purchase, or
other acquisition of any of such stock by the Company;
(k) any
sale,
assignment or transfer of any Company Intellectual Property that could
reasonably be expected to result in a Material Adverse Effect;
(l) receipt
of notice that there has been a loss of, or material order cancellation by,
any
major customer of the Company;
(m) to
the
Company’s knowledge, any other event or condition of any character, other than
events affecting the economy or the Company’s industry generally, that
could reasonably be expected to result in a Material Adverse Effect;
or
(n) any
arrangement or commitment by the Company to do any of the things described
in
this Section 2.11.
5
3. Representations
and Warranties of Purchaser.
The
Purchaser hereby represents and warrants to the Company that:
3.1. Authorization.
The
Purchaser has full power and authority to enter into the Transaction Agreements.
The Transaction Agreements, when executed and delivered by the Purchaser,
will
constitute valid and legally binding obligations of the Purchaser, enforceable
in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and
any other laws of general application affecting enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies, or (b) to the
extent the indemnification provisions contained in the Investor Rights Agreement
may be limited by applicable federal or state securities laws.
3.2. Purchase
Entirely for Own Account.
This
Agreement is made with the Purchaser in reliance upon the Purchaser’s
representation to the Company, which by the Purchaser’s execution of this
Agreement, the Purchaser hereby confirms, that the Shares to be acquired
by the
Purchaser will be acquired for investment for the Purchaser’s own account, not
as a nominee or agent, and not with a view to the resale or distribution
of any
part thereof, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, the Purchaser further represents that the Purchaser does
not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any
third
person, with respect to any of the Shares. The Purchaser has not been formed
for
the specific purpose of acquiring the Shares.
3.3. Disclosure
of Information.
The
Purchaser has received the Memorandum and had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions
of the offering of the Units with the Company’s management. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section
2
of this
Agreement or the right of the Purchasers to rely thereon.
3.4. Restricted
Securities.
The
Purchaser understands that the Units have not been registered under the
Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things,
the
bona fide nature of the investment intent and the accuracy of the Purchaser’s
representations as expressed herein. The Purchaser understands that the Shares
are “restricted securities” under applicable U.S. federal and state securities
laws and that, pursuant to these laws, the Purchaser must hold the Shares
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Purchaser
acknowledges that the Company has no obligation to register or qualify the
Shares, or the Common Stock into which it may be converted, for resale except
as
set forth in the Investor Rights Agreement. The Purchaser further acknowledges
that if an exemption from registration or qualification is available, it
may be
conditioned on various requirements including, but not limited to, the time
and
manner of sale, the holding period for the Shares, and on requirements relating
to the Company which are outside of the Purchaser’s control, and which the
Company is under no obligation and
may
not be able to satisfy.
3.5. No
Public Market.
The
Purchaser understands that no public market now exists for the Shares, and
that
the Company has made no assurances that a public market will ever exist for
the
Shares.
3.6. Legends.
The
Purchaser understands that the Shares and any securities issued in respect
of or
exchange for the Shares, may bear one or all of the following
legends:
(a) “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT
SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”
(b) Any
legend set forth in, or required by, the other Transaction
Agreements.
6
(c) Any
legend required by the securities laws of any state to the extent such laws
are
applicable to the Shares represented by the certificate so
legended.
3.7. Investor
Suitability.
The
Purchaser has accurately completed and delivered to the Company an Investor
Questionnaire reflecting that the Purchaser is an accredited investor as
defined
in Rule 501(a) of Regulation D promulgated under the Securities Act or otherwise
meets the suitability standards set forth in the Memorandum.
3.8. No
General Solicitation.
Neither
the Purchaser, nor any of its officers, directors, employees, agents,
stockholders or partners has been solicited, either directly or indirectly,
including through a broker or finder, by means of (a) any general
solicitation, or (b) any advertisement published in connection with the
offer and sale of the Shares.
3.9. Offering
Risks.
Purchaser is aware that the Units are speculative and that it may lose its
entire investment and affirms that it can afford to bear the risks of an
investment in the Company, including the risk of losing its entire
investment.
4. Conditions
to the Purchaser’s Obligations at Closing.
The
obligations of the Purchaser to purchase Units at the Closing are subject
to the
fulfillment, on or before such Closing, of each of the following conditions,
unless otherwise waived:
4.1. Representations
and Warranties.
The
representations and warranties of the Company contained in Section 2
shall be
true and correct in all material respects as of such Closing, except that
any
such representations and warranties shall be true and correct in all respects
where such representation and warranty is qualified with respect to
materiality.
4.2. Performance.
The
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required
to be
performed or complied with by it on or before Closing.
4.3. Compliance
Certificate.
The
President of the Company shall deliver to the Escrow Agent at Closing a
certificate certifying that the conditions specified in Sections
4.1 and 4.2
have
been fulfilled.
4.4. Qualifications.
All
authorizations, approvals or permits, if any, of any governmental authority
or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Units pursuant to this
Agreement shall be obtained and effective as of Closing.
4.5. Investor
Rights Agreement.
The
Company and each
other purchaser of Units (other than the Purchaser relying upon this condition
to excuse such Purchaser’s performance hereunder) shall have executed and
delivered the Investor Rights Agreement.
4.6. Series
B Certificate of Designation.
The
Company shall have filed the Series B Certificate of Designation with the
Secretary of State of Texas on or prior to the Closing, which shall continue
to
be in full force and effect as of the Closing.
4.7. Sale
of All Units.
The
Company shall have received duly completed Stock Purchase Agreements and
subscription proceeds from the sale of all $300,000 of Units offered pursuant
to
the Memorandum and the Offering.
5. Conditions
of the Company’s Obligations at Closing.
The
obligations of the Company to sell Units to the Purchasers at the Closing
are
subject to the fulfillment, on or before the Closing, of each of the following
conditions, unless otherwise waived:
5.1. Representations
and Warranties.
The
representations and warranties of each Purchaser contained in Section 3
shall be
true and correct in all material respects as of such Closing.
7
5.2. Performance.
The
Purchaser shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required
to be
performed or complied with by them on or before Closing.
5.3. Qualifications.
All
authorizations, approvals or permits, if any, of any governmental authority
or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Units pursuant to this
Agreement shall be obtained and effective as of the Closing.
5.4. Investor
Rights Agreement.
Each
Purchaser of Units shall have executed and delivered the Investor Rights
Agreement.
5.5. Sale
of All Units.
The
Company shall have received duly completed Stock Purchase Agreements and
subscription proceeds from the sale of all $300,000 of Units offered pursuant
to
the Memorandum and the Offering.
6.
Miscellaneous.
6.1. Survival
of Warranties.
Unless
otherwise set forth in this Agreement, the representations and warrants of
the
Company and the Purchaser contained in or made pursuant to this Agreement
shall
survive the execution and delivery of this Agreement and the Closing and
shall
in no way be affected by any investigation of the subject matter thereof
made by
or on behalf of the Purchaser or the Company.
6.2. Transfer;
Successors and Assigns.
The
terms and conditions of this Agreement shall inure to the benefit of and
be
binding upon the respective successors and assigns of the parties. Nothing
in
this Agreement, express or implied, is intended to confer upon any party
other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
6.3. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the Business
Corporation Act of the State of Texas as to matters within the scope thereof,
and as to all other matters shall be governed by and construed in accordance
with the internal laws of the State of Texas, without regard to its principles
of conflicts of laws.
6.4. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement may also be executed and delivered by facsimile
signature and in two or more counterparts, each of which shall be deemed
an
original, but all of which together shall constitute one and the same
instrument.
6.5. Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this
Agreement.
6.6. Notices.
All
notices and other communications given or made pursuant to this Agreement
shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient, and if not
so
confirmed, then on the next business day, (c) five (5) days after having
been
sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at their address as
set
forth on the signature page, or to such e-mail address, facsimile number
or
address as subsequently modified by written notice given in accordance with
this
Section
6.6.
6.7. No
Finder’s Fees.
Each
party represents that it neither is nor will be obligated for any finder’s fee
or commission in connection with this transaction. The Purchaser agrees to
indemnify and to hold harmless the Company from any liability for any commission
or compensation in the nature of a finder’s fee arising out of this transaction
(and the costs and expenses of defending against such liability or asserted
liability) for which the Purchaser or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless the Purchaser from any liability for any commission or compensation
in the nature of a finder’s or broker’s fee arising out of this transaction
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
8
6.8. Attorney’s
Fees.
If any
action at law or in equity (including arbitration) is necessary to enforce
or
interpret the terms of any of the Transaction Agreements, the prevailing
party
shall be entitled to reasonable attorney’s fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
6.9. Amendments
and Waivers.
Any
term of this Agreement may be amended, terminated or waived only with the
written consent of the Company and the Purchaser.
6.10. Severability.
The
invalidity of unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
6.11. Delays
or Omissions.
No
delay or omission to exercise any right, power or remedy accruing to any
party
under this Agreement, upon any breach or default of any other party under
this
Agreement, shall impair any such right, power or remedy of such non-breaching
or
non-defaulting party nor shall it be construed to be a waiver of any such
breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind
or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
6.12. Entire
Agreement.
This
Agreement (including the Exhibits hereto, if any), the Series B Certificate
of
Designation and the other Transaction Agreements (as defined in this Agreement)
constitute the full and entire understanding and agreement between the parties
with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties
are
expressly canceled. .
6.13 Dispute
Resolution.
Any
unresolved controversy or claim arising out of or relating to this Agreement,
except as (i) otherwise provided in this Agreement, or (ii) any such
controversies or claims arising out of either party’s intellectual property
rights for which a provisional remedy or equitable relief is sought, shall
be
submitted to arbitration by one arbitrator mutually agreed upon by the parties,
and if no agreement can be reached within 30 days after names of potential
arbitrators have been proposed by the American Arbitration Association (the
“AAA”),
then
by one arbitrator having reasonable experience in corporate finance transactions
of the type provided for in this Agreement and who is chosen by the AAA.
The
arbitration shall take place in Houston, Texas, in accordance with the AAA
rules
then in effect, and judgment upon any award rendered in such arbitration
will be
binding and may be entered in any court having jurisdiction thereof. There
shall
be limited discovery prior to the arbitration hearing as follows: (a) exchange
of witness lists and copies of documentary evidence and documents relating
to or
arising out of the issues to be arbitrated, (b) depositions of all party
witnesses and (c) such other depositions as may be allowed by the arbitrators
upon a showing of good cause. Depositions shall be conducted in accordance
with
the Texas Code of Civil Procedure, the arbitrator shall be required to provide
in writing to the parties the basis for the award or order of such arbitrator,
and a court reporter shall record all hearings, with such record constituting
the official transcript of such proceedings. The prevailing party shall be
entitled to reasonable attorney’s fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled. Each of the
parties to this Agreement consents to personal jurisdiction for any equitable
action sought in the U.S. District Court for the Southern District of Texas
or
any court of the State of Texas having subject matter jurisdiction.
[Remainder
of Page Intentionally Left Blank]
9
If
the
foregoing correctly sets forth the agreement between the Company and the
Purchaser, please indicate your acceptance in the space provided for that
purpose below.
|
Purchaser
Name:
|
_________________________
|
|
|
Purchaser
Address:
|
_________________________
|
|
|
_________________________
|
||
|
Telephone
No.:
|
_________________________
|
|
|
Facsimile
No.:
|
_________________________
|
|
|
Tax
ID No.:
|
_________________________
|
|
|
Units
Subscribed:
|
_________________________
|
|
|
Purchase
Price
|
||
|
(Units
x $1,000):
|
$________________________
|
|
|
PURCHASER:
|
||
| Date: ___________, 200__ | ||
|
By:
/s/
Name:
Title:
|
Accepted
and agreed, this ___ day
of
_____________, 200__, by:
The
Xxx
Xxxxxx Corporation
By:
/s/
Name:
Title:
Address: 0000
Xxxxx Xx., Xxxxx 000
Xxxx,
Xxxxx 00000
10
