EXHIBIT 4.11
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION Agreement (the "Agreement")
dated___________, 2001 is entered into by and between BrightStar Information
Technology Group, Inc., a Delaware corporation (together with its successors,
the "Company"), BrightStar Information Technology Services, Inc., a Delaware
corporation ("Subsidiary") and a wholly-owned subsidiary of the Company, and the
investors executing the signature pages attached hereto ("the Investors").
Unless otherwise defined herein, capitalized terms used herein
and not defined herein shall have the meanings given to them under the
Securities Act of 1933, as amended (the "Securities Act").
The parties hereto agree as follows:
1. Purchase and Sale. In consideration of and upon the basis
of the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement, the Investors agree to purchase from the
Subsidiary, and the Subsidiary agrees to issue and sell to the Investors, on the
Closing Date specified in Section 2 hereof, the principal amount of the
Subsidiary's Series 1 Convertible Subordinated Secured Promissory Notes (the
"Notes") set forth on the signature page attached hereto, which principal amount
shall not add up to more than $2,000,000 in the aggregate, plus warrants (the
"Warrants") to purchase 652.17 shares of the Company's Common Stock ("Common
Stock") for each $1,000 in principal amount of the Notes (or such number of
shares based on the conversion formula then in effect) all for a price equal to
such principal amount (the "Purchase Price"). The Notes, which shall be in the
form set forth in Exhibit 1 attached hereto, are convertible into shares of the
Company's Common Stock (the "Conversion Common Stock"), as provided therein. The
Warrants, which shall be in the form set forth in Exhibit 2 attached hereto, are
exercisable for shares of the Company's Common Stock (the "Warrant Common
Stock") at a price of $.50 per share. The Conversion Common Stock and the
Warrant Common Stock are herein referred to collectively as the "Underlying
Common Stock." Each $1,000 in original principal amount of the Notes plus the
associated Warrant to purchase 652.17 shares of the Company's Common Stock (or
such number of shares based on the conversion formula then in effect), is herein
referred to as a "Unit." The Investors, as holders of the Notes, shall have the
benefit of the Security Agreement (the "Security Agreement") in the form set
forth in Exhibit 3 attached hereto. On or before the Closing Date (as defined
below), the Subsidiary will have authorized the sale and issuance of the Units
to the Investors, and the Company will have authorized the issuance of the
Underlying Common Stock upon conversion of the Notes and exercise of the
Warrants.
2. Escrow and Closing. Immediately upon execution hereof, each
Investor shall deposit cash in the amount of the Purchase Price for the Notes to
be purchased by such Investor in an escrow account to be designated by the
Company. Subject to the satisfaction or
waiver of the conditions set forth in Sections 7 and 8 hereof, the closing of
the sale of the Units (the "Closing") shall take place on a date designated by
the Subsidiary, not later than thirty (30) days after the date hereof, or at
such other date and time as the Investors and the Subsidiary shall mutually
agree (such date and time being referred to herein as the "Closing Date"). At
the Closing, the cash deposited in the escrow account by each Investor shall be
disbursed to the Company to pay the Purchase Price for the Units purchased by
that Investor. Not later than five (5) business days after Closing, the
Subsidiary shall deliver to each Investor the Note and the Warrants purchased by
that Investor.
3. Representations and Warranties of the Company and the
Subsidiary. The Company and the Subsidiary hereby represent and warrant to the
Investors as follows:
a. Each of the Company and the Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. Each of
the Company and the Subsidiary 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 on its respective business or properties. The Company
owns all of the issued and outstanding capital stock of the Subsidiary, and
there are not outstanding or in existence any options or warrants or other
rights to purchase any capital stock of the Subsidiary, any securities
convertible into or exercisable for any shares of capital stock of the
Subsidiary, or any other agreements of any type or nature whatsoever pursuant to
which any party has the right to purchase or otherwise acquire any shares of
capital stock of the Subsidiary.
b. All corporate action on the part of the Company
and the Subsidiary, and their respective officers and directors necessary for
the authorization, execution and delivery of this Agreement, the performance of
all obligations of the Company and the Subsidiary hereunder and thereunder, the
authorization, issuance, sale and delivery of the Units, and the reservation and
issuance of the Underlying Common Stock, has been taken or will be taken prior
to the Closing. This Agreement constitutes a valid and legally binding
obligation of each of the Company and the Subsidiary, enforceable against each
respectively in accordance with its respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
c. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
result in any violation of the respective corporate charter or bylaws of either
the Company or the Subsidiary or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
of the respective assets of the Company or the Subsidiary or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization, or approval applicable to the Company or the Subsidiary,
or the business or operations of either of them respectively or any of their
respective assets or properties.
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d. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company or the
Subsidiary is required in connection with the consummation of the transactions
contemplated by this Agreement, except such filings as may be required after
closing by applicable securities laws.
e. Except as disclosed in the SEC Filings (as defined
below) or the Private Placement Memorandum (draft) dated June 11, 2001 (the
"PPM"), a copy of which has been delivered to each of the Investors, there is no
action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company or the Subsidiary that
questions the validity of this Agreement or the right of the Company or the
Subsidiary to enter into such agreements, or to consummate the transactions
contemplated hereby.
f. The Company has filed all filings with the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
or under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or under the rules and regulations promulgated by
the SEC (any such filing, an "SEC Filing") required to be filed by the Company
pursuant to such acts and no SEC Filing contained, on the date on which such
document was filed with the SEC, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements, in the light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
SEC Filings (including any similar documents filed after the date of this
Agreement) comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto), and fairly present the
consolidated financial position of Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
g. The Notes and the Warrants, when issued, sold or
delivered in accordance with the terms hereof, for the consideration expressed
herein, will be duly and validly issued, and will be free of any liens and
encumbrances created by the Company or the Subsidiary and, subject to the
accuracy of the representations of the Investors in this Agreement, will be
issued in compliance with all applicable federal and state securities laws. The
Company has reserved shares of its Common Stock for issuance upon conversion of
the Notes and exercise of the Warrants. The Underlying Common Stock, when issued
upon conversion of the Notes or exercise of the Warrants, will have been duly
and validly issued, and will be free of any liens and encumbrances created by
the Company or the Subsidiary.
4. Representations and Warranties of the Investors. Each
Investor hereby represents and warrants to the Company and the Subsidiary on the
date hereof, and agrees with the Company and the Subsidiary (unless otherwise
specified as provided in the paragraphs below), as follows:
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a. such Investor understands that no United States
federal or state agency has passed on, reviewed or made any recommendation or
endorsement of the Units.
b. such Investor has full power and authority to
enter into this Agreement and such Agreement constitutes its valid and legally
binding obligation, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
c. this Agreement is made with such Investor in
reliance upon such Investor's representation to the Company and the Subsidiary,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Units will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a present view to the resale or
distribution of any part thereof, and that such Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, such Investor further represents that
such Investor does not 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 Units.
d. such Investor acknowledges that it can bear the
economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Units. Such Investor also represents it has not
been organized for the purpose of acquiring the Units.
e. such Investor (if not an officer of the Company)
is an "accredited investor" within the meaning of SEC Rule 501(a) of Regulation
D, as presently in effect.
f. such Investor acknowledges receipt of a copy of
the PPM and acknowledges that it has had an opportunity to discuss the business
and affairs of the Company with officers of the Company, and to ask questions
regarding such matters.
g. such Investor understands that the Units and the
Underlying Common Stock are being offered and sold in reliance on a
transactional exemption from the registration requirements of Federal and state
securities laws and that the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of such Investor set forth herein in order to determine the applicability of
such exemptions and the suitability of such Investor to acquire the Units and
the Underlying Common Stock.
h. such Investor understands that the Units it is
purchasing and the Underlying Common Stock are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act, only in certain limited
circumstances. In this
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connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act.
i. the execution, delivery and performance of this
Agreement and the consummation by such Investor of the transactions contemplated
hereby do not and will not (i) result in a violation of such Investor's charter
documents or bylaws or (ii) conflict with any material agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any order, judgment or decree of any court or governmental agency applicable to
such Investor or, to such Investor's knowledge, of any law, rule, or regulation.
Such Investor is not required to obtain any consent or authorization of any
governmental agency in order for it to perform its obligations under this
Agreement.
5. Covenants.
a. Each Investor covenants and agrees with the
Company that neither such Investor nor any of such Investor's affiliates nor any
person acting on its or their behalf will at any time offer or sell any Notes or
Warrants or the Underlying Common Stock, other than pursuant to registration
under the Securities Act or pursuant to an available exemption therefrom,
provided that in the case of an offer or sale pursuant to an available exemption
such Investor shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (ii) if reasonably requested by the
Company, such Investor shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company that such disposition will not
require registration of such securities under the Securities Act. It is agreed
that the Company will not require opinions of counsel for transactions made
pursuant to Rule 144 except in circumstances that require a designation of an
entity's status as an "affiliate".
b. With a view to making available the benefits of
certain rules and regulations of the SEC that may at any time permit the sale of
the restricted securities to the public without registration, the Company agrees
to:
(1) Make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times after the effective date of the first registration
under the Securities Act filed by the Company for an offering of its securities
to the general public;
(2) Use its best efforts to then file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
c. So long as any Investor owns any of the Notes or
Warrants or the Underlying Common Stock, to furnish to each such Investor upon
request, a written statement by the Company as to its compliance with the
reporting requirements of said Rule 144 and of the Securities Act and of the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company as any such
Investor may
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reasonably request in availing itself of any rule or regulation of the SEC
allowing such Investor to sell any such securities without registration.
d. Each Investor covenants and agrees with the
Company that, while the Notes are outstanding, such Investor shall not engage in
any "short sales" or engage in any other transactions involving the Common
Stock, such as puts or calls, that are the economic equivalent of "short sales"
whereby the Investor will profit from such transaction if the market price of
the Common Stock declines in comparison to the market price at the time such
transaction is carried out. In the event of any assignment or transfer of the
Notes or the Warrants, the Investor agrees that the assignee or transferee
shall, as a condition to completing such assignment or transfer, be required to
execute and deliver to the Company a written undertaking under which such
assignee or transferee has agreed to be bound by the terms of this Section 5.d.
e. The Company shall not, prior to the effectiveness
of the Registration Statement referred to in Section 6.a below, issue any Common
Stock at a price less than $0.23 per share or warrants to purchase Common Stock
with an exercise price of less than $0.23 per share.
6. Registration Rights.
a. Registration of Shares. The Company shall file
with the SEC, as promptly as practicable following the Closing and in any event
within ninety (90) days after the Closing, a registration statement under the
Securities Act covering the resale to the public by the Investors of the
Underlying Common Stock (the "Registration Statement"). The Company shall use
its best efforts to cause the Registration Statement to be declared effective by
the SEC as soon as practicable. The Company shall cause the Registration
Statement to remain effective until the earlier of 3 years from the Closing Date
or such time as all shares of Underlying Common Stock may be sold under Rule 144
within a ninety (90) day period or such earlier time as all of the shares of
Underlying Common Stock covered by the Registration Statement have been sold
pursuant thereto.
b. Limitations on Registration Rights.
(1) The Company may, by written notice to
the Investors, (x) delay the filing or effectiveness of the Registration
Statement (for up to a total of sixty (60) days) or (y) suspend (for up to a
total of seventy-five (75) days within any twelve-month period) the Registration
Statement after effectiveness and require that the Investors immediately cease
sales of shares pursuant to the Registration Statement, in the event and during
such period as the Company determines that the existence of any fact or the
happening of any event (including without limitation pending negotiations
relating to, or the consummation of, a transaction or the occurrence of any
other event) would require additional disclosure of material information by the
Company in the Registration Statement the confidentiality of which the Company
has a business purpose to preserve or which fact or event would render the
Company unable to comply with SEC requirements (in either case, a "Suspension
Event"). In the case of any Suspension Event occurring prior to and delaying the
filing of the Registration Statement, the Company shall file the Registration
Statement, the Company shall be required to keep the Registration Statement
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effective until the earlier of (x) such time as all of the shares offered
thereby have been disposed of in accordance with the intended methods of
distribution set forth in the Registration Statement or (y) the period required
by Section 6.a above plus an extended period equal to the number of days during
which any such suspension was in effect.
(2) If the Company delays or suspends the
Registration Statement or requires the Investors to cease sales of shares
pursuant to paragraph (1) above, the Company shall, as promptly as practicable
following the termination of the circumstance which entitled the Company to do
so, take such actions as may be necessary to file or reinstate the effectiveness
of the Registration Statement and/or give written notice to all the Investors
authorizing them to resume sales pursuant to the Registration Statement. If as a
result thereof the prospectus included in the Registration Statement has been
amended to comply with the requirements of the Securities Act, the Company shall
enclose such revised prospectus with the notice to the Investors given pursuant
to this paragraph 2, and the Investors shall make no offers or sales of shares
pursuant to the Registration Statement other than by means of such revised
prospectus.
c. Registration Procedures.
(1) In connection with the filing by the
Company of the Registration Statement, the Company shall furnish to each of the
Investors a copy of the prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act and such additional
copies as are reasonably requested by the Investors.
(2) The Company shall use its best efforts
to register or qualify the shares of Underlying Common Stock covered by the
Registration Statement under the securities laws of such states as the Investors
shall reasonably request; provided, however, that the Company shall not be
required in connection with this paragraph (2) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
(3) If the Company has delivered final
prospectuses to the Investors and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Investors and, if requested by the Company, the Investors
shall immediately cease making offers or sales of shares under the Registration
Statement and return all prospectuses to the Company. The Company shall promptly
provide the Investors with revised prospectuses and, following receipt of the
revised prospectuses, the Investors shall be free to resume making offers and
sales under the Registration Statement.
(4) The Company shall pay the expenses
incurred by it in complying with its obligations under this Section 6, including
all registration and filing fees, exchange listing fees, fees and expenses of
counsel for the Company, and fees and expenses of accountants for the Company,
but excluding (x) any brokerage fees, selling commissions or underwriting
discounts incurred by the Investors in connection with sales under the
Registration Statement and (y) the fees and expenses of any counsel retained by
the Investors.
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d. Requirements of the Investors. The Company shall
not be required to include in the Registration Statement any shares of
Underlying Common Stock held by an Investor unless such Investor furnishes to
the Company in writing such information regarding such Investor and the proposed
sale of shares of Underlying Common Stock by such Investor as the Company may
reasonably request in writing in connection with the Registration Statement or
as shall be required in connection therewith by the SEC or any state securities
law authorities.
e. Assignment of Rights. No Investor may assign any
of the rights of such Investor under this Section 6 except in connection with
the transfer of some or all of its Notes or shares of Underlying Common Stock to
an affiliated entity or to the limited or general partner(s) or members of such
Investor, provided each such transferee agrees in a written instrument delivered
to the Company to be bound by the provisions of this Section 6.
f. Indemnification.
(1) To the extent permitted by law, the
Company shall indemnify and hold the Investors, the partners or officers,
directors and stockholders of the Investors, legal counsel and accountants for
the Investors, any underwriter (as defined in the Securities Act) for the
Investors and each person, if any, who controls the Investors or underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations in connection with the Registration
Statement (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities laws; and the Company will reimburse
the Investors, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 6.f(1) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Investors, underwriter or controlling person;
provided further, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of the Investors or
underwriter, or any person controlling the Investors or underwriter, from whom
the person asserting any such losses, claims, damages or liabilities purchased
shares in the offering, if the Company shall have furnished to the Investors a
revised prospectus (by amendment or supplement) which cures the defect giving
rise to such loss, claim, damage or liability and if a
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copy of such revised prospectus (as then amended or supplemented) was not sent
or given by or on behalf of the Investors or underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the shares to such person.
(2) To the extent permitted by law, each
Investor shall indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Securities Act, legal
counsel and accountants for the Company, any underwriter, any other party
selling securities in such registration statement and any controlling person of
any such underwriter or other party, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or any state securities
laws, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Investor expressly
for use in connection with such registration; and such Investor will reimburse
any person intended to be indemnified pursuant to this subsection 6.f(2), for
any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 6.f(2) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Investors (which consent shall not be unreasonably withheld),
provided that in no event shall any indemnity under this subsection 6.f(2)
exceed the gross proceeds from the offering received by such Investor.
(3) If the indemnification provided for in
this Section 6.f is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of indemnifying
such indemnified party hereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relevant intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
7. Conditions Precedent to the Investors' Obligations. The
obligations of the Investors to purchase the Units under Section 1 of this
Agreement are subject to the fulfillment on or before the Closing of each of the
following conditions, unless expressly waived in writing by the Investors:
a. The representations and warranties of the Company
and the Subsidiary contained in Section 3 shall be true on and as of the Closing
with the same effect as
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though such representations and warranties had been made on and as of the date
of such Closing, except for representations and warranties made as of a
particular date, which shall be true and correct as of such date.
b. The Company and the Subsidiary shall have
performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by the
Company or the Subsidiary, respectively, on or before the Closing.
c. The Security Agreement shall have been executed
and delivered by each of the signatories thereto, and the Company shall have
caused to be filed UCC-1 financing statements in the States of California,
Arkansas, Louisiana and Texas, for each of the debtors thereunder and showing
the Investors as the secured parties and covering the collateral described in
Section 1 of the Security Agreement.
d. The Chief Executive Officer of the Company shall
deliver to the Investors at the Closing a certificate stating that the
conditions specified in Sections 7.a, 7.b and 7.c have been fulfilled.
e. 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.
8. Conditions Precedent to the Subsidiary's Obligations. The
obligations of the Subsidiary to issue and sell the Units to the Investors under
Section 1 of this Agreement are subject to the fulfillment on or before the
Closing of each of the following conditions by the Investors, unless expressly
waived in writing by the Company:
a. The representations and warranties of the
Investors contained in Section 4 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and
as of the date of such Closing, except for representations and warranties made
as of a particular date, which shall be true and correct as of such date.
b. The Investors shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
c. 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.
d. The aggregate purchase price paid by all Investors
for Units hereunder shall be at least one million Dollars ($1,000,000).
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e. The Subsidiary shall have received the Purchase
Price for the Notes.
9. Fees and Expenses. Each of the Investors and the Company
and the Subsidiary agrees to pay their own respective expenses incident to the
performance of its obligations hereunder, including, but not limited to the
fees, expenses and disbursements of such party's counsel, except as is otherwise
expressly provided in this Agreement.
10. Survival of the Representations, Warranties, etc. The
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect for a period
of one year from the Closing Date, regardless of any investigation made by or on
behalf of the other party to this Agreement or any officer, director or employee
of, or person controlling or under common control with, such party and will
survive delivery of and payment for the Units.
11. Termination.
a. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing as follows:
(i) by mutual written consent of the Company
and the Investors; or
(ii) by either the Company or the Investors
if the Closing shall not have occurred on or before the date which is thirty
(30) days after the date of this Agreement (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 11 shall
not be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before the Termination Date.
b. In the event of termination of this Agreement by either the
Company or the Investors as provided in this Section 11, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of the Company or the Investors, other than the provisions of this
Section 11 and Section 13, and except to the extent that such termination
results from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
12. Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable international
courier service or upon personal delivery to the party to be notified.
13. Miscellaneous.
a. This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties appear on
the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
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b. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective successors and assigns.
c. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of California without regard
to principles of conflict of laws.
d. The provisions of this Agreement are severable,
and if any clause or provision hereof shall be held invalid, illegal or
unenforceable in whole or in part, such invalidity or unenforceability shall not
in any manner affect any other clause or provision of this Agreement.
e. The headings of the sections of this document have
been inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.
f. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter of this Agreement
and is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder or under the terms of the term sheets between such
parties.
g. The term "affiliate" is used herein as defined in
Rule 144(a)(1) under the Securities Act.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.
By:
--------------------------------
Name:
Title:
BRIGHTSTAR INFORMATION
TECHNOLOGY SERVICES, INC.
By:
--------------------------------
Name:
Title:
Principal Amount of Notes INVESTOR:
--------------
-----------------------------------
By:
--------------------------------
Name:
Title:
Address:
--------------------------
--------------------------
--------------------------
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Schedule 1:
The following parties have identical agreements entered into with the Company:
Xx. Xxxxxx X. Xxxxx
Xx. Xxxxx X. Xxxxxx
Mr. Forest X. Xxxxxxx
Xx. Xxxxxxx X. Xxxxx
Mr. Xxxxxx Xxxxxx
Mr. Xxxxx Xxxxxxxx
The Xxxxxxx Foundation
Ivy Creek Investments, LTD
Nauset Properties Ltd.
Xx. Xxxxxx Xxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx Defined Benefit Plan
Mr. Xxxxx Xxxxxxxx
Mr. Xxxxx Xxxxxx
Mr. G. Xxxxxxxx Xxxxxxx
Mr. Xxxxx Xxxxxxxx
Altamont Capital Management Inc.
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