ONLINE SPECIALTY RETAILING, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Agreement is made as of July 17, 1998, by and among Online Specialty
Retailing, Inc., a Washington corporation (the "Company"), with its principal
office at 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and the
investors listed on the Schedule of Purchasers attached as EXHIBIT 1.2 (the
"Purchasers").
The Company and the Purchasers hereby agree as follows:
1. AUTHORIZATION AND SALE OF PREFERRED STOCK
1.1 AUTHORIZATION. The Company will authorize the sale and issuance of up
to 1,142,857 shares of its Series A Convertible Preferred Stock ("Series A
Preferred"), having the rights, restrictions, privileges and preferences as set
forth in the Certificate of Designation, substantially in the form attached
hereto as EXHIBIT 1.1 (the "Certificate of Designation"). The Series A
Preferred to be sold pursuant to this Agreement shall be referred to as the
"Shares."
1.2 SALE OF SERIES A PREFERRED. Subject to the terms and conditions
hereof, the Company will issue and sell to the Purchasers, and the Purchasers
will buy from the Company, the number of Shares set forth opposite each
Purchaser's name on the Schedule of Purchasers attached hereto as EXHIBIT 1.2,
at a purchase price of $1.75 per Share. The Company's agreements with each of
the Purchasers are separate agreements, and the sales of the Shares to each of
the Purchasers are separate sales.
2. CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The initial closing of the purchase and sale of the
Shares hereunder (the "Initial Closing") shall be held following the receipt by
the Company of subscriptions for at least 200,000 Shares (the date of such
Initial Closing being referred to as the "Initial Closing Date"). The place of
the Initial Closing shall be at the offices of Xxxxxx Xxxxxx White & XxXxxxxxx,
6100 Columbia Center, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, or such other
place as the Purchasers and the Company shall agree.
2.2 SUSBSEQUENT CLOSINGS. At any time on or prior to May 31, 1999 the
Company may sell, in one or more transactions, up to the balance of the Shares
authorized to be sold pursuant to this Agreement and not sold at the Initial
Closing (a "Subsequent Closing"). The date of any such Subsequent Closing shall
be referred to herein as a "Subsequent Closing Date." Any sale of Shares at a
Subsequent Closing shall be on the same terms and conditions set forth in this
Agreement by execution of this Agreement by the Purchasers of Shares in such
Subsequent Closing. Purchasers of Shares sold pursuant to this subsection 2.2
who execute this Agreement as Purchasers shall be deemed to be "Purchasers" for
all purposes under this Agreement. In connection with any Subsequent Closing,
the Company may add the names of additional
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Purchasers to EXHIBIT 1.2, without any action on the part of the Purchasers in
the previous Closings.
2.3 DELIVERY. At the Initial Closing or any Subsequent Closing, as the
case may be, subject to the terms and conditions set forth in this Agreement,
the Company will deliver to each Purchaser a certificate representing the number
of Shares to be purchased by that Purchaser at such Closing (which is set forth
opposite that Purchaser's name on the Schedule of Purchasers) against payment of
the purchase price therefor (which is set forth opposite that Purchaser's name
on the Schedule of Purchasers) by check or wire transfer payable to the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
EXHIBIT 3, (the "Schedule of Exceptions") or as otherwise expressly contemplated
by this Agreement, as of the Initial Closing Date, and as of each Subsequent
Closing Date, the Company hereby represents and warrants to each Purchaser as
follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington. The Company has requisite corporate power to own and operate its
properties and assets and to carry on its business as presently conducted and as
presently proposed to be conducted.
3.2 CORPORATE POWER. The Company has all requisite legal and corporate
power to execute and deliver this Agreement and all agreements to be executed
and delivered by the Company pursuant to the terms of this Agreement
(collectively, the "Ancillary Agreements") to sell and issue the Shares
hereunder, to issue the Common Stock issuable upon conversion of the Shares, and
to carry out and perform its obligations under the terms of this Agreement and
the Ancillary Agreements.
3.3 AUTHORIZATION. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution, delivery
and performance of this Agreement and the Ancillary Agreements by the Company,
the authorization, sale, issuance and delivery of the Shares (and the Common
Stock issuable upon conversion of the Shares) and the performance of the
Company's obligations under this Agreement and under the Ancillary Agreements
has been taken. Subject to satisfaction of the conditions set forth in
Sections 5 below, this Agreement and the Ancillary Agreements, when executed and
delivered by the Company, shall constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as rights to indemnity and contribution thereunder may be limited
by applicable law and public policy and subject (i) to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws of general applicability
relating to or affecting creditors' rights and (ii) to general principles of
equity, whether such enforceability is considered in a proceeding in equity or
at law.
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3.4 CAPITALIZATION. At the time of the Initial Closing, the authorized
capital stock of the Company will consist of 20,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock, 1,142,857 shares of which
will, upon filing of the Certificate of Designation with the Secretary of
State of the State of Washington, be designated Series A Preferred. Without
giving effect to the issuance of the Shares to be issued under this Agreement
at the Initial Closing or any Subsequent Closing, 1,579,164 shares of Common
Stock and no shares of Series A Preferred will be issued and outstanding.
Upon the payment for and issuance of the Shares in accordance with the terms
and conditions of this Agreement, the Ancillary Agreements and the
Certificate of Designation, all issued and outstanding shares of capital
stock of the Company will be duly authorized, validly issued, fully paid and
nonassessable. The Company has reserved (i) 1,142,857 shares of Series A
Preferred for issuance hereunder, (ii) sufficient shares of Common Stock for
issuance upon conversion of the Shares, which upon issuance and delivery in
accordance with this Agreement and the Certificate of Designation, will be
duly authorized, validly issued, fully paid and nonassessable, and (iii)
1,000,000 shares of Common Stock issuable at any time to employees, officers,
directors, consultants and advisors of the Company pursuant the Company's
1997 Stock Incentive Plan (the "Incentive Plan"). The Series A Preferred
shall have the rights, preferences, privileges and restrictions set forth in
the Certificate of Designation.
3.5 FINANCIAL STATEMENTS. The Company has provided to each Purchaser an
unaudited balance sheet as of December 31, 1997 and unaudited statements of
operations, stockholders' equity and cash flows for the year then ended (the
"Financial Statements"). The Financial Statements are complete and correct in
all material respects, and do not omit any material liabilities, fixed or
contingent, of the Company, other than liabilities incurred in the ordinary
course of business subsequent to December 31, 1997.
3.6 PATENTS, TRADEMARKS, ETC. The Company owns or has sufficient legal
right to use all patents, trademarks, service marks, trade names, copyrights,
licenses, trade secrets, information and other proprietary rights necessary to
conduct its business as now conducted and as presently proposed to be conducted
(the "Intellectual Properties") and, the Company has not received any
communications alleging that the Company has violated, infringed upon or
otherwise acted adverse to, or, by conducting its business (as now conducted and
as presently proposed to be conducted) would violate, infringe upon or otherwise
be adverse to any patent, trademark, service xxxx, trade name, copyright or
trade secret or other proprietary right of any other person or entity.
3.7 COMPLIANCE WITH AGREEMENTS AND LAWS. The Company is not in violation
or default in any material respect of any term or provision of any material
mortgage, indenture, contract, agreement or instrument to which it is a party or
by which it is bound or of any judgment, order, writ or decree applicable to it
and, to its knowledge, is not in violation of any order, statute, rule or
regulation applicable to the Company, which violation reasonably would be
expected to have a material adverse effect on the Company's business, assets,
liabilities, financial condition or operations. The execution, delivery and
performance of and compliance with this
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Agreement and the Ancillary Agreements, and the issuance of the Shares and
the Common Stock issuable upon conversion of the Shares, will not, with or
without the passage of time or giving notice, result in any violation of, or
conflict with, or constitute a default under, or result in the creation of,
any material mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company, or the suspension, revocation,
impairment, forfeiture or non-renewal of any permit, license, authorization
or approval applicable to the Company, its business or operation, or any of
its assets or properties.
3.8 LITIGATION. There are no actions, suits, proceedings or
investigations pending against the Company or its properties before any court
or governmental agency (nor, to the Company's knowledge, is there any written
threat thereof), which, either individually or in the aggregate, reasonably
would be expected to result in any material adverse change in the business or
financial condition of the Company or any of its properties or assets, or in
any material impairment of the right or ability of the Company to carry on
its business as now conducted or as presently proposed to be conducted, or in
any material liability on the part of the Company.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company and agrees
with respect to his, her or its purchase of the Shares as follows:
4.1 AUTHORIZATION. All acts and conditions necessary for the
authorization, execution, delivery and consummation by such Purchaser of this
Agreement and the Ancillary Agreements and the transactions contemplated herein
and therein have been taken, performed and obtained. This Agreement and the
Ancillary Agreements constitute valid and legally binding obligations of such
Purchaser, enforceable against such Purchaser in accordance with their
respective terms, except as rights to indemnity and contribution thereunder may
be limited by applicable law and public policy and subject, as to enforcement,
(i) to bankruptcy, insolvency, reorganization, arrangement, moratorium and other
laws of general applicability relating to or affecting creditors' rights and
(ii) to general principles of equity, whether such enforceability is considered
in a proceeding in equity or at law.
4.2 INVESTMENT REPRESENTATIONS AND COVENANTS OF THE PURCHASERS.
4.2.1 Each Purchaser acknowledges that this Agreement is made
by the Company with such Purchaser in reliance upon such Purchaser's
representations and covenants made in this SECTION 4. Each Purchaser
represents that the Shares to be received will be acquired for investment for
such Purchaser's own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and that such Purchaser has
no present intention of selling, granting any participation in or otherwise
distributing the same. Each Purchaser further represents that such Purchaser
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 Shares or any Common Stock acquired
on conversion or exercise thereof (collectively, "Restricted Securities ").
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4.2.2 Each Purchaser understands and acknowledges that the
offering of the Shares pursuant to this Agreement will not, and any issuance of
Common Stock on conversion of the Shares will not, be registered under the
Securities Act or under the securities laws of any jurisdiction, on the ground
that the sale provided for in this Agreement and the issuance of such securities
hereunder is exempt pursuant to Section 4(2) of the Securities Act, and similar
provisions of applicable state securities laws and that the Company's reliance
on such exemptions is predicated on the accuracy of the Purchasers'
representations set forth herein.
4.2.3 Each Purchaser covenants that in no event will he, she or it
make any disposition of any Restricted Securities, except in accordance with
applicable federal and state securities laws.
4.2.4 Each Purchaser represents that such Purchaser is experienced
in evaluating developmental stage companies such as the Company, is able to fend
for himself, herself or itself in transactions such as the one contemplated by
this Agreement, has such knowledge and experience in financial and business
matters that such Purchaser is capable of evaluating the merits and risks of its
prospective investment in the Company, and has the ability to bear the economic
risks of the investment (including possible complete loss of such investment)
for an indefinite period of time. Each Purchaser which is not an individual
confirms that it was not organized for the purpose of acquiring the Restricted
Securities.
4.2.5 Each Purchaser acknowledges and understands that the
Restricted Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available, and that, except as otherwise provided in the Investors' Rights
Agreement, the Company is under no obligation to register the Restricted
Securities.
4.2.6 Each Purchaser acknowledges that in the event the applicable
requirements of Rule 144 under the Securities Act ("Rule 144") are not met,
registration under the Securities Act or compliance with another exemption from
registration will be required for any disposition of the Restricted Securities.
Each Purchaser understands that although Rule 144 is not exclusive, the
Securities and Exchange Commission (the "Commission") has expressed its opinion
that persons proposing to sell restricted securities received in a private
offering other than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and the brokers who
participate in the transactions do so at their own risk.
4.2.7 Each Purchaser agrees to comply in all respects with the
provisions of this SECTION 4. Prior to any proposed sale, assignment, transfer
or pledge of any Restricted Securities, unless there is in effect a registration
statement under the Securities Act covering the proposed transfer, the holder
thereof shall give written notice to the Company of such holder's intention to
effect such transfer, sale, assignment or pledge. Each such notice shall
describe the manner and circumstances of the proposed transfer, sale, assignment
or pledge in sufficient detail and, if the Company reasonably so requests, shall
be accompanied at such holder's expense by an opinion
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of legal counsel which shall be reasonably satisfactory to the Company, which
opinion shall be addressed to the Company, to the effect that the proposed
transfer of the Restricted Securities may be effected without registration
under the Securities Act, whereupon the holder of such Restricted Securities
shall be entitled to transfer such Restricted Securities in accordance with
the terms of the notice delivered by the holder to the Company.
4.2.8 Each Purchaser represents that one or more of the following
criteria are applicable to such Purchaser:
(i) The Purchaser is a natural person who has a net worth or
joint net worth with the Purchaser's spouse exceeding $1,000,000 at the
time of purchase; or
(ii) The Purchaser is a natural person who had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with that person's spouse in excess of $300,000 in each of those
years and who reasonably expects reaching the same income level in the
current year; or
(iii) The Purchaser is either (a) an investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in section 2(a)(48) of such Act, (b) a Small
Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958 or (c) a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940; or
(iv) The Purchaser is a corporation, partnership, not-for-profit
organization or entity exempt from income tax under Section 501(c)(3) of
the Internal Revenue Code, not formed for the specific purpose of acquiring
the Shares, with total assets in excess of $5,000,000; or
(v) The Purchaser is a corporation, partnership or trust and
each and every equity owner of such entity meets the qualifications set
forth in subsection (i), (ii), (iii) or (iv) of this SECTION 4.2.8.
4.2.9 Each Purchaser represents that such Purchaser is a resident
of, or if not an individual, has its principal place of business in, the state
set forth below the Purchaser's name on the signature pages hereto.
4.3 LEGEND ON CERTIFICATES. Each Purchaser consents to the placement of a
legend on the certificates for the Shares, and any shares of Common Stock issued
on the conversion of the Shares, in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
LAWS. THESE
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SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS UNLESS THE COMPANY RECEIVES
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT
OR ANY OTHER STATE SECURITIES LAWS.
4.4 NO PUBLIC MARKET. Each Purchaser understands that no public market
now exists for any of the securities issued by the Company and that it is
unlikely that a public market will ever exist for the Shares.
4.5 RECEIPT OF INFORMATION. Each Purchaser has received and reviewed this
Agreement (including exhibits), the Ancillary Agreements, the Financial
Statements, and the business plan of the Company dated May, 1998 (the "Business
Plan") and each Purchaser and such Purchaser's attorney, accountant and other
advisers have had access to, and an opportunity to review, all corporate books,
financial statements, records, contracts, documents and other materials
concerning the Company (to the extent such exists), and its offices and
facilities; and have been given an opportunity to ask any and all questions of,
and receive answers from, the Company's officers, employees, agents, accountants
and representatives concerning the Company's proposed business, operations,
financial condition, assets, liabilities, the terms and conditions of the
offering and other relevant matters as they have deemed necessary or appropriate
to verify the accuracy of the information provided and to evaluate the
suitability of an investment in the Shares; and, in evaluating the suitability
of an investment in the Shares and they have not relied upon any representations
or other information (whether oral or written) other than as set forth in the
documents and answers referred to above. Each of the Purchasers further
represents and acknowledges that such Purchaser has been solely responsible for
his, her or its own "due diligence" investigation of the Company and its
management and business, for his, her or its own analysis of the merits and
risks of this investment, and for his, her or its own analysis of the fairness
and desirability of the terms of the investment, that in taking any action or
performing any role relative to the arranging of the proposed investment, each
of the other Purchasers has acted solely in his or its own interest, and that
none of the Purchasers (or any of their agents or employees) has acted as an
agent, employee, partner or fiduciary of any other Purchaser, or as an agent of
the Company, or as an issuer, underwriter, broker, dealer or investment adviser
relative to any security involved in this investment.
4.6 BROKERS OR FINDERS. Each Purchaser has not incurred, and will not
incur directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transactions contemplated hereby. Each Purchaser hereby agrees to indemnify
the Company for any claims, losses, and expenses incurred by the Company as a
result of the representation in this SECTION 4.6 being untrue.
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4.7 COMPANY INFORMATION. Each Purchaser acknowledges that the
information regarding the Company disclosed to such Purchaser and the
information provided to such Purchaser pursuant to this Agreement, Ancillary
Agreements and the Business Plan is confidential and/or proprietary to the
Company (the "Confidential Information"). Each Purchaser agrees not to
disclose Confidential Information to any third parties and to keep the
Confidential Information confidential, using the same standard of care in
safeguarding the Confidential Information as a prudent business person would
employ in protecting its own proprietary information which it desires not to
disseminate or publish. Each Purchaser will instruct such Purchaser's
directors, officers, employees, and representatives to so keep such
Confidential Information confidential. Confidential Information does not
include information, technical data or know-how which (a) is in such
Purchaser's possession at the time of disclosure to the such Purchaser as
shown by such Purchaser's files and records immediately prior to the time of
disclosure; (b) before or after it has been disclosed to such Purchaser, is
part of the public knowledge or literature, not as a result of any action or
inaction of such Purchaser; (c) is independently developed by such Purchaser,
as properly documented by such Purchaser; or (d) is approved for release by
written authorization of Company.
5. CONDITIONS TO CLOSING OF PURCHASERS
The Purchasers' obligations to purchase the Shares at the Initial Closing,
or any Subsequent Closing, as the case may be, are, at the option of each
Purchaser, subject to the fulfillment on or prior to the Initial Closing Date,
or any Subsequent Closing Date at which such Shares are purchased, of the
following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in SECTION 3 shall be true and correct on the
Initial Closing Date or any Subsequent Closing Date, as the case may be, with
the same force and effect as if they had been made on and as of said date,
except for representations and warranties made as of a specific date, which
shall be true and correct as of such date.
5.2 AMENDMENT OF CERTIFICATE OF INCORPORATION AND FILING OF CERTIFICATE OF
DESIGNATION. The Certificate of Incorporation of the Company shall have been
duly amended by the affirmative vote of the requisite percentage of the
outstanding shares of Common Stock to increase the authorized capital of the
Company to 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock, the latter being issuable with such rights, preferences, privileges and
restrictions as may be specified by the Board of Directors of the Company from
time to time (the "Certificate Amendment"), and the Certificate of Designation
shall have been duly filed with the Secretary of State of the State of
Washington.
5.3 INVESTORS' RIGHTS AGREEMENT. The Company and each Purchaser shall
have executed the Investors' Rights Agreement in substantially the form attached
hereto as EXHIBIT 5.3 (the "Investors' Rights Agreement").
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5.4 DUE DILIGENCE. The Purchasers shall have completed, to their
reasonable satisfaction, their due diligence review of the Company.
6. CONDITIONS TO CLOSING BY COMPANY
The Company's obligation to sell and issue the Shares at the Initial
Closing or any Subsequent Closing, as the case may be, is, at the option of the
Company, subject to the fulfillment on or prior to the Initial Closing Date, or
any Subsequent Closing Date at which such Share are sold, of the following
conditions:
6.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of each Purchaser made in SECTION 4 shall be true and correct when
made, and shall be true and correct on the Initial Closing Date or any
Subsequent Closing Date, as the case may be, with the same force and effect as
though such representations and warranties had been made as of such Closing
Date.
6.2 OTHER CONDITIONS. The conditions set forth at Section 5.2 shall have
been satisfied.
6.3 PAYMENT OF PURCHASE PRICE. Each Purchaser shall have delivered to the
Company in accordance with SECTION 2.3 the purchase price specified in
SECTION 1.2.
6.4 PERFORMANCE. Each Purchaser 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 Initial Closing
Date or any Subsequent Closing Date, as the case may be.
7. MISCELLANEOUS.
7.1 NOTICES, ETC. Any notice given under this Agreement shall be in
writing and delivered in person, via facsimile machine, sent by documented
overnight delivery service, or mailed by certified or registered mail, postage
prepaid, to the appropriate party or parties at the addresses referenced below,
or to such other address as the parties may hereinafter designate. Unless
otherwise specified in this Agreement, all such notices and other written
communications shall be effective (and considered received for the purposes of
this Agreement) (a) if delivered in person, upon delivery, (b) if by facsimile
machine during normal business hours upon transmission with confirmation of
receipt by the receiving party's facsimile terminal and if not sent during
normal business hours, then on the next business day, (c) if sent by documented
overnight delivery service, on the date delivered, or (d) if mailed, three (3)
days after mailing. Notices shall be sent (i) if to a Purchaser, at such
Purchaser's address set forth in this Agreement, or at such other address as
such Purchaser shall have furnished to the Company in writing, or (ii) if to the
Company, one copy should be sent to its address set forth on the first page of
this Agreement, or at such other address as the Company shall have furnished to
the Purchasers, and addressed to the attention of Xxxxxxxx X. Xxxxxx, and one
copy shall be sent to Xxxxxx Xxxxxx
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White & XxXxxxxxx, 6100 Columbia Center, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000, Attn: Xxxxxx X. Xxxxx.
7.2 GOVERNING LAW AND VENUE. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Washington
(without giving effect to any choice or conflict of law provision or rule,
whether of the State of Washington or any other jurisdiction, that would cause
the application of the laws of any jurisdiction other than the State of
Washington). The venue of any arbitration or action brought on or in connection
with this Agreement shall be in King County, Washington.
7.3 CONSENT TO JURISDICTION. The parties hereto irrevocably submit to the
jurisdiction of any Washington state or federal court sitting in Seattle in any
action or proceeding arising out of or relating to this Agreement, and agree
that all claims in respect of such action or proceeding may be heard and
determined in such Washington state or federal court. Each party hereby waives,
to the fullest extent it may effectively do so, the defense of any inconvenient
forum to the maintenance of such action or proceeding. The parties agree that a
final judgment in any action or proceeding shall be conclusive and may be
enforced in any other manner provided by law.
7.4 COSTS AND ATTORNEY'S FEES. If any action at law or equity is
necessary to enforce or interpret the terms of this Agreement, the mostly
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled, including any such fees, costs and necessary disbursements incurred
in any appellate proceeding.
7.5 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto;
PROVIDED, HOWEVER, that, except as otherwise provided herein, the rights of a
Purchaser to purchase Shares shall not be assignable without the written consent
of the Company.
7.6 THIRD PARTY BENEFICIARIES. This Agreement shall not confer any rights
or remedies upon any person or entity other than the parties and their
respective successors and permitted assigns.
7.7 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Ancillary
Agreements, the Certificate of Designation and the other documents delivered
pursuant to those agreements constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof, and supersede all prior agreements, contracts or understandings with
respect to the subject matter hereof. This Agreement may be amended or
modified, and the obligations of the Company under Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only upon the written consent of the Company and holders of a
majority of the Shares (treated as if converted and including any Common Stock
into which the Shares have been converted that have not been sold
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to the public); any such amendment, modification or waiver shall be binding
on the Company, all holders of any securities purchased under this Agreement
at the time outstanding (including securities into which such securities are
convertible) and each future holder of any such securities. The foregoing
notwithstanding, this Agreement and any term hereof may be amended, waived,
discharged or terminated by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or termination is
sought.
7.8 INTERPRETATION AND FAIR CONSTRUCTION. This Agreement has been
reviewed and approved by each of the parties. If it should be determined that
any provision of this Agreement is uncertain or ambiguous, the language in all
parts of this Agreement shall be in all cases construed as a whole according to
its fair meaning and not strictly construed for or against either the Company or
the Purchasers.
7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
7.10 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
The foregoing Series A Preferred Stock Purchase Agreement is hereby
executed.
COMPANY:
ONLINE SPECIALTY RETAILING, INC.
By:-------------------------------
Xxxxxxxx X. Xxxxxx, Chairman
PURCHASERS:
------------------------------
Name:
Address:
Fax:
Tel:
E-mail:
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------------------------------
Name:
Address:
Fax:
Tel:
E-mail:
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Investor List
PURCHASERS NUMBER OF SHARES PURCHASED
---------- --------------------------
Xxx X. Xxxxxx 28,571
Xxxxxx X. Xxxxxx 68,571
Fraser Black & Xxxxxxx Xxxxx, JT TEN 5,714
Xxxxxxx Xxxx 28,571
Xxxxxx X. Xxxxxx 14,285
Heller, Ehrman, White & XxXxxxxxx, a 4,285
partnership of professional corporations
Xxxxxxx & Xxxxx Xxxxxx 28,571
Xxxx X.X. Xxxx & Xxxxx Xxxxxxx Xxxx, Tenants 3,428
in Common
Xxxxxx Xxxxxx & Xxxxxxx X. Xxxxxx XX, 28,571
Tenants in Common
Xxxxxx X. Xxxxxxx & Xxxxx X. Xxxxxxx, 600,000
Tenants in Common
Xxxxxxxx X. Xxxxxx 7,142
Xxxxx Xxxxxxxx & Xxxx Xxxxxxxx 28,571
Xxxxxxxxx X. Xxxx 28,571
X. Xxxxxxxx Rush 17,142
Xxxxx X. Xxxxxx Trust FBO X.X. Xxxx III 60,000
Xxxx X. Xxxxxxx 28,571
Xxxxxx X. Xxxxxx 5,714
Xxxxxx Xxxxxxx Xxxx Xxxxxx custodian for 14,285
Xxxx X. Xxxxxxx XXX SEP dated 4/14/89
Xxxxx X. Xxxxxxxxxxxx 28,571
Xxxxxxx X. Xxxx 14,285
Xxxxx X. Xxxxx & Xxx XxXxxx Xxxxx 56,571
(WYNOT INVESTMENTS)
Xxxxx X. Xxxxx 42,857
13
