Exhibit 10.61
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of January 25,
1999 by and among FIDELITY HOLDINGS, INC., a corporation organized under the
laws of the State of Nevada (the "Company"), with headquarters located at 00-00
Xxx Xxxxxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxx Xxxx 00000, COMPUTER BUSINESS
SCIENCES, INC., a corporation organized under the laws of the State of Delaware
and a wholly-owned subsidiary of the Company ("CBS") and each of the purchasers
(collectively, the "Purchasers") set forth on the execution pages hereof (the
"Execution Pages").
WHEREAS:
A. The Company, CBS and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act") and Section 4(2) of the Securities
Act.
B. The Company and CBS desire to sell, and the Purchasers, severally and
not jointly, desire to purchase, upon the terms and conditions stated in this
Agreement up to 2,750 Units (the "Units"), each Unit consisting of no less than
one and up to three tranches, (a) in the first tranche, (i) a Convertible
Debenture in the principal amount of One Thousand Dollars ($1,000) of the
Company, in the form attached hereto as Exhibit A (the "Debentures"),
convertible on certain terms and conditions into shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"), (ii) 36.3636 shares of
Common Stock, (iii) warrants (the "Warrants"), in the form attached hereto as
Exhibit B, to acquire 83.3333 shares of Common Stock and (iv) warrants (the "CBS
Warrants") in the form attached hereto as Exhibit C, to acquire 25.4545 shares
of common stock, par value $0.01 per share, of CBS (the "CBS Shares"), and (b),
in the second tranche, (i) a Debenture in the principal amount of One Thousand
Five Hundred Sixty-Three and 64/100 Dollars ($1,563.64) and (ii) Warrants to
acquire 130.3030 shares of Common Stock and (c) in the third tranche, (i)
Debentures in an aggregate principal amount of One Thousand Five Hundred
Sixty-Three and 64/100 Dollars ($1,563.64) and (ii) Warrants to purchase
130.3030 shares of Common Stock. The shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Debentures are referred to herein as
the "Conversion Shares" and the shares of Common Stock issuable upon exercise of
or otherwise pursuant to the Warrants are referred to herein as the "Warrant
Shares." The Debentures, the Common Stock, the Warrants, the CBS Warrants, the
CBS Stock, the Conversion Shares and the Warrant Shares are collectively
referred to herein as the "Securities."
C. Contemporaneous with the execution and delivery of this Agreement, the
Company and the Purchasers are executing and delivering a Registration Rights
Agreement, in the form
attached hereto as Exhibit D (the "Registration Rights Agreement"), pursuant to
which the Company has agreed to provide certain registration rights under the
Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF UNITS
a. Purchase of Units. The issuance, sale and purchase of the Debentures,
the Common Stock, the CBS Warrants and the Warrants shall occur in three
tranches with separate closings, hereinafter referred to as the "First Closing,"
the "Second Closing" and the "Third Closing," respectively. Each of the First
Closing, the Second Closing and the Third Closing is hereinafter referred to as
a "Closing". On the date of each Closing, subject to the satisfaction (or
waiver) of the relevant conditions set forth in Section 6 and Section 7 below,
the Company shall issue and sell to each Purchaser, and each Purchaser severally
(but not jointly) agrees to purchase from the Company, such Units for the
relevant purchase price as is set forth on such Purchaser's Execution Page
attached hereto (the "Purchase Price"). Each Purchaser's obligation to purchase
Units hereunder is distinct and separate from each other Purchaser's obligation
to purchase and no Purchaser shall be required to purchase hereunder more than
the principal amount of its Debentures and the number of its Common Stock, CBS
Warrants and Warrants set forth on such Purchaser's Execution Page hereto
notwithstanding any failure by any other Purchaser to purchase Units hereunder
nor shall any Purchaser have any liability by reason of any such failure by any
other Purchaser.
b. Form of Payment. At each Closing, each Purchaser shall pay the
aggregate Purchase Price of the Securities being purchased by such Purchaser
hereunder at such Closing by wire transfer of immediately available funds to the
Company, in accordance with the Company's written wiring instructions, in each
case, against delivery of the duly executed Debentures, certificates
representing the Common Stock and duly executed CBS Warrants (at the First
Closing only) and duly executed Warrants being purchased by such Purchaser and
the Company shall deliver such Debentures, certificates, Warrants and CBS
Warrants, each bearing the restrictive legend set forth in Section 2(f), against
delivery of such aggregate Purchase Price.
c. Closing Date. Subject to the satisfaction (or waiver) of the relevant
conditions thereto set forth in Section 6 and Section 7 below, the date and time
of the issuance and sale of the Units shall be (i) in the case of the First
Closing, 12:00 noon Eastern Time on January 25, 1999 and (ii) in the case of the
Second Closing and the Third Closing, 12:00 noon Eastern Time on the fifth (5th)
trading day following notification of satisfaction (or waiver) of the relevant
conditions to such Closing and (iii) in the case of the Third Closing 12:00 noon
Eastern Time on the fifth (5th) trading day following notification of
satisfaction (or waiver) of the relevant conditions to such Closing, or, in each
case, such other time as may be mutually agreed upon by the Company and the
Purchasers. The date of the First Closing, the Second Closing, or the Third
Closing, as the case may be, shall hereinafter be referred to as the "First
Closing Date," "Second Closing Date," or the "Third Closing Date,"
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respectively. Each Closing shall occur at the offices of Klehr, Harrison,
Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally represents and warrants to the Company as
follows:
a. Investment Purpose. The Purchaser is purchasing the Securities for the
Purchaser's own account, not as nominee or agent, for investment purposes only
and not with a present view towards the public sale or distribution thereof,
except pursuant to sales that are exempt from the registration requirements of
the Securities Act and/or sales registered under the Securities Act. The
Purchaser understands that the Purchaser must bear the economic risk of this
investment indefinitely, unless the Securities are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws or an
exemption from such registration is available, and that the Company has no
present intention of registering the resale of any such Securities other than as
contemplated by the Registration Rights Agreement. Notwithstanding anything in
this Section 2(a) to the contrary, by making the representations herein, the
Purchaser does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time,
provided that any such deposition shall be in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. 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 Securities. The Purchaser has not been formed
for the specific purpose of acquiring the Securities. The Purchaser is not a
registered broker-dealer and is not engaged in the business of being a
broker-dealer.
b. Accredited Investor Status. The Purchaser is an "Accredited Investor"
as that term is defined in Rule 501(a) of Regulation D.
c. Reliance on Exemptions. The Purchaser understands that the Units are
being offered and sold to the Purchaser in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Units. The Purchaser understands that the resale of
Securities is "restricted" under applicable U.S. Federal and state securities
laws and that, pursuant to these laws, the Purchaser must hold the Securities
indefinitely unless they are registered for resale 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
Securities for resale except as set forth in the Registration 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
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holding period for the Securities, and on requirements relating to the Company
which are outside of the Purchaser's control.
d. Information. The Purchaser and its counsel have been furnished all
materials relating to the business, management, finances and operations of the
Company and of CBS materials relating to the offer and sale of the Units which
have been specifically requested by the Purchaser or its counsel. The Purchaser
and its counsel have been afforded access and the opportunity to ask questions
of the Company and have received what the Purchaser believes to be satisfactory
answers to any such inquiries. Although neither such inquiries nor any other due
diligence investigation conducted by the Purchaser or its counsel or any of its
representatives shall modify, amend or affect the Purchaser's right to rely on
the Company's representations and warranties contained in Section 3 below,
Purchaser acknowledges and agrees that it has conducted its own due diligence
investigation of the Company and CBS. The Purchaser understands that its
investment in the Units involves a high degree of risk. Specifically, Purchaser
acknowledges that CBS, following the merger described in Section 4(k) below,
will be a private company engaged in developing technology which may never prove
to become commercially accepted and that no assurance can be given that CBS will
effect an initial public offering in the near future or ever.
e. Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Units. THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED
AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID
ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY,
NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS AGREEMENT. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
f. Transfer or Resale. The Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and may not be transferred unless (a) the resale
of the Securities has been registered thereunder, or (b) the Purchaser shall
have delivered to the Company an opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be
sold or transferred under an exemption from such registration, or (c) sold under
Rule 144 promulgated under the Securities Act (or a successor rule) ("Rule
144"), or (d) sold
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or transferred to an affiliate of the Purchaser which agrees in writing to be
bound by the terms hereof and which makes written representations and warranties
as set forth in this Section 2; and (ii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement).
g. Legends. The Purchaser understands that the Debentures, the
certificates for the Common Stock, the CBS Warrants and the Warrants and, until
such time as the Conversion Shares, Warrant Shares and/or CBS Shares have been
registered under the Securities Act as contemplated by the Registration Rights
Agreement or otherwise may be sold by the Purchaser under Rule 144, the
certificates for the Conversion Shares, Warrant Shares and CBS Shares, may bear
a restrictive legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state of the United States. The securities
represented hereby may not be offered or sold in the absence of an
effective registration statement for the securities under applicable
securities laws unless offered, sold or transferred under an
available exemption from the registration requirements of those
laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which such
legend is stamped, if, unless otherwise required by state securities laws, (a)
the resale of such Security is registered pursuant to an effective registration
statement under the Securities Act or (b) such holder provides the Company with
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act or
(c) such holder provides the Company with reasonable assurances that the resale
of such Security is covered by Rule 144(k). The Purchaser agrees to sell all
Securities, including those represented by a certificate(s) from which the
legend has been removed, only pursuant to an effective registration statement or
under an exemption from the registration requirements of the Securities Act. In
the event the above legend is removed from any Security subject to an effective
registration statement and thereafter the effectiveness of the registration
statement covering such Security is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities laws, then
upon reasonable advance notice to the Purchaser the Company may require that the
above legend be placed on any such Security subject to an effective registration
statement, or may place appropriate "stop transfer" instructions with its
transfer agent, and the Purchaser shall cooperate in the prompt replacement of
such legend. The Company shall use its best efforts to remove such suspension or
file such amendment as promptly as possible, and such legend shall be removed or
"stop transfer" instructions canceled, when such Security again may be sold
pursuant to an effective registration statement or such legend otherwise may be
removed under conditions (b) or (c) above.
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h. Authorization; Enforcement. This Agreement , when executed and
delivered by the Purchaser, will constitute the valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its 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 Registration Rights Agreement may be limited by
applicable federal or state securities laws.
i. Residency. The Purchaser is a resident of the jurisdiction set forth
under the Purchaser's name on the Execution Page hereto executed by such
Purchaser.
j. No General Solicitation. The Purchaser is unaware of, is no way relying
on, and did not become aware of the offering of the Securities through or as a
result of, any form of general solicitation or general advertising including,
without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, in connection with the offering and sale of the Securities
and is not subscribing for Securities and did not become aware of the offering
of the Securities through or as a result of any seminar or meeting to which the
Purchaser was invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in securities
generally.
k. No Finders. The Purchaser has taken no action which would give rise to
any claim by any person for brokerage commissions, finders' fees or the like
relating to this Agreement or the transactions contemplated hereby, except for
Zanett Securities Corporation, the sole placement agent in connection with the
offering of Securities, whose fees shall be the sole responsibility of the
Company.
l. Knowledge and Experience. The Purchaser has such knowledge and
experience in financial, tax, and business matters, and, in particular,
investments in securities, so as to enable it to utilize the information made
available to it in connection with the offering of the Securities to evaluate
the merits and risks of an investment in the Securities and the Company and to
make an informed investment decision with respect thereto. The Purchaser is not
relying on the Company or any of its employees or agents with respect to the
legal, tax, economic and related considerations of an investment in the
Securities, and the Purchaser has relied on the advice of, or has consulted
with, only his own advisors. The Purchaser has significant prior investment
experience, including investment in non-listed and non-registered securities.
The Purchaser is knowledgeable about investment considerations in
development-stage companies. The Purchaser has a sufficient net worth to sustain
a loss of its entire investment in the Company in the event such a loss should
occur. The Purchaser's overall commitment to investments which are not readily
marketable is not exces sive in view of its net worth and financial
circumstances and the purchase of the Securities will not cause such commitment
to become excessive. The investment is a suitable one for the Purchaser. The
Purchase has reviewed or had the opportunity to review the Company's public
filings under the Securities Exchange Act of 1934 (the "Exchange Act") as filed
with the SEC.
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m. No Need for Liquidity. The Purchaser has adequate means of providing
for such Purchaser's current financial needs and foreseeable contingencies and
has no need for liquidity of the investment in the Securities for an indefinite
period of time.
n. Limited Trading Market of the Company. The Purchaser represents and
warrants that it understands that the Common Stock thinly trades and no
assurance can be given that an active market for the Common Stock will develop
or be maintained.
o. No Trading Market for CBS. The Purchaser understands and acknowledges
that there is no trading market for CBS securities nor is there any assurance
that such market shall ever develop or be maintained.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CBS.
a. The Company represents and warrants to each Purchaser as follows:
(i) Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated, and has the requisite
corporate power to own its properties and to carry on its business as it is now
being conducted. The Company and each of its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect. "Material Adverse Effect" means any material adverse effect on (i) the
Securities, (ii) the ability of the Company to perform its obligations hereunder
and under the Debentures, the Warrants or the Registration Rights Agreement or
(iii) the business, operations, properties, financial condition or previously
publicly announced prospects of the Company and its subsidiaries, taken as a
whole.
(ii) Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Debentures, the Warrants and the Registration Rights
Agreement, to issue and sell the Debentures, the Common Stock and the Warrants,
in accordance with the terms hereof and to issue Conversion Shares upon
conversion of the Debentures in accordance with the terms of the Debentures and
to issue the Warrant Shares upon exercise of the Warrants in accordance with the
terms of such Warrants; (ii) the execution, delivery and performance of this
Agreement, the Debentures, the Warrants and the Registration Rights Agreement by
the Company and the consummation by it of the transactions contemplated hereby
and thereby (including, without limitation, the issuance of the Debentures,
Common Stock and Warrants and the issuance and reservation for issuance of the
Conversion Shares and Warrant Shares) have been duly authorized by the Company's
Board of Directors and no further consent or authorization of the Company, its
Board or Directors or its stockholders is required (under the rules promulgated
by the
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National Association of Securities Dealers ("NASD") or otherwise, except for the
shareholder approval required pursuant to Rule 4310(a)(25)(H) promulgated by the
NASD); (iii) this Agreement has been duly executed and delivered by the Company;
and (iv) assuming due execution and delivery of this Agreement, the Placement
Agency Agreement and the Registration Rights Agreement by parties other than the
Company and compliance by Zanett with applicable Federal and state securities
laws, this Agreement constitutes, and, upon execution and delivery by the
Company of the Debentures, the Warrants and the Registration Rights Agreement,
such instruments and agreements will constitute, valid and binding obligations
of the Company enforceable against the Company in accordance with their terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and other laws of general application
affecting enforcement of creditors' rights generally, as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, or (ii) to the extent the indemnification provisions
contained in the Registration Rights Agreement may be limited by applicable
federal or state securities laws.
(iii) Capitalization. The capitalization of the Company and CBS as
of the date hereof, including the authorized capital stock, the number of shares
issued and outstanding, the number of shares issuable and reserved for issuance
pursuant to stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities exercisable for, or convertible into or
exchangeable for any shares of capital stock and the number of shares to be
reserved for issuance upon conversion of Debentures and exercise of Warrants is
set forth on Schedule 3(a)(iii). All of such outstanding shares of capital stock
have been, or upon issuance will be, validly issued, fully paid and
nonassessable. No shares of capital stock of the Company (including the
Conversion Shares and the Warrant Shares) are subject to preemptive rights or
any other similar rights of the stockholders of the Company or any liens or
encumbrances, pursuant to the Company's Certificate of Incorporation or bylaws
or any agreement to which the Company is a party. Except for the obligation of
the Company to issue the Conversion Shares in accordance with the terms of the
Debentures and the Warrant Shares in accordance with the terms of the Warrants
and except as disclosed in Schedule 3(a)(iii), as of the date of this Agreement,
(i) there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exercisable or exchangeable for, any shares of
capital stock of the Company or any of its subsidiaries, or arrangements by
which the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries,
and (ii) there are no agreements or arrangements under which the Company or any
of its subsidiaries is obligated to register the sale of any of its or their
securities under the Securities Act (except the Registration Rights Agreement).
Except as set forth on Schedule 3(a)(iii), there are no securities or
instruments containing antidilution or similar provisions that will be triggered
by the issuance of the Securities in accordance with the terms of this
Agreement, the Debentures or the Warrants. The Company has furnished to each
Purchaser true and correct copies of the Company's and CBS's Certificates of
Incorporation as in effect on the date hereof ("Certificates of Incorporation"),
the Company's and CBS's By-laws as in effect on the date hereof (the "By-laws"),
and all other instruments and agreements governing securities convertible into
or exercisable or exchangeable for capital stock of the Company or CBS.
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(iv) Issuance of Shares. The Conversion Shares and Warrant Shares
are duly authorized and reserved for issuance, and, upon conversion of the
Debentures in accordance with the terms of the Debentures, and exercise of the
Warrants in accordance with the terms thereof, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances
and will not be subject to preemptive rights or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder thereof other than restrictions on transfer imposed by Federal and state
securities laws.
(v) No Conflicts. Except as set forth in Schedule 3(a)(v), the
execution, delivery and performance of this Agreement, the Debentures, the
Warrants and the Registration Rights Agreement by the Company, and this
Agreement and the CBS Warrants by CBS and the consummation by the Company and
CBS of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance, as applicable, of the
Common Stock, Warrants, Conversion Shares and Warrant Shares, CBS Warrants and
CBS Shares) will not (i) result in a violation of the Certificates of
Incorporation or By-laws or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or, to the Company's knowledge,
result in a violation of any material law, rule, regulation, order, judgment or
decree (including U.S. federal and state securities laws and regulations and
rules or regulations of any self-regulatory organizations to which either the
Company or its securities are subject) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected (except, with respect to clause (ii), for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents
and, to the Company's knowledge, neither the Company nor any of its subsidiaries
is in default (and no event has occurred which, with notice or lapse of time or
both, would put the Company or any of its subsidiaries in default) under, nor
has there occurred any event giving others (with notice or lapse of time or
both) any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, except for actual or possible violations, defaults or
rights as would not, individually or in the aggregate, have a Material Adverse
Effect. The businesses of the Company and its subsidiaries are not being
conducted, and shall not be conducted so long as any Debentures are outstanding,
in violation of any law, ordinance or regulation of any governmental entity,
except for actual or possible violations, if any, the sanctions for which either
singly or in the aggregate would not have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any applicable state securities laws, the Company is not required to
obtain any consent, approval, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or self
regulatory agency in order for it to execute, deliver or perform any of its
obligations under this Agreement, the Debentures, the Warrants or the
Registration Rights Agreement, in each case in accordance with the terms hereof
or thereof, the failure to obtain would have a Material Adverse Effect. Except
as disclosed in Schedule 3(a)(v),
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the Company is not in violation of the listing requirements of the Nasdaq
Smallcap Market ("NASDAQ") and the Company does not reasonably anticipate that
the Common Stock will be delisted by NASDAQ for the foreseeable future.
(vi) SEC Documents, Financial Statements. Since December 31, 1996,
the Company has timely filed (giving effect to applicable extension periods) all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (all of the foregoing
filed prior to the date hereof and after December 31, 1995, and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to herein as the
"SEC Documents"). The Company has delivered to the Purchasers true and complete
copies of the SEC Documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
updated or amended under applicable law, where the failure to update or amend
would have a Material Adverse Effect. As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC applicable with respect thereto. Such
financial statements have been prepared in accordance with U.S. generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the consolidated
financial position of the 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
typical year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the SEC Documents filed prior to the date
hereof, the Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such financial statements and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in such financial
statements, which liabilities and obligations referred to in clauses (i) and
(ii), individually or in the aggregate, are not material to the financial
condition or operating results of the Company. Neither the Company nor any of
its officers, directors, employees or agents have provided Purchasers with any
material nonpublic information.
(vii) Absence of Certain Changes. Since December 31, 1997, there has
been no change and no development in the business, properties, operations,
financial condition, results of operations or previously publicly announced
prospects of the Company or any of its subsidiaries
10
which has had or reasonably could have a Material Adverse Effect, except as
disclosed in Schedule 3(a)(vii) or in the SEC Documents filed prior to the date
hereof.
(viii) Absence of Litigation. Except as expressly disclosed in the
SEC Documents filed prior to the date hereof, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or
affecting the Company, any of its subsidiaries, or any of their respective
directors or officers in their capacities as such which could reasonably be
anticipated to have a Material Adverse Effect. To the Company's knowledge, there
are no facts which, if known by a potential claimant or governmental authority,
could give rise to a claim or proceeding which, if asserted or conducted with
results unfavorable to the Company or any of its subsidiaries, could reasonably
be anticipated to have a Material Adverse Effect.
(ix) Intellectual Property. Each of the Company and its subsidiaries
owns or is licensed to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, permits, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") which are material for the conduct of its business as now being
conducted and as described in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997. To the best knowledge of the Company,
neither the Company nor any subsidiary of the Company infringes or is in
material conflict with any right of any other person with respect to any
Intangibles which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has received written notice of
any pending conflict with or infringement upon such third party Intangibles
which alleged pending conflict or alleged infringement, if adversely determined,
would have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has entered into any consent Agreement, indemnification agreement,
forbearance to xxx or settlement agreements with respect to the validity of the
Company's or its subsidiaries' ownership or right to use its Intangibles and, to
the best knowledge of the Company, there is no reasonable basis for any such
claim to be successful. The Intangibles are valid and enforceable and to the
Company's knowledge, no registration relating thereto has lapsed, expired or
been abandoned or canceled or is the subject of cancellation or other
adversarial proceedings, and all applications therefor are pending and in good
standing. The Company and its subsidiaries have complied, in all material
respects, with their respective contractual obligations relating to the
protection of the Intangibles used pursuant to licenses. To the best knowledge
of the Company, no person is infringing on or violating the Intangibles owned or
used by the Company of its subsidiaries.
(x) Foreign Corrupt Practices. Neither the Company, nor any of its
subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political
11
activity; made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
(xi) Disclosure. All information relating to or concerning the
Company and its subsidiaries set forth in this Agreement or provided by the
Company to the Purchasers pursuant to Section 2(d) hereof or otherwise provided
by the Company to the Purchasers in connection with the transactions
contemplated hereby is true and correct in all material respects and the Company
has not omitted to state any material fact necessary in order to make the
statements made herein or therein, in light of the circumstances under which
they were made, not misleading. No event or circumstance has occurred or exists
with respect to the Company or its subsidiaries or their respective businesses,
properties, prospects, operations or financial conditions, which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date hereof by the Company under the Securities Act with respect to a primary
issuance of the Company's securities.
(xii) Acknowledgment Regarding the Purchasers' Purchase of the
Securities. The Company acknowledges and agrees that none of the Purchasers or
the Placement Agent is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement or the transactions
contemplated hereby, and the relationship between the Company and each of the
Purchasers and the Placement Agent is "arms length" and that any statement made
by any Purchaser or the Placement Agent or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is not advice or a recommendation and is merely incidental
to such Purchaser's purchase of Securities or such Placement Agent's role as a
placement agent and has not been relied upon by the Company, its officers or
directors in any way. The Company further acknowledges that the Company's
decision to enter into this Agreement has been based solely on an independent
evaluation by the Company and its representatives.
(xiii) Form S-3 Eligibility. Except for the circumstances described
in Schedule 3(a)(xiii), the Company is currently eligible to register the resale
of its Common Stock on a registration statement on Form S-3 under the Securities
Act. Except as set forth in Schedule 3(a)(xiii), There exist no facts or
circumstances that would prohibit or delay the preparation and filing of a
registration statement on Form S-3 with respect to the Registrable Securities
(as defined in the Registration Rights Agreement).
(xiv) No General Solicitation. Neither the Company nor any
distributor participating on the Company's behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any such
distributor, has conducted any "general solicitation," as such term is defined
in Regulation D, with respect to any of the Securities being offered hereby.
(xv) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security
12
or solicited any offers to buy any security under circumstances that would
require registration of the Securities being offered hereby under the Securities
Act or cause this offering of Securities to be integrated with any prior
offering of securities of the Company for purposes of the Securities Act or any
applicable stockholder approval provisions.
(xvi) Brokers. The Company has taken no action which would give rise
to any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby except for dealings with The Zanett Securities Corporation,
whose commissions and fees will be paid by the Company.
(xvii) Acknowledgment of Dilution. The number of Conversion Shares
issuable upon conversion of the Debentures may increase substantially in certain
circumstances, including the circumstance wherein the trading price of the
Common Stock declines (subject to the Floor Conversion Price set forth in the
Debentures). The Company's executive officers have studied and fully understand
the nature of the Securities being sold hereunder. The Company acknowledges that
its obligation to issue Conversion Shares upon conversion of the Debentures in
accordance with the terms of the Debentures is absolute and unconditional,
regardless of the dilution that such issuance may have on the ownership
interests of other stockholders. Taking the foregoing into account, the
Company's Board of Directors has determined in its good faith business judgment
that the issuance of the Debentures and the Warrants hereunder and the
consummation of the other transactions contemplated hereby are in the best
interests of the Company and its stockholders.
(xviii) Tax Status. Except as set forth in the SEC Documents filed
prior to the date hereof or on Schedule 3(a)(xviii), the Company and each of its
subsidiaries has made or filed all federal, state and local income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject (unless and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim. Except as set forth in Schedule 3(a)(xviii), the Company has not executed
a waiver with respect to any statute of limitations relating to the assessment
or collection of any federal, state or local tax. Except as set forth in
Schedule 3(a)(xviii), none of the Company's tax returns has been or is being
audited by any taxing authority.
(xix) Title. The Company and its subsidiaries have good and
merchantable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(a)(xix) or
such as do not materially affect the value of such property and do not
materially interfere with the use made and
13
proposed to be made of such property by the Company and its subsidiaries. Any
real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.
b. CBS represents and warrants to each Purchaser as follows:
(i) Organization and Qualification. CBS and each of its subsidiaries
is a corporation duly organized and existing in good standing under the laws of
the jurisdiction in which it is incorporated, and has the requisite corporate
power to own its properties and to carry on its business as it is now being
conducted. CBS and each of its subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a CBS Material Adverse
Effect. "CBS Material Adverse Effect" means any material adverse effect on (i)
the CBS Warrants or CBS Shares, (ii) the ability of the CBS to perform its
obligations hereunder and under the CBS Warrants or (iii) the business,
operations, properties, financial condition or previously publicly announced
prospects of CBS and its subsidiaries, taken as a whole.
(ii) Authorization; Enforcement. (i) CBS has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and the CBS Warrants, to issue and sell the CBS Warrants in accordance
with the terms hereof and to issue the CBS Shares upon exercise of the CBS
Warrants in accordance with the terms of such CBS Warrants; (ii) the execution,
delivery and performance of this Agreement and the CBS Warrants by the CBS and
the consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the CBS Warrants and the
issuance and reservation for issuance of the CBS Shares) have been duly
authorized by CBS's Board of Directors and no further consent or authorization
of CBS, its Board or Directors or its stockholders is required; (iii) this
Agreement has been duly executed and delivered by CBS; and (iv) assuming due
execution and delivery of this Agreement by parties other than CBS and
compliance by Zanett with applicable Federal and state securities laws, this
Agreement constitutes, and, upon execution and delivery by the Company of the
CBS Warrants, such instruments and agreements will constitute, valid and binding
obligations of CBS enforceable against CBS in accordance with their terms except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting
enforcement of creditors' rights generally, as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
(iii) Issuance of Shares. The CBS Shares are duly authorized and
reserved for issuance, and, upon exercise of the CBS Warrants in accordance with
the terms thereof, will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights or other similar rights of stockholders of CBS and will not
impose personal liability upon the holder thereof other than restrictions on
transfer imposed by Federal and state securities laws.
14
4. COVENANTS.
a. Best Efforts. The parties shall use their commercially reasonable
efforts timely to satisfy each of the conditions described in Section 6 and
Section 7 of this Agreement.
b. Form D; Blue Sky Laws. The Company agrees to cooperate with the filing
of a Form D with respect to the Securities as required under Regulation D. The
Company shall, on or before the applicable Closing Date, cooperate with The
Zanett Securities Corporation ("Zanett") to take such action as the Company
shall reasonably determine is necessary to qualify the Securities for sale to
the Purchasers pursuant to this Agreement under applicable securities or "blue
sky" laws of the states of the United States or obtain exemption therefrom, and
shall provide evidence of any such action so taken to the Purchasers on or prior
to the First Closing Date. In a timely fashion after the First Closing, the
Company agrees to file a Form 8-K concerning this Agreement and the transactions
contemplated hereby, which Form 8-K shall attach this Agreement and its Exhibits
as exhibits to such Form 8-K.
c. Reporting Status. So long as any Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.
d. Use of Proceeds. The Company shall use the proceeds from the sale of
the Units as set forth on Schedule 4(d).
e. Financial Information. The Company agrees to send the following reports
to each Purchaser until such Purchaser transfers, assigns or sells all of its
Securities: (i) within ten (10) business days after the filing with the SEC, a
copy of its Annual Report on Form 10-K or Form 10- KSB, its Quarterly Reports on
Form 10-Q or Form 10-QSB, its proxy statements and any Current Reports on Form
8-K; and (ii) within one (1) business day after release, copies of all press
releases issued by the Company or any of its subsidiaries.
f. Reservation of Shares. The Company shall at all times have authorized
and reserved for the purpose of issuance a sufficient number of shares of Common
Stock to provide for the full conversion of the Debentures and issuance of the
Conversion Shares in connection therewith and the full exercise of the Warrants
and the issuance of the Warrant Shares in connection therewith, subject to and
as otherwise required by the Debentures and the Warrants, and for the issuance
of shares of Common Stock pursuant to Section 4(e) below. In that regard, a
"sufficient number of shares" with respect to the Debentures shall be deemed to
be equal to the number of shares of Common Stock required to be reserved for
issuance by the Company pursuant to Article IV of the Debentures, including
without limitation, any increase in the number of shares so reserved that may be
required in certain circumstances pursuant to such Article. The Company shall
not reduce the number of shares reserved for issuance upon conversion of the
Debentures and the full exercise of the Warrants
15
(except as a result of any such conversion or exercise) without the consent of
the Purchasers. Following the Merger, CBS(Del) shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of its common stock to provide for the full exercise of the CBS Warrants
and the issuance of the CBS Shares in connection therewith.
g. Listing. The Company shall promptly secure the listing of the
Conversion Shares and Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so long as
any purchaser owns any Securities, such listing of all of the Conversion Shares
and Warrant Shares; provided, however, that the Purchasers acknowledge and agree
that the Company may be required to obtain shareholder approval for the issuance
of the Conversion Shares and the Warrant Shares subsequent to the First Closing
in order to secure such listing with respect to listing a number of shares in
excess of the Cap Amount (as defined in the Debenture). The Company will take
all action necessary to continue the listing and trading of its Common Stock on
the NASDAQ, the Nasdaq National Market ("NNM"), the New York Stock Exchange
("NYSE") or the American Stock Exchange ("AMEX") and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of such exchanges and the NASD, as applicable. In the event the Common
Stock is not eligible to be traded on any of the NASDAQ, NNM, NYSE or AMEX and
the Common Stock is not eligible for listing on any such exchange or system, the
Company shall use its best efforts to cause the Common Stock to be eligible for
trading on the over-the-counter bulletin board at the earliest practicable date
and remain eligible for trading while any Securities are outstanding. The
Company shall promptly provide to the Purchasers copies of any notices it
receives regarding the continued eligibility of the Common Stock for trading in
the over-the-counter market or, if applicable, any securities exchange
(including the NASDAQ) on which securities of the same class or series issued by
the Company are then listed or quoted, if any.
h. Corporate Existence. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, except in the
event of a merger, consolidation or sale of all or substantially all of the
Company's assets, as long as the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
Debentures, the Warrants and the agreements and instruments entered into in
connection herewith (except as expressly provided herein) regardless of whether
or not the Company would have had a sufficient number of shares of Common Stock
authorized and available for issuance in order to effect the conversion of all
Debentures and the exercise in full of all Warrants outstanding as of the date
of such transaction and (ii) is a publicly traded corporation whose common stock
is listed for trading on the NASDAQ, NYSE or AMEX. Notwithstanding the
foregoing, the Company covenants and agrees that it will not engage in any
merger, consolidation or sale of all or substantially all of its assets at any
time prior to the effectiveness of the registration statement required to be
filed pursuant to the Registration Rights Agreement without (A) providing each
Purchaser with written notice of such transaction at least sixty (60) days prior
to the consummation of the transaction and (B) obtaining the written consent of
all of the Purchasers of the then outstanding principal amount of the Debentures
on or before the 10th day after the delivery of such notice by the Company.
16
i. No Integrated Offerings. The Company shall not make any offers or sales
of any security (other than pursuant to this Agreement and the Registration
Rights Agreement) under circumstances that would require registration of the
Securities being offered or sold hereunder under the Securities Act or cause the
offering of the Securities to be integrated with any other offering of
securities by the Company for purposes of any stockholder approval provision
applicable to the Company or its securities.
j. Redemptions and Dividends. So long as any Purchaser beneficially owns
any Debentures, the Company shall not, without first obtaining the written
approval of such Purchaser, redeem, or declare or pay any cash dividend or
distribution on, any shares of capital stock of the Company.
k. CBS Reorganization. Within fifteen (15) days following the date of this
agreement, CBS shall effect a merger (the "Merger") with Computer Business
Sciences, Inc., a new York corporation ("CBS(NY)"), pursuant to which CBS will
be the surviving entity with no change to its capital structure.
l. CBS Offering. In the event that (i) the Merger does not occur in a
timely fashion, (ii) during the period commencing with the First Closing Date
and ending with the first anniversary of the First Closing Date (the "CBS
Deadline"), CBS(Del) or CBS, whoever is the issuer of the CBS Warrants, does not
successfully complete an initial public offering (an "IPO") for shares of its
common stock (pursuant to an effective registration statement which also covers
the resale of the CBS Shares to the extent required by Section 8 of the CBS
Warrants), (iii) following an IPO, the average Closing Bid Price (calculated in
a manner consistent with the definition thereof in the Debentures) of CBS(Del)
or CBS, as the case may be, common stock is less than $5.00 for the twenty (20)
trading days commencing either (A) sixty (60) days following closing on the IPO,
if the Purchasers are not subject to "lockup" agreements, or (B) with the first
trading day following expiration of any "lock-up" period, or (iv) at any time
CBS, as the case may be, fails to issue CBS Shares upon a Purchaser's exercise
of CBS Warrants, then the Company shall immediately on written demand from a
Purchaser accompanied by such Purchaser's CBS Warrants and/or certificates
evidencing such Purchaser's CBS Shares endorsed in blank, issue to such
Purchaser, in exchange for such CBS Warrants and/or CBS Shares, shares of Common
Stock equal to the sum of the surrendered CBS Shares and the CBS Shares issuable
upon exercise of the surrendered CBS Warrants.
m. No Manipulations. So as long as a Purchaser beneficially owns any
Debentures or Warrants, neither the Purchaser nor any person acting on behalf of
such Purchaser shall take any action intended to decrease the trading price of
the Company's Common Stock during any period in which the Conversion Price (as
defined in the Debenture) is being computed for purposes of any conversion under
the Debenture. For as long as the Debentures or Warrants are outstanding, each
Purchaser agrees not to effect "short" sales in the Common Stock, loan shares or
otherwise participate in any transaction which could be considered as a "short
sale" under the rules and regulations promulgated under the Exchange Act (a
"Short Sale") and agrees to prohibit each
17
stockholder, executive, employee, representative, affiliate, officer, director
or control person of the Purchaser from effecting any Short Sale.
Notwithstanding the foregoing, so long as an effective registration statement
covering a resale of Common Stock of Purchaser is timely delivered, the
provisions of this subsection (n) shall not prohibit a sale, including a Short
Sale, by a Purchaser of shares of Common Stock effected within two business days
of the date on which a notice of conversion of the Debenture is delivered to the
Company entitling such Purchaser to receive a number of shares of Common Stock
at least equal to the number of shares so sold.
n. Proxy. The Company shall use its best efforts to cause Xxxxx Xxxxx and
Xxxxx Xxxxxxx to each execute a proxy in form and substance satisfactory to the
Purchasers (collectively, the "Proxies") wherein such persons would agree with
the Company to vote all shares of Common Stock they own in favor of the
transactions contemplated by this Agreement in connection with the shareholder
vote required by Section 4(o) hereof and the Company shall use its best efforts
to enforce such Proxies in any such shareholder vote.
o. Stockholders' Meeting. The Company shall use its best efforts to hold
its 1999 annual meeting of stockholders prior to September 30, 1999 for the
purpose, among other things, of voting upon and approving this Agreement, the
Debentures, Warrants and Registration Rights Agreement, the issuance of
Conversion Shares and Warrant Shares and the transactions contemplated hereby
and thereby, including, without limitation, the issuance of the Securities. The
Company shall, through its Board of Directors, recommend to its stockholders
approval of such matters. The Company shall use its best efforts to solicit from
its stockholders proxies in favor of such matters.
p. The Company and the Placement Agent, on behalf of the Purchasers, shall
negotiate in good faith milestones to be met by the Company (the "Company
Milestones") prior to closing on the second and third tranches.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company shall instruct its transfer agent to issue certificates,
registered in the name of each Purchaser or its nominee, for the Conversion
Shares and the Warrant Shares in such amounts as specified from time to time by
such Purchaser to the Company upon conversion or exercise, as the case may be.
To the extent and during the periods provided in Section 2(f) and Section 2(g)
of this Agreement, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement.
b. The Company warrants that no instruction other than such instructions
referred to in this Section 5, and stop transfer instructions to give effect to
Sections 2(f) and 2(g) hereof in the case of the transfer of the Conversion
Shares and the Warrant Shares prior to registration of the resale of the
Conversion Shares and the Warrant Shares under the Securities Act or without an
exemption therefrom, will be given by the Company to its transfer agent and that
the Warrant Shares and Conversion Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent, but only to the
extent, provided in this Agreement and the Registration Rights
18
Agreement; provided that the Company may issue stop transfer instructions with
respect to the resale of the Warrant Shares and Conversions Shares following
registration thereof requiring that the selling party represent in writing that
it has complied with applicable law in effecting such resale. Nothing in this
Section shall affect in any way each Purchaser's obligations, requirements and
agreement set forth in Section 2(g) hereof to resell the Securities pursuant to
an effective registration statement or under an exemption from the registration
requirements of applicable securities law.
c. If a Purchaser provides the Company and its transfer agent with an
opinion of counsel, which opinion of counsel shall be in form, substance and
scope customary for opinions of counsel in comparable transactions, to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from registration, or a Purchaser provides the Company
with reasonable assurances that the resale of such Securities is covered by Rule
144(k) or pursuant to an effective registration statement, the Company shall
permit the transfer, and, in the case of the Conversion Shares and Warrant
Shares, promptly instruct its transfer agent to issue one or more certificates
in such name and in such denominations as specified by such Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Units to a
Purchaser hereunder is subject to the satisfaction, at or before the relevant
Closing Date, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing prior written notice to each
Purchaser. The obligations of the Company and CBS to issue and sell the
Securities to any Purchaser hereunder are distinct and separate from their
obligation to issue and sell Securities to any other Purchaser hereunder and any
failure by one or more Purchasers to fulfill the conditions set forth herein or
to consummate the purchase of Securities hereunder will not relieve the Company
and CBS of their obligations with respect to any other Purchaser.
a. At or prior to the First Closing, the applicable Purchaser shall have
executed this Agreement and the Registration Rights Agreement, and delivered
executed copies to the Company.
b. The applicable Purchaser shall have delivered the Purchase Price for
that portion of the Units being purchased by it at such Closing in accordance
with Section 1(b) above.
c. The representations and warranties of the applicable Purchaser shall be
true and correct in all material respects as of the date when made and as of the
date and time of such Closing as though made at that time (except for
representations and warranties that relate to a specific date, which
representations and warranties shall be true and correct as of such date), and
the applicable Purchaser shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the applicable
Purchaser at or prior to the applicable Closing Date.
19
d. No litigation, 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 or any
self-regulatory organization having authority over the matters contemplated
hereby that prohibits the consummation of any of the transactions contemplated
by this Agreement.
e. With respect to the Second and Third Closings, the Company has elected
to close by written notice to the Placement Agent.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase the Units to be
purchased by it hereunder is subject to the satisfaction, at or before the
relevant Closing Date, of each of the following conditions, provided that these
conditions are for such Purchaser's sole benefit and may be waived by such
Purchaser at any time in the Purchaser's sole discretion:
a. With respect to the First Closing:
(i) The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered executed copies of each to such
Purchaser.
(ii) The Company shall have delivered to such Purchaser such
Purchaser's duly executed Debentures, Warrants and CBS Warrants, and
certificates representing the Common Stock being purchased by such Purchaser (in
such denominations as such Purchaser shall request in writing prior to Closing)
in accordance with Section 1(b) above.
(iii) The Common Stock shall be authorized for quotation on NASDAQ
and trading in the Common Stock (or NASDAQ generally) shall not have been
suspended by the SEC or NASDAQ.
(iv) The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
First Closing Date as though made at that time (except for representations and
warranties that relate to a specific date, which representations and warranties
shall be true and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the First Closing Date. Each Purchaser shall
have received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the First Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by any Purchaser in writing
prior to Closing.
(v) No litigation, statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any
20
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby that
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
(vi) Such Purchaser shall have received an opinion of the Company's
counsel, dated as of the First Closing Date, in form, scope and substance
reasonably satisfactory to such Purchaser and in substantially the form of
Exhibit E attached hereto.
(vii) The Company shall have delivered evidence reasonably
satisfactory to each Purchaser that the Company's transfer agent has agreed to
act in accordance with irrevocable instructions in the form attached hereto as
Exhibit F.
(viii) There shall have been no changes and no developments in the
business, properties, operations, financial condition, results of operations or
publicly announced prospects of the Company and its subsidiaries, taken as a
whole, which have had or will have a Material Adverse Effect, since the date
hereof, and no information, of which the Purchasers are not currently aware,
shall come to the attention of the Purchasers that is materially adverse to the
Company.
(viii) The Purchasers shall have completed their due diligence
regarding the Company to their complete satisfaction in their sole discretion.
b. With respect to the Second Closing:
(i) The Company shall have delivered to such Purchaser such
Purchaser's duly executed Debentures and Warrants (in such denominations as such
Purchaser shall request in writing prior to the Closing in accordance with
Section 1(b) above.
(ii) The Common Stock shall be authorized for quotation on NASDAQ
and trading in the Common Stock (or NASDAQ generally) shall not have been
suspended by the SEC or NASDAQ.
(iii) The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of the
Second Closing Date as though made at that time (except for representations and
warranties that relate to a specific date, which representations and warranties
shall be true and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Second Closing Date. Each Purchaser shall
have received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the Second Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by any Purchaser.
(iv) No litigation, statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any
21
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby that
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
(v) The Purchasers shall have received an opinion of the Company's
counsel, dated as of the Second Closing Date, in form, scope and substance
reasonably satisfactory to the Purchasers and in substantially the form of
Exhibit E attached hereto.
(vi) The Company shall have delivered evidence reasonably
satisfactory to each Purchaser that the Company's transfer agent has agreed to
act in accordance with irrevocable instructions in the form attached hereto as
Exhibit F.
(vii) There shall have been no changes and no developments in the
business, properties, operations, financial condition, results of operations or
publicly announced prospects of the Company and its subsidiaries, taken as a
whole, which have had or will have a Material Adverse Effect, since the date
hereof, and no information, of which the Purchasers are not currently aware,
shall come to the attention of the Purchasers that is materially adverse to the
Company.
(viii) The First Closing shall have occurred.
(ix) The Company Milestones for the Second Closing shall have been
met.
(x) The Placement Agent, on behalf of the Purchasers, has elected to
close by written notice to the Company.
c. With respect to the Third Closing:
(i) The Company shall have delivered to such Purchaser such
Purchaser's duly executed Debentures and Warrants (in such denominations as such
Purchaser shall request in writing prior to the Closing) in accordance with
Section 1(b) above.
(ii) The Common Stock shall be authorized for quotation on NASDAQ
and trading in the Common Stock (or NASDAQ generally) shall not have been
suspended by the SEC or NASDAQ.
(iii) The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of the
Third Closing Date as though made at that time (except for representations and
warranties that relate to a specific date, which representations and warranties
shall be true and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Third Closing Date. Each Purchaser shall
have received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the Third Closing Date, to the foregoing
22
effect and as to such other matters as may be reasonably requested by any
Purchaser in writing prior to Closing.
(iv) No litigation, statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby that questions the validity of, or challenges or
prohibits the consummation of, any of the transactions contemplated by this
Agreement.
(v) The Purchasers shall have received an opinion of the Company's
counsel, dated as of the Third Closing Date, in form, scope and substance
reasonably satisfactory to the Purchasers and in substantially the form of
Exhibit E attached hereto.
(vi) The Company shall have delivered evidence reasonably
satisfactory to each Purchaser that the Company's transfer agent has agreed to
act in accordance with irrevocable instructions in the form attached hereto as
Exhibit F.
(vii) There shall have been no changes and no developments in the
business, properties, operations, financial condition, results of operations or
publicly announced prospects of the Company and its subsidiaries, taken as a
whole, which have had or will have a Material Adverse Effect, since the date
hereof, and no information, of which the Purchasers are not currently aware,
shall come to the attention of the Purchasers that is materially adverse to the
Company.
(viii) The Second Closing shall have occurred.
(ix) The Company Milestones for the Third Closing shall have been
met.
(x) This Agreement, the Debentures, Warrants and Registration Rights
Agreement and the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Securities, shall have been approved and
adopted by the stockholders of the Company at the stockholders' meeting referred
to in Section 4(o) hereof.
(xi) The Placement Agent, on behalf of the Purchasers, has elected
to close by written notice to the Company.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of choice of law or conflict of laws that would defer to the
substantive law of another jurisdiction. The Company irrevocably consents to the
jurisdiction of the United States federal courts and the state courts located in
the City of New York in the State of New York in any suit or proceeding based on
or arising under this Agreement and irrevocably agrees that all claims in
respect of such suit or proceeding shall be
23
determined exclusively in such courts. The Company irrevocably waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding.
The Company further agrees that service of process mailed by first class mail
shall be deemed in every respect effective service of process in any such suit
or proceeding. Nothing herein shall affect the right of any Purchaser to serve
process in any other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the other agreements
and instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Purchaser
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived other than by an
instrument in writing signed by the party to be charged with enforcement and no
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and each Purchaser.
f. Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
24
If to the Company:
Fidelity Holdings, Inc.
00-00 Xxx Xxxxxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
With a copy to:
Xxxxxxx Xxxxxx Xxxx & Ball P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esquire
If to a Purchaser, to the address set forth under such Purchaser's name on
the signature page hereto executed by the Purchaser.
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Except as
provided herein, neither the Company nor any Purchaser shall assign this
Agreement or any rights or obligations hereunder. Notwithstanding the foregoing,
any Purchaser may assign its rights hereunder to any of its "affiliates," as
that term is defined under the Exchange Act, without the consent of the Company
or to any other person or entity with the consent of the Company, so long as
each assignee agrees in writing to be bound by the terms hereof and to make the
representations and warranties set forth in Section 2 hereof. This provision
shall not limit a Purchaser's right to transfer the Securities pursuant to the
terms of this Agreement, the Debentures, the Warrants or the Registration Rights
Agreement or to assign such Purchaser's rights hereunder and/or thereunder to
any such transferee. In addition, and notwithstanding anything to the contrary
contained in this Agreement, the Debentures, the Warrants or the Registration
Rights Agreement, the Securities may be pledged and all rights of Purchaser
under this Agreement or any other agreement or document related to the
transaction contemplated hereby may be assigned, without further consent of the
Company, to a bona fide pledgee in connection with a Purchaser's margin or
brokerage accounts.
h. Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
25
i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in Sections 3, 4, 5 and 8 shall survive the
Closing hereunder notwithstanding any due diligence investigation conducted by
or on behalf of any Purchasers. Moreover, none of the representations and
warranties made by the Company herein shall act as a waiver of any rights or
remedies a Purchaser may have under applicable federal or state securities laws.
j. Indemnity. (i) The Company agrees to indemnify and hold harmless each
Purchaser and each other holder of the Securities and all of their stockholders,
officers, directors, employees, partners, members, agents and direct or indirect
investors and affiliates and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Purchaser Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages and
expenses in connection therewith (irrespective of whether any such Indemnitee is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by any Purchaser Indemnitee as a result of, or arising
out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement, the Debentures, the Warrants,
the Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in this Agreement, the
Debentures, the Warrants, the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (c) any
cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement, the Debentures, the Warrants, the Registration
Rights Agreement or any other certificate, instrument or document contemplated
hereby or thereby, (d) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the
Securities or (e) the status of such Purchaser or holder of the Securities as an
investor in the Company. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(ii) Each Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company and all of its stockholders, officers, directors,
employees, agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Company Indemnitees") from and against any and all
"Indemnified Liabilities" incurred by any Company Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Purchaser in this Agreement, or (b) any
breach of any covenant, agreement or obligation of the Purchaser contained in
this Agreement.
k. Publicity. The Company and each Purchaser shall have the right to
approve before issuance any press releases, SEC, NASDAQ or NASD filings, or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be
26
entitled, without the prior approval of the Purchasers, to make any press
release which does not name the Purchasers or SEC, NASDAQ or NASD filings with
respect to such transactions as is required by applicable law and regulations
(although the Purchasers shall be consulted by the Company in connection with
any such press release and filing prior to its release and shall be provided
with a copy thereof).
l. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
m. Termination. In the event that the First Closing Date shall not have
occurred on or before January 31, 1999, unless the parties agree otherwise, this
Agreement shall terminate at the close of business on such date. Notwithstanding
any termination of this Agreement, any party not in breach of this Agreement
shall preserve all rights and remedies it may have against another party hereto
for a breach of this Agreement prior to or relating to the termination hereof.
n. Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement, the Debentures,
the Warrants and the Registration Rights Agreement. As such, the language used
herein and therein shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against any party to this Agreement.
o. Equitable Relief. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Purchaser by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
hereunder (including, but not limited to, its obligations pursuant to Section 5
hereof) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement (including, but not
limited to, its obligations pursuant to Section 5 hereof), that a Purchaser
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
p. "Trading day" and "business day" shall mean any day on which the New
York Stock Exchange is open for trading.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
FIDELITY HOLDINGS, INC. CBS CORP.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxxx
------------------- -------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
Title: President Title: President
By: By:
------------------- -------------------
Name: Name:
Title: Title:
PURCHASER:
ZANETT LOMBARDIER, LTD. PURCHASE PRICE
First Second Third
Closing Closing Closing
By: /s/ Xxxxxxxx Xxxxxxx $500,000 $781,818.18 $781,818.18
---------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director to Advisor
RESIDENCE: Cayman Islands
ADDRESS: c/o Bank Xxxxxx Xxxx Trust Co.
Xxxx House, P.O. Box 1100
Grand Cayman, Cayman Islands
British West Indies
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with copies of all notices to:
The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
SUBSCRIPTION AMOUNT:
Number of Units 500
28
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
FIDELITY HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
-------------------
Name: Xxxxx Xxxxx
Title: President
PURCHASER:
XXXXXXX SACHS PERFORMANCE PURCHASE PRICE
PARTNERS, L.P.
By: Commodities Corporation LLC, First Second Third
its general partner Closing Closing Closing
By: /s/ Xxxxx X. Judge $1,120,000 $1,751,272.73 $1,751,272.73
---------------------
Name: Xxxxx X. Judge
Title: Vice President
RESIDENCE: Delaware
ADDRESS: c/o Commodities Corporation LLC
000 Xxxxx Xxxxx Xxxx
XX 000
Xxxxxxxxx, XX 00000
SUBSCRIPTION AMOUNT:
Number of Units 1,120
29
IN WITNESS WHEREOF, the undersigned Purchasor and the Company have caused
this Agreement to be duly executed as of the date first above written.
FIDELITY HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
-------------------
Name: Xxxxx Xxxxx
Title: President
PURCHASER:
XXXXXXX SACHS PERFORMANCE PURCHASE PRICE
PARTNERS (OFFSHORE), L.P.
By: Commodities Corporation LLC, First Second Third
its general partner Closing Closing Closing
By: /s/ Xxxxx X. Judge $880,000 $1,376,000 $1,376,000
---------------------
Name: Xxxxx X. Judge
Title: Vice President
RESIDENCE: Cayman Islands
ADDRESS: P.O. Box 309
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
with copies of all notices to:
c/o Commodities Corporation LLC
000 Xxxxx Xxxxx Xxxx
XX 000
Xxxxxxxxx, XX 00000
SUBSCRIPTION AMOUNT:
Number of Units 880
30
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
FIDELITY HOLDINGS, INC. CBS CORP.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxxx
------------------- -------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
Title: President Title: President
By: By:
------------------- -------------------
Name: Name:
Title: Title:
PURCHASER:
XXXXX XXXXXXXX PURCHASE PRICE
First Second Third
Closing Closing Closing
/s/ Xxxxx Xxxxxxxx $230,000 $359,636.36 $359.636.36
---------------------
Xxxxx Xxxxxxxx
RESIDENCE: New York
ADDRESS:
c/o The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
SUBSCRIPTION AMOUNT:
Number of Units 230
31
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
FIDELITY HOLDINGS, INC. CBS CORP.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxxx
------------------- -------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
Title: President Title: President
By: By:
------------------- -------------------
Name: Name:
Title: Title:
PURCHASER:
XXXXX XxXXXXXX PURCHASE PRICE
First Second Third
Closing Closing Closing
/s/ Xxxxx XxXxxxxx $20,000 $31,272.73 $31,272.73
---------------------
Xxxxx XxXxxxxx
RESIDENCE: New York
ADDRESS:
c/o The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
SUBSCRIPTION AMOUNT:
Number of Units 20
32
