SVI HOLDINGS, INC.
COMMON STOCK
PURCHASE AGREEMENT
Dated as of December 22, 2000
SVI HOLDINGS, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is entered into
as of December 22, 2000, by and among SVI Holdings, Inc., a Nevada corporation
(the "Company"), and the parties listed on the Schedule of Investors attached
hereto (each, an "Investor"), with reference to the following facts:
WHEREAS, the Company has authorized the sale and issuance of up to
2,941,176 shares of its Common Stock, par value $.0001 per share, (the "Common
Stock") pursuant to the terms of this Agreement.
WHEREAS, the Investors hereto wish to purchase, and the Company wishes
to sell to those Investors, shares of the Common Stock on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions set forth in this Agreement, the parties agree
as follows:
1. AUTHORIZATION AND SALE OF THE SHARES.
1.1 AUTHORIZATION. The Company has authorized the issuance and
sale pursuant to the terms and conditions hereof of up to 2,941,176 shares of
its Common Stock.
1.2 ISSUANCE AND SALE OF COMMON STOCK. Subject to the terms
and conditions hereof, each Investor agrees, severally but not jointly, to
purchase, and the Company agrees to issue and sell to each such Investor, at
each Closing (as such term is hereinafter defined), the respective number of
shares of Common Stock specified opposite the name of such Investor for such
Closing on the Schedule of Investors attached hereto at a purchase price of
$0.85 per share.
1.3 ISSUANCE AND SALE OF INITIAL WARRANTS. Subject to the
terms and conditions hereof, the Company agrees to issue to each Investor
participating in the applicable Closing a warrant to purchase shares of Common
Stock equal to one-half the number of shares of Common Stock that Investor
acquires in such Closing. The warrants will be in the form of Exhibit A hereto
(each, an "Initial Warrant" and collectively, the "Initial Warrants"). The
exercise price of each Initial Warrant will be $1.50 per share of Common Stock
issuable on exercise of the Initial Warrant.
1.4 CLOSINGS; DELIVERY.
(a) FIRST CLOSING. Upon satisfaction of the
conditions set forth in Sections 4 and 5, the closing of the purchase and sale
of the shares of Common Stock listed in Part I of the Schedule of Investors
attached hereto and the issuance of the Initial Warrants related thereto shall
take place at the offices of Xxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxxxx LLP, 000 X.
Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000, on or before December 22, 2000
(the "First Closing Date"), at 10:00 a.m., or at such other time and place as
the parties may agree (the "First Closing"). The First Closing Date and all
subsequent closing dates referred to Section 1.4(c) of this Agreement are
collectively referred to herein as the "Closing Dates" and each individually as
a "Closing Date." The First Closing and all subsequent closings referred to
Section 1.4(c) of this Agreement are collectively referred to herein as the
"Closings" and each individually as a "Closing."
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(b) DELIVERY AT THE FIRST CLOSING. Subject to the
terms of this Agreement, at the First Closing the Company will deliver to each
Investor listed in Part I of the Schedule of Investors a stock certificate
representing the number of shares of Common Stock set forth beside such
Investor's name in Part I of the Schedule of Investors and an Initial Warrant
exercisable into the applicable number of shares of Common Stock against (i) in
the case of principal of the Convertible Promissory Note and Grant of Security
Interest dated December 14, 2000 (the "Convertible Note") made by the Company in
favor of Koyah Leverage Partners, L.P., cancellation of such principal pursuant
to the Convertible Note pursuant to the automatic conversion provisions of the
Convertible Note (with accrued interest on the Convertible Note to be paid by
the Company) and (ii) in the case of the remainder of the purchase price,
delivery to the Company by each such Investor at the First Closing of a check or
wire transfer of funds for the purchase price of the shares of Common Stock.
(c) SUBSEQUENT SALES OF SHARES.
(i) SECOND CLOSING. Upon satisfaction of the
conditions set forth in Section 4 and 5, the closing of the purchase and sale of
the shares of Common Stock listed in Part II of Schedule of Investors attached
hereto and the issuance of the Initial Warrants related thereto shall take place
at the offices of Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP, on or before January
20, 2001 (the "Second Closing Date"), at 10:00 a.m., or at such other time and
place as the parties may agree (the "Second Closing").
(ii) ADDITIONAL OPTIONAL PURCHASE. At any
time on or before the date that is 60 days after the First Closing Date, Koyah
Partners, L.P., Koyah Leverage Partners, L.P. and any other entity or account
managed by or under common investment management with ICM Asset Management, Inc.
(collectively, the "Approved Investors") have the exclusive right, upon the
election of one or more of the Approved Investors, as the case may be, to
purchase, and the Company agrees to sell to such Approved Investor or Approved
Investors, as the case may be, upon such election, up to an additional 588,235
shares of such Common Stock not sold in the First Closing or the Second Closing
at a purchase price of $0.85 per share together with the issuance of the Initial
Warrants related thereto. All such subsequent sales shall be at the election of
the Approved Investors (but without obligation on their part), but shall
otherwise be made on the terms and conditions set forth in this Agreement,
including, without limitation, satisfaction of the conditions set forth in
Sections 4 and 5.
(iii) TREATMENT OF SUBSEQUENT SALES OF
SHARES. Any shares of Common Stock sold pursuant to this Section 1.4(c) shall be
deemed to be "Common Stock" for all purposes under this Agreement and any
investors thereof shall be deemed to be "Investors" for all purposes under this
Agreement and under the Investors' Rights Agreement, dated as of the date
hereof, by and among the Company and the Investors, the form of which is
attached hereto as Exhibit B (the "Investors' Rights Agreement"), and such
investors shall automatically become parties to this Agreement and the
Investors' Rights Agreement and shall have the rights and obligations of an
Investor hereunder and thereunder.
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(d) DELIVERY AT EACH SUBSEQUENT CLOSING. Subject to
the terms of this Agreement, at each Closing after the First Closing, the
Company shall deliver to each Investor acquiring shares of Common Stock at such
Closing a stock certificate representing that number of shares of Common Stock
set forth beside such Investor's name for such Closing on the Schedule of
Investors attached hereto and an Initial Warrant exercisable into the applicable
number of shares of Common Stock against delivery to the Company by each such
Investor participating in such Closing of a check or wire transfer of funds for
the purchase price of the shares of Common Stock. After each such Closing, the
Company will update the Schedule of Investors attached hereto by adding the
investors in such Closing to a new Part of the Schedule of Investors.
1.5 [Intentionally omitted]
1.6 EFFECT OF CHANGE IN COMPANY'S CAPITAL STRUCTURE. For
purposes of this Section 1, appropriate adjustments shall be made in the price,
number and class of shares in the event of a stock split, reverse stock split,
combination, reclassification or like change in the capital structure of the
Company after the date of this Agreement.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company (expressly including for purposes of this Section 2 its wholly owned
subsidiaries, SVI Training Products, Inc., a California corporation, Sabica
Ventures, Inc., a California corporation, SVI Retail, Inc., a Delaware
corporation, and SVI Retail (Pty) Ltd., an Australian corporation) hereby
represents and warrants to each Investor, as of the date of this Agreement and
as of each Closing, that except as set forth on the Schedules attached hereto
(which exceptions shall be deemed to be representations and warranties as if
made hereunder):
2.1 ORGANIZATION; STANDING AND POWER. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, (b) has all requisite corporate power and
authority to own and operate its properties and to carry on its businesses as
presently conducted and as proposed hereafter to be conducted, and (c) is duly
qualified and in good standing to do business as a foreign corporation in each
and every jurisdiction where its assets are located and wherever such
qualification is necessary to carry out its business and operations except where
the failure to so qualify or be in good standing would not have a material
adverse effect on the condition (financial or otherwise), business, operations,
assets or prospects of the Company (the "Condition of the Company"). The Company
has all requisite corporate power and authority to execute and deliver, and
perform all of its obligations under this Agreement and the other Related
Documents (as defined in Section 8).
2.2 CAPITALIZATION; RESERVED STOCK, PREEMPTIVE RIGHTS. The
total authorized capital stock of the Company immediately prior to the First
Closing consists of 50,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, of which 34,342,525 shares of Common Stock are issued and
outstanding (consisting of 33,897,884 shares issued and outstanding and an
additional 444,641 held as treasury stock) and no shares of Preferred Stock are
issued and outstanding. All capital stock of the Company that is outstanding
immediately prior to the First Closing has been duly and validly issued, is
fully paid and nonassessable and has been issued in accordance with all
applicable federal and state securities laws. Except for (a) 3,500,000 shares of
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Common Stock issuable upon conversion of options which are outstanding or
reserved for issuance under the Company's 1998 Equity Incentive Plan and 688,535
of Common Stock issuable upon conversion of options which are outstanding or
reserved for issuance under the Company's 1989 Incentive Stock Option Plan, (b)
25,000 shares of Common Stock issuable on exercise of warrants outstanding prior
to the First Closing, (c) shares of Common Stock issuable on exercise of
warrants contemplated under the Convertible Note (which is terminating upon the
First Closing), (d) shares of Common Stock issuable upon exercise of the Initial
Warrants and (e) shares of Common Stock issuable upon exercise of the additional
warrants contemplated under the Investors' Rights Agreement (each a
"Registration Warrant", collectively the "Registration Warrants" and together
with the Initial Warrants, the "Warrants"), no other shares have been reserved
for issuance on the First Closing Date and there are no outstanding options,
warrants or other rights to subscribe for or purchase from the Company any
shares of its capital stock or any securities convertible into or exchangeable
for its capital stock. Except for the rights of first refusal set forth in the
Investors' Rights Agreement, there are no preemptive rights or rights of first
refusal or similar rights which are binding on the Company permitting any person
to subscribe for or purchase from the Company shares of its capital stock
pursuant to any provision of law, the articles of incorporation or bylaws of the
Company or by agreement or otherwise. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of each class
and series of authorized capital stock of the Company are as set forth in the
certificate or articles of incorporation of the Company, and all such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable against the Company and in
accordance with all applicable laws, rules and regulations.
2.3 AUTHORIZATION AND BINDING OBLIGATION.
(a) The execution and delivery by the Company of this
Agreement, the other Related Documents, the performance of the Company's
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby (including the issuance and delivery of the
shares of Common Stock and the Common Stock issuable on exercise of the
Warrants) have been duly authorized by all necessary corporate action and will
not, either prior to or as a result of the consummation of the transactions
contemplated by this Agreement: (i) violate any law or any governmental rule or
regulation applicable to the Company, any provision of the certificate or
articles of incorporation or bylaws of the Company, or any contract, indenture,
agreement or other instrument to which the Company is a party, or by which the
Company or any of its assets or properties are bound, or (ii) be in conflict
with, result in a breach of, or constitute (after the giving of notice or lapse
of time or both) a default under, or result in the creation or imposition of any
lien of any nature whatsoever upon any of the property or assets of the Company
pursuant to the provisions of any contract, indenture, agreement or other
instrument to which the Company is a party or by which its assets or property is
bound. The Company is not required to obtain any approval, consent or
authorization from, or to file any declaration or statement with, any
governmental instrumentality or agency in connection with or as a condition to
the execution, delivery or performance of this Agreement (including the issuance
and delivery of the shares of Common Stock and the Common Stock issuable on
exercise of the Warrants), or the other Related Documents, other than (i)
approval of the board of directors of the Company, which has been obtained, and
(ii) the filing of the Form D and any applicable state securities law filings,
which filing or filings, as the case may be, will be made in accordance with
applicable laws and regulations.
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(b) Each of the Agreement and the other Related
Documents has been duly executed and delivered by the Company and is the legally
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
(c) The Common Stock that is being issued hereunder,
when issued, sold, paid for and delivered in accordance with the terms of this
Agreement will be duly and validly issued, fully paid and non-assessable, and
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act of 1933, as amended (the "Securities Act"), and state
securities laws) and any taxes, security interests, options, warrants, purchase
rights, preemptive rights, contracts, commitments, equities, claims or demands.
The shares of Common Stock issuable on exercise of the Warrants, when issued in
accordance with the terms of the Warrants, will be duly and validly issued,
fully paid and non-assessable, and free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and state
securities laws) and any taxes, security interests, options, warrants, purchase
rights, preemptive rights, contracts, commitments, equities, claims or demands.
2.4 SECURITIES LAW EXEMPTION. The offer, sale and issuance of
the shares of the Common Stock and Warrants as contemplated by this Agreement
are exempt from the registration requirements of the Securities Act and
applicable state securities laws, and neither the Company nor any authorized
agent acting on its behalf has taken or will take any action hereafter that
would cause the loss of such exemption.
2.5 NON-CONTRAVENTION. The Company is not in violation or
breach of or in default with respect to, any material provision of any contract,
agreement, instrument, lease, license, arrangement or understanding to which it
is a party, and each such contract, agreement, instrument, lease, license,
arrangement and understanding is in full force and effect and is the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
2.6 SEC REPORTS. The Company has filed all required reports,
schedules, forms, statements, and other documents with the Securities and
Exchange Commission (the "SEC") (together with other documents that revise or
supersede earlier filed documents, the "SEC Reports"). The Company has delivered
or made available to the Investors true and complete copies of the SEC Reports.
As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act or the 1934 Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable to such
SEC Reports. None of the SEC Reports 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. The financial
statements of the Company included in the SEC Reports complied as of their
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respective dates of filing with the SEC in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Regulation S-X promulgated by the SEC) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto), and
fairly present the financial position of the Company as of the dates thereof and
the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). As of the date hereof, the Company has on a timely basis made all
filings required to be made by the Company with the SEC.
2.7 LITIGATION. Except as set forth in the SEC Reports, there
is no action, suit or litigation, administrative proceeding, arbitration or
other proceeding to which the Company is a party or of which the Company is
aware, pending or threatened, which might materially and adversely affect the
Condition of the Company, and none of which questions the validity or impairs
the ability of the Company to perform on a timely basis any obligation under
this Agreement or the or the other Related Documents or any action taken or to
be taken in connection herewith or therewith. None of the transactions
contemplated hereby or by any of the other Related Documents has been enjoined
by any Authority and no suit or other proceeding challenging the transactions
contemplated by the Related Documents (of which the Company has been served or
is aware) has been instituted or, to the best of the Company's knowledge,
threatened and no investigative demand on the Company related to such
transactions has been made by any Authority. There are no unsatisfied judgments
or outstanding orders, injunctions, decrees, stipulations or awards against the
Company or any of its properties or assets that, individually or in the
aggregate, exceed $25,000 or otherwise have a material adverse effect on the
Condition of the Company.
2.8 FINANCIAL STATEMENTS. The financial statements of the
Company included in the SEC Reports and an unaudited income statement and
balance sheet for the three-month period ending September 30, 2000, included in
the SEC Reports (the "Financial Statements") (a) have been prepared (i) in
accordance with generally accepted accounting principles ("GAAP") (except that
the unaudited Financial Statements have not been reviewed by the independent
public accountants of the Company, , and do not contain footnotes and are
subject to year-end adjustments, which adjustments are not expected to be
material, individually or in the aggregate), (ii) on a consistent basis for all
periods presented, and (iii) in accordance with the books and records of the
Company, (b) are complete and correct in all material respects, and (c) fairly
present in all material respects the financial condition of the Company as at
said dates, and the results of operations for the periods stated. As of the date
hereof, there are no liabilities or obligations of the Company ("Liabilities"),
whether known or unknown, accrued, absolute, contingent or otherwise, and
whether due or to become due, other than Liabilities that are reflected in the
SEC Reports or the Financial Statements or Liabilities incurred since the date
of the Financial Statements that are not and would not be, individually or in
the aggregate, material to the Condition of the Company. The Company is not
aware of any reasonable basis for the assertion against the Company of any other
debt, duty, liability, obligation or loss contingency other than Liabilities
that are not and would not be, individually or in the aggregate, material to the
Condition of the Company.
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2.9 USE OF PROCEEDS. The proceeds from the sale of the shares
of Common Stock shall be used solely for general corporate purposes. The
proceeds from the sale of the shares of Common Stock may not be used to redeem,
repurchase or otherwise acquire any shares of preferred stock, common stock or
other equity securities issued by the Company.
2.10 INTELLECTUAL PROPERTY.
(a) The Company owns, or has the contractual right to
use, sell or license all intellectual property necessary or required for the
conduct of its business as presently conducted and as proposed to be conducted,
including, without limitation, all trade secrets, processes, source code,
licenses, trademarks, service marks, trade names, logos, brands, copyrights,
patents, franchises, domain names, permits and Proprietary Information (all such
intellectual property and the rights thereto are collectively referred to as the
"Company IP Rights"), except for any failure to own or have the right to use,
sell or license that would not have a material adverse effect on the Condition
of the Company. Set forth in the SEC Reports are all (i) patents, applications
for patents, registrations of trademarks and applications therefor, and
registrations of copyrights and applications therefor that are owned by the
Company, and (ii) unexpired licenses relating to the Company IP Rights that have
been granted to the Company and that are material to the conduct of the
Company's business as presently conducted or as proposed to be conducted, but
excluding end-user licenses granted to the Company relating to standard "off the
shelf" software that is generally available on commercially reasonable terms.
(b) Neither the execution, delivery and performance
of this Agreement or the other Related Documents nor the consummation of the
transactions contemplated hereby or thereby will (i) constitute a breach of any
instrument or agreement governing any Company IP Rights, (ii) cause the
forfeiture or termination or give rise to a right of forfeiture or termination
of any Company IP Rights or (iii) impair the right of the Company to use, sell
or license any Company IP Rights or portion thereof, except for any such breach,
forfeiture, termination, right of forfeiture or termination or impairment that
would not, individually or in the aggregate, have a material adverse effect on
the Condition of the Company.
(c) The manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by the Company is not in
breach of any material license or agreement between the Company and any third
party or, to the best of the Company's knowledge, has not infringed and is not
infringing on any intellectual property right of any other party. To the best of
the Company's knowledge, there is no claim or litigation, pending or threatened,
which contests the validity, ownership or right to use, sell, license or dispose
of any Company IP Rights.
(d) Except as set forth on Schedule 2.10(d), the
Company owns the Company IP Rights free and clear of all liens or other
encumbrances. The Company has not received any communications alleging that the
Company has violated or, by conducting its business presently conducted or as
proposed to be conducted, violates or will violate any intellectual property
rights of any other person or entity. The Company is not aware that any of its
employees are obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or that would conflict with the Company's business
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as presently conducted or as proposed to be conducted. Neither the execution nor
delivery of this Agreement or the other Related Documents, nor the carrying on
of the Company's business by the employees of the Company, nor the conduct of
the Company's business as presently conducted or as proposed to be conducted,
will conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract, covenant or instrument under
which any employee is now bound. The Company does not believe it is or will be
necessary to utilize any inventions, trade secrets or proprietary information of
any of its employees (or people the Company currently intends to hire) made
prior to their employment by the Company, except for Company IP Rights that have
been assigned to the Company.
(e) The Company has taken reasonable security
measures to maintain the confidentiality of and to protect the Company IP
Rights. Each executive officer of the Company has executed a Company IP Rights
and inventions agreement to protect the rights of the Company to all Company IP
Rights in substantially the form provided to the Investors.
2.11 TITLE TO PROPERTY AND ASSETS. The Company does not own
any real property. The Company has good and marketable title to or, in the case
of leases and licenses, has valid and subsisting leasehold interests or licenses
in, all of its properties and assets of whatever kind (whether real or personal,
tangible or intangible) free and clear of any liens or other encumbrances,
except for liens or other encumbrances that are not, individually or in the
aggregate, material to the Condition of the Company. No person other than the
Company owns any equipment or other tangible assets or property situated on the
premises of the Company that is necessary to the operation of the business of
the Company as conducted or as proposed to be conducted, except for leased items
that are leased. With respect to property leased by the Company, the Company has
a valid leasehold interest in such property pursuant to leases which are in full
force and effect, and the Company is in compliance in all material respects with
the material provisions of such leases. All facilities, equipment and other
material items of tangible property and assets of the Company are in good
operating condition and repair, subject to normal wear and maintenance, and
conform to all applicable Laws relating to their construction, use and
operation.
2.12 COMPLIANCE WITH LAWS. The Company is and has been in
compliance in all material respects with all Laws that are applicable to the
Company, the conduct of its business as presently conducted and as proposed to
be conducted, and the ownership of its property and assets (including, without
limitation, all occupational safety, health, wage and hour, employment
discrimination and environmental laws), and the Company, to its knowledge, is
not aware of any state of facts, events, conditions or occurrences which may now
or hereafter constitute or result in a violation of any of such Laws or which
may give rise to the assertion of any such violation, the effect of which could
have a material adverse effect on the Condition of the Company. All required
reports and filings with Authorities have been properly made as and when
required, except where the failure to report or file would not, individually or
in the aggregate, have a material adverse effect on the Condition of the
Company.
2.13 LICENSES AND PERMITS. The Company has obtained and
maintains all federal, state and local licenses, permits, consents, approvals,
registrations, memberships, authorizations and qualifications required to be
maintained in connection with and material to the operations of the Company as
presently conducted and as proposed to be conducted, and all such licenses,
permits, consents, approvals, registrations, memberships, authorizations and
qualifications obtained are valid and in full force and effect.
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2.14 RELATED ENTITIES. Except as set forth in the SEC Reports,
the Company does not presently own or control, directly or indirectly, any
interest in any other subsidiary, corporation, association or other business
entity. The Company is not a party to any joint venture.
2.15 RELATED PARTY TRANSACTIONS AND AGREEMENTS.
(a) Except as disclosed in the SEC Reports, there are
no agreements, understandings or proposed transactions (other than
employer/employee relationships) between the Company, on the one hand, and any
of its respective officers, directors, shareholders (who hold one percent or
more of the Company's Common Stock (on a fully-diluted basis)) or any affiliate
thereof, on the other hand which would have a material adverse effect on the
Condition of the Company.
(b) No employee, officer or director of the Company
or shareholder who holds one percent or more of the Company's Common Stock (on a
fully-diluted basis) or member of the immediate family of any of the foregoing
(i) owns, directly or indirectly, any interest in (except for less than 1% stock
holdings for investment purposes in securities of publicly traded companies), or
is an officer, director, employee or consultant of, any company which is or was
engaged in business as, a competitor, lessor, lessee, supplier or customer of
the Company; (ii) owns, directly or indirectly, as a whole or in part, any
tangible or intangible property that the Company uses or contemplates using in
the conduct of its business as presently conducted or as proposed to be
conducted; or (iii) has any cause of action or other claim whatsoever against,
or is owed any amount from, the Company, except as disclosed in the SEC Reports
and except for immaterial claims in the ordinary course of business, such as
accrued vacation pay, accrued benefits under employee benefit plans and medical,
dental and other similar health benefit plans existing on the date hereof.
2.16 MARKETING RIGHTS. The Company has not granted rights to
develop, license, market, distribute or sell its products or use any of its
Proprietary Information to any other person or entity and is not bound by any
agreement that affects the exclusive right of the Company to develop, license,
market, distribute or sell its products or any other products that utilize the
Proprietary Information.
2.17 CHANGES. Since the date of the most recent SEC Report,
the Company has operated its respective business diligently and in the ordinary
course of business and there has not been, or the Company has not caused,
permitted or suffered to exist:
(a) any material adverse change in the Condition of
the Company;
(b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the Condition of the
Company;
(c) any waiver or compromise by the Company of a
right worth in excess of $25,000 or of a debt in excess of $25,000 owed it;
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(d) sold, encumbered, assigned or transferred any
assets or properties of the Company in excess of $25,000, other than in the
ordinary course of business;
(e) incurred any liability in excess of $25,000,
other than in the ordinary course of business;
(f) created, incurred, assumed or guaranteed any
indebtedness or subjected any of its assets to any lien or encumbrance, except
for indebtedness, liens or encumbrances that are not, individually or in the
aggregate, material to the Condition of the Company;
(g) declared, set aside or paid any dividends or made
any other distributions in cash or property on the Company's capital stock;
(h) directly or indirectly redeemed, purchased or
otherwise acquired any shares of capital stock of the Company;
(i) suffered any resignation or termination of
employment of any key officers or employees;
(j) except in the ordinary course of business of the
Company, increased the compensation payable or to become payable by the Company
to any of its officers, employees or directors or increased any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
by the Company for or with any such officers, employees or directors;
(k) made any direct or indirect loan to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(l) changed any agreement to which the Company is a
party which materially and adversely affects the Condition of the Company; or
(m) entered into any agreement or commitment to do
any of the things described in this Section 2.17.
2.18 EMPLOYEE BENEFIT PLANS. Set forth in the SEC Reports or
on Schedule 2.18 are all "employee benefit plans," as such term is defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), to
which the Company has any liability or obligation, contingent or otherwise. To
the best knowledge of the Company, all such employee benefit plans comply and
have been maintained and administered in compliance with ERISA, the Code (as
defined in Section 2.19) and all other statutes, orders and governmental rules
and regulations applicable to such employee benefit plans. The Company does not
maintain or contribute to, and has not maintained or contributed to, any
"multiemployer plan," as such term is defined in ERISA.
10
2.19 TAXES. The Company has timely filed all tax returns and
reports (federal, state and local) as required by Law and these returns and
reports are true and correct in all material respects. The Company has paid all
taxes and other assessments shown to be due on such returns or reports. Neither
the Internal Revenue Service nor any state or local taxing authority has, during
the past three years, examined or informed the Company it is in the process of
examining, any such tax returns and reports. The provision for taxes of the
Company, as shown on the most recent Financial Statements, is adequate for taxes
due or accrued as of the date thereof. The Company has not elected, pursuant to
the Internal Revenue Code of 1986, as amended (the "Code"), to be treated as a
collapsible corporation pursuant to Section 341(f) of the Code, nor has it made
any other elections pursuant to the Code (other than elections that relate
solely to methods of accounting, depreciation or amortization) that would have a
material effect on the Condition of the Company.
2.20 INSURANCE. The Company has in full force and effect fire,
casualty and liability insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow the Company to replace any
of its properties that might be damaged or destroyed to the extent and in the
manner customary for companies in similar business similarly situated.
2.21 EMPLOYEES. The Company does not have any collective
bargaining agreements with any of its employees. There is no labor union
organizing activity pending or, to the Company's knowledge, threatened with
respect to the Company. Except as set forth in the SEC Reports, no employee has
any agreement or contract, written or verbal, regarding his employment
contracts. Except as set forth in the SEC Reports, the Company is not a party to
or bound by any deferred compensation arrangement, bonus plan, incentive plan,
profit sharing plan, retirement agreement or other employee compensation plan or
agreement. The Company is not aware that any officer or key employee, or that
any group of key employees, intends to terminate their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing. Except as set forth in the SEC Reports, the
employment of each officer and employee of the Company is terminable at the will
of the Company. The Company is and has been in compliance with all applicable
Laws regulating employment and employment practices or prescribing terms and
conditions of employment, wages and hours and the provisions of all Laws
applicable to any employee benefit, stock option or other similar plan
maintained or contributed to by the Company for the benefit of its employees,
and there are no claims (other than routine claims for benefits and claims in
connection with terminations of employment) pending or threatened with respect
to any of such plans or arrangements.
2.22 MATERIAL CONTRACTS. Set forth in the SEC Reports and on
Schedule 2.22, are all material contracts, agreements, commitments and
arrangements that require capital expenditures or payments in excess of $100,000
or that are otherwise material, necessary or otherwise desirable to conduct the
Company's business as presently conducted or as proposed to be conducted
("Material Contracts"). The Material Contracts are valid and in full force and
effect as to the Company, and, to the best of the Company's knowledge, to the
other parties thereto. Except as otherwise disclosed herein, the Company is not
in violation of, or default under (and there does not exist any event or
condition which, after notice or lapse of time or both, would constitute such a
default under), the Material Contracts, except to the extent that such
11
violations or defaults, individually or in the aggregate, could not reasonably
be expected to (a) affect the validity of this Agreement or the other Related
Documents, (b) have a material adverse effect on the Condition of the Company,
or (c) impair the ability of the Company to perform fully on a timely basis any
material obligation which the Company has or will have under this Agreement or
the other Related Documents. To the Company's knowledge, none of the other
parties to any Material Contract are in violation of or default under any
Material Contract in any respect that would result in a material adverse effect
on the Condition of the Company. The Company has not received any notice of
cancellation or any written communication threatening cancellation of any
Material Contract by any other party thereto. The Company is not a party to and
is not bound by any contract, agreement or instrument, or subject to any
restriction under its articles of incorporation, as amended, bylaws or other
governing documents that materially adversely affects (i) it business as
presently conducted or as proposed to be conducted or (ii) the Condition of the
Company.
2.23 REAL PROPERTY HOLDING COMPANY. The Company is not a real
property holding company within the meaning of Section 897 of the Code.
2.24 SIGNIFICANT CUSTOMERS AND SUPPLIERS. No customer or
supplier that was significant to the Company during the period covered by the
Financial Statements or that has been significant to the Company thereafter, has
terminated, materially reduced or threatened to terminate or materially reduce
its purchases from or provision of products or services to the Company, if such
a termination or material reduction by such significant customer or supplier
would have a material adverse effect on the Condition of the Company.
2.25 BROKERS AND FINDERS. The Company has not employed any
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement that would be entitled to a broker's, finder's or
similar fee or commission in connection herewith and therewith.
2.26 REGISTRATION RIGHTS. Except as provided by the Investors'
Rights Agreement and an obligation to register an additional 19,991 shares of
Common Stock by post-effective amendment to the Form S-3 of the Company which
was declared effective October2 4, 2000, the Company is not under any obligation
to register any presently outstanding securities, or any securities which may
hereafter be issued, under the Securities Act of 1933, as amended.
2.27 FOREIGN CORRUPT PRACTICES. Neither the Company nor any
director, officer, employee, agent or other person acting on behalf of the
Company has, in the course of that person's actions for, or on behalf of, the
Company, (a) used any corporate assets for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity, (b)
made any direct or indirect unlawful payment to any foreign or domestic
governmental official or employee, (c) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, or (d) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic governmental official or employee.
2.28 FORM S-3 ELIGIBILITY. 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.
12
2.29 DISCLOSURE. This Agreement, Schedules and Exhibits
hereto, the other Related Documents, and all other documents delivered to the
Investors in connection herewith or therewith at the Closing, do not contain any
untrue statement of a material fact, or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. There are no facts that, individually or in the
aggregate, materially adversely affect the Condition of the Company that has not
been disclosed to the Investors in this Agreement (including the Schedules and
Exhibits hereto), the other Related Documents and all other documents delivered
to the Investors in connection herewith or therewith at the Closing.
3. REPRESENTATIONS AND WARRANTIES OF EACH INVESTOR. Each Investor,
severally but not jointly, represents and warrants that:
3.1 INVESTMENT INTENT. The Investor is acquiring the Common
Stock and the Warrants (collectively, the "Securities") pursuant to this
Agreement with his, her or its own funds for his, her or its own account and not
as a nominee or agent for the account of any other person. No other person has
any interest, beneficial or otherwise, in any of the Securities to be purchased
by the Investor. Except as provided herein, the Investor is not obligated to
transfer any Securities to any other person, nor does the Investor have any
agreement or understanding with any other person to do so. The Investor is
purchasing the Securities for investment purposes and not with a view to the
sale or distribution of any Securities, by public or private sale or other
disposition, and the Investor has no intention of selling, granting any
participation in or otherwise distributing or disposing of any of the
Securities. Except as provided in Section 6 hereof, the Investor does not intend
to subdivide or transfer to any other person the Securities acquired by the
Investor herewith. Notwithstanding the foregoing, the disposition of the
Investor's property shall be at all times within the Investor's own control, and
the Investor's right to sell or otherwise dispose of all or any part of the
Securities purchased by it pursuant to an effective registration statement under
the Securities Act or under an exemption under the Securities Act shall not be
prejudiced; provided, that the Investor complies with Section 6 herein. Nothing
herein shall prevent the distribution of any Securities to any member, partner
or stockholder, former member, partner or stockholder of the Investor in
compliance with the Securities Act and applicable state "blue sky" laws.
3.2 NO PUBLIC OFFERING. The Investor is able to bear the
economic risk of his, her or its investment in the Securities. The Investor is
aware that it must be prepared to hold the Securities for an indefinite period
and that the Securities have not been, and when issued will not be, registered
under the Securities Act or registered or qualified under any state securities
law, on the ground that the Securities are being issued by the Company without
any public offering within the meaning of Section 4(2) of the Securities Act.
The Investor has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management. The Investor is
not subscribing for the Securities as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
any solicitation of a subscription by any person not previously known to the
Investor in connection with investments in securities generally.
13
3.3 CERTIFICATES TO BE LEGENDED. The Investor understands that
each stock certificate representing Securities acquired hereunder will bear a
legend on the face thereof (or on the reverse thereof with a reference to such
legend on the face thereof) required by the SEC or a state securities
commission.
3.4 SECURITIES WILL BE "RESTRICTED SECURITIES". The Investor
understands that the Securities will be "restricted securities" as that term is
defined in Rule 144 promulgated under the Securities Act and, accordingly, that
the Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
The Investor understands and agrees that, except as provided herein and in the
Investors' Rights Agreement, the Company is not under any obligation to register
the Securities under the Securities Act or to comply with Regulation A or any
other exemption.
3.5 ACCREDITED INVESTOR. The Investor has been advised or is
aware of the provisions of Regulation D under the Securities Act relating to the
accreditation of investors, and the Investor is an "accredited investor" as
defined in Rule 501 of Regulation D promulgated under the Securities Act.
3.6 SOPHISTICATION OF THE INVESTOR. The Investor has such
knowledge and experience in financial and business matters that the Investor is
capable of evaluating the merits and risks of the investment contemplated by
this Agreement and has the capacity to protect his, her or its own interests.
The Investor acknowledges that investment in the Securities is highly
speculative and involves a substantial and high degree of risk of loss of the
Investor's entire investment. The Investor has adequate means of providing for
current and anticipated financial needs and contingencies, is able to bear the
economic risk of the investment for an indefinite period of time and has no need
for liquidity of the investment in the Securities and could afford complete loss
of such investment.
3.7 BROKERS' FEES. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Investor.
3.8 ORGANIZATION. Unless the Investor is an individual, the
Investor is a corporation, limited liability company or limited partnership, as
the case may be, duly organized, validly existing and in good standing in the
jurisdiction of its formation. The Investor has all requisite power and
authority to execute, deliver and carry out the terms of this Agreement and the
Investors' Rights Agreement.
3.9 EXECUTION AND BINDING EFFECT. The execution and delivery
of this Agreement and the Investors' Rights Agreement and the consummation of
the transactions contemplated hereby or thereby have been duly authorized by all
necessary action on the part of the Investor. Upon the execution and delivery by
the Investor, this Agreement and the Investors' Rights Agreement shall
constitute the legal, valid and binding obligations of the Investor enforceable
against the Investor in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or other laws relating to or limited creditors'
rights generally or by equitable principles relating to enforceability.
14
4. EACH INVESTOR'S CONDITIONS TO EACH CLOSING. Each Investor's
obligation to purchase and pay for the shares of Common Stock to be sold to such
Investor at the applicable Closing and the issuance of the Initial Warrants is
subject to the fulfillment to such Investor's satisfaction, prior to or at the
such Closing, of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct when
made and as of the applicable Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing, except to the extent of changes caused by transactions expressly
contemplated herein.
4.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed by it or with which it is required to have complied
on or before the applicable Closing.
4.3 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the applicable
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to the Investor, and the Investor shall have received all
such counterpart original and certified or other copies of such documents as
they may reasonably request.
4.4 SECURITIES COMPLIANCE. Upon the filing of its Form D in
the appropriate jurisdictions, the Company shall have taken all action necessary
to comply with any federal or state securities laws applicable to the
transactions contemplated hereunder.
4.5 CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the applicable Closing).
4.6 CERTIFICATE. The Company shall deliver to each Investor at
the applicable Closing, relating to such Investor's purchase of shares of Common
Stock and the issuance of the Initial Warrants, a certificate signed by the
President of the Company certifying the matters set forth in Sections 4.1
through 4.5.
4.7 INVESTORS' RIGHTS AGREEMENT. The Investors' Rights
Agreement, in the form attached hereto as Exhibit B, shall have been executed by
all the parties thereto on or prior to the applicable Closing.
4.8 STOCK CERTIFICATE. The Company shall deliver to each
Investor at the applicable Closing a duly executed stock certificate evidencing
the shares of Common Stock purchased by such Investor at such Closing.
4.9 WARRANTS. The Company shall deliver to each Investor at
the applicable Closing a duly executed Initial Warrant.
15
4.10 OPINION OF COUNSEL. The Company shall deliver to each
Investor at the applicable Closing an opinion of counsel for the Company, dated
as of such Closing, in the form attached hereto as Exhibit C.
4.11 EXPENSES. The Company shall pay (i) the legal fees and
expenses of Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP (legal counsel only for ICM
Asset Management, Inc.), in an amount not to exceed $15,000, incurred in
connection with the First Closing under this Agreement, the Other Related
Documents and the transactions contemplated hereby and thereby and (ii) the
legal fees and expenses of Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP, in an
amount not to exceed $3,000 with respect to each subsequent Closing, incurred in
connection with each subsequent Closing contemplated by this Agreement. The
Company shall pay the reasonable fees and out of pocket expenses of Raven
Ventures, LLC, in an amount not to exceed $10,000, incurred in connection with
the transactions contemplated by this Agreement, the Other Related Documents and
the transactions contemplated hereby and thereby.
4.12 DUE DILIGENCE. The Investors shall have completed due
diligence to their satisfaction.
4.13 LEGAL MATTERS. All matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby shall have
been approved by counsel to the Investors.
5. THE COMPANY'S CONDITIONS TO EACH CLOSING. The Company's obligation
to deliver the shares of Common Stock and issuance of the Initial Warrants at
the applicable Closing is subject to the fulfillment to the Company's
satisfaction, prior to or at such Closing, of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Investor participating in the applicable Closing contained in
Section 3 hereof shall be true and correct on and as of such Closing.
5.2 PERFORMANCE. Each Investor participating in the applicable
Closing shall have performed and complied with all agreements, obligations, and
conditions contained in the Agreement that are required to be performed by it or
them or with which it or they are required to have complied on or before such
Closing.
5.3 PAYMENT. Each Investor participating in the applicable
Closing shall have delivered the consideration specified in Section 1 for each
share of Common Stock purchased by the Investor at such Closing.
5.4 LEGAL MATTERS. All matters of a legal nature which pertain
to this Agreement and the transactions contemplated hereby shall have been
approved by counsel to the Company.
16
6. TRANSFER OF SECURITIES.
6.1 RESTRICTIONS ON TRANSFER. The Securities are not
transferable except upon the conditions specified in the Investors' Rights
Agreement and applicable federal and state securities laws.
6.2 RESTRICTIVE LEGENDS. The Warrants and the stock
certificates representing the shares of Common Stock shall be stamped or
otherwise imprinted with legends in substantially the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND THUS MAY NOT BE TRANSFERRED UNLESS REGISTERED OR
QUALIFIED UNDER THAT ACT OR SUCH LAWS OR UNLESS, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AN EXEMPTION FROM
REGISTRATION OR QUALIFICATION IS AVAILABLE.
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. The warranties, representations
and covenants of the Company and each Investor contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closings.
7.2 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors
holding more than 50% of the outstanding shares of Common Stock acquired
hereunder. Any amendment or waiver effective in accordance with this Section 7.2
shall be binding upon each Investor, his, her or its heirs, representatives or
permitted assigns, and the Company and its heirs, representatives and permitted
assigns.
7.3 NOTICES. Any notice, consent, authorization or other
communication to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally or transmitted by facsimile
transmission with receipt acknowledged by the addressee or three days after
being mailed by first class mail, or the next business day after being deposited
for next-day delivery with a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such
notice at the address(es) specified on the signature page of this Agreement for
the Company and each Investor (or at such other address as shall be specified by
like notice).
7.4 ENTIRE AGREEMENT. This Agreement (including the Schedules
and Exhibits, and the Warrants and the Investors' Rights Agreement) contains the
entire agreement of the parties and supersede all prior negotiations,
correspondence, term sheets, agreements and understandings, written and oral,
between or among the parties regarding the subject matter hereof.
17
7.5 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the respective heirs, representatives, successors
and permitted assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective heirs, representatives, successors and permitted assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
7.6 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid or unenforceable, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
to be invalid or unenforceable, shall not be affected thereby.
7.7 GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the law of the State of Washington,
without regard to that state's conflict of laws principles. All disputes between
the parties hereto, whether sounding in contract, tort, equity or otherwise,
shall be resolved only by state and federal courts located in Spokane,
Washington, and the courts to which an appeal therefrom may be taken. All
parties hereto waive any objections to the location of the above referenced
courts, including but not limited to any objection based on lack of
jurisdiction, improper venue or forum non-conveniens. Notwithstanding the
foregoing, any party obtaining any order or judgment in any of the above
referenced courts may bring an action in a court in another jurisdiction in
order to enforce such order or judgment.
7.8 ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or the other
Related Documents, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
7.9 INTERPRETATION. This Agreement shall be construed
according to its fair language. The rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.
7.10 FURTHER ASSURANCES. Each party shall execute such other
and further certificates, instruments and other documents as may be reasonably
necessary and proper to implement, complete and perfect the transactions
contemplated by this Agreement.
7.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, and all of
which together shall be considered one and the same agreement.
7.12 ASSIGNMENT. Each Investor may assign or transfer all or
any part of the Securities acquired hereunder provided that the conditions
specified in Section 6 are satisfied, which conditions are, among other things,
intended to insure compliance with the provisions of the Securities Act and
state securities laws in respect of the transfer of any of the Securities
acquired hereunder. The Company shall not assign this Agreement or any rights
hereunder or delegate any duties hereunder. Any attempted or purported
assignment or delegation in violation of the preceding sentence shall be void.
18
7.13 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.14 EXCULPATION AMONG INVESTORS. Each Investor acknowledges
that it is not relying upon any person, firm or corporation, other than the
Company and its officers and directors, in making its investment or decision to
invest in the Company. Each Investor agrees that no Investor nor the respective
controlling person, officers, directors, partners, agents or employees of any
Investor shall be liable to any other Investor for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Common Stock or the execution of or performance under any of
this Agreement or the Other Related Documents.
7.15 REPRESENTATION. Each party hereto acknowledges that (a)
ICM Asset Management, Inc. retained Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP to
represent only ICM Asset Management, Inc. and its affiliates (collectively,
"ICM") in connection with this Agreement, the other Related Documents and the
transaction related hereto and thereto, (b) the interests of ICM may not
necessarily coincide with the interests of other Investors, (c) Xxxxx Xxxxxxx
Xxxxxx Xxxxxx & Xxxxxx LLP does not represent any Investor other than ICM, and
(d) each Investor has consulted with, or has had an opportunity to consult with,
its own legal counsel and has not relied on Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx
LLP for legal counsel in connection with this Agreement, the other Related
Documents and the transactions related hereto and thereto.
8. GLOSSARY. For purposes of this Agreement, the following terms shall
have the meanings set forth below, which shall be equally applicable to both the
singular and plural forms of any of such terms:
"Authority" shall mean any government or political subdivision, or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury, arbitrator or
mediator, in each case whether federal, state, local or foreign.
"Law" shall mean any judgment, decree, order, statute, law, ordinance,
rule or regulation of any Authority (including common law), constitution,
statute, treaty, regulation, rule, ordinance, judgment, order, foreign
injunction, writ, decree or award of any Authority.
19
"Proprietary Information" shall mean all trade secrets, technical
knowledge and experience, confidential information and other proprietary
knowledge, whether or not patentable, possessed by, accumulated or owned by the
Company concerning the design, formulation, manufacturing, quality control,
testing, storage, development, improvement, installation and operation of the
products and services of the Company, including, without limitation, the Company
IP Rights, technical, engineering and operating data relating to the products,
designs, schematics, plans, operating principles, formulas, computer software
programs, electronically recordable data or concepts, marketing data,
inventions, improvements, research and development records and reports,
experimental and engineering reports, product specifications, drawings,
photographs, models, compilations of information, records, books and papers,
quality control reports and specifications, and any other information possessed
by the Company, relating to its products or services.
"Related Documents" shall mean this Agreement, the Investors' Rights
Agreement (including the exhibits attached thereto) and the Warrants.
[Signatures appear on following page.]
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.
"COMPANY"
SVI HOLDINGS, INC.
By: /S/ Xxxxx Xxxxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx Seidenwurm & Xxxxx
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn; Xxxxxx Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
"INVESTOR"
KOYAH LEVERAGE PARTNERS, L.P.
By: Koyah Ventures LLC, its general partner
By: /s/ A. Xxxxx Xxxxxxxx
------------------------------------
Name: A. Xxxxx Xxxxxxxx
----------------------------------
Title: Manager
---------------------------------
c/o ICM Asset Management, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP
W. 717 Xxxxxxx, Suite 1200
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
"INVESTOR"
KOYAH PARTNERS, L.P.
By: Koyah Ventures LLC, its general partner
By: /s/ A. Xxxxx Xxxxxxxx
------------------------------------
Name: A. Xxxxx Xxxxxxxx
----------------------------------
Title: Manager
---------------------------------
c/o ICM Asset Management, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxx Xxxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP
W. 717 Xxxxxxx, Suite 1200
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
"INVESTOR"
/s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
Address:____________________________________
____________________________________
____________________________________
Tel: ____________________________________
Fax: ____________________________________
"INVESTOR"
/s/ Xxxxx Xxxxxxxx
--------------------------------------------
Xxxxx Xxxxxxxx
Address:____________________________________
____________________________________
____________________________________
Tel: ____________________________________
Fax: ____________________________________
