EXHIBIT 10.5
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EXCHANGE AGREEMENT
------------------
AGREEMENT, dated as of April 13, 2004, by and among NETWORK-1 SECURITY
SOLUTIONS, INC. (the "Company"), a Delaware corporation with offices at 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, and the holders of the Company's
Series E Convertible Stock (the "Series E Preferred Stock") and the Series D
Convertible Preferred Stock (the "Series D Preferred Stock") signatory hereto
(collectively, the "Preferred Stockholders").
WHEREAS, as part of a recapitalization of the Company, the Board of
Directors of the Company has determined that it is in the best interest of the
Company to eliminate its outstanding shares of Preferred Stock (the "Preferred
Stock") by exchanging such securities for shares of Common Stock, par value $.01
per share, of the Company (the "Common Stock"), upon the terms and subject to
the conditions set forth herein;
WHEREAS, each of the Preferred Stockholders and the Company desire that
the Preferred Stockholders exchange (i) 2,483,508 shares of Series E Preferred
Stock which is convertible into 4,967,016 shares of Common Stock and (ii)
231,054 shares of Series D Preferred Stock which is convertible into 391,478
shares of Common Stock, for an aggregate of 6,698,118 shares of Common Stock, or
1.25 times the number of shares of Common Stock for each share of Common Stock
that each Preferred Stockholder would have received upon conversion of their
Preferred Stock, all upon the terms and subject to the conditions set forth
therein. The Common Stock issuable in exchange for the shares of Preferred Stock
are referred to herein as the "Shares."
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
Issuance of Shares for Preferred Stock
--------------------------------------
1.1 Exchange Agreement. At the Closing provided for in Section 1.2, the
Company will issue to each Preferred Stockholder and, subject to the terms and
conditions of this Agreement, each Preferred Stockholder will exchange the
Preferred Stock for the number of Shares set forth in Exhibit A hereto (the
"Exchange") in accordance with Schedule A hereto.
1.2 The Closing. The closing of the Exchange (the "Closing") shall take
place at the offices of Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx, LLP, Park
Avenue Tower, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx on the date that this
Agreement is executed by the parties hereto (the time and date of the Closing
being herein referred to as the "Closing Date"). On the Closing Date there will
be delivered to the Preferred Stockholders the Shares on the Closing Date
against delivery and cancellation of the original Preferred Stock in accordance
with Schedule A hereto.
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ARTICLE II
Representations. Warranties. and Agreements of the Company
----------------------------------------------------------
The Company represents and warrants to the Preferred Stockholders as
follows:
2.1 Corporate Organization and Qualification. The Company is a
corporation duly organized and validly existing under the laws of the State of
Delaware and is qualified to transact business as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its business makes such qualification necessary, except
in such jurisdictions where the failure to be so qualified would not have a
material adverse effect on the business, results of operations, financial
condition, or prospects of the Company. The Company has all required power and
authority to own its property and to carry on its business as now conducted and
proposed to be conducted.
2.2 Validity of Transaction. The Company has all requisite power and
authority to execute, deliver, and perform this Agreement, and to issue the
Shares in exchange for the Preferred Stock as part of the Exchange. All
necessary corporate proceedings of the Company have been duly taken to authorize
the execution, delivery, and performance of this Agreement, and to authorize the
issuance of the Shares for the Preferred Stock as part of the Exchange. This
Agreement, has been duly authorized, executed, and delivered by the Company, and
constitutes the legal, valid, and binding obligation of the Company, and is
enforceable as to the Company in accordance with its respective terms, except as
may be limited by applicable bankruptcy, reorganization, insolvency, moratorium,
or other similar laws or by legal or equitable principles relating to or
limiting creditors' rights generally or as rights to indemnification may be
limited by applicable securities laws. Except as to filings which may be
required under applicable state securities regulations, no consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any Federal, state, local, or other governmental
authority or of any court or other tribunal is required by the Company in
connection with the transactions contemplated hereby. No consent of any party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Company is a party, or by which any of its properties
or assets is bound, is required for the execution, delivery, or performance by
the Company of this Agreement, and the execution, delivery, and performance of
this Agreement, will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the Certificate of Incorporation or By-laws of the
Company, or violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on the Company or to which any of
its operations, business, properties, or assets is subject. The Shares issuable
in exchange for the Shares are duly authorized, will be validly issued, fully
paid, and nonassessable, will not have been issued in violation of any
preemptive right of stockholders or rights of first refusal, and the Preferred
Stockholders will have good title to the Shares, free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders agreements and
voting trusts (other than any created by the Preferred Stockholders).
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2.3 Capitalization. The authorized capital stock of the Company consists
of 40,000,000 shares of Common Stock and 10,000,000 shares of preferred stock,
par value $.01 per share (the "Preferred Stock"), of which 1,250,000 shares have
been designated Series D Convertible Preferred Stock and 3,500,000 shares have
been designated Series E Convertible Preferred Stock, having the designations,
dividend rights, voting powers, conversion and redemption rights, rights on
liquidation or dissolution, and other preferences and relative, participating,
optional, or other preferences and relative, participating, optional, or other
special rights, and the qualifications, limitations or restrictions thereof, set
forth in their respective Certificates of Designations. Immediately prior to the
Closing, the Company shall have 8,314,458 shares of Common Stock, 2,483,508
shares of Series E Convertible Preferred Stock, and 231,054 shares of Series D
Convertible Preferred Stock outstanding. All issued and outstanding shares of
Common Stock and Preferred Stock have been validly issued and are fully paid and
nonassessable and have not been issued in violation of any Federal or state
securities laws. Except for (a) upon the exercise of the options and warrants
which are currently outstanding to purchase 5,481,860 shares of Common Stock
(including options to purchase 3,297,370 under the Company's Stock Option Plan),
there are not, as of the date hereof, any outstanding or authorized
subscriptions, options, warrants, calls, rights, commitments, or any other
agreements obligating the Company to issue (i) any additional shares of its
capital stock or (ii) any securities convertible into, or exercisable or
exchangeable for, or evidencing the right to subscribe for, any shares of its
capital stock. Other than the Company's Stock Option Plan, the Company has not
adopted or authorized any plan for the benefit of its officers, employees, or
directors which require or permit the issuance, sale, purchase, or grant of any
shares of the Company's capital stock, any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for any
shares of the Company's capital stock, or any phantom shares or any stock
appreciation rights.
2.4 SEC Filings. The Company has filed all forms, reports, statements
and other documents required to be filed with (i) the SEC including, without
limitation, (A) all Annual Reports on Form 10-KSB, (B) all Quarterly Reports on
Form 10-QSB, (C) all Reports on Form 8-K, (D) all other reports or registration
statements and (E) all amendments and supplements to all such reports and
registration statements (collectively referred to as the "SEC Reports") and (ii)
any other applicable state securities authorities (all such forms, reports,
statements and other documents in (i) and (ii) of this Section 2.4 being
referred to herein, collectively, as the "Reports"). The Reports (i) were
prepared in all material respects in accordance with the requirements of
applicable law (including, with respect to the SEC Reports, the Securities Act
of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports) and (ii) did
not at the time they were filed contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. In addition, since the last quarterly
report of the Company on Form 10-QSB filed with the SEC, there have been no
material events that require disclosure under the Exchange Act.
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ARTICLE III
Representations and Warranties of the Preferred Stockholders
------------------------------------------------------------
Each of the Preferred Stockholders, severally and not jointly,
represents and warrants to the Company as follows:
3.1 Organization. Such Preferred Stockholder (if not an individual) is
duly organized under the laws of the state of its jurisdiction of organization
and has full power and authority to enter into this Agreement and to consummate
the transactions set forth herein. All necessary proceedings have been duly
taken to authorize the execution, delivery, and performance of this Agreement by
such Preferred Stockholder (if not an individual).
3.2 Accredited Investor; Access to Information. Such Preferred
Stockholder and, to the knowledge of such Preferred Stockholder, each limited
partner of such Preferred Stockholder in the case of a Preferred Stockholder
which is a limited partnership, and each partner of such Preferred Stockholder
in the case of a Preferred Stockholder which is a general partnership, is an
"accredited investor," as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act. Such Preferred Stockholder, shareholders
of the general partner of such Preferred Stockholder, if any, and each of the
limited partners of such Preferred Stockholder, if any, has had substantial
experience in private securities transactions like this one and has had a full
opportunity to discuss the business, management, and financial affairs of the
Company with the Company's management. Such Preferred Stockholder has received
all requested documents from the Company and has had a full opportunity to ask
questions of, and receive answers from, the officers of the Company.
3.3 Authorization. All actions on the part of such Preferred Stockholder
necessary for the authorization, execution, delivery, and performance by such
Preferred Stockholder of this Agreement have been taken. This Agreement has been
duly authorized, executed, and delivered by such Preferred Stockholder, is the
legal, valid, and binding obligation of such Preferred Stockholder, and are
enforceable as to such Preferred Stockholder in accordance with their respective
terms, except as may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium, or other similar laws or by legal or equitable
principles relating to or limiting creditors' rights generally or as rights to
indemnification may be limited by applicable securities laws.
3.4 Investment Intent. Such Preferred Stockholder is acquiring the
Shares for its, his or her own account for investment and not with a view to, or
for sale in connection with, any public distribution thereof in violation of the
Securities Act. Such Preferred Stockholder understands that Shares have not been
registered for sale under the Securities Act or qualified under applicable state
securities laws and that the Shares are being offered and sold to such Preferred
Stockholder pursuant to one or more exemptions. Such Preferred Stockholder
understands that it, he or she must bear the economic risk of the investment in
the Company for an indefinite period of time, as the Shares cannot be sold
unless subsequently registered under the Securities Act and qualified under
state securities laws, unless an exemption from such registration and
qualification is available.
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3.5 Transfer of Securities. Such Preferred Stockholder will not sell or
otherwise dispose of the Shares unless (a) a registration statement with respect
thereto has become effective under the Securities Act and such Shares have been
qualified under applicable state securities laws or (b) there is presented to
the Company notice of the proposed transfer and, if it so requests, a legal
opinion reasonably satisfactory to the Company that such registration and
qualification is not required; provided, however, that no such registration or
qualification or opinion of counsel shall be necessary for a transfer by such
Preferred Stockholder (i) to any entity controlled by, or under common control
with, such Preferred Stockholder (ii) to a partner or officer of such Preferred
Stockholder, (iii) to a partner or officer of the general partner of such
Preferred Stockholder, or (iv) to the spouse, lineal descendants, estate, or a
trust for the benefit of any of the foregoing, provided the transferee agrees in
writing to be subject to the terms hereof to the same extent as if he were such
Preferred Stockholder. Such Preferred Stockholder consents that any transfer
agent of the Company may be instructed not to transfer any Shares unless it
receives satisfactory evidence of compliance with the foregoing provisions, and
that there may be endorsed upon any certificate representing such shares (and
any certificates issued in substitution therefor) the following legend calling
attention to the foregoing restrictions on transferability of such shares,
stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT TO THE SECURITIES EVIDENCED BY THIS
CERTIFICATE, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER SUCH ACT AND APPLICABLE SECURITIES LAWS IS NOT REQUIRED."
The Company shall, upon the request of any holder of a stock certificate bearing
the foregoing legend and the surrender of such certificate, issue a new stock
certificate without such legend if (A) the stock evidenced by such certificate
has been effectively registered under the Securities Act and qualified under any
applicable state securities law and sold by the holder thereof in accordance
with such registration and qualification, or (B) such holder shall have
delivered to the Company a legal opinion reasonably satisfactory to the Company
to the effect that the restrictions set forth herein are no longer required or
necessary under the Securities Act or any applicable state law.
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ARTICLE IV
Additional Provisions.
----------------------
4.1 Indemnification. From and after the Closing, the Company, on the one
hand, and the Preferred Stockholders (severally and not jointly), on the other
hand, shall indemnify and save harmless the other (including officer, directors,
employees, agents and representatives) against any loss, claim, liability,
expense (including reasonable attorney's fees) or other damage caused by or
arising out of (i) the breach of any representation or warranty made by any such
party or (ii) the failure by the party against whom indemnification is sought to
perform any of its covenants or agreements in this Agreement.
4.2 Communications. All notices or other communications hereunder shall
be in writing and shall be given by registered or certified mail (postage
prepaid and return receipt requested), by an overnight courier service which
obtains a receipt to evidence delivery, or by telex or facsimile transmission
(provided that written confirmation of receipt is provided), addressed as set
forth below:
If to the Company:
Network- 1 Security Solutions, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Chairman and Chief Executive
Officer
With a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx, LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx, Esq.
If to the Preferred Stockholders, at their respective addresses as set
forth on Exhibit A hereto, or such other address as any party may designate to
the other in accordance with the aforesaid procedure. All notices and other
communications sent by overnight courier service shall be deemed to have been
given as of the next business day after delivery thereof to such courier
service, those given by telex or facsimile transmission shall be deemed given
when sent, and all notices and other communications sent by mail shall be deemed
given as of the third business day after the date of deposit in the United
States mail.
4.3 Successors and Assigns. The Company may not sell, assign, transfer,
or otherwise convey any of its rights or delegate any of its duties under this
Agreement, except to a corporation which has succeeded to substantially all of
the business and assets of the Company and has assumed in writing its
obligations under this Agreement, and this Agreement shall be
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binding on the Company and such successor. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the Preferred Stockholders and
their successors and assigns.
4.4 Amendments and Waivers. Neither this Agreement nor any term hereof
may be changed or waived (either generally or in a particular instance and
either retroactively or prospectively) absent the written consent each party
hereto.
4.5 Survival of Representations. The representations, warranties,
covenants, and agreements made herein or in any certificate or document executed
in connection herewith shall survive the execution and delivery of this
Agreement and the issuance and delivery of the Shares to the Preferred
Stockholders.
4.6 Delays or Omissions; Waiver. No delay or omission to exercise any
right, power, or remedy accruing to either the Company or the Preferred
Stockholders upon any breach or default by the other under this Agreement shall
impair any such right, power, or remedy no shall it be construed to be a waiver
of any such breach or default, or any acquiescence therein or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring.
4.7 Entire Agreement; Binding Effect. This Agreement (together with
Schedule A attached hereto) contains the entire understanding of the parties
with respect to their respective subject matter and all prior negotiations,
discussions, commitments, and understandings heretofore had between them with
respect thereto are merged herein and therein. This Agreement and the Exchange
shall be binding on each Preferred Stockholder who executes this Agreement,
provided, that, Preferred Stockholders holding at least 75% of the outstanding
shares of Preferred Stock have executed this Agreement (the "Required
Percentage"). The failure of any Preferred Stockholder named in Exhibit A to
execute this Agreement shall not effect the Closing of the Exchange with respect
to those Preferred Stockholders who have executed this Agreement so long as the
Agreement has been signed by the Required Percentage.
4.8 Headings. All article and section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
4.9 Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York, without giving effect to conflict of laws.
4.10 Further Actions. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the date
hereinabove set forth.
NETWORK-1 SECURITY SOLUTIONS, INC.
s/Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
APPLEGREEN PARTNERS
s/Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Title: Partner
BROOKWOOD PARTNERS, L.P.
s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Partner
XXXXXXX REVOCABLE TRUST
S/Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
CMH CAPITAL MANAGEMENT CORP.
S/Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
s/Xxxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxxx
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s/Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx
s/Xxxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxxx
s/Xxx Xxxx
-----------------------------------------
Xxx Xxxx
s/Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
s/Xxxxxxxx Xxxxxx
-----------------------------------------
Xxxxxxxx Xxxxxx
s/Xxxx Xxxxxx
-----------------------------------------
Xxxx Xxxxxx
s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
s/Xxxxxxxx Xxxxx
-----------------------------------------
Xxxxxxxx Xxxxx
s/Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxxx
s/Xxxxxxx Xxxxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxxxx
s/Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
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SENECA VENTURES
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Partner
s/Xxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
s/Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
XXXXXXXX PARTNERS, L.P.
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: CEO, XXXXXXXX PARTNERS LLC
General Partner
XXXXXXXX PARTNERS II, L.P.
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Partner
XXXXXXXX FOREIGN PARTNERS, L.P.
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: CEO, XXXXXXXX PARTNERS LLC
General Partner
WOODLAND PARTNERS
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Partner
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WOODLAND VENTURE FUND
By:s/Xxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: General Partner
s/Xxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxx
SANDLER COMPANY INVESTMENT PARTNERS
Sandler Co-Investment Partners, L.P.
By: Sandler Capital Management, General
Partner
By: MJDM Corp., a General Partner
s/Xxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
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SCHEDULE A
PREFERRED STOCKHOLDERS
Series E Convertible Preferred Stock
------------------------------------
Number of Shares
of Common Stock Number of Shares of
Name and Address Number of Shares of Upon Conversion Common Stock Upon
of Preferred Stockholder Preferred Stock of Preferred Stock Exchange
------------------------ ------------ ------------ ------------
Applegreen Partners 35,377 70,754 88,442
c/o Xxxxxxxx Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Brookwood Partners, L.P. 117,924 235,848 294,810
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Revocable Trust 47,169 94,338 117,922
0000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx 11,792 23,584 29,480
00 Xxxx 00xx Xx. Xxx. 00X
Xxx Xxxx, XX 00000
Xxxxx Xxxxxxxxx 165,094 330,188 412,735
Xxxxxxxx Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxx Xxxxxxxxx 11,792 23,584 29,480
00 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
CMH Capital Management Corp. 1,084,935 2,169,870 2,712,337
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, President
Xxx Xxxx 9,433 18,866 23,583
00 Xxxxx Xxxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx 165,094 330,188 412,735
0 Xxxxxxxxxx Xxxxx
Xxx Xxxxxxxx, XX 00000
Xxxxxxxx Xxxxxx 11,792 23,584 29,480
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
12
Number of Shares
of Common Stock Number of Shares of
Name and Address Number of Shares of Upon Conversion Common Stock Upon
of Preferred Stockholder Preferred Stock of Preferred Stock Exchange
------------------------ ------------ ------------ ------------
Xxxx Xxxxxx 11,792 23,584 29,480
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxxxx Xxxxxxxx 11,792 23,584 29,480
00 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxxxxx Xxxxx 11,792 23,584 29,480
c/o Xxxxxxxx X. Xxxxx
00000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxxx Xxxxxx 11,792 23,584 29,480
00 Xxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxxxxxx 47,169 94,338 117,922
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxxxx 23,584 47,168 58,960
Xxxxxxx & Xxxxxx, Inc.
Xxx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Seneca Ventures 165,094 330,188 412,735
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxxx 35,377 70,754 88,442
0000 Xxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, XX 00000
Xxxx Xxxxxxx 9,433 18,866 23,582
000 Xxxxxxx Xxxxxx, Xxx. 000
Xxx Xxxxx, XX 00000
Xxxxxxxx Partners, L.P. 86,792 173,584 216,980
00 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxxxx Partners II, L.P. 94,339 188,678 235,848
00 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Wheatley Foreign Partners, L.P. 7,547 15,094 18,868
00 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
13
Number of Shares
of Common Stock Number of Shares of
Name and Address Number of Shares of Upon Conversion Common Stock Upon
of Preferred Stockholder Preferred Stock of Preferred Stock Exchange
------------------------ ------------ ------------ ------------
Woodland Partners 94,339 188,678 235,848
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Woodland Venture Fund 212,264 424,528 530,660
00 Xxxxxxxx xxxx
Xxxxxxxxxx, XX 00000
------------ ------------ ------------
Total Series E Preferred Stock 2,483,508 4,967,016 6,208,770
============ ============ ============
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Series D Convertible Preferred Stock
------------------------------------
Number of Shares
of Common Stock Number of Shares of
Name and Address Number of Shares of Upon Conversion Common Stock Upon
of Preferred Stockholder Preferred Stock of Preferred Stock Exchange
------------------------ ------------ ------------ ------------
Woodland Venture Fund 69,379 117,550 146,936
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Seneca Ventures 34,689 58,774 73,468
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Woodland Partners 34,689 58,774 73,468
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx 34,689 58,774 73, 468
Xxxxxxxx Partners, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxxxx Xxxxxxxxx 34,689 58,774 73,468
Xxxxxxxx Partners, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Applegreen Partners 8,672 14,693 18,364
c/o Xxxxxxxx Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx 4,098 6,943 8,677
Liberation Investment Group
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxxxxx 495 839 1,049
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxx 495 839 1,049
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Sandler Company Investment Partners 9,159 15,518 19,398
------------ ------------ ------------
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Total Series D Preferred Stock 231,054 391,478 489,348
------------ ------------ ------------
TOTAL PREFERRED STOCK (SERIES E AND
SERIES D) 2,714,562 5,358,494 6,698,118
============ ============ ============
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