Exhibit 10.1
PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT ("Agreement") is made as of the 2nd day of
March, 2007 by and among Narrowstep Inc., a Delaware corporation (the
"Company"), and the Investors set forth on the signature pages affixed hereto
(each an "Investor" and collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D ("Regulation D"), as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended; and
B. The Investors wish to purchase from the Company, and the
Company wishes to sell and issue to the Investors, upon the terms and conditions
stated in this Agreement, (i) up to $10,000,000 in aggregate principal amount of
the Company's 12% Mandatorily Convertible Notes in the form attached hereto as
EXHIBIT A (the "Notes") which Notes are convertible into securities of the
Company as provided therein and an (ii) warrants to purchase up to an aggregate
of 5,000,000 shares of the Company's Common Stock, par value $0.000001 per share
(together with any securities into which such shares may be reclassified the
"Common Stock") (subject to adjustment) at an exercise price of $0.60 per share
(subject to adjustment) in the form attached hereto as EXHIBIT B (the
"Warrants"); and
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business.
"COMPANY'S KNOWLEDGE" means the actual knowledge of the
executive officers (as defined in Rule 405 under the 0000 Xxx) of the Company.
"CONFIDENTIAL INFORMATION" means trade secrets, confidential
information and know-how (including but not limited to ideas, formulae,
compositions, processes, procedures and
techniques, research and development information, computer program code,
performance specifications, support documentation, drawings, specifications,
designs, business and marketing plans, and customer and supplier lists and
related information).
"CONTROL" (including the terms "controlling", "controlled by" or
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"CONVERSION SECURITIES" means the securities issued upon
conversion of the Notes, including any shares of Common Stock issuable upon the
exercise or conversion of any Conversion Securities.
"INTELLECTUAL PROPERTY" means all of the following: (i) patents,
patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i)
the results of operations or financial condition of the Company and its
Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its
obligations under the Transaction Documents.
"PERSON" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
"PURCHASE PRICE" means up to Ten Million Dollars ($10,000,000).
"SEC FILINGS" has the meaning set forth in Section 4.6.
"SECURITIES" means the Notes, the Conversion Securities, the
Warrants and the Warrant Shares.
"SUBSIDIARY" of any Person means another Person, an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.
"TRANSACTION DOCUMENTS" means this Agreement, the Notes and the
Warrants.
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"WARRANT SHARES" means the shares of Common Stock issuable upon
the exercise of the Warrants.
"1933 ACT" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
"1934 ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute, and the rules and regulations promulgated
thereunder.
2. PURCHASE AND SALE OF THE NOTES AND WARRANTS. Subject to the
terms and conditions of this Agreement, on the Closing Date, each of the
Investors shall severally, and not jointly, purchase, and the Company shall sell
and issue to the Investors, the Notes and Warrants in the respective amounts set
forth opposite the Investors' names on the signature pages attached hereto in
exchange for the Purchase Price as specified in Section 3 below.
3. CLOSING. Upon confirmation that the other conditions to closing
specified herein have been satisfied or duly waived by the Investors, (i) the
Investors shall cause a wire transfer in same day funds to be sent to the
account of the Company as instructed in writing by the Company, in an amount
representing such Investor's pro rata portion of the Purchase Price as set forth
on the signature pages to this Agreement and (ii) the Company shall execute and
FedEx to each Investor a Note and a Warrant representing the Notes and Warrants
purchased by such Investor, registered in such name or names as the Investor may
designate. The date on which the Company receives the Purchase Price is
hereinafter referred to as the Closing Date. The closing of the purchase and
sale of the Shares and Warrants (the "Closing Date") shall take place at the
offices of Xxxxxxxxxx Xxxxxxx PC, 1251 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other location and on such other date as the
Company and the Investors shall mutually agree.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of
the Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own its properties. Each of the Company and
its Subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or leasing
necessary unless the failure to so qualify has not had and could not reasonably
be expected to have a Material Adverse Effect.
4.2 AUTHORIZATION. The Company has the corporate power and
has taken all requisite action on the part of the Company, its officers,
directors and stockholders necessary for (i) the authorization, execution and
delivery of the Transaction Documents, (ii) the authorization of the performance
of all obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Securities. The
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Transaction Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
4.3 CAPITALIZATION. The SEC Filings (as defined below) set
forth the capitalization of the Company as of December 31, 2006 and the
outstanding warrants, options, convertible securities or other rights to
subscribe for Common Stock as of such date. All of the issued and outstanding
shares of the Company's capital stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of pre-emptive rights and were
issued in compliance in all material respects with applicable state and federal
securities law and any rights of third parties. All of the issued and
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive
rights, were issued in compliance in all material respects with applicable state
and federal securities law and any rights of third parties and are owned by the
Company, beneficially and of record, subject to no lien, encumbrance or other
adverse claim. No Person is entitled to pre-emptive or similar statutory or
contractual rights with respect to any securities of the Company. There are no
voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among the Company and any of the
securityholders of the Company relating to the securities of the Company held by
them.
The issuance and sale of the Securities hereunder will not
obligate the Company to issue shares of Common Stock or other securities to any
other Person (other than the Investors) and will not result in the adjustment of
the exercise, conversion, exchange or reset price of any outstanding security.
The Company does not have outstanding stockholder purchase
rights or "poison pill" or any similar arrangement in effect giving any Person
the right to purchase any equity interest in the Company upon the occurrence of
certain events.
4.4 VALID ISSUANCE. The Warrants have been duly and validly
authorized. Upon the due exercise of the Warrants, the Warrant Shares will be
validly issued, fully paid and non-assessable free and clear of all encumbrances
and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for
those created by the Investors. The Company has reserved a sufficient number of
shares of Common Stock for issuance upon the exercise of the Warrants, free and
clear of all encumbrances and restrictions, except for restrictions on transfer
set forth in the Transaction Documents or imposed by applicable securities laws
and except for those created by the Investors.
Upon the due conversion of the Notes, the Conversion Securities
will (i) to the extent constituting capital stock of the Company, be validly
issued, fully paid and non-assessable free and clear of all encumbrances and
restrictions, except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws and except for those created
by the Investors and (ii) in all other cases, constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to
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bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally. No later than the Mandatory Conversion Date, the Company will
have reserved a sufficient number of shares of Common Stock for issuance upon
the exercise or conversion of any Conversion Securities exercisable for or
convertible into Common Stock, free and clear of all encumbrances and
restrictions, except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws and except for those created
by the Investors.
4.5 CONSENTS. The execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Securities require no consent of, action by or in respect of, or filing with,
any Person, governmental body, agency, or official other than filings that have
been made pursuant to applicable state securities laws and post-sale filings
pursuant to applicable state and federal securities laws which the Company
undertakes to file within the applicable time periods. Subject to the accuracy
of the representations and warranties of each Investor set forth in Section 5
hereof, the Company has taken all action necessary to exempt (i) the issuance
and sale of the Securities, (ii) the issuance of the Warrant Shares upon due
exercise of the Warrants, (iii) the issuance of the Conversion Securities and
(iv) the other transactions contemplated by the Transaction Documents from the
provisions of any anti-takeover, business combination or control share law or
statute binding on the Company or to which the Company or any of its assets and
properties may be subject and any provision of the Company's Certificate of
Incorporation or Bylaws that is or could reasonably be expected to become
applicable to the Investors as a result of the transactions contemplated hereby.
4.6 DELIVERY OF SEC FILINGS; BUSINESS. The Company has made
available to the Investors through the XXXXX system, true and complete copies of
the Company's most recent Annual Report on Form 10-KSB for the fiscal year ended
February 28, 2006 (the "10-KSB"), and all other reports filed by the Company
pursuant to the 1934 Act since the filing of the 10-KSB and prior to the date
hereof (collectively, the "SEC Filings"). The SEC Filings are the only filings
required of the Company pursuant to the 1934 Act for such period.
4.7 USE OF PROCEEDS. The net proceeds of the sale of the
Notes and the Warrants hereunder shall be used by the Company for working
capital and general corporate purposes.
4.8 NO MATERIAL ADVERSE CHANGE. Since February 28, 2006,
except as identified and described in the SEC Filings, there has not been:
(i) any material adverse change in the consolidated
assets, liabilities, financial condition or operating results of the Company
from that reflected in the financial statements included in the Company's
Quarterly Report on Form 10-QSB for the quarter ended December 31, 2006;
(ii) any declaration or payment of any dividend, or
any authorization or payment of any distribution, on any of the capital stock of
the Company, or any redemption or repurchase of any securities of the Company;
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(iii) any material damage, destruction or loss,
whether or not covered by insurance to any assets or properties of the Company
or its Subsidiaries;
(iv) any material labor difficulties or labor union
organizing activities with respect to employees of the Company or any
Subsidiary;
(v) any material transaction entered into by the
Company or a Subsidiary other than in the ordinary course of business; or
(vi) any other event or condition of any character
that has had or could reasonably be expected to have a Material Adverse Effect.
4.9 SEC FILINGS. At the time of filing thereof as amended on
or prior to the date hereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
4.10 NO CONFLICT, BREACH, VIOLATION OR DEFAULT. The
execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Securities will not conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute a
default under (i) the Company's Certificate of Incorporation or the Company's
Bylaws, both as in effect on the date hereof (true and complete copies of which
have been made available to the Investors through the XXXXX system), or (ii)(a)
any statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, any Subsidiary
or any of their respective assets or properties, or (b) any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or
properties is subject, except, in the case of clause (ii), for such breaches,
violations or defaults as would not reasonably be expected to result in a
Material Adverse Effect.
4.11 TAX MATTERS. The Company and each Subsidiary has filed
all tax returns required to have been filed by the Company or such Subsidiary
with all appropriate governmental agencies and paid all taxes shown thereon or
otherwise owed by it, except where such taxes are being contested in good faith
by appropriate proceedings. The charges, accruals and reserves on the books of
the Company in respect of taxes for all fiscal periods are adequate in all
material respects, and there are no material unpaid assessments against the
Company or any Subsidiary except for any assessment which is not material to the
Company and its Subsidiaries, taken as a whole. All taxes and other assessments
and levies that the Company or any Subsidiary is required to withhold or to
collect for payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due. There are no tax liens or claims
pending or, to the Company's Knowledge, threatened against the Company or any
Subsidiary or any of their respective assets or property.
4.12 TITLE TO PROPERTIES. Except as disclosed in the SEC
Filings, the Company and each Subsidiary has good and marketable title to all
real properties and all other properties
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and assets owned by it, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere with the
use made or currently planned to be made thereof by them; and except as
disclosed in the SEC Filings, the Company and each Subsidiary holds any leased
real or personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or currently planned to be
made thereof by them.
4.13 CERTIFICATES, AUTHORITIES AND PERMITS. The Company and
each Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, except where the failure to possess such certificates,
authorities or permits as have not had and would not reasonably be expected to
have a Material Adverse Effect and neither the Company nor any Subsidiary has
received any written notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely to the Company or such Subsidiary, would reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate.
4.14 LABOR MATTERS.
(a) The Company is not a party to or bound by any collective
bargaining agreements or other agreements with labor organizations. The Company
has not violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees' health, safety,
welfare, wages and hours.
(b) (i) There are no labor disputes existing, or to the
Company's Knowledge, threatened, involving strikes, slow-downs, work stoppages,
job actions, disputes, lockouts or any other disruptions of or by the Company's
employees, (ii) there are no unfair labor practices or petitions for election
pending or, to the Company's Knowledge, threatened before the National Labor
Relations Board or any other federal, state or local labor commission relating
to the Company's employees, (iii) no demand for recognition or certification
heretofore made by any labor organization or group of employees is pending with
respect to the Company and (iv) to the Company's Knowledge, the Company enjoys
good labor and employee relations with its employees and labor organizations.
4.15 INTELLECTUAL PROPERTY.
(a) To the Company's Knowledge, all Intellectual Property
used by the Company and its Subsidiaries in their respective businesses is valid
and enforceable. No patent of the Company or its Subsidiaries is involved in any
interference, reissue, re-examination or opposition proceeding.
(b) To the Company's Knowledge, all of the licenses and
sublicenses and consent, royalty or other agreements concerning Intellectual
Property which are necessary for the conduct of the Company's and each of its
Subsidiaries' respective businesses as currently
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conducted to which the Company or any Subsidiary is a party or by which any of
their assets are bound (other than generally commercially available, non-custom,
off-the-shelf software application programs having a retail acquisition price of
less than $10,000 per license) (collectively, "License Agreements") are
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally, and there exists no event or
condition which will result in a material violation or breach of or constitute
(with or without due notice or lapse of time or both) a default by the Company
or any of its Subsidiaries under any such License Agreement.
(c) The Company and its Subsidiaries own or have the valid
right to use all of the Intellectual Property that is necessary for the conduct
of the Company's and each of its Subsidiaries' respective businesses as
currently conducted.
(d) To the Company's Knowledge, the conduct of the Company's
and its Subsidiaries' businesses as currently conducted does not infringe or
otherwise impair or conflict with (collectively, "Infringe") any Intellectual
Property rights of any third party or any confidentiality obligation owed to a
third party. There is no litigation or order pending or outstanding or, to the
Company's Knowledge, threatened, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries.
4.16 ENVIRONMENTAL MATTERS. To the Company's Knowledge, (i)
neither the Company nor any Subsidiary is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "Environmental
Laws"), except for violations which have not had and would not be reasonably
expected to have a Material Adverse Effect, (ii) is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, or (iii) is
subject to any claim relating to any Environmental Laws, which violation,
contamination, liability or claim has had or could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate.
4.17 LITIGATION. There are no pending or, to the Company's
Knowledge, threatened actions, suits or proceedings against or affecting the
Company, its Subsidiaries or any of its or their properties which would
reasonably be expected to have a Material Adverse Effect.
4.18 FINANCIAL STATEMENTS. The financial statements included
in each SEC Filing present fairly, in all material respects, the consolidated
financial position of the Company as of the dates shown and its consolidated
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis ("GAAP") (except as
may be disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-QSB under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, neither the Company nor any of its Subsidiaries
has incurred any liabilities, contingent or otherwise, except those
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incurred in the ordinary course of business, consistent (as to amount and
nature) with past practices since the date of such financial statements, none of
which, individually or in the aggregate, have had or could reasonably be
expected to have a Material Adverse Effect.
4.19 BROKERS AND FINDERS. Except for Brimberg & Co., no
Person will have, as a result of the transactions contemplated by the
Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company.
4.20 NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.
4.21 NO INTEGRATED OFFERING. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the
Securities under the 1933 Act.
4.22 PRIVATE PLACEMENT. Assuming the accuracy of the
representations and warranties of the Investors contained in Section 5 hereof
and compliance by the Investors with the terms of the Transaction Documents, the
offer and sale of the Securities to the Investors as contemplated hereby is
exempt from the registration requirements of the 1933 Act.
4.23 QUESTIONABLE PAYMENTS. Neither the Company nor any of
its Subsidiaries nor, to the Company's Knowledge, any of their respective
current or former stockholders, directors, officers or employees, has on behalf
of the Company or any Subsidiary or in connection with their respective
businesses: (a) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (b)
made any direct or indirect unlawful payments to any governmental officials or
employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (d) made any false or
fictitious entries on the books and records of the Company or any Subsidiary; or
(e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature.
4.24 TRANSACTIONS WITH AFFILIATES. Except as disclosed in the
SEC Filings, none of the officers or directors of the Company and, to the
Company's Knowledge, none of the employees of the Company is presently a party
to any transaction with the Company or any Subsidiary (other than as holders of
stock options and/or warrants, and for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the
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Company's Knowledge, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
4.25 INTERNAL CONTROLS. The Company is in material compliance
with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to
the Company. Except as disclosed in the SEC Filings, the Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the SEC Filings, the Company
has established disclosure controls and procedures (as defined in 1934 Act Rules
13a-14 and 15d-14) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company,
including the Subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Company's
most recently filed period report under the 1934 Act, as the case may be, is
being prepared. The Company's certifying officers have evaluated the
effectiveness of the Company's controls and procedures as of the end of the
period covered by the most recently filed periodic report under the 1934 Act
(such date, the "Evaluation Date"). The Company presented in its most recently
filed periodic report under the 1934 Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company's internal controls (as such
term is defined in Item 308 of Regulation S-B) or, to the Company's Knowledge,
in other factors that could significantly affect the Company's internal
controls. The Company maintains and will continue to maintain a standard system
of accounting established and administered in accordance with GAAP and the
applicable requirements of the 0000 Xxx.
4.26 DISCLOSURES. Neither the Company nor any Person acting
on its behalf has provided the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public
information, other than the terms of this transaction. The Company understands
that the Investors will be relying on this representation in effecting
transactions in the Company's securities.
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:
5.1 ORGANIZATION AND EXISTENCE. Such Investor is a validly
existing corporation, limited partnership or limited liability company and has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 AUTHORIZATION. The execution, delivery and performance
by such Investor of the Transaction Documents to which such Investor is a party
have been duly authorized and
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will each constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors' rights generally.
5.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Securities to be
received by such Investor hereunder will be acquired for such Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the 1933 Act, and such Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the 1933 Act without prejudice, however,
to such Investor's right at all times to sell or otherwise dispose of all or any
part of such Securities in compliance with applicable federal and state
securities laws. Nothing contained herein shall be deemed a representation or
warranty by such Investor to hold the Securities for any period of time. Such
Investor is not a broker-dealer registered with the SEC under the 1934 Act or an
entity engaged in a business that would require it to be so registered.
5.4 INVESTMENT EXPERIENCE. Such Investor acknowledges that
it can bear the economic risk and complete loss of its investment in the
Securities and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
contemplated hereby.
5.5 DISCLOSURE OF INFORMATION. Such Investor has had an
opportunity to receive all information related to the Company requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the
Securities. Such Investor acknowledges receipt of copies of the SEC Filings.
Neither such inquiries nor any other due diligence investigation conducted by
such Investor shall modify, amend or affect such Investor's right to rely on the
Company's representations and warranties contained in this Agreement.
5.6 RESTRICTED SECURITIES. Such Investor understands that
the Securities are characterized as "restricted securities" under the U.S.
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 LEGENDS. It is understood that, except as provided
below, certificates evidencing the Securities may bear the following or any
similar legend:
(a) "The securities represented hereby may not be
transferred unless (i) such securities have been registered for sale pursuant to
the Securities Act of 1933, as amended, (ii) such securities may be sold
pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel
reasonably satisfactory to it that such transfer may lawfully be made without
registration under the Securities Act of 1933, as amended, or qualification
under applicable state securities laws."
-11-
(b) If required by the authorities of any state in
connection with the issuance of sale of the Securities, the legend required by
such state authority.
5.8 ACCREDITED INVESTOR. Such Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the 0000
Xxx.
5.9 NO GENERAL SOLICITATION. Such Investor did not learn of
the investment in the Securities as a result of any public advertising or
general solicitation.
5.10 BROKERS AND FINDERS. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of such Investor.
5.11 PROHIBITED TRANSACTIONS. During the last thirty (30)
days prior to the date hereof, neither such Investor nor any Affiliate of such
Investor which (x) had knowledge of the transactions contemplated hereby, (y)
has or shares discretion relating to such Investor's investments or trading or
information concerning such Investor's investments, including in respect of the
Securities, or (z) is subject to such Investor's review or input concerning such
Affiliate's investments or trading (collectively, "Trading Affiliates") has,
directly or indirectly, effected or agreed to effect any short sale, whether or
not against the box, established any "put equivalent position" (as defined in
Rule 16a-1(h) under the 0000 Xxx) with respect to the Common Stock, granted any
other right (including, without limitation, any put or call option) with respect
to the Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Securities (each, a "Prohibited
Transaction"). Prior to the earlier of (i) the termination of this Agreement and
(ii) such time as may be permitted pursuant to the Qualified Financing Documents
(as defined in the Notes), such Investor shall not, and shall cause its Trading
Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction.
Such Investor acknowledges that the representations, warranties and covenants
contained in this Section 5.11 are being made for the benefit of the Investors
as well as the Company and that each of the other Investors shall have an
independent right to assert any claims against such Investor arising out of any
breach or violation of the provisions of this Section 5.11.
6. CONDITIONS TO CLOSING.
6.1 CONDITIONS TO THE INVESTORS' OBLIGATIONS. The obligation
of each Investor to purchase the Notes and the Warrants at the Closing is
subject to the fulfillment to such Investor's satisfaction, on or prior to the
Closing Date, of the following conditions, any of which may be waived by such
Investor (as to itself only):
(a) The representations and warranties made by the
Company in Section 4 hereof qualified as to materiality shall be true and
correct at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct as of such
-12-
earlier date, and, the representations and warranties made by the Company in
Section 4 hereof not qualified as to materiality shall be true and correct in
all material respects at all times prior to and on the Closing Date, except to
the extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date. The Company shall have performed
in all material respects all obligations and covenants herein required to be
performed by it on or prior to the Closing Date.
(b) The Company shall have obtained any and all
consents, permits, approvals, registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Securities and the consummation
of the other transactions contemplated by the Transaction Documents, all of
which shall be in full force and effect.
(c) No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
(d) The Investors shall have received an opinion
from Xxxxxxxxxx Xxxxxxx PC, the Company's counsel, dated as of the Closing Date,
in form and substance reasonably acceptable to the Investors and addressing such
legal matters as the Investors may reasonably request.
(e) No stop order or suspension of trading shall
have been imposed by the SEC or any other governmental or regulatory body with
respect to public trading in the Common Stock.
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to sell and issue the Notes and the Warrants at the Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to the
Closing Date of the following conditions, any of which may be waived by the
Company:
(a) The representations and warranties made by the
Investors in Section 5 hereof, other than the representations and warranties
contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The
Investment Representations shall be true and correct in all respects when made,
and shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The Investors
shall have performed in all material respects all obligations and covenants
herein required to be performed by them on or prior to the Closing Date.
(b) The Investors shall have delivered the Purchase
Price to the Company.
-13-
6.3 TERMINATION OF OBLIGATIONS TO EFFECT CLOSING; EFFECTS.
(a) The obligations of the Company, on the one hand,
and the Investors, on the other hand, to effect the Closing shall terminate as
follows:
(i) Upon the mutual written consent of the
Company and the Investors;
(ii) By the Company if any of the conditions
set forth in Section 6.2 shall have become incapable of fulfillment, and shall
not have been waived by the Company;
(iii) By an Investor (with respect to itself
only) if any of the conditions set forth in Section 6.1 shall have become
incapable of fulfillment, and shall not have been waived by the Investor; or
(iv) By either the Company or any Investor
(with respect to itself only) if the Closing has not occurred on or prior to
March 7, 2007;
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party's seeking to
terminate its obligation to effect the Closing.
(b) In the event of termination by the Company or
any Investor of its obligations to effect the Closing pursuant to this Section
6.3, written notice thereof shall forthwith be given to the other Investors and
the other Investors shall have the right to terminate their obligations to
effect the Closing upon written notice to the Company and the other Investors.
Nothing in this Section 6.3 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.
7. COVENANTS AND AGREEMENTS OF THE COMPANY.
7.1 RESERVATION OF COMMON STOCK. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of providing for the exercise of the
Warrants, such number of shares of Common Stock as shall from time to time equal
the number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with their respective terms. No later
than the Mandatory Conversion Date, the Company shall reserve a sufficient
number of shares of Common Stock for issuance upon the exercise or conversion of
any Conversion Securities exercisable for or convertible into Common Stock.
-14-
7.2 NO CONFLICTING AGREEMENTS. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the Company's obligations to the
Investors under the Transaction Documents.
7.3 COMPLIANCE WITH LAWS. The Company will comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
7.4 REMOVAL OF LEGENDS. Upon Rule 144(k) becoming available,
delivery to the transfer agent for the Common Stock (the "Transfer Agent") (with
a copy to the Company), of the certificate representing the shares of Common
Stock (or the Company, in the case of the Notes and Warrants) and the delivery
to the Company and/or the Transfer Agent, as applicable, of a representation
letter from the Investor in customary form that Rule 144(k) applies, the Company
shall or shall promptly cause the Transfer Agent to issue replacement securities
which does not bear a restrictive legends.
7.5 EQUAL TREATMENT OF INVESTORS. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents on a pro rata
basis measured with respect to their then-investment in the securities issued
pursuant hereto. No payment of principal or interest on any Note shall be made
to any Investor unless a pro rata amount of interest and principal is also paid
to all other Investors in respect of their Notes. For clarification purposes,
this provision constitutes a separate right granted to each Investor by the
Company and negotiated separately by each Investor, and is intended for the
Company to treat the Investors as a class and shall not in any way be construed
as the Investors acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.
8. SURVIVAL AND INDEMNIFICATION.
8.1 SURVIVAL. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing of the
transactions contemplated by this Agreement; provided, however, that any claim
for Losses arising out of a breach of representation or warranty must be made,
if at all, within one year of the Closing Date.
8.2 INDEMNIFICATION. The Company agrees to indemnify and
hold harmless each Investor and its Affiliates and their respective directors,
officers, employees and agents from and against any and all losses, claims,
damages, liabilities and expenses (including without limitation reasonable
attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) (collectively, "Losses") to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any
such Person for all such amounts as they are incurred by such Person.
-15-
8.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any Person (the "Indemnified Person") of notice of any demand, claim
or circumstances which would or might give rise to a claim or the commencement
of any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 8.2, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; PROVIDED,
HOWEVER, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding.
9. MISCELLANEOUS.
9.1 SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by a party hereto without the prior written consent of the Company or
the Investors, as applicable, provided, however, that an Investor may assign its
rights and delegate its duties hereunder in whole or in part to an Affiliate or
to a third party acquiring some or all of its Securities in a private
transaction without the prior written consent of the Company or the other
Investors, after notice duly given by such Investor to the Company provided,
that no such assignment or obligation shall affect the obligations of such
Investor hereunder. The provisions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and 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 successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
9.2 COUNTERPARTS; FAXES. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
-16-
9.3 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.
9.4 NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier. All notices shall be addressed to the party to be
notified at the address as follows, or at such other address as such party may
designate by ten days' advance written notice to the other party:
If to the Company:
Narrowstep Inc.
Battersea Studios
00 Xxxxxxxxxxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx
and
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxx, Interim Chief
Executive Officer
Fax: (000) 000 0000
With a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to the Investors:
to the addresses set forth on the signature pages hereto.
9.5 EXPENSES. The parties hereto shall pay their own costs
and expenses in connection herewith.
-17-
9.6 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
agreeing to purchase a majority of the Shares. Any amendment or waiver effected
in accordance with this Section 9.6 shall be binding upon each holder of any
Securities purchased under this Agreement at the time outstanding, each future
holder of all such Securities, and the Company.
9.7 PUBLICITY. Except as set forth below, no public release
or announcement concerning the transactions contemplated hereby shall be issued
by the Company or the Investors without the prior consent of the Company (in the
case of a release or announcement by the Investors) or the Investors (in the
case of a release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Company or the Investors, as the case may
be, shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance. By 8:30 a.m. (New York City
time) on the trading day immediately following the Closing Date, the Company
shall issue a press release disclosing the consummation of the transactions
contemplated by this Agreement. No later than the fourth trading day following
the Closing Date, the Company will file a Current Report on Form 8-K attaching
the press release described in the foregoing sentence as well as copies of the
Transaction Documents. In addition, the Company will make such other filings and
notices in the manner and time required by the SEC.
9.8 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
9.9 ENTIRE AGREEMENT. This Agreement, including the Exhibits
and the Disclosure Schedules, and the other Transaction Documents constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
9.10 FURTHER ASSURANCES. The parties shall execute and
deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.
9.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State
-18-
of New York without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
9.12 INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS.
The obligations of each Investor under any Transaction Document are several and
not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.
[signature page follows]
-19-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company: NARROWSTEP INC.
By: /s/ Xxxx XxxXxxxxx
--------------------------------------
Name: Xxxx XxxXxxxxx
Title: Chief Financial Officer
-20-
The Investors: STIASSNI CAPITAL PARTNERS, L.P.
By: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Manager, Stiassni Capital LLC
General Partner
Aggregate Purchase Price: $350,000
Number of Warrants: 175,000
Address for Notice:
0000 Xxxxx Xxxxxx Xxxxx, Xxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
OMNI CAPITAL FUND, L.P.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Partner, Omnicapital, LLC
Aggregate Purchase Price: $1,000,000
Number of Warrants: 500,000
Address for Notice:
00 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
-21-
W. INVESTMENT PARTNERS V, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
Aggregate Purchase Price: $425,000
Number of Warrants: 212,500
Address for Notice:
Xxxxxxx Xxxxxx Agency
000 Xx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
XXXXX OPPORTUNITY FUND, L.P.
/s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
Aggregate Purchase Price: $1,275,000
Number of Warrants: 637,500
Address for Notice:
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
XXX OPPORTUNITY FUND, LTD
/s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
-00-
Xxxxxxxxx Xxxxxxxx Price: $225,000
Number of Warrants: 112,500
Address for Notice:
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
-23-
/s/ Xxxx X. Xxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxx
Aggregate Purchase Price: $500,000
Number of Warrants: 250,000
Address for Notice:
c/o Spring Mountain Capital
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
/s/ Xxxxx Xxxxxxxxxx
--------------------------------------
Xxxxx Xxxxxxxxxx
Aggregate Purchase Price: $1,000,000
Number of Warrants: 500,000
Address for Notice:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxx X. Xxxxxx, Xx.
--------------------------------------
Xxxxx X. Xxxxxx, Xx.
Aggregate Purchase Price: $150,000
Number of Warrants: 75,000
Address for Notice:
00 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
-24-
SANO VENTURES XII LLC
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: CFO
Aggregate Purchase Price: $500,000
Number of Warrants: 250,000
Address for Notice:
0000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, XX 00000
GLACIER PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: General Partner - Glacier Partners
Aggregate Purchase Price: $200,000
Number of Warrants: 100,000
Address for Notice:
000 Xxxxxxx Xxxxxx, Xxxxx X
Xxxxx Xxxxxxx, XX 00000
-25-
SOPHROSYNE TECHNOLOGY FUND LTD
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Managing Member of G.P.
Aggregate Purchase Price: $435,000
Number of Warrants: 217,500
Address for Notice:
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
-00-
XXXXXXXXX XXXXXXX ADVISORS, LLC
By: /s/ Xxxx Xxxx
--------------------------------------
Name: Xxxx Xxxx
Title: Manager, Sovereign Capital
Advisors, LLC
Aggregate Purchase Price: $100,000
Number of Warrants: 50,000
Address for Notice:
000 Xxxxx Xxxxxxxxx, Xxxxx 000-000
Xxxxxxx Xxxxxxx, XX 00000
-27-
XXXXXXXX XXXXXXX CAPITAL, LLC
By: /s/ Xxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxx X. XxXxxxx
Title: Member
Aggregate Purchase Price: $500,000
Number of Warrants: 250,000
Address for Notice:
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
-28-
ALB PRIVATE INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx, Xx.
Title: Managing Member
Aggregate Purchase Price: $200,000
Number of Warrants: 100,000
Address for Notice:
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
THE THUNEN FAMILY TRUST, DATED
OCTOBER 4, 2005 UAD 10/04/05
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Trustee
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Trustee
Aggregate Purchase Price: $150,000
Number of Warrants: 75,000
Address for Notice:
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
-29-
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
Aggregate Purchase Price: $100,000
Number of Warrants: 50,000
Address for Notice:
000 Xxxx 00xx Xxxxxx
Xxxxxxxxx X
Xxx Xxxx, XX 00000-0000
-30-
