SERIES A PREFERRED STOCK PURCHASE AGREEMENT Dated February 20, 2007 by and between THE LAM OPPORTUNITY FUND, LTD and SEARCHHELP, INC.
SERIES
A
PREFERRED STOCK PURCHASE AGREEMENT
Dated
February 20, 2007
by
and
between
THE
XXX
OPPORTUNITY FUND, LTD
and
SEARCHHELP,
INC.
TABLE
OF CONTENTS
Page
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ARTICLE
I DEFINITIONS
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1
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1.1
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Definitions
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1
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1.2
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Knowledge
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3
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1.3
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Interpretation
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3
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ARTICLE
II CLOSING; PURCHASE AND SALE
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4
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2.1
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The
Closing
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4
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2.2
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Issuance
and Delivery of the Purchase Shares
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4
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2.3
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The
Purchase Price
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4
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2.4
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Delivery
of Purchase Price
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4
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2.5
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Use
of Proceeds
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4
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ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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4
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3.1
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Organization;
Good Standing
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4
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3.2
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Subsidiaries
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5
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3.3
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Authority;
Execution and Delivery; Enforceability
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5
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3.4
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Non-Contravention
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5
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3.5
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Corporate
Documents
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6
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3.6
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Capitalization;
Options
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6
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3.7
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Consents
and Approvals
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7
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3.8
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SEC
Reports and Financial Statements
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7
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3.9
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Litigation
and Claims
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8
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3.10
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No
Finder
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8
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3.11
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Exempt
Offering
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8
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3.12
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Agreements;
Action
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8
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3.13
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Related-Party
Transactions
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8
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3.14
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Title
to Property and Assets
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9
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3.15
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Employee
Benefit Plans
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9
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3.16
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Tax
Returns, Payments and Elections
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9
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3.17
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Insurance
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9
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3.18
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Disclosure
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10
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE BUYER
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10
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4.1
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Organization
and Good Standing
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10
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4.2
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Corporate
Authority; Execution and Delivery; Enforceability
|
10
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4.3
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Non-Contravention
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10
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4.4
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Consents
and Approvals
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10
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|||||
4.5
|
Litigation
and Claims
|
11
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4.6
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No
Finder
|
11
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4.7
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Investment
Representations
|
11
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4.8
|
Accredited
Investor
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11
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4.9
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Access
to Information
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11
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ARTICLE
V COVENANTS
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11
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5.1
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Restrictive
Legends
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11
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5.2
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Change
in Condition
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12
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ARTICLE
VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
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12
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6.1
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Conditions
to obligations of the Buyer
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12
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6.2
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Conditions
to obligations of the Company
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13
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ARTICLE
VII MISCELLANEOUS
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13
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7.1
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Survival;
Certain Other Matters
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13
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7.2
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Further
Assurances
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14
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7.3
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Expenses
of the Transaction
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14
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7.4
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Notices
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14
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7.5
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No
Modification Except in Writing
|
15
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7.6
|
Entire
Agreement
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15
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7.7
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Severability
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15
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7.8
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Assignment
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15
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7.9
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Governing
Law; Jurisdiction
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16
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7.10
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Captions
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16
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7.11
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Counterparts
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16
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7.12
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Delays
or Omissions
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16
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Exhibit
A
Certificate
of Des
ii
SERIES
A PREFERRED STOCK PURCHASE AGREEMENT
SERIES
A PREFERRED STOCK PURCHASE AGREEMENT
(“Agreement”),
made
and entered into this 20th day of February, 2007, by and between THE XXX
OPPORTUNITY FUND, LTD (“Buyer”),
and
SEARCHHELP, INC., a Delaware corporation (the “Company”).
WITNESSETH:
WHEREAS,
the
Buyer desires to purchase and acquire from the Company, and the Company desires
to issue and deliver to the Buyer, an aggregate of 30,534 shares of the
Company’s Series A Convertible Series A Preferred Stock, par value $0.0001
(“Series
A Preferred Stock”),
free
and clear of all claims, liens, options, charges and encumbrances of any kind
other than restrictions on transfer as provided under applicable securities
laws
(“Liens”)
and a
Warrant to purchase from Company 76,335 fully paid and non-assessable shares
of
Common Stock, $.0001 par value, at the Exercise Price of $0.26 per share (the
“Purchase
Shares”),
on
the terms and subject to the conditions hereinafter set forth; and
WHEREAS,
unless
the context otherwise requires, capitalized terms used in this Agreement shall
have the meanings ascribed to such terms in Article I of this
Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing premises and of the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:
ARTICLE
I
|
DEFINITIONS
1.1
Definitions.
As used
herein, the following terms shall have the respective meanings ascribed to
them
below:
“Action”
has
the
meaning ascribed to such term in Section 3.9.
“Affiliate”
means,
with respect to any specified Person, (i) any other Person 50% or more of whose
outstanding voting securities are directly or indirectly owned, controlled
or
held with the power to vote by such specified Person or (ii) any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
the
term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person by
virtue of ownership of voting securities, by contract or otherwise.
“Agreement”
has
the
meaning ascribed to such term in the Preamble.
“Business
Day”
means
any day (other than Saturday or Sunday) on which banking institutions in the
State of New York are not authorized or obligated by law to close.
“Buyer”
has
the
meaning ascribed to such term in the Preamble.
“Certificate
of Designations”
shall
mean the Certificate of Designations of the Series A Preferred Stock, attached
hereto as Exhibit A.
“Closing”
has
the
meaning ascribed to such term in Section 2.1.
“Closing
Date”
has
the
meaning ascribed to such term in Section 2.1.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute thereto.
“Common
Stock”
has
the
meaning ascribed to such term in Section 3.6.
“Company”
has
the
meaning ascribed to such term in the Preamble.
“Company
Material Adverse Effect”
shall
mean any event, condition or contingency that has had, or is reasonably likely
to have, a material adverse effect on the business, assets, liabilities, results
of operations, prospects or financial condition of the Company and its
Subsidiaries, taken as a whole, provided,
however,
that a
Company Material Adverse Effect shall not include any such effect resulting
from
or arising in connection with (a) changes or conditions generally affecting
the
industries or segments in which the Company operates or (b) changes in general
economic, market or political conditions.
“Conversion
Shares”
has
the
meaning ascribed to such term in Section 3.6(b).
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended from time to time, and
all
regulations promulgated thereunder.
“Financial
Statements”
has
the
meaning ascribed to such term in Section 3.8.
“GAAP”
shall
mean United States generally accepted accounting principles, consistently
applied.
“Governmental
Authority”
shall
mean any federal, state, municipal or other governmental authority, department,
commission, board, agency or other instrumentality.
“Governmental
Rules”
shall
mean all laws, statutes, rules, regulations, codes, ordinances, writs, orders
or
decrees of any Governmental Authority.
“Lien”
has
the
meaning ascribed to such term in the Preamble.
“Person”
shall
mean any individual, corporation, partnership, limited liability company,
limited liability partnership, joint venture, estate, trust, cooperative,
foundation, union, syndicate, league, consortium, coalition, committee, society,
firm, company or other enterprise, association, organization or other entity
or
Governmental Authority.
2
“Purchase
Price”
has
the
meaning ascribed to such term in Section 2.3.
“Purchase
Shares”
has
the
meaning ascribed to such term in the Recitals.
“SEC”
shall
mean the Securities and Exchange Commission.
“SEC
Reports”
has
the
meaning ascribed to such term in Section 3.8.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended from time to time, and all
regulations promulgated thereunder.
“Series
A Preferred Stock”
has
the
meaning ascribed to such term in the Recitals.
“Subsidiary”
shall
mean, when used with respect to any Person, any other Person, whether
incorporated or unincorporated, of which (i) more than fifty percent of the
securities or other ownership interests or (ii) securities or other interests
having by their terms ordinary voting power to elect more than fifty percent
of
the board of directors or others performing similar functions with respect
to
such corporation or other organization, is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries.
“Survival
Period”
has
the
meaning ascribed to such term in Section 8.1.
“Transaction
Documents”
shall
mean the Certificate of Designations and those other agreements, certificates
and documents entered into or delivered between the Buyer and the Company
related to, ancillary to, or in connection with this Agreement or the
Certificate of Designations.
“Warrant”
shall
mean a five-year warrant entitling the holder to purchase 76,335 shares of
common stock, par value $0.0001 per share, of the Company (the “Common Stock”)
at the Exercise Price of $0.26 per share.
1.2
Knowledge.
As used
in the Agreement, “to the Company’s knowledge” or “to the knowledge of the
Company” or words of similar import shall mean the actual knowledge of Xxxxxxx
X. Xxxxxxxx, the Chief Executive Officer of the Company.
1.3
Interpretation.
When a
reference is made in this Agreement to a section, article, paragraph, clause,
annex or exhibit, such reference shall be to a reference to this Agreement
unless otherwise clearly indicated to the contrary. The descriptive article
and
section headings herein are intended for convenience of reference only and
are
not intended to be a part of or to affect the meaning or interpretation of
this
Agreement. Whenever the words “include”, “includes” or “including” are used in
this Agreement they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement. The meaning
assigned to each term used in this Agreement shall be equally applicable to
both
the singular and the plural forms of such term, and words denoting either gender
shall include both genders. Where a word or phrase is defined herein, each
of
its other grammatical forms shall have a corresponding meaning.
3
The
parties have participated jointly in the negotiation and drafting of this
Agreement and the Transaction Documents. Consequently, in the event an ambiguity
or question of intent or interpretation arises, this Agreement and each of
the
Transaction Documents shall be construed as if drafted jointly by the parties
thereto, and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of the authorship of any provision of this
Agreement or of any of the Transaction Documents.
ARTICLE
II
|
CLOSING;
PURCHASE AND SALE
2.1
The
Closing.
Subject
to the terms and conditions of this Agreement, the closing (the “Closing”)
of the
transaction set forth in this Article II shall take place on or before February
20, 2007, or at such other time or such other date as Buyer and the Company
may
agree, at the offices of Xxxxxx Xxxxxx Rosenman LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx (such date upon which the Closing occurs is referred to as the
“Closing
Date”).
2.2
Issuance
and Delivery of the Purchase Shares.
At the
Closing, the Company shall issue and deliver to the Buyer certificates for
the
purchase Shares and the Buyer shall purchase the Purchase Shares from the
Company.
2.3
The
Purchase Price.
At the
Closing, the Buyer shall purchase the Purchase Shares for a purchase price
equal
to $2.62 per Purchase Share (the “Purchase
Price”),
which
shall be paid to the Company by the Buyer.
2.4
Delivery
of Purchase Price.
At the
Closing, the aggregate Purchase Price shall be paid by the Buyer to the Company
by wire transfer of immediately available funds to an account designated
in
writing by the Company at least one Business Day prior to the Closing.
2.5
Use
of
Proceeds.
The
Company shall use the net proceeds from the issuance of the Purchase Shares
for
general working capital purposes.
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to the Buyer as of the date hereof and as of
the
Closing Date as follows:
3.1
Organization;
Good Standing.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has the corporate power
and
authority to conduct its business as now being conducted and is duly licensed
or
qualified to do business and is in good standing as a foreign corporation
in all
jurisdictions in which the nature of the business conducted by it, and/or
the
character of the assets owned or leased by it, makes such qualification or
licensure necessary, except for those jurisdictions in which the failure
to be
so qualified or licensed or to be in good standing would not, individually
or in
the aggregate, limit the Company’s ability to consummate the transactions hereby
contemplated or have a Company Material Adverse Effect.
4
3.2
Subsidiaries.
All of
the outstanding shares of the capital stock of each Subsidiary of the Company
are owned by the Company free and clear of all Liens. Each of the Company’s
Subsidiaries is set forth on Schedule 3.2 and is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws
of
its jurisdiction of organization. Each of the Company’s Subsidiaries has the
power and authority to conduct its business as now being conducted and is
duly
licensed or qualified to do business and is in good standing as a foreign
corporation or other legal entity in all jurisdictions in which the nature
of
the business conducted by it, and/or the character of the assets owned or
leased
by it, makes such qualification or licensure necessary, except for those
jurisdictions in which the failure to be so qualified or licensed or to be
in
good standing would not, individually or in the aggregate, limit the Company’s
ability to consummate the transactions hereby contemplated or have a Company
Material Adverse Effect.
3.3
Authority;
Execution and Delivery; Enforceability.
The
Company has the corporate power and authority to execute and deliver this
Agreement and the Transaction Documents and to consummate the transactions
hereby and thereby contemplated. The execution and delivery by the Company
of
this Agreement and the Transaction Documents and the consummation by the
Company
of the transactions hereby and thereby contemplated have been authorized
by all
necessary corporate action of the Company. The Company has duly executed
and
delivered this Agreement and the Transaction Documents, and, assuming the
due
execution and delivery of this Agreement and the Transaction Documents by
each
party thereto (other than the Company), this Agreement and the Transaction
Documents constitute valid and binding obligations of the Company and are
enforceable against the Company in accordance with its and their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting creditors’ rights generally or general equitable principles
(whether considered in a proceeding at equity or in law).
3.4
Non-Contravention.
Neither
the execution and delivery of this Agreement and the Transaction Documents
by
the Company, nor the consummation of the transactions hereby and thereby
contemplated by the Company, will:
(i) constitute
any violation or breach of the certificate of incorporation or the by-laws
(or
comparable organizational documents in the case of Subsidiaries) of the Company
or any of its Subsidiaries;
(ii) constitute
a default under or a violation or breach of, or result in the acceleration
of
any obligation under, any provision of any Contract to which the Company or
any
of its Subsidiaries is a party or by which any of the assets of the Company
or
any of its Subsidiaries or the Purchase Shares may be affected;
5
(iii) assuming
the consents and approvals described in Section 3.7 have been received, violate
any Governmental Rules affecting the Company or any of its Subsidiaries;
or
(iv) result
in
the creation of any Lien on any of the assets of the Company or any of its
Subsidiaries;
other
than, in the case of foregoing clauses (ii), (iii), and (iv), those defaults,
violations, breaches, accelerations and Liens which, individually or in the
aggregate, would not have a Company Material Adverse Effect.
3.5
Corporate
Documents.
The
Company has filed as exhibits to its SEC Reports true and complete copies
of the
Certificate of Incorporation, as amended, and By-Laws of the Company.
3.6
Capitalization;
Options.
(a) The
Company is authorized to issue 250,000,000 shares of Common Stock, par value
$0.00001 per share, 38,197,596 of which are issued and outstanding as of
the
date hereof, (“Common Stock”) and 25,000,000 shares of Series A Preferred Stock,
none of which are issued and outstanding as of the date hereof (prior to
giving
effect to the transactions contemplated by this Agreement).
(b) All
of
the Purchase Shares when issued to the Buyer in accordance with the terms of
this Agreement shall be legally and validly issued, fully paid and
non-assessable, free and clear of all Liens. The shares of Common Stock issuable
upon conversion of the Purchase Shares or the exercise of the Warrant (the
“Conversion
Shares”)
have
been duly and validly reserved on the books and records of the Company and,
when
issued upon conversion of the Purchase Shares in accordance with the terms
of
the Certificate of Designations and the Warrant and applicable Governmental
Rules, shall be legally and validly issued, fully paid and nonassessable, free
and clear of all Liens.
(c) Other
than the Common Stock and the Series A Preferred Stock, there are no other
series or classes of capital stock of the Company authorized or issued and
outstanding. Except as set forth in the SEC Filings, there are no outstanding
warrants, options, contracts, rights (preemptive or otherwise), calls,
commitments or other instruments convertible into or exchangeable for shares
of
capital stock of the Company or any of the Company’s Subsidiaries, in each such
case, to which the Company or any of Company’s Subsidiaries is a party and which
relates to the sale or issuance of shares of capital stock of the Company or
of
any of Company’s Subsidiaries (collectively, the “Company
Instruments”).
Except as set forth in the SEC Filings or as contemplated by this Agreement
and
the Transaction Documents, (i) the Company has not agreed to register any shares
of its capital stock under the Securities Act or granted registration rights
with respect to shares of its capital stock to any Person and (ii) there are
no
voting trusts, stockholders agreements, proxies or other agreements or
understandings in effect to which the Company is a party with respect to the
voting or transfer of any shares of Common Stock. Except as disclosed in the
SEC
Reports or any exhibit thereto, to the extent any such Company Instruments
are
outstanding as of the date hereof, neither the issuance and sale of the Purchase
Shares nor the issuance of the Conversion Shares in accordance with its terms
will result in an adjustment of the exercise or conversion price of, or number
of shares issuable upon the exercise or conversion of any such, Company
Instruments.
6
(d) The
outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable. All outstanding Common Stock, options
and
other securities of the Company were issued in accordance with the registration
or qualification provisions of the Securities Act and any relevant state
securities laws (including, without limitation, anti-fraud provisions) or,
subject in part to the truth and accuracy of each purchaser’s representations to
the Company at the time of the purchase thereof, pursuant to valid exemptions
therefrom.
3.7
Consents
and Approvals.
Except
for filings required under applicable securities laws and designation in
Delaware, no consent, approval or authorization of, or declaration, filing
or
registration with, any Governmental Authority or any other Person is required
on
behalf of the Company or any of its Subsidiaries in connection with the
execution, delivery or performance of this Agreement and the Transaction
Documents or the consummation of the transactions contemplated hereby and
thereby, other than such consents, approvals and authorizations of, and
declarations, filings and registrations the failure of which to obtain, make
or
otherwise effect which would not, individually or in the aggregate, result
in a
Company Material Adverse Effect.
3.8
SEC
Reports and Financial Statements.
(a) The
Company has filed all forms, reports and documents required to be filed by
it
with the SEC since July 23, 2003 (collectively, the “SEC Reports”). The SEC
Reports (i) were prepared in all material respects in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be,
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 made therein, in the light of the
circumstances under which they were made, not misleading. None of the Company’s
Subsidiaries is required to file any form, report or other document with the
SEC.
(b) Each
of
the financial statements (including, in each case, any notes thereto) contained
in the SEC Reports (the “Financial
Statements”)
(i)
was prepared from the books of account and other financial records of the
Company, (ii) was prepared in accordance with GAAP applied on a consistent
basis
throughout the periods indicated (except as may be indicated in the notes
thereto) and (iii) presented fairly in all material respects the financial
position of the Company as at the respective dates thereof and the results
of
its operations and its cash flows for the respective periods indicated therein
except as otherwise noted therein (subject, in the case of unaudited statements,
to the omission of footnotes and normal and recurring year-end adjustments
which
were not and are not expected, individually or in the aggregate, to have a
Company Material Adverse Effect).
(c) Except
for liabilities and obligations reflected on the September 30, 2006 balance
sheet of the Company included in the SEC Reports (including the notes thereto),
liabilities and obligations disclosed in the SEC Reports (including exhibits
thereto) filed prior to the date of this Agreement and other liabilities and
obligations incurred in the ordinary course of business since September 30,
2006, neither the Company nor any of the Company’s Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) of a nature required to be disclosed on a balance sheet prepared
in accordance with GAAP which, individually or in the aggregate, would cause
a
Company Material Adverse Effect.
7
3.9
Litigation
and Claims.
There
is no action, suit, claim, proceeding, arbitration or investigation (each,
an
“Action”)
pending or, to the knowledge of the Company, threatened against or affecting
the
Company or any of its Subsidiaries or, to the best of the Company’s knowledge,
against any officer, director or employee of the Company in connection with
such
officer’s, director’s or employee’s relationship with, or actions taken on
behalf of, the Company or that questions the validity of this Agreement,
or the
right of the Company to enter into such agreements, or to consummate the
transactions contemplated hereby or thereby. Neither the Company nor any
of its
Subsidiaries is subject to or in default under any judgment, order, writ,
agreement, injunction or decree of any court or Governmental Authority.
3.10
Exempt
Offering.
Subject
in part to the truth and accuracy of the Buyer’s representations set forth in
Article IV of this Agreement, the offer, sale and issuance of the Purchase
Shares and the Conversion Shares, as contemplated by and in conformity with
this
Agreement are exempt from the registration requirements of Section 5 of the
Securities Act by virtue of Regulation D thereunder, and from the registration
or qualification requirements of any other applicable federal or state
securities laws, and the issuance of the Conversion Shares in accordance
with
the Company’s Certificate of Incorporation and the Certificate of Designations
will be exempt from such registration and qualification requirements, and
neither the Company nor any authorized agent acting on its behalf will take
any
action hereafter that would cause the loss of such exemption.
3.11
Agreements;
Action.
Other
than as attached as an exhibit to the Company’s Annual Report on Form 10-KSB for
year ended December 31, 2005 (as amended), or any subsequent report on Form
10-QSB or 8-K filed with the SEC, the Company is not a party to, and none
of its
properties, rights or assets are bound by, any material contract, agreement,
lease, power of attorney, guaranty, surety arrangement, or other commitment,
whether written or oral.
3.12
Disclosure.
None of
this Agreement or any other statements or certificates made or delivered
in
connection herewith or therewith contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated therein or necessary to make the statements herein
or
therein, in light of the circumstances in which they are made, not
misleading.
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF THE BUYER
The
Buyer
represents and warrants to the Company as of the date hereof and the Closing
Date as follows:
4.1
Organization
and Good
Standing.
The
Buyer is duly organized, validly existing and in good standing under the
laws of
its jurisdiction of formation.
4.2
Corporate
Authority; Execution and Delivery; Enforceability.
The
Buyer has the requisite power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a party and to consummate
the transactions hereby and thereby contemplated. The execution and delivery
by
the Buyer of this Agreement and the Transaction Documents to which it is
a party
and the consummation by the Buyer of the transactions hereby and thereby
contemplated have been authorized by all necessary action (corporate or
otherwise). The Buyer has duly executed and delivered this Agreement and
the
Transaction Documents to which it is a party, and, assuming the due execution
and delivery of this Agreement and the Transaction Documents by each party
thereto (other than the Buyer), this Agreement and the Transaction Documents
to
which it is a party constitute valid and binding obligations of the Buyer
and
are enforceable against the Buyer in accordance with its and their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting creditors’ rights generally or general equitable principles
(whether considered in a proceeding at equity or in law).
8
4.3
Non-Contravention.
Neither
the execution and delivery of this Agreement or the Transaction Documents
to
which it is a party by the Buyer, nor the consummation of the transactions
hereby or thereby contemplated by the Buyer, will:
(i) constitute
any violation or breach of the organizational documents of the Buyer; or
(ii) violate
any Government Rule affecting the Buyer, other than any such violations which,
individually or in the aggregate, would not prevent the Buyer from consummating
the transactions contemplated by this Agreement and the Transaction
Documents.
4.4
Consents
and Approvals.
No
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Authority or third party is required on behalf of
the
Buyer in connection with the execution, delivery or performance of this
Agreement or the Transaction Documents to which it is a party and all documents
contemplated hereby or thereby or the transactions contemplated hereby and
thereby, other than such consents, approvals and authorizations of, and
declarations, filings and registrations with, third parties the failure of
which
to obtain, make or otherwise effect which would not, individually or in the
aggregate, prevent the Buyer from consummating the transactions contemplated
by
this Agreement and the Transaction Documents.
4.5
Litigation
and Claims.
There
is no action, suit, claim, proceeding, arbitration or investigation pending
or,
to the knowledge of the Buyer, threatened against or affecting the Buyer
with
respect to the propriety or validity of the transactions contemplated
hereby.
4.6
No
Finder.
Neither
the Buyer nor any party acting on the Buyer’s behalf has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary
for
or on account of the transactions contemplated hereby.
4.7
Investment
Representations.
The
Buyer hereby acknowledges and agrees that the Purchase Shares, and, if and
when
issued, the Conversion Shares, will not be registered under the Securities
Act
or any state securities laws and may not be offered or sold except pursuant
to
registration or an exemption from the registration requirements of the
Securities Act and all applicable state securities laws. In this connection,
the
Buyer understands Rule 144 promulgated under the Securities Act, as presently
in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
9
4.8
Accredited
Investor.
The
Buyer represents that: (i) the Buyer is an “accredited investor” (as such term
is defined in Regulation D under the Securities Act) and is acquiring the
Purchase Shares for its own account, for investment purposes only, and not
with
a view to the resale or offer for sale thereof or with any present intention
of
distributing or selling or offering for sale any of such securities; and
(ii)
the Buyer is capable of bearing the economic risk of such investment, including
a complete loss of the investment in the Purchase Shares.
4.9
Access
to Information.
Such
Purchaser or his representative during the course of this transaction, and
prior
to the purchase of any Series APreferred Stock, has had the opportunity to
ask
questions of and receive answers from management of the Company concerning
the
terms and conditions of the offering of the Series A Preferred Stock and
the
additional information, documents, records and books relative to its business,
assets, financial condition, results of operations and liabilities (contingent
or otherwise) of the Company.
ARTICLE
V
|
COVENANTS
5.1
Restrictive
Legends.
None of
the Purchase Shares or the Conversion Shares may be transferred without
registration under the Securities Act and applicable state securities laws
unless counsel to the Buyer shall advise the Company in writing that such
transfer may be effected without such registration. Each certificate
representing any of the foregoing shall bear legends in substantially the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”)
AND
MAY NOT BE OFFERED, SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES UNDER THE ACT, OR (II) UPON RECEIPT BY ISSUER OF AN OPINION OF LEGAL
COUNSEL REASONABLY SATISFACTORY TO ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
The
Company shall remove or cause its registrar and transfer agent to remove such
legend at the time such Purchase Shares or Conversion Shares are transferred
pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 under the Securities Act.
5.2
Change
in Condition.
Prior
to the Closing, the Company shall promptly advise the Buyer in writing of
any
material change in the condition (financial or otherwise), operations or
properties or businesses of the Company.
10
ARTICLE
VI
|
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE PARTIES
The
obligation of the parties to consummate the transactions contemplated under
this
Agreement are subject to the fulfillment of each of the following conditions,
any or all of which may be waived in whole or in part by the party whose
obligation is subject to such conditions, in their sole discretion.
6.1
Conditions
to obligations of the
Buyer.
(a) There
shall not be in effect any injunction or restraining order issued by a court
of
competent jurisdiction in an Action against the consummation of the transactions
contemplated hereby or by any Transaction Document.
(b) The
Company shall have filed the Certificate of Designations with the Secretary
of
State of the State of Delaware.
(c) The
representations and warranties of the Company contained in Article III that
are
qualified as to materiality shall be true and correct and those not so qualified
shall be true and correct in all material respects on and as of the Closing
with
the same effect as though such representations and warranties had been made
on
and as of the date of such Closing.
(d) The
Company shall have performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the
Closing.
(e) All
authorizations, approvals or permits, if any, of any governmental authority
or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to
this
Agreement shall be duly obtained and effective as of the Closing.
6.2
Conditions
to obligations of the Company.
(a) There
shall not be in effect any injunction or restraining order issued by a court
of
competent jurisdiction in an Action against the consummation of the transactions
contemplated hereby or by any Transaction Document.
ARTICLE
VII
|
REGISTRATION
RIGHTS
If
at any
time the Company shall determine to register for its own account or the account
of others under the Securities Act (including pursuant a demand for registration
of any stockholder of the Company) any of its equity securities, other than
on
Form S-4 or Form S-8 or their then equivalents relating to
shares
of Common Stock to be issued solely in connection with any acquisition of any
entity or business or shares of Common Stock issuable in connection with stock
option or other employee benefit plans, it shall send to the Buyer written
notice of such determination and, if within fifteen (15) days after receipt
of
such notice, the Buyer shall so request in writing to the Company, the Company
shall use its best efforts to include in such registration statement all or
any
part of the Conversion Shares requested to be registered.
11
ARTICLE
VIII
|
MISCELLANEOUS
8.1
Survival;
Certain Other Matters.
(a) The
representations and warranties of the parties contained in this Agreement shall
survive the Closing and shall continue in full force and effect until the second
anniversary of the date hereof, after which time such representations and
warranties shall terminate and have no further force or effect; provided,
however,
that
the representations and warranties contained in Sections 3.6, 4.6, 4.7, 4.8
and
4.9 hereof shall survive the Closing and remain in full force and effect until
the expiration of the applicable statute of limitations, after which time such
representations and warranties shall terminate and have no further force or
effect. The period during which any such representation or warranty survives
is
the “Survival
Period”
for
such representation or warranty. Notwithstanding the foregoing, any
representation or warranty that would otherwise terminate shall survive with
respect to, and only with respect to, any matter of which notice is given to
Company or the Buyer, as the case may be, in writing pursuant to this Agreement
prior to the end of the applicable Survival Period until such matter is
resolved, after which time such representation and warranty shall terminate
and
have no further force or effect. The representations, warranties and covenants
of the Company contained in or made pursuant to this Agreement shall in no
way
be affected by any investigation of the subject matter thereof made by or on
behalf of the Buyer or the Company.
(b) The
covenants and agreements of the parties contained in this Agreement shall
survive the Closing as to the Buyer until the Buyer no longer owns any Purchase
Shares or Conversion Shares.
(c) Each
party hereto may assert a claim or cause of action under this Agreement with
respect to (i) any breach of one or more of the representations and warranties
contained in Articles III and IV hereof, as the case may be, provided that
such
claim or cause of action is asserted within the applicable time period specified
in Section 8.1(a) hereof and (ii) subject to Section 8.1(b) hereof, a breach
of
any one or more of the covenants or agreements contained in this Agreement.
Except as provided for in the immediately preceding sentence, the parties to
this Agreement agree that no claims or causes of action on any basis (including
in contract or tort, under federal or state securities laws or otherwise),
other
than for fraud, may be brought against the Company or the Buyer or any of their
respective directors, officers, employees, Affiliates, shareholders, successors,
permitted assigns, agents, or representatives based upon, directly or
indirectly, any of the representations or warranties contained in Articles
III
and IV of this Agreement or any misstatement or failure to state any fact made
by Company in connection with the Buyer’s purchase of the Purchase Shares or the
Conversion Shares.
8.2
Further
Assurances.
From
and after the Closing Date, each party shall, at any time and from time to
time,
make, execute and deliver, or cause to be made, executed and delivered, such
instruments and agreements, and take or cause to be taken all such actions
as
counsel for the other party may reasonably request for the effectual
consummation of this Agreement and the transactions hereby
contemplated.
12
8.3
Expenses
of the Transaction.
The
Company and the Buyer shall each pay its own fees and expenses in connection
with this Agreement and the transactions hereby contemplated.
8.4
Notices.
All
notices or other communications required or permitted hereunder shall be
in
writing and shall be deemed given or delivered (i) when delivered personally
or
by private courier, (ii) when actually delivered by registered or certified
United States mail, return receipt requested, or (iii) when sent by telecopy
(provided that it is confirmed by a means specified in clause (i) or (ii)),
addressed as follows:
If
to the
Buyer:
The
XXX
Opportunity Fund, LTD
00
Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxx
Telecopy:__________________
Telephone:
(000) 000-0000
With
a
copy to:
Name:__________________
Address:__________________
Attention:__________________
Telecopy:__________________
Telephone:__________________
If
to the
Company to:
SearchHelp,
Inc.
0000
Xxxxxxx Xxxxxxxx, Xxxxx 000X
Xxxxxxx,
Xxx Xxxx 00000
Attention:
CFO
Telecopy:
(000) 000-0000
Telephone:
(000) 000-0000
With
a
copy to:
Xxxxxx
Xxxxxx Rosenman LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxx, Esq.
Telecopy:
(000) 000-0000
Telephone:
(000) 000-0000
13
or
to
such other address as such party may indicate by a notice delivered to the
other
parties hereto.
8.5
No
Modification Except in Writing.
This
Agreement shall not be changed, modified, or amended except by a writing
signed
by the party to be affected by such change, modification or amendment, and
this
Agreement may not be discharged except by performance in accordance with
its
terms or by a writing signed by the party to which performance is to be
rendered.
8.6
Entire
Agreement.
This
Agreement, together with any Schedules and Exhibits hereto, sets forth the
entire agreement and understanding among the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature among them.
8.7
Severability.
If any
provision of this Agreement or the application of any provision hereof to
any
person or circumstances is held invalid, the remainder of this Agreement
and the
application of such provision to other persons or circumstances shall not
be
affected unless the provision held invalid shall substantially impair the
benefits of the remaining portions of this Agreement.
8.8
Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns. This Agreement may not be assigned by the Company or the Buyer without
the prior written consent of the other party; provided,
however,
that,
prior to Closing, the Buyer may assign its rights under this Agreement to
any
Affiliate of the Buyer that agrees in favor of the Company in writing to
the
assumption of the assigning the Buyer’s obligations under this Agreement. No
such assignment and assumption shall relieve the Buyer of its obligations
under
this Agreement.
8.9
Governing
Law; Jurisdiction.
(a) This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York applicable to contracts made and to be performed wholly
within said State, without giving effect to the conflict of laws principles
thereof.
(b) Each
of
the parties hereto irrevocably and unconditionally submits to the exclusive
jurisdiction of the United States District Court for the Southern District
of
New York or, if such court will not accept jurisdiction, the Supreme Court
of
the State of New York, New York County or any court of competent civil
jurisdiction sitting in New York County, New York. In any action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above courts, that such action
or suit is brought in an inconvenient forum or that the venue of such action,
suit or other proceeding is improper. Each of the parties hereto also agrees
that any final and unappealable judgment against a party hereto in connection
with any action, suit or other proceeding shall be conclusive and binding on
such party and that such award or judgment may be enforced in any court of
competent jurisdiction, either within or outside of the United States. A
certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment.
14
(c) EACH
OF
THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION
WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF
ANY
PROVISION OF THIS AGREEMENT.
8.10
Captions.
The
captions appearing in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the
scope
and intent of this Agreement or any of the provisions hereof.
8.11
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which taken together shall constitute a single
agreement.
8.12
Delays
or Omissions.
No
delay or omission to exercise any right, power or remedy accruing to the
Company
or to the Buyer, upon any breach or default of any party hereto under this
Agreement, shall impair any such right, power or remedy of the Company or
any
Buyer nor shall it be construed to be a waiver of any such breach or default,
or
an acquiescence therein, or of any similar breach of default thereafter
occurring; nor shall any waiver of any other breach or default theretofore
or
thereafter occurring. Any waiver, permit, consent or approval of any kind
or
character on the part of the Company or the Buyer of any breach of default
under
this Agreement, or any waiver on the part of the Company or any Buyer of
any
provisions or conditions of this Agreement, must be in writing and shall
be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to
the
Company or the Buyer, shall be cumulative and not
alternative.
[Signature
page follows]
15
IN
WITNESS WHEREOF,
each of
the parties hereto has executed this Series A Preferred Stock Purchase Agreement
on the day and year first above written.
SEARCHHELP, INC. | ||
|
|
|
By: | ||
Xxxxxxx X. Xxxxxxxx |
||
Chief Executive Officer |
THE XXX OPPORTUNITY FUND, LTD | ||
|
|
|
By: | ||
Xxxxxx Xxxxx |
SEARCHHELP,
INC.
PAYMENT
INFORMATION
¨PAYMENT
BY WIRE¨
Your
bank should wire transfer only U.S. dollars via Fed wire
to:
HSBC
BANK USA
SearchHelp,
Inc., IPO Account
ABA
# - 000000000
Account
# 945705107
(i) |
|
IMPORTANT:
1)
Please
have your bank identify on the wire transfer the name of the intended
investor.
2)
We
recommend that your bank charge its wiring fees separately so that
an even
amount may be invested.
|