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EXHIBIT 4.1
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (the "AGREEMENT"), dated as of September 9, 1999, by
and among General Magic, Inc., a Delaware corporation, with headquarters located
at 000 X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 (the "COMPANY"), and the
investors listed on the Schedule of Investors attached hereto (individually, an
"INVESTOR" and collectively, the "INVESTORS").
WHEREAS:
A. Each of the Investors owns shares of Series D Convertible Preferred
Stock, par value $.001 per share (the "SERIES D PREFERRED STOCK"), of the
Company;
B. The Company has agreed and each of the Investors, severally and not
jointly, has agreed that, subject to the terms and conditions of this Agreement,
each Investor will tender to the Company that number of shares of Series D
Preferred Stock set forth opposite such Investor's name on the Schedule of
Investors and the Company will exchange the Series D Preferred Stock for an
equal number of shares of a newly created series of preferred stock, par value
$.001 per share, designated Series F Convertible Preferred Stock (the "PREFERRED
SHARES"), which shall be convertible into shares of the Company's Common Stock,
par value $.001 per share (the "COMMON STOCK") (as converted, the "CONVERSION
SHARES"), in accordance with the terms of the Company's Certificate of
Designations, Preferences and Rights of the Series F Convertible Preferred Stock
(the "CERTIFICATE OF DESIGNATIONS"), substantially in the form attached hereto
as Exhibit A.
C. The execution and delivery of this Agreement by the Company and the
Investors and the offer and issuance by the Company of Preferred Shares is being
made in reliance upon the provisions of Section 3(a)(9) of the Securities Act of
1933, as amended (the "1933 Act"). The Preferred Shares and the Conversion
Shares issuable upon conversion thereof are sometimes collectively referred to
in this Agreement as the "SECURITIES"; and
D. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
substantially in the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
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NOW THEREFORE, the Company and the Investors hereby agree as follows:
1 AGREEMENT TO EXCHANGE.
(a) Exchange. Each Investor, severally and not jointly, hereby
agrees that at the Closing (as defined below) it will exchange shares of Series
D Preferred Stock for shares of Series F Convertible Preferred Stock in the
amounts set forth in the Schedule of Investors and on the terms and conditions
set forth herein. At the Closing, the Company shall issue to each Investor one
Preferred Share for each share of Series D Preferred Stock being exchanged by
such Investor, in the denominations as such Investor shall request and in the
name of such Investor or its designee.
(b) The Closing Date. The date and time of the Closing (the
"CLOSING Date") shall be 10:00 a.m. Central Time within three (3) business days
following the date hereof, subject to satisfaction (or waiver) of the conditions
to the Closing set forth in Sections 6 and 7 (or such later date as is mutually
agreed to by the Company and the Investors). The Closing shall occur on the
Closing Date at the offices of Xxxxxx Xxxxxx & Zavis, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000 or at such other place as the Company
and the Investors may mutually agree.
2 INVESTOR'S REPRESENTATIONS AND WARRANTIES.
Each Investor represents and warrants with respect to only itself
that:
(a) Reliance on Exemptions. Such Investor understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of such
Investor to acquire the Securities.
(b) No Governmental Review. Such Investor understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(c) Transfer or Resale. Such Investor understands that, except as
provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Investor shall have delivered to
the Company an opinion of counsel, in form and substance reasonably satisfactory
to the Company, to the effect that the Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Investor provides the Company with reasonable
assurance that the Securities can be sold, assigned or transferred pursuant to
Rule 144 promulgated under the 1933 Act (or a successor rule thereto) ("RULE
144"); (ii) any sale of the
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Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. Notwithstanding the foregoing, the
Securities may be pledged in connection with a bona fide margin account.
(d) Legends. Such Investor understands that the certificates or
other instruments representing the Preferred Shares and, until such time as the
sale of the Conversion Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT.
The legend set forth above shall be removed and the Company shall issue a
certificate or other instrument without such legend to the holder of the
Securities upon which it is stamped, if (i) such Securities are registered for
sale under the 1933 Act, (ii) in connection with a sale transaction, such holder
provides the Company with an opinion of counsel, in form and substance
reasonably acceptable to the Company, to the effect that a public sale,
assignment or transfer of such Securities may be made without registration under
the 1933 Act, or (iii) such holder provides the Company with reasonable
assurances that such Securities can be sold without restriction pursuant to Rule
144(k). Each Investor acknowledges, covenants and agrees to sell the Securities
represented by a certificate(s) or other instruments from which the legend has
been removed, only pursuant to (i) a registration statement effective under the
1933 Act, or (ii) advice of counsel that such sale is exempt from registration
required by Section 5 of the 1933 Act. Notwithstanding anything to the contrary
contained herein, if the legend is removed from any certificate representing any
of the Securities due to the availability of an effective registration statement
relating to the resale thereof, and such registration statement is no longer
effective, upon the reasonable request of the Company, each Investor who is a
holder of such Securities agrees to return certificates representing the
affected Securities, provided such Securities have not been sold pursuant to
such registration statement, to
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the Company's transfer agent in order that the legend set forth above may be
re-imposed on such Securities.
(e) Authorization; Enforcement. This Agreement, the Registration
Rights Agreement and the Waiver Agreement, which is attached hereto as Exhibit E
(the "Waiver Agreement") have been duly and validly authorized, executed and
delivered on behalf of such Investor and constitute valid and binding agreements
of such Investor enforceable against such Investor in accordance with their
terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
(f) Residency. Such Investor is a resident of that country or
jurisdiction specified on the Schedule of Investors.
(g) No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Waiver Agreement by such
Investor and the consummation by such Investor of the transactions contemplated
hereby and thereby will not result in a violation of the certificate of
incorporation, by-laws or other documents of organization of such Investor.
3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Investors that:
(a) Organization and Qualification. Set forth in Schedule 3(a) is a
complete list of each entity in which the Company, directly or indirectly, owns
any capital stock or holds an equity or similar interest. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns more than 50% of the outstanding
capital stock or holds an equity or similar interest representing at least 50%
of the outstanding equity or similar interests of such entity) (a complete list
of which is set forth in Schedule 3(a)) are corporations duly organized and
validly existing in good standing under the laws of the jurisdiction in which
they are incorporated, and have the requisite corporate power and authorization
to own their properties and to carry on their business as now being conducted.
Each of the Company and its Subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse
effect on the business, properties, assets, operations, results of operations,
financial condition or prospects of the Company and its Subsidiaries, if any,
taken as a whole, or on the transactions contemplated hereby or by the
agreements and instruments to be entered into in connection herewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below) or the Certificate of Designations.
(b) Authorization; Enforcement; Compliance with Other Instruments.
(i) The Company has the requisite corporate power and authority to enter into
and perform its obligations
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under this Agreement, the Registration Rights Agreement, the Waiver Agreement
and the Irrevocable Transfer Agent Instructions (as defined in Section 5) and
each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the
"TRANSACTION DOCUMENTS"), and to issue the Securities in accordance with the
terms hereof and thereof; (ii) the execution and delivery of the Transaction
Documents and the Certificate of Designations by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Preferred Shares and the
reservation for issuance and the issuance of the Conversion Shares issuable upon
conversion) have been duly authorized by the Company's Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders; (iii) the Transaction Documents have been duly
executed and delivered by the Company; (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies; and (v)
prior to the Closing Date, the Certificate of Designations will have been filed
with the Secretary of State of the State of Delaware and will be in full force
and effect, enforceable against the Company in accordance with its terms.
(c) Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of (i) 100,000,000 shares of Common Stock, of
which as of the date hereof, 41,219,797 shares were issued and outstanding,
9,953,234 shares are issuable and reserved for issuance pursuant to the
Company's stock option and purchase plans and 805,000 shares are issuable and
reserved for issuance pursuant to securities (other than the Preferred Shares)
exercisable or exchangeable for, or convertible into, shares of Common Stock;
and (ii) 500,000 shares of Preferred Stock, of which as of the date hereof, (A)
50,000 shares were designated as Series A Preferred Stock and 50,000 shares of
Series A Preferred Stock were issued and outstanding, (B) 12,000 shares were
designated as Series B Preferred Stock and no shares of Series B Preferred Stock
were issued and outstanding, (C) 3,000 shares were designated as Series C
Preferred Stock and no shares of Series C Preferred Stock were issued and
outstanding, (D) 2,000 shares were designated as the Series D Preferred Stock
and 2,000 shares of Series D Preferred Stock were issued and outstanding, and
(E) 699 shares were designated as the Series E Preferred Stock and 599 shares of
Series E Preferred Stock were issued and outstanding and 100 shares are issuable
and reserved for issuance pursuant to securities exercisable for shares of
Series E Preferred Stock. All of such outstanding shares have been, or upon
issuance will be, validly issued and fully paid and nonassessable. Except as
disclosed in Schedule 3(c), (i) no shares of the Company's capital stock are
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
debt securities; (iii) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries; (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under
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the 1933 Act (except the Registration Rights Agreement); (v) there are no
outstanding securities of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement; and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement. The Company has furnished to the Investors true and
correct copies of the Company's Certificate of Incorporation, as amended and as
in effect on the date hereof (the "CERTIFICATE OF INCORPORATION"), and the
Company's By-laws, as in effect on the date hereof (the "BY-LAWS"), and the
terms of all securities convertible into or exercisable for Common Stock and the
material rights of the holders thereof in respect thereto.
(d) Issuance of Securities. The Preferred Shares are duly authorized
and, upon issuance in accordance with the terms hereof, shall be (i) validly
issued, fully paid and non-assessable, (ii) free from all taxes, liens and
charges with respect to the issue thereof and (iii) entitled to the rights and
preferences set forth in the Certificate of Designations. At least that number
of shares of Common Stock required to be reserved by the Company pursuant to
Section 4(e) have been duly authorized and reserved for issuance upon conversion
of the Preferred Shares. Upon conversion in accordance with the Certificate of
Designations, the Conversion Shares, and upon issuance, the Registration Delay
Payment Shares, will be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof, with the
holders being entitled to all rights accorded to a holder of Common Stock and,
except as disclosed in Schedule 3(d), entitled to be traded on the Nasdaq
National Market, The New York Stock Exchange, Inc. ("NYSE") or The American
Stock Exchange, Inc. ("AMEX"). Based in part upon the representations of
Investors in Section 2 hereof, the issuance by the Company of the Securities is
exempt from registration under the 1933 Act.
(e) No Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company,
the performance by the Company of its obligations under the Certificate of
Designations and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the reservation
for issuance and issuance of the Conversion Shares) will not (i) result in a
violation of the Certificate of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of Preferred Stock of the
Company or the By-laws; (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company or any of its Subsidiaries is a party; or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
principal market or exchange on which the Common Stock is traded or listed)
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or affected. Except as
disclosed in Schedule 3(e), neither the Company nor its Subsidiaries is in
violation of any term of or in default under (x) its Certificate of
Incorporation, any Certificate of Designation, Preferences and Rights of any
outstanding series of Preferred Stock or By-laws or their organizational charter
or by-laws, respectively, or (y) any contract, agreement, mortgage,
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indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company or its Subsidiaries, except for
such violations which have not had and, to the knowledge of the Company, will
not have a Material Adverse Effect. The business of the Company and its
Subsidiaries is not being conducted, in violation of any law, ordinance or
regulation of any governmental entity, except for any violations which
individually or in the aggregate will not have a Material Adverse Effect. Except
as specifically contemplated by this Agreement and as required under the 1933
Act, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency or
any regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by the Transaction
Documents or the Certificate of Designations in accordance with the terms hereof
or thereof. Except as disclosed in Schedule 3(e), all consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date hereof. The Company complies with and is not in violation of the
listing requirements of the Nasdaq National Market as in effect on the date
hereof and the Closing Date and is not aware of any facts which would reasonably
lead to delisting or suspension of the Common Stock by the Nasdaq National
Market in the foreseeable future.
(f) SEC Documents; Financial Statements. Since December 31, 1996,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 ACT")
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
DOCUMENTS"). The Company has delivered to or made available for review by the
Investors or their respective representatives true and complete copies of the
SEC Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other written information provided by or on behalf of the
Company to the Investors which is not included in the SEC Documents, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading. Neither the
Company nor any of its Subsidiaries or any of their officers, directors, agents
or employees have provided the Investors with any material, nonpublic
information.
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(g) Absence of Certain Changes. Except as disclosed in Schedule 3(g)
or the SEC Documents filed on XXXXX at least five (5) business days prior to the
date hereof, since December 31, 1998, there has been no adverse change and no
adverse development in the business, properties, operations, financial
condition, prospects, liabilities or results of operations of the Company or its
Subsidiaries which has had or, to the knowledge of the Company or its
Subsidiaries, may have a Material Adverse Effect. The Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.
(h) Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the Company's Subsidiaries' officers or directors in their capacities as such,
except as set forth in Schedule 3(h).
(i) Acknowledgment Regarding Investors' Purchase of Securities. The
Company acknowledges and agrees that each of the Investors is acting solely in
the capacity of arm's length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that
each Investor is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
Certificate of Designations and the transactions contemplated thereby, and any
advice given by any of the Investors or any of their respective representatives
or agents in connection with the Transaction Documents and the Certificate of
Designations and the transactions contemplated thereby is merely incidental to
such Investor's purchase of the Securities. The Company further represents to
each Investor that the Company's decision to enter into the Transaction
Documents has been based solely on the independent evaluation by the Company and
its representatives.
(j) No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists with respect to the Company or its Subsidiaries or their respective
business, properties, prospects, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws on a
registration statement filed with the SEC relating to an issuance and sale by
the Company of its Common Stock and which has not been publicly disclosed.
(k) No Solicitation. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has been paid or given, either
directly or indirectly, a commission or other remuneration for soliciting the
exchange of the securities.
(l) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable
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stockholder approval provisions, including, without limitation, under the rules
and regulations of The Nasdaq Stock Market, Inc., nor will the Company or any of
its Subsidiaries take any action or steps that would require registration of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.
(m) Employee Relations. Neither the Company nor any of its
Subsidiaries is involved in any material union labor dispute nor, to the
knowledge of the Company or any of its Subsidiaries, is any such dispute
threatened. Neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement. The Company and its Subsidiaries believe that
relations between the Company and its Subsidiaries and their respective
employees are good. No executive officer (as defined in Rule 501(f) of the 0000
Xxx) has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer's employment with the Company.
(n) Intellectual Property Rights. The Company and its Subsidiaries
own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. Except as set forth on Schedule 3(n), none of the
Company's trademarks, trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets or other intellectual
property rights have expired or terminated, or are expected to expire or
terminate within two (2) years from the date of this Agreement, where the result
of such expiration or termination would have, individually or in the aggregate,
a Material Adverse Effect. The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of trademarks,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service xxxx registrations, trade secret or other
similar rights of others, or of any such development of similar or identical
trade secret or technical information by others which infringement could have a
Material Adverse Effect, and, except as set forth on Schedule 3(n), there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its Subsidiaries regarding
trademarks, trade name rights, patents, patent rights, inventions, copyrights,
licenses, service names, service marks, service xxxx registrations, trade
secrets or other infringement. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties.
(o) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, where such noncompliance or
failure to receive permits, licenses or approvals referred to in clauses (i),
(ii) and (iii) above could have, individually or in the aggregate, a Material
Adverse Effect.
(p) Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them
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which is material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such as are
described in Schedule 3(p) or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company or any of its Subsidiaries. Any real property and
facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries.
(q) Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.
(r) Regulatory Permits. The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or a modification
of any such certificate, authorization or permit.
(s) Internal Accounting Controls. The Company and each of its
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 generally accepted accounting principles 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.
(t) Foreign Corrupt Practices Act. To the knowledge of the Company,
neither the Company, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of acting
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977;
or made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
(u) Tax Status. Except as set forth on Schedule 3(u), the Company
and each of its Subsidiaries has made or filed all federal and state income and
all other tax returns, reports and
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declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the Company is not
aware of any basis for any such claim.
(v) Certain Transactions. Except as set forth on Schedule 3(v) and
in the SEC Documents filed on XXXXX at least five (5) business days prior to the
date hereof and except for arm's length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from third parties and other than the
grant of stock options disclosed on Schedule 3(c), none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company or any of its Subsidiaries (other than 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 knowledge of the
Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
(w Dilutive Effect. The Company understands and acknowledges that
the number of Conversion Shares issuable upon conversion of the Preferred Shares
will increase in certain circumstances. The Company further acknowledges that
its obligation to issue Conversion Shares upon conversion of the Preferred
Shares in accordance with this Agreement and the Certificate of Designations is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.
(x Application of Takeover Protections. The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable Section 203 of the Delaware General Corporation Law, or any other
similar anti-takeover provision under applicable California law, contained in
the Company's Certificate of Incorporation, or otherwise which is or could
become applicable to the Investors as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the
Securities and the Investor's ownership of the Securities.
(y No Other Agreements. The Company has not, directly or indirectly,
made any agreements with any Investors relating to the terms or conditions of
the transactions contemplated by the Transaction Documents except as set forth
in the Transaction Documents.
(z Rights Plan. Neither the Company nor any of its Subsidiaries has
adopted a shareholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.
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(aa Stockholder Approval. At a meeting held on June 24, 1999, the
Company held a special meeting of its stockholders, at which meeting the
Company's stockholders approved the Company's issuance of all of the Common
Stock issuable upon conversion of the Series D Preferred Stock and exercise of
the warrants issued pursuant to the terms of the Securities Purchase Agreement
dated March 30, 1999 by and between the Company and the purchasers listed on the
execution pages thereof (the "WARRANTS"). The Company further represents that no
further stockholder approval is required, pursuant to Nasdaq rule or otherwise,
for the issuance of all of the Securities as described in this Agreement,
including without limitation, the issuance of the Conversion Shares upon
conversion of the Preferred Shares.
4. COVENANTS.
(a Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.
(b Blue Sky. The Company shall, on or before the Closing Date, take
such action as the Company shall reasonably determine is necessary to qualify
the Securities for, or obtain exemption for the Securities for, sale to the
Investors at the Closing pursuant to this Agreement under applicable securities
or "Blue Sky" laws of the states of the United States, and shall provide
evidence of any such action so taken to the Investors on or prior to the Closing
Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or "Blue Sky" laws
of the states of the United States following the Closing Date.
(c Reporting Status. Until the earlier of (i) the date which is one
(1) year after the date as of which the Investors (as that term is defined in
the Registration Rights Agreement) may sell all of the Conversion Shares without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto); or (ii) the date on which (A) the Investors shall have sold all the
Conversion Shares, and (B) none of the Preferred Shares is outstanding (the
"REPORTING PERIOD"); the Company (I) shall file all reports required to be filed
with the SEC pursuant to the 1934 Act, and (II) except as a result of a Major
Transaction (as defined in the Certificate of Designations) (provided that the
Company has complied with Sections 2(d)(iv) and 3(g) of the Certificate of
Designations), shall not terminate its status as an issuer required to file
reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would otherwise permit such termination.
(d Financial Information. The Company agrees to send the following
to each Investor (as that term is defined in the Registration Rights Agreement)
during the Reporting Period: (i) within two (2) business days after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any registration
statements or amendments (other than on Form S-8) filed pursuant to the 1933
Act; (ii) using the Company's reasonable best efforts, on the same day as the
release thereof, facsimile copies of all press releases issued by the Company or
any of its Subsidiaries, and (iii) copies of any notices and other information
made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.
(e Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than the greater of (I) the
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sum of (A) 200% of the number of shares of Common Stock needed to provide for
the issuance of the Conversion Shares (without regard to any limitations on
conversions) as of the Closing Date (based on the Conversion Price (as defined
in the Certificate of Designations) on the Closing Date) plus (B) 7,000,000
additional shares of Common Stock (as adjusted for stock dividends, stock
splits, stock combinations and similar transactions) and (II) 200% of the number
of shares of Common Stock needed to provide for the issuance of the Conversion
Shares (without regard to any limitations on conversions) , based on the then
current Conversion Price.
(f) No Discounted Convertible Offerings. Notwithstanding any other
provision of the Transaction Documents or the Certificate of Designations, until
March 30, 2000, the Company will not, without the consent of Investors holding
at least two-thirds (2/3) of the Preferred Shares then outstanding, offer or
sell any securities convertible into or exercisable or exchangeable for Common
Stock where the conversion, exercise and/or exchange price of such security is a
function of or varies or may vary with or as a result of (other than upon stock
splits, stock dividends and the like) (i) the market price of the underlying
security at or during some period of time prior to such conversion or (ii) the
price at which any holder of the underlying security sells that security on or
about the date of such conversion, exercise or exchange.
(g) Listing. The Company shall promptly secure the listing of all of
the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system (including
The Nasdaq SmallCap Market and the Nasdaq National Market), if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance)
and shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Registrable Securities from time to time issuable
under the terms of the Transaction Documents and the Certificate of
Designations. The Company shall use its best efforts to maintain the Common
Stock's authorization for listing on the Nasdaq National Market, AMEX or NYSE.
Neither the Company nor any of its Subsidiaries shall take any action which
would reasonably be expected to result in the delisting or suspension of the
Common Stock on the Nasdaq National Market, AMEX or NYSE (other than to switch
listings from the Nasdaq National Market to AMEX or NYSE or from AMEX to the
Nasdaq National Market or NYSE). The Company shall promptly offer to provide to
each Investor copies of any notices it receives from the Nasdaq National Market,
AMEX or NYSE regarding the continued eligibility of the Common Stock for listing
on such automated quotation system or securities exchange. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section 4(g).
(h) Expenses. Subject to Section 9(l) below, following the Closing,
the Company shall reimburse the Investors for the Investors' expenses (including
attorneys' fees and expenses) in connection with negotiating and preparing the
Transaction Documents and consummating the transactions contemplated thereby up
to an aggregate of $25,000.
(i) Transactions With Affiliates. So long as any Preferred Shares
are outstanding the Company shall not, and shall cause each of its Subsidiaries
not to, enter into, amend, modify or supplement, or permit any Subsidiary to
enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any of its or any Subsidiary's officers, directors, persons
who were officers or directors at any time during the previous two (2) years,
stockholders who beneficially own 5% or more of the Common Stock, or affiliates
or with any individual related by blood, marriage or adoption to any such
individual or with any entity in which any such entity or
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individual owns a 5% or more beneficial interest (each a "RELATED PARTY"),
except for (a) customary employment arrangements and benefit programs on
reasonable terms, (b) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable from a person other than such Related Party, or (c) any agreement,
transaction, commitment or arrangement which is approved by a majority of the
disinterested directors of the Company. For purposes hereof, any director who is
also an officer of the Company or any Subsidiary of the Company shall not be a
disinterested director with respect to any such agreement, transaction,
commitment or arrangement. "AFFILIATE" for purposes hereof means, with respect
to any person or entity, another person or entity that, directly or indirectly,
(i) has a 5% or more equity interest in that person or entity, (ii) has 5% or
more common ownership with that person or entity, (iii) controls that person or
entity, or (iv) shares common control with that person or entity. "CONTROL" or
"CONTROLS" for purposes hereof means that a person or entity has the power,
direct or indirect, to conduct or govern the policies of another person or
entity.
(j Filing of Form 8-K. On or before the second business day
following the Closing Date, the Company shall file a Form 8-K with the SEC
describing the terms of the transaction contemplated by the Transaction
Documents and consummated at the Closing, in the form required by the 1934 Act.
(k Intentionally Left Blank.
(l Right of First Refusal. Subject to the exceptions described
below, the Company and its Subsidiaries shall not contract with any party for
any (i) convertible securities (other than the Preferred Shares) that are
convertible into or exchangeable for Common Stock at a price which may vary
(including by way of periodic adjustments to a fixed conversion price) with the
market price of the Common Stock (the formulation for such variable price being
herein referred to as, the "VARIABLE PRICE"), (ii) shares of Common Stock issued
at a price which is less than 93% of the Closing Bid Price on the issuance date
of such shares, or (iii) convertible securities (other than the Preferred
Shares) that are convertible into or exchangeable for Common Stock at a price
which is less than 93% of the Closing Bid Price on the issuance date ("FUTURE
OFFERINGS") during the period (the "RIGHT OF FIRST REFUSAL Period") beginning on
the Closing Date and ending on and including the date which is 365 days after
the date the Registration Statement (as defined in the Registration Rights
Agreement) is declared effective by the SEC, unless it shall have first
delivered to each Investor or a designee appointed by such Investor written
notice (the "FUTURE OFFERING NOTICE") describing the proposed Future Offering,
including the terms and conditions thereof, and providing each Investor an
option to purchase up to its Aggregate Percentage (as defined below), as of the
date of delivery of the Future Offering Notice, of the Future Offering (the
limitations referred to in this sentence are collectively referred to as the
"CAPITAL RAISING Limitation"). For purposes of this Section 4(l), "AGGREGATE
PERCENTAGE" at any time with respect to any Investor shall mean the percentage
obtained by dividing (i) the aggregate number of Preferred Shares received by
such Investor at the Closing by (ii) the aggregate number of Preferred Shares
received by all Investors at the Closing, provided, however, that an Investor's
Aggregate Percentage will be reduced by and to the extent that such Investor
exercised its rights to participate in such Future Offering pursuant to Section
4(m) of the Securities Purchase Agreement between the Company and the holders of
the Series D Preferred Stock dated March 31, 1999. An Investor can exercise its
option to participate in a Future Offering by delivering written notice thereof
to participate to the Company within 10
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business days of receipt of a Future Offering Notice, which notice shall state
the quantity of securities being offered in the Future Offering that such
Investor will purchase, up to its Aggregate Percentage of the Future Offering,
and that number of securities it is willing to purchase in excess of its
Aggregate Percentage of the Future Offering. In the event that one or more
Investors fail to elect to purchase up to each such Investor's Aggregate
Percentage of the Future Offering, then each Investor which has indicated that
it is willing to purchase a number of securities in excess of its Aggregate
Percentage of the Future Offering shall be entitled to purchase its pro rata
portion (determined in the same manner as described in the preceding sentence)
of the securities in the Future Offering which one or more Investors have not
elected to purchase. In the event the Investors fail to elect to fully
participate in the Future Offering within the periods described in this Section
4(l), the Company shall have 45 days thereafter to sell the securities of the
Future Offering that the Investors did not elect to purchase, upon terms and
conditions (including the amount thereof), no more favorable to the purchasers
thereof than specified in the Future Offering Notice. In the event the Company
has not sold such securities of the Future Offering within such 45 day period,
the Company shall not thereafter issue or sell such securities during the Right
of First Refusal Period without first offering such securities to the Investors
in the manner provided in this Section 4(l). The Capital Raising Limitation
shall not apply to (i) a loan from a bank or institutional lender which does not
have any equity feature other than warrants exercisable at an exercise price
greater than 50% of the market price of the Common Stock at the time of such
loan and exercisable for a number of shares of Common Stock which does not
exceed the quotient of (I) 10% of the proceeds to the Company from such loan,
divided by (II) the market price of the Common Stock at the time of such loan,
(ii) any transaction involving the Company's issuances of securities (A) as
consideration in a merger or consolidation, (B) in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise
equity capital), or (C) as consideration for the acquisition of a business,
product or license or other assets by the Company, (iii) the issuance of Common
Stock in a firm commitment, underwritten public offering, (iv) the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (v) the grant of
additional options or warrants, or the issuance of additional securities, under
any contract, plan or agreement which has been approved by the board of
directors of the Company pursuant to which the Company's securities may be
issued to any employee, officer, director, consultant or other service providers
or (vi) the issuance of securities pursuant to an offering by the Company in
reliance upon Rule 144A under the 1933 Act with proceeds to the Company of at
least $75,000,000. The Investors shall not be required to participate or
exercise their right of first refusal with respect to a particular Future
Offering in order to exercise their right of first refusal with respect to later
Future Offerings.
(m Corporate Existence. So long as a Investor beneficially owns any
Preferred Shares, the Company shall maintain its corporate existence and shall
not sell all or substantially all of the Company's assets, except in the event
of a merger or consolidation or sale of all or substantially all of the
Company's assets, where the surviving or successor entity in such transaction
(i) assumes the Company's obligations hereunder and under the agreements and
instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose common stock is listed for trading on the Nasdaq National
Market, NYSE or AMEX.
(n Rule 144. The Company shall not, directly or indirectly, dispute
or otherwise interfere with any claim by a holder of Preferred Shares that such
holder's holding period of any
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Security for purposes of Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) ("RULE 144") relates back (i.e., tacks) to the holding period for
the Series D Preferred Stock. The Company acknowledges and agrees that under
Rule 144 and no-action letters issued by the SEC, such tacking is permitted.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates, registered in
the name of each Investor or its respective nominee(s), for the Conversion
Shares in such amounts as specified from time to time by each Investor to the
Company upon conversion of the Preferred Shares (the "IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS"). Prior to registration of the Conversion Shares under the 1933
Act, all such certificates shall bear the restrictive legend specified in
Section 2(d) of this Agreement. The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions and stop transfer instructions
permitted by the Irrevocable Transfer Agent Instructions or to give effect to
Section 2(c) (in the case of the Conversion Shares, prior to registration of the
Conversion Shares under the 0000 Xxx) will be given by the Company to its
transfer agent and that the Securities shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way each Investor's obligations and agreements set forth in
Section 2(d) to comply with all applicable prospectus delivery requirements, if
any, upon resale of the Securities. If an Investor provides the Company with an
opinion of counsel, in form and substance generally acceptable to the Company,
that registration of resale by such Investor of any Securities is not required
under the 1933 Act, the Company shall permit the transfer, and, in the case of
the Conversion Shares promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by such
Investor and without any restrictive legends. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Investors by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5 will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Section 5, that the Investors shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE.
The obligation of the Company hereunder to consummate the exchange
as contemplated hereby at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Investor with prior
written notice thereof:
(i Each Investor shall have executed each of this Agreement and the
Registration Rights Agreement and delivered the same to the Company.
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(ii The Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware.
(iii Each Investor shall have delivered to the Company certificates
representing that number of shares of Series D Preferred Stock being
tendered by such Investor as set forth on the Schedule of Investors.
(iv The representations and warranties of each Investor shall be
true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that
speak as of a specific date), and such Investor shall have performed,
satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or
complied with by such Investor at or prior to the Closing Date.
7. CONDITIONS TO EACH INVESTOR'S OBLIGATION TO EXCHANGE.
The obligation of each Investor hereunder to consummate the
exchange as contemplated hereby at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for each Investor's sole benefit and may be waived by
such Investor at any time in its sole discretion:
(i The Company shall have executed each of the Transaction
Documents, and delivered the same to such Investor.
(ii The Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware, and a copy thereof
certified by such Secretary of State shall have been delivered to such
Investor.
(iii The Common Stock shall be authorized for quotation on the
Nasdaq National Market or listing on AMEX or NYSE, trading in the Common
Stock issuable upon conversion of the Preferred Shares to be traded on
the Nasdaq National Market, AMEX or NYSE shall not have been suspended
by the SEC, The Nasdaq Stock Market, Inc., AMEX or NYSE and all of the
Conversion Shares issuable upon conversion of the Preferred Shares to be
exchanged at the Closing shall be listed upon the Nasdaq National
Market, AMEX or NYSE.
(iv The representations and warranties of the Company shall be true
and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed,
satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents or Certificate of Designations to
be performed, satisfied or complied with by the Company at or prior to
the Closing Date. Such Investor shall have received a certificate,
executed by the Chief Executive Officer of the Company, dated as of the
Closing Date, to the foregoing effect and as to such other matters as
may be reasonably requested by such Investor including, without
limitation, an update as of the Closing Date regarding the
representation contained in Section 3(c) above.
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(v Such Investor shall have received the opinion of Xxxxxx Godward
LLP, dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to such Investor and in substantially the form
of Exhibit C attached hereto.
(vi The Company shall have executed and delivered to such Investor
the Stock Certificates (in such denominations as such Investor shall
request) for the Preferred Shares.
(vii The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b)(ii) above and in a form
reasonably acceptable to such Investor (the "RESOLUTIONS").
(viii As of the Closing Date, the Company shall have reserved out of
its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Shares, at least that number
of shares of Common Stock required to be reserved by the Company
pursuant to Section 4(e).
(ix The Irrevocable Transfer Agent Instructions, in the form of
Exhibit D attached hereto, shall have been delivered to and acknowledged
in writing by the Company's transfer agent.
(x The Company shall have delivered to such Investor a certificate
evidencing the incorporation and good standing of the Company and each
Subsidiary in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within
ten days of the Closing Date.
(xi The Company shall have delivered to such Investor a secretary's
certificate certifying as to (A) the Resolutions, (B) certified copies
of its Certificate of Incorporation and (C) By-laws, each as in effect
at the Closing.
(xii The Company shall have delivered to such Investor a certified
copy of its Certificate of Incorporation as certified by the Secretary
of State of the State of Delaware within ten days of the Closing Date.
(xiii The Company shall have delivered to such Investor a letter
from the Company's transfer agent certifying the number of shares of
Common Stock outstanding as of a date within five (5) days of the
Closing Date.
(xiv No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which
prohibits or adversely affects any of the transactions contemplated by
this Agreement, nor shall any proceeding have been commenced which may
have the effect of prohibiting or adversely affecting any of the
transactions contemplated by this Agreement.
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(xv The Company shall have delivered to such Investor such other
documents relating to the transactions contemplated by the Transaction
Documents as such Investor or its counsel may reasonably request.
8. INDEMNIFICATION. In consideration of each Investor's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction
Documents and the Certificate of Designations, the Company shall defend,
protect, indemnify and hold harmless each Investor and each other holder of the
Securities and all of their stockholders, officers, directors, employees and
direct or indirect investors and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or the Certificate of Designations or any
other certificate, instrument or document contemplated hereby or thereby, (b)
any breach of any covenant, agreement or obligation of the Company contained in
the Transaction Documents or the Certificate of Designations or any other
certificate, instrument or document contemplated hereby or thereby, (c) any
cause of action, suit or claim brought or made against such Indemnitee (other
than a cause of action, suit or claim by another Investor) and arising out of or
resulting from (i) the execution, delivery, performance, breach by the Company
or enforcement of the Transaction Documents or the Certificate of Designations,
or any other certificate, instrument or document contemplated hereby or thereby,
(ii) any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, excluding
losses resulting solely from a decline in the market value of the Company's
securities, or (iii) the status of such Investor or holder of the Securities as
an investor in the Company. Notwithstanding the foregoing, Indemnified
Liabilities shall not include any liability of any Indemnitee arising solely out
of such Indemnitee's willful misconduct or fraudulent action(s). To the extent
that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 8 shall
be the same as those set forth in Sections 6(a) and (d) of the Registration
Rights Agreement, including, without limitation, those procedures with respect
to the settlement of claims and Company's right to assume the defense of claims.
9. GOVERNING LAW; MISCELLANEOUS.
(a Governing Law; Jurisdiction; Jury Trial. The corporate laws of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and interpreted in accordance with the laws of the State of New
York without regard to the principles of conflict of laws. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of (i) the state and
federal courts sitting in the City of New York,
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borough of Manhattan and (ii) the state and federal courts sitting in the State
of California, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(b Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Investors, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. The Warrants and
the Securities Purchase Agreement dated March 30, 1999, by and among the Company
and the Investors and certain other investors, shall remain in full force and
effect with respect to the securities and transactions contemplated thereby. The
Registration Rights Agreement dated March 30, 1999, by and among the Company and
RGC International Investors, LDC ("RGC") and certain other investors, as
amended, shall remain in full force and effect between RGC and the Company with
respect to the transactions contemplated thereby. No provision of this Agreement
may be amended other than by an instrument in writing signed by the Company and
the holders of at least two-thirds (2/3) of the Preferred Shares and the
Conversion Shares held by holders or former holders of the Preferred Shares
(determined on an as converted to Common Stock basis at the time of such
determination) then outstanding, and no provision hereof may be waived other
than by an
20
21
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Preferred Shares then outstanding. 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 or the Certificate of
Designations unless the same consideration also is offered to all of the parties
to the Transaction Documents or holders of the Preferred Shares, as the case may
be.
(f Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) upon receipt, when delivered by a
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
General Magic, Inc.
000 X. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to the Transfer Agent:
EquiServe LP
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
If to an Investor, to its address and facsimile number on the Schedule
of Investors, with copies to such Investor's representatives as set forth on the
Schedule of Investors. Each party shall provide five (5) days' prior written
notice to the other party of any change in address or facsimile
21
22
number. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, overnight or courier delivery or transmission by facsimile
in accordance with clause (i), (ii) or (iii) above, respectively.
(g Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Preferred Shares. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the holders of two-thirds (2/3) of the Preferred Shares then
outstanding, including by merger or consolidation, except pursuant to a Major
Transaction with respect to which the Company is in compliance with Sections
2(d)(iv) and 3 of the Certificate of Designations. A Investor may assign some or
all of its rights hereunder without the consent of the Company; provided,
however, that any such assignment shall not release such Investor from its
obligations hereunder unless such obligations are assumed by such assignee and
the Company has consented to such assignment and assumption. Notwithstanding
anything to the contrary contained in the Transaction Documents, each Investor
shall be entitled to pledge the Securities in connection with a bona fide margin
account.
(h No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(i Survival. Unless this Agreement is terminated under Section 9(l),
the representations and warranties of the Company and the Investors contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9,
and the indemnification provisions set forth in Section 8, shall survive the
Closing. Each Investor shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.
(j Publicity. The Company and each Investor shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Investor, to make
any press release or other public disclosure with respect to such transactions
as is required by applicable law and regulations (although each Investor shall
be consulted by the Company in connection with any such press release or other
public disclosure prior to its release and shall be provided with a copy
thereof).
(k Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l Termination. In the event that the Closing shall not have
occurred with respect to a Investor on or before three (3) business days from
the date hereof due to the Company's
22
23
or such Investor's failure to satisfy the conditions set forth in Sections 6 and
7 above (and the nonbreaching party's failure to waive such unsatisfied
condition(s)), the nonbreaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party; provided, however, that
if this Agreement is terminated pursuant to this Section 9(l), the Company shall
remain obligated to reimburse the Investors for expenses up to the amount
described in Section 4(h), provided that no Investor has failed to satisfy the
conditions set forth in Section 7.
(m Placement Agent. The Company acknowledges that it has not engaged
a placement agent in connection with the exchange. The Company shall be
responsible for the payment of any placement agent's fees or broker's
commissions relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold each Investor harmless against, any liability,
loss or expense (including, without limitation, attorneys' fees and out of
pocket expenses) arising in connection with any such claim.
(n No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(o Remedies. Each Investor and each holder of Preferred Shares or
Conversion Shares shall have all rights and remedies set forth in the
Transaction Documents and the Certificate of Designations and all rights and
remedies which such holders have been granted at any time under any other
agreement or contract relating to the subject matter hereof and all of the
rights which such holders have under any law. Any person having any rights under
any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
(p Payment Set Aside. To the extent that the Company makes a payment
or payments to the Investors hereunder or pursuant to the Certificate of
Designations or the Investors enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
* * * * * *
23
24
IN WITNESS WHEREOF, the Investors and the Company have caused this
Exchange Agreement to be duly executed as of the date first written above.
COMPANY: INVESTORS:
GENERAL MAGIC, INC. HFTP INVESTMENT LLC
By: Promethean Asset Management, L.L.C.
Its: Investment Manager
By:
------------------------------
Name:
Its: By:
-------------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Its: President
RGC INTERNATIONAL INVESTORS, LDC
By: Xxxx Xxxx Capital Management,L.P.
Its: Investment Manager
By: RGC General Partner Corp.
Its: General Partner
By:
-------------------------------------
Name: Xxxxx Xxxxx
Its: Managing Director
HALIFAX FUND, L.P.
By: The Palladin Group, L.P.
Its: Attorney-in-Fact
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
25
[PAGE 2 OF 3 OF THE EXCHANGE AGREEMENT SIGNATURE PAGES]
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management,
L.L.C.
Its: General Partner
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
PALLADIN OVERSEAS FUND
LIMITED
By: The Palladin Group L.P.
Its: Attorney-in-Fact
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
THE GLENEAGLES FUND COMPANY
By: The Palladin Group L.P
Its: Attorney-in-Fact
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
LANCER SECURITIES LTD.
By: The Palladin Group L.P
Its: Attorney-in-Fact
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
26
[PAGE 3 OF 3 OF THE EXCHANGE AGREEMENT SIGNATURE PAGES]
XXXXXX CAPITAL LTD.
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Its: Authorized Signatory
XXXXXXX CAPITAL LTD.
By:
-------------------------------------
Name: Xxxxxx Xxxxxxx
Its: Authorized Signatory
CONSECO DIRECT LIFE
By:
-------------------------------------
Name:
Its:
27
SCHEDULE OF INVESTORS
NUMBER OF
INVESTOR NAME INVESTOR ADDRESS SERIES D INVESTOR'S REPRESENTATIVES' ADDRESS
AND FACSIMILE NUMBER PREFERRED AND FACSIMILE NUMBER
SHARES
EXCHANGED
-----------------------------------------------------------------------------------------------------------------------------------
HFTP Investment LLC _Promethean Asset Management, L.L.C. 350 Xxxxxx Xxxxxx & Zavis
000 Xxxxxxxxx Xxxxxx, 00xx Floor 000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. X'Xxxxx, Xx. Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000 Facsimile: 312-902-1061
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: New York
RGC International Investors, c/o Xxxx Xxxx Capital Management, L.P. 125 Xxxx Xxxx Capital Management, L.P.
LDC 0 Xxxx Xxxxx Xxxx, Xxxxx 000 3 Bala Plaza East, Suite 200
Bala Cynwyd, Pennsylvania Bala Cynwyd, Pennsylvania
Attn: Xxxx Xxxxxxxx Attn: Xxxx Xxxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: Cayman Islands
Palladin Partners I, L.P. c/o The Palladin Group L.P. 17 The Palladin Group L.P.
000 Xxxxxxxxx Xxxxxx As Investment Advisor
Xxxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Attn: Xxxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000
Residence: New York
Halifax Fund, L.P. c/o Citco Fund Services (Cayman 285 The Palladin Group L.P.
Islands) Ltd. As Investment Advisor
Corporate Centre, Xxxx Xxx Xxxx 000 Xxxxxxxxx Xxxxxx
P.O. Box 31106 SMB Xxxxxxxxx, Xxx Xxxxxx 00000
Grand Cayman, Cayman Islands Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: Cayman Islands
The Gleneagles Fund Company c/o Citco Fund Services (Cayman 30 The Palladin Group L.P.
Islands) Ltd. As Investment Advisor
Corporate Centre, Xxxx Xxx Xxxx 000 Xxxxxxxxx Xxxxxx
P.O. Box 31106 SMB Xxxxxxxxx, Xxx Xxxxxx 00000
Grand Cayman, Cayman Islands Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: Cayman Islands
Palladin Overseas Fund Limited c/o Citco Fund Services (Cayman 10 The Palladin Group L.P.
Islands) Ltd. As Investment Advisor
Corporate Centre, Xxxx Xxx Xxxx 000 Xxxxxxxxx Xxxxxx
P.O. Box 31106 SMB Xxxxxxxxx, Xxx Xxxxxx 00000
Grand Cayman, Cayman Islands Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000 Telephone: 000-000-0000
Residence: Cayman Islands
Lancer Securities Ltd. c/o The Palladin Group L.P.
28
000 Xxxxxxxxx Xxxxxx 10 The Palladin Group L.P.
Xxxxxxxxx, Xxx Xxxxxx 00000 As Investment Advisor
Attn: Xxxxx Xxxxxxx 000 Xxxxxxxxx Xxxxxx
Facsimile: 000-000-0000 Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: 000-000-0000 Attn: Xxxxx Xxxxxxx
Facsimile: 000-000-0000
Residence: New York Telephone: 000-000-0000
Xxxxxx Capital Ltd. _Citadel Investment Group, L.L.C. 90 Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Simpler Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000
Residence: Illinois
Xxxxxxx Capital Ltd. _Citadel Investment Group, L.L.C. 60 Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Simpler Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000
Residence: Illinois
Conseco Direct Life c/o The Palladin Group L.P. 23 The Palladin Group L.P.
000 Xxxxxxxxx Xxxxxx As Investment Advisor
Xxxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Attn: Xxxxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Attn: Xxxxx Xxxxxxx
Telephone: 000-000-0000 Facsimile: 000-000-0000
Telephone: 000-000-0000
Residence: New York
29
LIST OF SCHEDULES
SCHEDULE 3(a) Subsidiaries
SCHEDULE 3(c) Capitalization
SCHEDULE 3(e) Conflicts
SCHEDULE 3(g) Material Changes
SCHEDULE 3(h) Litigation
SCHEDULE 3(n) Intellectual Property
SCHEDULE 3(p) Liens
SCHEDULE 3(u) Tax Status
SCHEDULE 3(v) Certain Transactions
LIST OF EXHIBITS
EXHIBIT A Form of Certificate of Designations, Preferences and Rights of
the Series F Preferred Stock
EXHIBIT B Form of Registration Rights Agreement
EXHIBIT C Form of Company Counsel Opinion
EXHIBIT D Form of Irrevocable Transfer Agent Instructions
