SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
SECURITIES PURCHASE AGREEMENT (this "Agreement")
is
made and entered into as of July 7, 2006, among SmartVideo Technologies, Inc.,
a
Delaware corporation, with headquarters located at 0000 Xxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxx 00000 (the "Company"),
and
the investors listed on the Schedule of Buyers attached hereto (individually,
a
"Buyer"
and
collectively, the "Buyers").
RECITALS
A. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the
Securities Act of 1933, as amended (the "1933
Act"),
and
Rule 506 of Regulation D ("Regulation
D")
as
promulgated by the United States Securities and Exchange Commission (the
"SEC")
under
the 1933 Act.
B. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) shares of the common stock, par value
$0.001 per share (the "Common
Stock"),
of the
Company at a price of $1.25 per share, in the amount set forth opposite such
Buyer's name on the Schedule of Buyers (which aggregate amount for all Buyers
shall collectively be referred to herein as the "Common
Shares"),
(ii) a
warrant to acquire shares of Common Stock at a price of $2.50 per share (the
"$2.50
Warrants"),
in
substantially the form attached hereto as Exhibit
A-l
(as
exercised, collectively, the "$2.50
Warrant Shares").
C. 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.
D. The
Common Shares, the Warrants and the Warrant Shares are sometimes hereinafter
collectively referred to as the "Securities."
NOW,
THEREFORE, the Company and each Buyer hereby agree as follows:
1.
PURCHASE
AND SALE OF COMMON SHARES AND WARRANTS.
(a)
Purchase
of Common Shares and Warrants.
Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7
herein:
(i)
The
Company shall issue and sell to each Buyer, and each Buyer severally, but not
jointly, agrees to purchase from the Company on the date hereof (the
"Closing
Date"),
the
number of Common Shares as is set forth opposite such Buyer's name in column
(3)
on the Schedule of Buyers, along with the Warrants to acquire up to that number
of $2.50 Warrant Shares as is set forth opposite such Buyer's name in column
(4)
on the Schedule of Buyers opposite such Buyer's name in column (5) on the
Schedule of Buyers (the "Closing").
The
purchase price for the Common Shares and related Warrants to be purchased by
each Buyer at the Closing shall be the amount set forth opposite such Buyer's
name in column (6) of the Schedule of Buyers (the "Closing
Purchase Price").
The
Closing shall occur on the Closing Date at the offices of the
Company.
(b)
Form
of Payment; Delivery of Certificates.
On the
Closing Date, (i) each Buyer shall pay the Purchase Price to the Company for
the
Securities to be issued and sold to such Buyer at such Closing, by wire transfer
of immediately available funds in accordance with the Company's written wire
instructions, and (ii) the Company shall deliver within ten (10) Business Days
to each Buyer (A) one or more stock certificates evidencing the number of Common
Shares such Buyer is purchasing, and (B) one or more Warrants pursuant to which
such Buyer shall have the right to acquire $2.50 Warrant Shares, in all cases
duly executed on behalf of the Company and registered in the name of such
Buyer.
2.
BUYER'S
REPRESENTATIONS AND WARRANTIES.
As
of the
date hereof, each Buyer represents and warrants to the Company with respect
to
only itself that:
(a)
No
Public Sale or Distribution.
Such
Buyer is (i) acquiring the Common Shares and the Warrants and (ii) upon exercise
of the Warrants will acquire the Warrant Shares issuable upon exercise thereof,
in the ordinary course of business for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933 Act
and
such Buyer does not have a present arrangement to effect any distribution of
the
Securities to or through any person or entity; provided,
however,
that by
making the representations herein, such Buyer does not agree to hold any of
the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act. Such Buyer is
acquiring the Securities hereunder in the ordinary course of its business.
Such
Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.
(b)
Investor
Status.
At the
time such Buyer was offered the Securities, such Buyer was, and at the Closing,
and on each date on which such Buyer exercises the Warrants such Buyer will
be a
sophisticated investor as described in Rule 506(b)(2)(ii) of Regulation D and
an
"accredited investor" as defined in Rule 501(a) of Regulation D.
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(c)
Reliance
on Exemptions. Such
Buyer 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 Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
such Buyer set forth herein in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire the
Securities.
(d)
Information.
Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities, which have been requested by such
Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other due
diligence investigations conducted by such Buyer or its advisors, if any, or
its
representatives shall modify, amend or affect such Buyer's right to rely on
the
Company's representations and warranties contained herein. Such Buyer
understands that its investment in the Securities involves a high degree of
risk
and is able to afford a complete loss of such investment. Such Buyer has sought
such accounting, legal and tax advice as it has considered necessary to make
an
informed investment decision with respect to its acquisition of the
Securities.
(e)
No
Governmental Review.
Such
Buyer 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.
-3-
(f)
Transfer
or Resale.
Such
Buyer 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 Buyer shall
have delivered to the Company an opinion of counsel, in a form reasonably
acceptable to the Company, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration, or (C) such Buyer provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended,
(or a successor rule thereto) (collectively, "Rule
144");
(ii)
any sale of the 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 (as defined in Section 3(r)) 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 the 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 or other loan secured
by
the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document, including, without limitation, this Section
2(f); provided,
that in
order to make any sale, transfer or assignment of Securities, such Buyer and
its
pledgee makes such disposition in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.
(g)
Legends.
Such
Buyer understands that the certificates or other instruments representing the
Common Shares, the Warrants and the stock certificates representing the Warrant
Shares and the Common Shares, except as set forth below, shall bear any legend
as required by the "blue sky" laws of any state and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][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 (I) IN THE ABSENCE OF
(A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR
(II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
-4-
(h)
Validity;
Enforcement.
This
Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against
such
Buyer in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
(i)
No
Conflicts.
The
execution, delivery and performance by such Buyer of this Agreement and the
Registration Rights Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Buyer or (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 agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of
any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.
(j)
Residency.
Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.
(k)
Broker-Dealer
Status.
Such
Buyer is a not a registered broker-dealer or, if such Buyer is an affiliate
of a
broker-dealer, such Buyer is acquiring the Securities hereunder in the ordinary
course of its business and such Buyer does not presently have any agreement
or
understanding, directly or indirectly, with any Person to distribute any of
the
Securities.
3.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
As
of the
date hereof, the Company represents and warrants to each of the Buyers
that:
(a)
Organization
and Qualification.
Each of
the Company and its "Subsidiaries"
(which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns capital stock or holds an equity or similar interest) 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, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby and the other Transaction Documents or by the agreements
and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). The Company has no Subsidiaries except
as set forth on Schedule
3(a).
-5-
(b)
Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Registration Rights Agreement,
the Irrevocable Transfer Agent Instructions (as defined in Section 5), the
Warrants 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. The
execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Common Shares and the
Warrants and the reservation for issuance and the issuance of the Warrant Shares
issuable upon exercise of the Warrants 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. This Agreement
and
the other Transaction Documents have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective 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 applicable
creditors' rights and remedies.
(c)
Issuance
of Securities.
The
Common Shares and the Warrants are duly authorized and, upon issuance in
accordance with the terms hereof, shall be validly issued and free from all
taxes, liens and charges with respect to the issue thereof and the Common Shares
shall be fully paid and non-assessable with the holders being entitled to all
rights accorded to a holder of Common Shares. The Company shall, so long as
any
of the Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued capital stock, solely for the
purpose of effecting the exercise of the Warrants, 100% of the number of shares
of Common Stock issuable upon the exercise of the Warrants. Upon exercise in
accordance with the Warrants, the Warrant 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 Preferred Stock. The issuance by the Company of the Securities
is
exempt from registration under the 1933 Act.
-6-
(d)
No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby
and
thereby (including, without limitation, the issuance of the Warrants and
reservation for issuance and issuance of the Warrant Shares) will not (i) result
in a violation of the Certificate of Incorporation (as defined below) or Bylaws
(as defined below) of the Company or any of its Subsidiaries or (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 over-the-counter market (the "Principal
Market"))
or
other principal market 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.
(e)
Consents.
The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by
the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. 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 Closing Date. The Company and its
Subsidiaries are unaware of any facts or circumstances that might prevent the
Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence. The Company is not in violation
of
the listing requirements of the Principal Market and has no knowledge of any
facts that would reasonably lead to delisting or suspension of the Common Stock
in the foreseeable future.
(f)
No
General Solicitation; Placement Agent's Fees.
Neither
the Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of
the
Securities. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, or brokers' commissions (other than
for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney's fees and out-of-pocket expenses) arising in connection
with any such claim. The Company has not engaged any placement agent or other
agent in connection with the sale of the Securities.
-7-
(g)
No
Integrated Offering.
None of
the Company, its Subsidiaries, any of their affiliates, and any Person acting
on
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 the Securities to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations
of
any exchange or automated quotation system on which any of the securities of
the
Company are listed or designated. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any
of
the Securities under the 1933 Act or cause the offering of the Securities to
be
integrated with other offerings.
(h)
Application
of Takeover Protections: Rights Agreement.
The
Company and its board of directors have taken all necessary action, if any,
in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the State of Delaware, including Section 203 of the Delaware
General Corporation Law, which is or could become applicable to any Buyer as
a
result of the transactions contemplated by this Agreement, including, without
limitation, the Company's issuance of the Securities and any Buyer's ownership
of the Securities.
(i)
SEC
Documents; Financial Statements.
Except
as set forth in Schedule
3(i), during
the two years prior to the date hereof, the Company has timely 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 1934 Act (all
of the foregoing filed prior to the date hereof or prior to the date of the
Closing, 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 the Buyers or their respective representatives true,
correct and complete copies of the SEC Documents not available on the XXXXX
system. 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 filing (or if amended
or
superseded by a filing prior to the date of this Agreement, then on the date
of
such filing, 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 the 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 information provided by or on behalf of the Company
to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this Agreement, 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.
-8-
(j)
Absence
of Certain Changes.
Since
December 31, 2005, there has been no material adverse change and no material
adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company
or
its Subsidiaries. Since December 31, 2005, the Company has not (i) declared
or
paid any dividends, (ii) sold any assets, individually or in the aggregate,
in
excess of $500,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of $1,000,000.
The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe
that
its creditors intend to initiate involuntary bankruptcy proceedings or any
actual knowledge of any fact which would reasonably lead a creditor to do so.
The Company is not as of the date hereof, and after giving effect to the
transactions contemplated hereby to occur at the Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(j), "Insolvent"
means
(i) the present fair saleable value of the Company's assets is less than the
amount required to pay the Company's total Indebtedness (as defined in Section
3(q)), (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature
or
(iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.
(k)
No
Undisclosed Events, Liabilities, Developments or Circumstances.
No
event, liability, development or circumstance has occurred or exists, or is
contemplated to occur, 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 on Form S-1 or SB-2 filed with
the
SEC relating to an issuance and sale by the Company of its Common Shares and
which has not been publicly disclosed.
-9-
(l)
Conduct
of Business; Regulatory Permits.
Neither
the Company nor its Subsidiaries is in violation of any term of or in default
under the Certificate of Incorporation or Bylaws or their organizational charter
or bylaws, respectively. Neither the Company nor any Subsidiary is in violation
of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or its Subsidiaries, and neither the Company nor
any
of its Subsidiaries will conduct its business in violation of any of the
foregoing, except for possible violations which would not, individually or
in
the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the Principal Market and has no knowledge of
any
facts or circumstances that would reasonably lead to delisting or suspension
of
the Common Stock by the Principal Market in the foreseeable future. Since
December 31, 2005, (i) the Common Stock has been designated for quotation or
listed on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market, and (iii) the Company has received
no communication, written or oral, from the SEC or the Principal Market
regarding the suspension or delisting of the Common Stock from the Principal
Market, or any requests for information in connection with any informal inquiry
or formal investigation or proceedings regarding the Company or its officers
and
directors and (iv) except as set forth in Schedule 3(j), the Company has not
received any comment letters from the staff of the SEC concerning any filings
made by the Company which have not been resolved to the satisfaction of the
SEC
staff. The Company and its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where
the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.
(m)
Foreign
Corrupt Practices.
Neither
the Company, nor any of its Subsidiaries, nor any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official
or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
-10-
(n)
Xxxxxxxx-Xxxxx
Act.
The
Company is in compliance with any and all applicable requirements of the
Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof, and any
and
all applicable rules and regulations promulgated by the SEC thereunder that
are
effective as of the date hereof, except where such noncompliance would not
have,
individually or in the aggregate, a Material Adverse Effect.
(o)
Transactions
With Affiliates.
Except
as set forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005, the Company's Post-Effective Amendment to its Registration
Statement on Form S-1 filed with the SEC on April 19, 2006, the Company's Form
8-K filed with the SEC on April 20, 2006, and the Company's Quarterly Report
on
Form 10-Q filed with the SEC on May 12, 2005, and the Company's Form 8-K filed
with the SEC on June 13, 2006, 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 ordinary course services as employees, officers
or directors or as an investor in this transaction), 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 such officer, director or employee or, to
the
knowledge of the Company, any corporation, partnership, trust or other entity
in
which any such officer, director, or employee has a substantial interest or
is
an officer, director, trustee or partner.
-11-
(p)
Equity
Capitalization.
As of
June 28, 2006, the authorized capital stock of the Company consists of (x)
150,000,000 shares of Common Stock, of which as of the date hereof, 39,670,618
shares are issued and outstanding and 35,460,487 shares are reserved for
issuance pursuant to the Company's employee incentive plan and other warrants,
exercisable or exchangeable for, or convertible into, shares of Common Stock,
and (y) 50,000,000 shares of Series A-1 Convertible Preferred Stock, of which
as
of the date hereof, 3,369,998 shares are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly issued and
are
fully paid and nonassessable. Except as set forth on Schedule
3(p):
(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 options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to,
or
securities or rights convertible into, or exercisable or exchangeable for,
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, or exercisable or exchangeable for,
any
shares of capital stock of the Company or any of its Subsidiaries; (iii) there
are no outstanding debt securities, notes, credit agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness (as
defined in Section 3(q)) of the Company or any of its Subsidiaries or by which
the Company or any of its Subsidiaries is or may become bound; (iv) there are
no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company; (v) 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 the 1933 Act
(except the Registration Rights Agreement); (vi) there are no outstanding
securities or instruments 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; (vii) there are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Securities; (viii) the Company does
not
have any stock appreciation rights or "phantom stock" plans or agreements or
any
similar plan or agreement; and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents (as
defined herein) but not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company's or any Subsidiary's respective
businesses and which, individually or in the aggregate, do not or would not
have
a Material Adverse Effect. The Company has furnished or made available to the
Buyer true, correct and complete 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 bylaws, as amended and as in effect on the date hereof (the
"Bylaws"),
and
the terms of all securities convertible into, or exercisable or exchangeable
for, Common Stock and the material rights of the holders thereof in respect
thereto.
-12-
(q)
Indebtedness
and Other Contracts.
Neither
the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
(as
defined below), (ii) is a party to any contract, agreement or instrument, the
violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument would result in a Material Adverse Effect,
(iii) is in violation of any term of or in default under any contract, agreement
or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of
the
Company's officers, has or is expected to have a Material Adverse Effect. No
outstanding Indebtedness is secured. For purposes of this Agreement: (x)
"Indebtedness"
of any
Person means, without duplication (A) all indebtedness for borrowed money,
(B)
all obligations issued, undertaken or assumed as the deferred purchase price
of
property or services (other than trade payables and broadcast rights payables
entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect
to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in
the
event of default are limited to repossession or sale of such property), (F)
all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment
of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) "Contingent
Obligation"
means,
as to any Person, any direct or indirect liability, contingent or otherwise,
of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; and (z) "Person"
means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(r)
Absence
of Litigation.
Except
as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry
or investigation before or by the Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, the
Securities or any of its Subsidiaries or any of the Company's or the Company's
Subsidiary's officers or directors, whether of a civil or criminal nature or
otherwise.
-13-
(s)
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, including directors'
and
officers' liability insurance with a policy limit of at least $5,000,000.
Neither the Company nor any Subsidiary has been refused any insurance coverage
sought or applied for and neither the Company nor any 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
have a Material Adverse Effect.
(t)
Employee
Relations,
(i)
Neither the Company nor any of its Subsidiaries is a party to any collective
bargaining agreement or employs any member of a union. The Company and its
Subsidiaries believe that their relations with their employees are good. No
executive officer of the Company (as defined in Rule 501 (f) of Regulation
D
promulgated under 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. No current or former executive officer of the Company, to
the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant. The continued employment
of
each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing
matters.
(ii)
The
Company and its Subsidiaries are in compliance with all federal, state, local
and foreign laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours, except where failure
to
be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
(u)
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 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
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 and any
of
its Subsidiaries. Any real property and facilities held under lease by the
Company and 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.
-14-
(v)
Intellectual
Property Rights.
Except
as set forth in Schedule
3(v),
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 other intellectual property
rights ("Intellectual
Property Rights")
necessary to conduct their respective businesses as now conducted. None of
the
Company's Intellectual Property Rights have expired or terminated, or is
expected to expire or terminate within three years from the date of this
Agreement. Except as set forth in Schedule
3(v),
the
Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others. There is no claim,
action or proceeding being made or brought, or to the knowledge of the Company,
being threatened, against the Company or any of its Subsidiaries regarding
its
Intellectual Property Rights. Except as set forth in Schedule
3(v),
the
Company is unaware of any facts or circumstances which might give rise to any
of
the foregoing infringements or claims, actions or proceedings. The Company
and
its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property
Rights.
(w)
Environmental
Laws.
The
Company and its Subsidiaries (i) are in compliance with any and all
Environmental Laws (as hereinafter defined), (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, in each
of
the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. The term "Environmental
Laws"
means
all federal, state, local or foreign laws relating to pollution or protection
of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "Hazardous
Materials")
into
the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands
or
demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.
(x)
Tax
Status.
The
Company and each of its Subsidiaries (i) 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 (ii) 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 officers of the Company know of no basis for any
such
claim.
-15-
(y)
Internal
Accounting and Disclosure 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 and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities
at
reasonable intervals and appropriate action is taken with respect to any
difference, except where the failure to satisfy any of clauses (i) through
(iv)
above, would not, individually or in the aggregate, be reasonably expected
to
result in a Material Adverse Effect. The Company maintains disclosure controls
and procedures (as such term is defined in Rule 13a-14 under the Securities
Exchange Act of 1934, as amended (the "1934
Act"))
that
are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by
the
Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company's management, including its
principal executive officer or officers and its principal financial officer
or
officers, as appropriate, to allow timely decisions regarding required
disclosure. The Company's independent public accountant has not informed the
Company, including the Company's board of directors, pursuant to Section 10A
of
the 1934 Act or otherwise, of any illegal act or fraud involving the Company,
of
any material weakness or significant deficiency in the Company's internal
control over financial reporting, or of any disagreements it has had with
management of the Company.
(z)
Off
Balance Sheet Arrangements.
There is
no transaction, arrangement, or other relationship between the Company and
an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its 1934 Act filings and is not so disclosed or
that
otherwise would be reasonably likely to have a Material Adverse
Effect.
(aa)
Manipulation
of Price.
The
Company has not, and to the actual knowledge of the directors and officers
of
the Company, no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale
of
any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed
to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
-16-
(bb)
Transfer
Taxes.
On the
Closing Date, all stock transfer or other taxes (other than income or similar
taxes) which are required to be paid in connection with the sale and transfer
of
the Securities to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes
will
be or will have been complied with.
(cc)
Disclosure.
The
Company confirms that neither it nor any other Person acting on its behalf
has
provided any of the Buyers or their respective agents or counsel with any
information that constitutes or might constitute material, nonpublic
information. The Company understands and confirms that each of the Buyers will
rely on the foregoing representations in effecting transactions in securities
of
the Company. All disclosure provided to the Buyers regarding the Company, its
business and the transactions contemplated hereby, including the Schedules
to
this Agreement, furnished by or on behalf of the Company are true and correct
and do not contain any untrue statement of a material fact or omit to state
any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No event
or circumstance has occurred or information exists with respect to the Company
or any Subsidiary or either of its or their respective business, properties,
prospects, operations or financial conditions, which, under applicable law,
rule
or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed (assuming for this purpose
that the Company's reports filed under the 1934 Act are being incorporated
into
an effective registration statement filed by the Company under the 1933 Act).
The Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
4.
COVENANTS.
(a)
Best
Efforts.
Each
party shall use its best efforts timely to satisfy each of the covenants and
the
conditions to be satisfied by it as provided in Sections 4, 5, 6 and 7 of this
Agreement.
(b)
Form
D
and Blue Sky.
The
Company agrees to file a Form D with respect to the Securities as required
under
Regulation D and to provide a copy thereof to each Buyer promptly after such
filing. The Company, on or before the Closing Date, shall take such action
as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or "Blue Sky" laws of
the
states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers 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.
-17-
(c)
Reporting
Status.
Until
the date on which the Investors (as defined in the Registration Rights
Agreement) shall have sold all the Common Shares and Warrant Shares and none
of
the Warrants is outstanding (the "Reporting
Period"),
the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company 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)
Use
of
Proceeds.
The
Company will use the proceeds from the sale of the Securities for general
corporate purposes, including general and administrative expenses, and current
accounts payable, but not for (i) the repayment of other outstanding
Indebtedness of the Company or any of its Subsidiaries in excess of $250,000
or
(ii) the payment of bonuses or other compensation in excess of $50,000, except
for salaries to officers, directors or other affiliates of the Company.
(e)
Financial
Information.
The
Company agrees to send to each Buyer during the Reporting Period, unless the
following are filed with the SEC through XXXXX and are available to the public
through the XXXXX system, within five (5) 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
(other than on Form S-8) or amendments filed pursuant to the 1933 Act, and
(ii)
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.
(f)
Listing.
The
Company shall promptly (i) 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, if any, upon which shares
of
Common Stock are then listed (subject to official notice of issuance) and (ii)
secure the listing of all of the Registrable Securities upon the NASDAQ SmallCap
Market or the NASDAQ National Market if and when the Company satisfies the
applicable listing requirements. The Company 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. The Company shall maintain the Common Stock's authorization for
listing on the Principal Market. Neither the Company nor any of its Subsidiaries
shall take any action which would be reasonably expected to result in the
delisting or suspension of the Common Stock on the Principal Market. The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(f).
-18-
(g)
Fees.
The
Company shall pay any placement agent's fees, financial advisory fees, or
broker's commissions (other than for Persons engaged by any Buyer) relating
to
or arising out of the transactions contemplated hereby. The Company shall pay,
and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney's fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as
otherwise set forth in this Agreement or in the Transaction Documents, each
party to this Agreement shall bear its own expenses in connection with the
sale
of the Securities to the Buyers.
(h)
Pledge
of Securities.
The
Company acknowledges and agrees that the Securities may be pledged by an
Investor (as defined in the Registration Rights Agreement) in connection with
a
bona fide margin agreement or other loan or financing arrangement that is
secured by the Securities. The pledge of Securities shall not be deemed to
be a
transfer, sale or assignment of the Securities hereunder, and no Investor
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document, including, without limitation,
Section 2(f) of this Agreement; provided that an Investor and its pledgee shall
be required to comply with the provisions of Section 2(f) of this Agreement
in
order to effect a sale, transfer or assignment of Securities to such pledgee.
The Company hereby agrees to execute and deliver such documentation as a pledgee
of the Securities may reasonably request in connection with a pledge of the
Securities to such pledgee by an Investor.
(i)
Corporate
Existence.
So long
as any Buyer beneficially owns any Warrants, 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, except in
compliance with the Warrant, 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 quoted on or listed for trading on the Principal Market,
the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock
Market, Inc.
(j)
Reservation
of Shares.
The
Company shall, so long as any of the Warrants are outstanding, take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, the number of shares of Common Stock issuable upon exercise of the
Warrants being issued at the Closing in conformity with Section
3(c).
5.
TRANSFER
RESTRICTIONS; TRANSFER AGENT INSTRUCTIONS.
-19-
(a)
Transfer
Restrictions.
The
legend set forth in Section 2(g) shall be removed and the Company shall issue
a
certificate without such legend or any other legend to the holder of the
applicable Securities upon which it is stamped, if (i) in connection with any
sale of such Securities made pursuant to a Registration Statement and in
accordance with the prospectus delivery requirements under the 1933 Act, (ii)
in
connection with a sale, assignment or other transfer, such holder provides
the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that such sale, assignment or transfer of such Securities may be made
without registration under the applicable requirements of the 1933 Act and
the
legend may be removed from such certificate in connection with such sale,
assignment or other transfer, or (iii) such holder provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144(k). The Company shall cause its legal counsel to issue
the
legal opinion included in the Irrevocable Transfer Agent Instructions to the
Company's transfer agent on the Effective Date. Following the Effective Date
or
at such earlier time as a legend is no longer required for any or all of the
Securities, the Company will no later than three Business Days following the
delivery by a Buyer to the Company or the Company's transfer agent of a legended
certificate representing such Securities, deliver or cause to be delivered
to
such Buyer a certificate representing such Securities that is free from all
restrictive and other legends. Following the Effective Date and upon the
delivery to any Buyer of any certificate representing Securities that is free
from all restrictive and other legends, such Buyer agrees that any sale of
such
Securities shall be made pursuant to a Registration Statement and in accordance
with the plan of distribution described therein or pursuant to an available
exemption from the registration requirements of the 0000 Xxx. The Company may
not make any notation on its records or give instructions to any transfer agent
of the Company that enlarge the restrictions on transfer set forth in Section
2(g). In order for the Buyers to effect sales under a Registration Statement
in
accordance with the legal opinion included in the Irrevocable Transfer Agent
Instructions, the Company agrees to give notice, at any time and from time
to
time upon written request of any Buyer, to the Company's transfer agent that
(a)
the Company has filed all required reports under the 1934 Act, (b) there is
no
stop order suspending the effectiveness of the Registration Statement, and
(c)
there has been no event that would cause the Registration Statement to include
any untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
The notice in the foregoing sentence shall be given by the Company on the same
business day as the request is made if the request is made at or prior to 11:00
A.M., EST, on any business day, and within one business day if the request
is
made after 11:00 A.M., EST.
(b)
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
Buyer or its respective nominee(s), for the Warrant Shares in such amounts
as
specified from time to time by each Buyer to the Company upon exercise of the
Warrants in the form of Exhibit
C
attached
hereto (the "Irrevocable
Transfer Agent Instructions").
The
Company represents and warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, and stop transfer
instructions to give effect to Section 2(f) hereof, will be given by the Company
to its transfer agent with respect to the Securities, 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 other Transaction
Documents.
-20-
(c)
Breach.
The
Company acknowledges that a breach by it of its obligations hereunder will
cause
irreparable harm to a Buyer. 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 a Buyer shall be entitled,
in
addition to all other available remedies, to an order and/or 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.
(d)
Additional
Relief.
If the
Company shall fail for any reason or for no reason to issue to such holder
unlegended certificates within three (3) Business Days of receipt of documents
necessary for the removal of the legend set forth above (the "Deadline
Date"),
then,
in addition to all other remedies available to the holder, if on or after the
Business Day immediately following such three (3) Business Day period, the
holder purchases (in an open market transaction or otherwise) Securities to
deliver in satisfaction of a sale by the holder of Securities that the holder
anticipated receiving from the Company (a "Buy-In"),
then
the Company shall, within five (5) Business Days after the holder's request
and
in the holder's discretion, either (i) pay cash to the holder in an amount
equal
to the holder's total purchase price (including brokerage commissions, if any)
for the Securities so purchased (the "Buy-In
Price"),
at
which point the Company's obligation to deliver such certificate (and to issue
such Securities) shall terminate, or (ii) if applicable, promptly honor its
obligation to deliver to the holder a certificate or certificates representing
such Securities and pay cash to the holder in an amount equal to the excess
(if
any) of the Buy-In Price over the product of (A) such number of Securities,
times (B) the Closing Bid Price (as defined in the Warrants) on the Deadline
Date.
6.
CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell Securities to each Buyer
at any Closing is subject to the satisfaction, at or before the corresponding
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 Buyer with prior written
notice thereof:
(a)
Such
Buyer shall have executed each of the Transaction Documents to which it is
a
party and delivered the same to the Company.
-21-
(b)
Such
Buyer shall have delivered to the Company the Purchase Price for the Securities
being purchased by such Buyer and each other Buyer at such Closing by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Company.
(c)
The
representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of such Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date), and such Buyer shall have performed, satisfied and complied
in
all material respects with the covenants, agreements and conditions required
by
this Agreement to be performed, satisfied or complied with by such Buyer at
or
prior to such Closing Date.
(d)
At
any time that the Buyer or any other Person shall have a beneficial ownership
interest (within the meaning of Rule 13d-3 under the 1934 Act), or a direct
or
indirect pecuniary interest (within the meaning of Rule 16a-l(a)(2) under the
0000 Xxx) in the Securities, the Buyer and each such Person shall not, directly
or indirectly, make any short sale or maintain any short position, establish
or
maintain a "put equivalent position" (within the meaning of Rule 16a-l(h) under
the 1934 Act), enter into any swap, derivative transaction or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock (whether any such transaction is to be settled
by delivery of Common Stock, other securities, cash or other consideration)
or
any securities convertible into, exercisable for or exchangeable for Common
Stock of the Company.
7.
CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE.
The
obligation of each Buyer hereunder to purchase Securities at any Closing is
subject to the satisfaction, at or before the corresponding Closing Date, of
each of the following conditions, provided that these conditions are for each
Buyer's sole benefit and may be waived by such Buyer at any time in its sole
discretion by providing the Company with prior written notice
thereof:
(a)
The
Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents and (ii) the Securities being purchased by such Buyer
at
such Closing pursuant to this Agreement.
(b)
The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit C attached hereto, which instructions
shall have been delivered to and acknowledged in writing by the Company's
transfer agent.
(c)
The
Common Stock (i) shall be listed on the Principal Market and (ii) shall not
have
been suspended, as of such Closing Date, by the SEC or the Principal Market
from
trading on the Principal Market nor shall suspension by the SEC or the Principal
Market have been threatened, as of such Closing Date, either (A) in writing
by
the SEC or the Principal Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Market.
-22-
(d)
The
representations and warranties of the Company shall be true and correct as
of
the date when made and as of such 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 in all respects with
the covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to such
Closing Date.
(e)
The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.
(f)
The
Company shall have delivered to such Buyer such other documents relating to
the
transactions contemplated by this Agreement as such Buyer or its counsel may
reasonably request.
8.
TERMINATION.
In
the
event that the Closing shall not have occurred with respect to a Buyer on or
before ten (10) days from the date hereof due to the Company's or such Buyer'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.
9.
MISCELLANEOUS.
(a)
Definitions.
The
following definitions shall for all purposes, unless otherwise clearly indicated
to the contrary, apply to terms used in this Agreement.
"Business
Day"
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York are authorized or required by law to remain
closed.
"Person"
means an
individual, a limited liability company, a limited liability partnership, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
-23-
(b)
Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than
the
State of Delaware. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Xxxxxx County, Georgia,
or any federal court sitting in the Northern District of Georgia, Atlanta
Division 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 WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(c)
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.
(d)
Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(e)
Pronouns.
As used
herein, all pronouns shall include the masculine, feminine, neuter, singular
and
plural whenever the context and facts require such construction.
(f)
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.
-24-
(g)
Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements between the
Buyers, 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 Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. 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 sixty percent of the aggregate amount
of
the Common Shares. No provision hereof may be waived other than by an 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 unless the same consideration
also is offered to all of the parties to the Transaction Documents, holders
of
Preferred Shares or holders of the Warrants, as the case may be. The Company
has
not, directly or indirectly, made any agreements with any Buyers relating to
the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.
(h)
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) one Business Day after deposit with an overnight courier 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:
SmartVideo
Technologies, Inc.
0000
Xxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxx
-25-
with
a copy to:
Xxxxxxx
Xxxxxx Xxxxxx & Dodge LLP
000
Xxxx
Xxx Xxxx Xxxxxxxxx
Xxxxx
0000
Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx, P.A.
If
to the Transfer Agent:
Continental
Stock Transfer and Trust Company
00
Xxxxxxx Xxxxx Xxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to a
Buyer, to his address and facsimile number set forth on the Schedule of Buyers,
with copies to Xxxxxxx Xxxxxx Xxxxxx & Dodge, 000 Xxx Xxxx, Xxxxxxxxx, Xxxxx
0000, Xx. Xxxxxxxxxx, XX 00000, telephone (000) 000-0000, facsimile (000)
000-0000, Attention: Xxxxxx X. Xxxxxxx, P.A., or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. 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 the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(i)
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 Common
Shares or the Warrants. The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the holders
of at least seventy-five percent of the aggregate amount of the Preferred Shares
and shares of Common Stock into which the Preferred Shares are converted,
including by merger or consolidation. A Buyer may assign some or all of its
rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.
-26-
(j)
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.
(k)
Survival.
Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyers contained in Sections 2 and 3, the agreements
and
covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
delivery and exercise of Securities, as applicable. Each Buyer shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.
(1)
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 any 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.
(m)
Indemnification.
In
consideration of each Buyer'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, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder
of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons' 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 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
any other certificate, instrument or document contemplated hereby or thereby
or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought
on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents 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, or (iii) the
status of such Buyer or holder of the Securities as an investor in the Company
(except, in the case of this clause (iii), arising from a Person who is,
directly or indirectly, an investor, partner, or equityholder in the Buyer
in
such Person's capacity as such an investor, partner or equityholder, or arising
in relation to the Buyer's capacity to make such an investment in the Company).
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 9(m)
shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.
-27-
(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
Buyer and each holder of the Securities shall have all rights and remedies
set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract
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. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all
of
its obligations under the Transaction Documents, any remedy at law may prove
to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any
such
case without the necessity of proving actual damages and without posting a
bond
or other security.
(p)
Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting
any
similar provisions of) the Transaction Documents, whenever any Buyer exercises
a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Buyer may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any relevant notice, demand
or
election in whole or in part without prejudice to its future actions and
rights.
-28-
(q)
Payment
Set Aside.
To the
extent that the Company makes a payment or payments to the Buyers hereunder
or
pursuant to any of the other Transaction Documents or the Buyers 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.
(r)
Independent
Nature of Buyers' Obligations and Rights.
The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under
any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall
be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers
are
in any way acting in concert or as a group with respect to such obligations
or
the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect
and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not
be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose. No Buyer of the Securities or third party has
acted
as agent for any Buyer in connection with the Purchaser making its investment
hereunder, and no Buyer or any other third party will be acting as agent of
any
Buyer in connection with monitoring its investment in the Securities or in
enforcing its rights under this Agreement.
[Signature
Page Follows]
-29-
IN
WITNESS WHEREOF, each Buyer and the Company have caused its respective signature
page to this Securities Purchase Agreement to be duly executed as of the date
first written above.
| COMPANY: | |
| SMARTVIDEO TECHNOLOGIES, INC. | |
| By: /s/ Xxxxxxx X. Xxxxxxxx | |
| Name: Xxxxxxx X. Xxxxxxxx | |
| Title: Vice President of Finance |
-30-
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first
written
above.
|
Xxxx
X. Xxxx as Trustee Under Trust Agreement UAD 3/15/76 For the
Benefit of
Xxxx X. Xxxx
/s/
Xxxx X. Xxxx, as Trustee
Name:
Xxxx X. Xxxx
|
/s/
Xxxxx X. Xxxxxxx
Xxxxx
X. Xxxxxxx
|
Global
Triangle Employees Retirement Trust
/s/
Xxxx Xxxxxxx
Name:
Xxxx Xxxxxxx
|
/s/
Xxxx X.Xxxxxx
Xxxx
X. Xxxxxx
|
|||
|
Xxxxxx
X. Xxxxxxx Revocable Trust u/a/d 9/14/88
/s/
Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
|
Apler
Investment Partnership
/s/
Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
|
/s/
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
|
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
|
|||
|
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
|
Xxxxxx
Investments, LLC
/s/
Xxx Xxxxxx
Name:
Xxx Xxxxxx
|
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx
|
/s/
Xxxxx X. Xxxxxxx
Xxxxx
X. Xxxxxxx
|
|||
|
/s/
Xxxxxx Xxxx
Xxxxxx
Xxxx
|
/s/
Xxxxxx Birdman
Xxxxxx
Birdman
|
/s/
Xxxxxxx X. Xxxx, D.D.S
Xxxxxxx
X. Xxxx, D.D.S..
|
/s/
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
|
|||
|
Vulcan
Properties, Inc.
/s/
Xxxxxx X. Xxxxx
Xxxxxx
X. Xxxxx
|
Xxxxxx
Xxxxx & Soryl Xxxxx, XX TEN
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
|
/s/
Art Criden
Art
Criden
|
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx
|
|||
|
/s/
Xxxxx Xxxx
Xxxxx
Xxxx
|
SME
Children LLP
/s/
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
|
/s/
Xxxx Xxxxx
Xxxx
Xxxxx
|
Qualified
Compensation Trust
/s/
Xxxxxxxx Xxxxxxx, M.D.
Name:
Xxxxxxxx Xxxxxxx, M.D.
|
|||
|
/s/
Xxxxxxxx X. Xxxx
Xxxxxxxx
X. Xxxx
|
Xxxxxxxx
Management Company, LLC
/s/
Xxxxx Xxxxxxx
Name:
Xxxxx Xxxxxxx, Attorney In Fact
|
Wachovia
Bank For the Benefit ofAlan Xxxxxxx XXX Acct: 39938330
By:
/s/
Xxxx Xxxxxxx
Name:
Xxxx Xxxxxxx
|
/s/
Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx
|
|||
|
/s/
Xxxx Xxxxxx
Xxxx
Xxxxxx
|
/s/
Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
|
Xxxx
Xxxxxxxx & Xxx Xxxx
/s/
Xxxx Xxxxxxxx
Xxxx
Xxxxxxxx
/s/
Xxx Xxxx
Xxx
Xxxx
|
/s/
Xxxx Xxxxxxxxx
Xxxx
Xxxxxxxxx
|
|||
|
/s/
Xxxx Xxxx
Xxxx
Xxxx
|
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx
|
Xxxx
Consulting LLC
/s/
Xxxx Xxxx
Name:
Xxxx Xxxx
|
/s/
Xxx Xxxxxxx
Xxx
Xxxxxxx
|
|||
|
SGL
Investments Limited Partnership 1
/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
|
Xxxx
X. Xxxxx, Trustee
/s/
Xxxx X. Xxxxx, Trustee
Xxxx
X. Xxxxx, Trustee
|
/s/
Xxxxxx Xxxx
Xxxxxx
Xxxx
|
/s/
Xxxxxxx Xxxx
Xxxxxxx
Xxxx
|
|||
|
/s/
Xxxxxxx
Xxxxxxxx
Xxxxxxx
Xxxxxxxx
|
/s/
Xxxxx Xxxx
Xxxxx
Xxxx
|
Xxxxxxx
Xxxx Revocable Living Trust u/a Dated 9/15/97
/s/
Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx, Trustee
|
Quantuck
Advisors, LLC
/s/
Xxxx XxXxxxxxx
Xxxx
XxXxxxxxx
|
|||
|
MOKO
Investments, LLC
/s/
Xxxxxx X. Xxxxxx, Mgr.
Name:
Xxxxxx X. Xxxxxx, Mgr.
|
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
|
TOP,
Inc.
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
|
/s/
Xxxxx Xxxx
Xxxxx
Xxxx
|
|||
|
Xxxxx
X. Xxxxxx Revocable Trust
/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
|
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
|
/s/
Xxxxxxx Xxxxx
Xxxxxxx
Xxxxx
|
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
|
|||
|
/s/
Xxxxxxx X. Xxxxxxxx, III
Xxxxxxx
X. Xxxxxxxx, III
|
/s/
Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx
|
Xxxxxx
Companies
/s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
|
Xxxxx
Xxxxxxx and Xxxxx Xxxxxxx, Joint Tennants
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
|
|||
|
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx
|
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx
|
/s/
Xxxxxx Xxxx
Xxxxxx
Xxxx
|
/s/
Xxxxx Xxxxxxxxxxx
Xxxxx
Xxxxxxxxxxx
|
|||
|
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
|
/s/
Xxx Xxxxxxx
Xxx
Xxxxxxx
|
GHS
Holdings Limited Partnership
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx
|
/s/
Xxxxx X. Xxxxxxxxxx
Xxxxx
X. Xxxxxxxxxx
|
|||
|
/s/
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx
X. Xxxxxxx, Xx.
|
/s/
J. Xxxxxxx Xxxx
J.
Xxxxxxx Xxxx
|
/s/
Xxxxx X. Xxxx
Xxxxx
X. Xxxx
|
/s/
Xxxxxxx X. Xxxx
Xxxxxxx
X. Xxxx
|
|||
|
/s/
Sushayla Ure
Sushayla
Ure
|
Bayview
Partners
/s/
Xxxxxxx X. Xxx Xxxx, XX
Name:
Xxxxxxx X. Xxx Xxxx, XX
|
Fremernat,
Inc.
/s/
Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
|
/s/
Xxxx Xxxxxx
Xxxx
Xxxxxx
|
|||
|
/s/
Xxxx Xxxxxx
Xxxx
Xxxxxx
|
/s/
Xxxxxxxx X. Xxxxxxxx
Xxxxxxxx
X. Xxxxxxxx
|
[Signature
Page to Securities Purchase Agreement]
-31-
SCHEDULE
OF BUYERS
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxx
X. Xxxx as Trustee Under
Trust Agreement UAD 3/15/76 For the Benefit of Xxxx X.
Xxxx
|
0000
XX 00xx Xxxxxx
Xxxxx
000
Xx.
Xxxxxxxxxx, XX 00000
(954)
491-9217
|
480,000
|
480,000
|
$600,000
|
|
Xxxxx
X. Xxxxxxx
|
0000
Xxxxxxxx Xxxxx
Xxxxxx,
XX 00000
(954)
358-6293
|
20,000
|
20,000
|
$25,000
|
|
Global
Triangle Employees Retirement Trust
|
000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
(619)
491-9383
|
120,000
|
120,000
|
$150,000
|
|
Xxxx
X. Xxxxxx
|
0000
Xxxx Xxxx Xxxx
Xxxx
Xxxxx, XX 00000
(561)
394-9485
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
X. Xxxxxxx Revocable Trust u/a/d 9/14/88
|
0000
Xxxxx Xxxxxxx Xxxxxxx
Xx.
Xxxxxxxxxx, XX 00000
(954)
565-1311
|
160,000
|
160,000
|
$200,000
|
|
Apler
Investment Partnership
|
000
Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx
000
Xxxxx
Xxxxxx, XX 00000
(305)
443-5171
|
120,000
|
120,000
|
$150,000
|
-32-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxxx
Xxxxxx
|
000
Xxxxxx Xxxxxxx Xxxx
0xx
Xxxxx
Xxxxx
Xxxxx, XX 00000
(305)
538-0670
|
120,000
|
120,000
|
$150,000
|
|
Xxxx
Xxxxxxx
|
00000
Xxxx 000
Xx.
Xxxx, XX 00000
(407)
333-8187
|
104,000
|
104,000
|
$130,000
|
|
Xxxx
Xxxxxxx
|
0000
Xxxxxxxx Xxxxxx
Xxxxx
0000
Xxxxx,
XX 00000
(305)
375-8183
|
200,000
|
200,000
|
$250,000
|
|
Xxxxxx
Investments, LLC
|
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxxx
000
Xxxxxx
Xxxxxx, XX 00000
(954)
563- 8052
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
Xxxxxxx
|
0000
Xxxxxxx Xxxx
Xxxxx
Xxxxx, XX 00000
|
80,000
|
80,000
|
$100,000
|
|
Xxxxx
X. Xxxxxxx
|
0000
Xxxxx Xxxxxxxx Xxx
Xxxxxxx
Xxxxx, XX 00000
(305)
648-0679
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
Xxxx
|
000
Xxx Xxxxxx
Xxxxxxxx,
XX 00000
(312)
782-4339
|
40,000
|
40,000
|
$50,000
|
-33-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxxx
Birdman
|
000
Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx,
XX 00000
(954)
239-4718
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxxx
X. Xxxx, D.D.S.
|
000
Xxxxxx Xxxxxxx Xxxx
Xxxxx
Xxxxx, XX 00000
(305)
538-2019
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
Xxxxxx
|
000
XX 00xx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
(954)
537-2772
|
80,000
|
80,000
|
$100,000
|
|
Vulcan
Properties, Inc.
|
0000
Xxxxxx xx xxx Xxxxxxxx
Xxxxx
0000
Xxx
Xxxx, XX 00000
(212)
632-4810
|
160,000
|
160,000
|
$200,000
|
|
Xxxxxx
Xxxxx & Soryl Xxxxx, XX TEN
|
0000
Xxxxx Xxxx Xxx
Xxxxxx,
XX 00000
(954)
217-2096
|
25,000
|
25,000
|
$31,250
|
|
Art
Criden
|
0000
Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
(770)
640-3931
|
80,000
|
80,000
|
$100,000
|
|
Xxxxx
Xxxxxx
|
000
Xxxxxx Xxxxxx
Xxxxx
Xxxxxx, XX 00000
(305)
666-0112
|
60,000
|
60,000
|
$75,000
|
-34-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxx
Xxxx
|
000
0xx Xxxxxx Xxxx
Xxxxxx
Xxxxx, XX 00000
(727)
456-3122
|
40,000
|
40,000
|
$50,000
|
|
SME
Children LLP
|
0000
Xxx Xxxxx Xxxxx Xxxx
Xxxxx,
XX 00000
(727)
347-4527
|
160,000
|
160,000
|
$200,000
|
|
Xxxx
Xxxxx
|
00000
XX 00xx Xxxxxx
Xxxxxxxxxx,
XX 00000
(800)
495-4049
|
80,000
|
80,000
|
$100,000
|
|
Qualified
Compensation Trust
|
0000
Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx
Xxxxxx, XX 00000
(305)
667-2115
|
40,000
|
40,000
|
$50,000
|
|
Xxxxxxxx
X. Xxxx
|
0000
Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
(305)
567-0682
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxxxx
Management Company, LLC
|
000
Xxxx 00xx Xxxxxx
Xxxxx
0000
Xxx
Xxxx, XX 00000
(212)
629-3985
|
100,000
|
100,000
|
$125,000
|
|
Wachovia
Bank For the Benefit of Xxxx Xxxxxxx XXX Acct: 39938330
|
0000
Xxxxxxxxxx Xxxxx
Xxxx
Xxxxx, XX 00000
(561)
477-9699
|
80,000
|
80,000
|
$100,000
|
-35-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxxxx
Xxxxxxx
|
0000
Xxxxxxxxxxx Xxxx
Xxxxx
Xxxxxx, XX 00000
(305)
357-9050
|
80,000
|
80,000
|
$100,000
|
|
Xxxx
Xxxxxx
|
0000
Xxxxxxx Xxxxx
Xxxxxx,
XX 00000
(970)
925-2966
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxxx
X. Xxxxxxx
|
0000
Xxxxxxxx Xxxxx
Xxxxxx,
XX 00000
(954)
358-6293
|
60,000
|
60,000
|
$75,000
|
|
Xxxx
Xxxxxxxx &Jan Xxxx
|
00000
Xxxxxxxxxxxx Xxx
Xxxxx,
XX 00000
(305)
935-0238
|
32,000
|
32,000
|
$40,000
|
|
Xxxx
Xxxxxxxxx
|
00
Xxxx Xxx Xxxxxx Xxxxx
Xxxxx
Xxxxx, XX 00000
(305)
534-9829
|
100,000
|
100,000
|
$125,000
|
|
Xxxx
Xxxx
|
000
Xxxxxxx Xxxxx
Xxxx
Xxxx, XX 00000
(215)
925-7899
|
320,000
|
320,000
|
$400,000
|
|
Xxxxxx
Xxxxxxx
|
0000
Xxxxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxxxx,
Xxxxxx X0X 0X0
(000)
000-0000
|
75,000
|
75,000
|
$93,750
|
-36-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxx
Consulting LLC
|
0000
Xxxxxxx Xxxx Xxxxxxx
Xxxxxx
Xxxxx, XX 00000
(970)
925-1841
|
312,000
|
312,000
|
$390,000
|
|
Xxx
Xxxxxxx
|
0000
Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
(305)
935-2428
|
40,000
|
40,000
|
$50,000
|
|
SGL
Investments Limited Partnership 1
|
000
Xxxxxxxx Xxxxxxx
Xxxxx
000
Xx.
Xxxxxxxxxx, XX 00000
(727)
456-2021
|
160,000
|
160,000
|
$200,000
|
|
Xxxx
X. Xxxxx, Trustee
|
0000
Xxxx Xxxxxxx Xxxxx Xxxx
Xx.
Xxxxxxxxxx, XX 00000
(954)
940-5040
|
200,000
|
200,000
|
$250,000
|
|
Baruch
(Xxxxx)Xxxx
|
0000
Xxxxxxxxx Xxxx Xxxxx
Xxxxxx,
XX 00000
(954)
385-6765
|
100,000
|
100,000
|
$125,000
|
|
Xxxxxxx
Xxxx
|
000
Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000
(954)
457-2599
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxxx
Xxxxxxxx
|
0000
Xxxxxxxx Xxxxx
Xxxxxxxxxxxxx,
XX 00000
(770)
279-3143
|
40,000
|
40,000
|
$50,000
|
-37-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxx
Xxxx
|
0000
XX 000 Xxxxxx
Xxxxx,
XX 00000
(305)
357-9050
|
40,000
|
40,000
|
$50,000
|
|
Xxxxxxx
Xxxx Revocable Living Trust u/a Dated 9/15/97
|
0000
Xxxxx Xxxx
Xxxxxx,
XX 00000
(954)
384-6288
|
100,000
|
100,000
|
$125,000
|
|
Quantuck
Advisors, LLC
|
000
Xxxx Xxxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
XX 00000
(312)
261-5271
|
80,000
|
80,000
|
$100,000
|
|
MOKO
Investments, LLC
|
0000
Xxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
(561)
750-4069
|
80,000
|
80,000
|
$100,000
|
|
Xxxxx
Xxxxxxx
|
00000
Xxxx Xxxxxxx Xxxx Xxxxx
XX-0
Xxxxxxxx,
XX 00000
(870)
972-6906
|
240,000
|
240,000
|
$300,000
|
|
TOP,
Inc.
|
00000
Xxxxxxx Xxxxxx # 0000
Xxxxx
Xxxxx Xxxxx, XX 00000
(305)
940-7288
|
40,000
|
40,000
|
$50,000
|
|
Xxxxx
Xxxx
|
00
Xxxxxxx Xxxxx
Xxx
Xxxx, XX 00000
(215)
322-6191
|
12,000
|
12,000
|
$15,000
|
-38-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxx
X. Xxxxxx Revocable Trust
|
0000
Xxxx Xxxxxx
Xxxxxxx
Xxxxx, XX 00000
(305)
476-0684
|
20,000
|
20,000
|
$25,000
|
|
Xxxxx
Xxxxx
|
0000
Xxx Xxxxxx Xxxxx
Xxxxxxxx
Xxxxxxx, XX 00000
(970)
922-0700
|
40,000
|
40,000
|
$50,000
|
|
Xxxxxxx
Xxxxx
|
0000
Xxxxxxxxx Xxx
Xxxx
Xxxxx, XX 00000
(970)
922-0700
|
120,000
|
120,000
|
$150,000
|
|
Xxxxx
X. Xxxxxxxx
|
000
Xxxxxxxxx Xxxxx Xxx
Xxxxxx
Xxxxx, XX 00000
(561)
330-7001
|
40,000
|
40,000
|
$50,000
|
|
Xxxxxxx
X. Xxxxxxxx, III
|
000
Xxxxxxxxx Xxxxx Xxx
Xxxxxx
Xxxxx, XX 00000
(561)
330-7001
|
120,000
|
120,000
|
$150,000
|
|
Xxxxxxx
Xxxxxxx
|
0000
Xxxx Xxxx Xxxx
Xxxx
Xxxxx, XX 00000
(561)
394-9485
|
20,000
|
20,000
|
$25,000
|
|
Xxxxxx
Companies
|
0000
Xxxxxxxxxx Xxxx
Xxxxx
000
Xxxxxx,
XX 00000
(703)
848-2143
|
80,000
|
80,000
|
$100,000
|
-39-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Xxxxx
Xxxxxxx And Xxxxx Xxxxxxx, Joint Tenants
|
0000
Xxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
(954)
385-4701
|
40,000
|
40,000
|
$50,000
|
|
Xxxxxx
Xxxxxxx
|
00
Xxxx Xxxx Xxxx
Xxxxxxxx
Xxxxxxx, XX 00000
(970)
923-6277
|
40,000
|
40,000
|
$50,000
|
|
Xxxxx
Xxxxxx
|
000
Xxxxx Xxxxxx
Xxxxx
Xxxxx, XX 00000
(305)
674-0619
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
Xxxx
|
2222
Avenue of the Stars, #0000 X
Xxx
Xxxxxxx, XX 00000
(310)
581-1611
|
40,000
|
40,000
|
$50,000
|
|
Xxxxx
Xxxxxxxxxxx
|
000
Xxxxx Xxxxxxxxx
Xxxxx
Xxxxx, XX 00000
(954)
523-4803
|
160,000
|
160,000
|
$200,000
|
|
Xxxxx
Xxxxxxx
|
0000
Xxxxxxx Xxxxxx
Xx.
Xxxxxxxxxx, XX 00000
(727)
343-4272
|
80,000
|
80,000
|
$100,000
|
|
Xxx
Xxxxxxx
|
00000
X.X. 00xx Xxxxx
Xxxxxxxxx,
XX 00000
(305)
789-3395
|
40,000
|
40,000
|
$50,000
|
-40-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
GHS
Holdings Limited Partnership
|
000
Xxxxx Xxxxxx Xxxxx
Xxxxxx
Xxxxx, XX 00000
(305)
692-7700
|
160,000
|
160,000
|
$200,000
|
|
Xxxxx
X. Xxxxxxxxxx
|
0000
Xxxxxxx Xxxxx
Xx.
Xxxxxxxxxx, XX 00000
(954)
333-4005
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxx
X. Xxxxxxx, Xx.
|
000
Xxxxxx Xxxx
Xxxxxxxx,
XX 00000
(312)
245-5033
|
80,000
|
80,000
|
$100,000
|
|
J.
Xxxxxxx Xxxx
|
0000
Xxxxx Xxxxx Xxxxx
Xxxxxxxxx,
XX 00000
(305)
891-6750
|
80,000
|
80,000
|
$100,000
|
|
Xxxxx
X. Xxxx
|
00000
Xxxxxxxx Xxx Xxxxx
Xxxxx
Xxxxx, XX 00000
(305)
891-6750
|
160,000
|
160,000
|
$200,000
|
|
Xxxxxxx
X. Xxxx
|
0000
Xxxxxxxxx 000xx Xxxxxx
Xxxxx
Xxxxx, XX 00000
(305)
891-6750
|
120,000
|
120,000
|
$150,000
|
|
Sushayla
Ure
|
000
Xxxxxxxx Xxx
Xxxxxx,
XX 00000
|
20,000
|
20,000
|
$25,000
|
|
Bayview
Partners
|
0000
Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
(713)
289-6290
|
120,000
|
120,000
|
$150,000
|
-41-
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
Buyer
|
Address
and
Facsimile
Number
|
Number
of
Common
Shares
|
Number
of $1.25
Warrant Shares
|
Purchase
Price
$
|
|
Fremernat,
Inc.
|
#0
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
(305)
292-8988
|
160,000
|
160,000
|
$200,000
|
|
Xxxx
Xxxxxx
|
000
Xxxxxx Xxxx Xxxxx
Xxxxx
000X
Xxxxxxxxxx,
XX 00000
(954)
458-2872
|
80,000
|
80,000
|
$100,000
|
|
Xxxx
Xxxxxx
|
00000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
(954)
472-7885
|
80,000
|
80,000
|
$100,000
|
|
Xxxxxxxx
X. Xxxxxxxx
|
000
Xxxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
(870)
974-506
|
40,000
|
40,000
|
$50,000
|
-42-
EXHIBITS
| Exhibit A |
Form
of Warrants
|
| Exhibit B |
Form
of Registration Rights Agreement
|
| Exhibit C |
Form
of Irrevocable Transfer Agent Instructions
|
-43-
Schedule
3(a)
Subsidiaries
OVT,
Inc., a Georgia corporation
Ownership:
100%
-44-
Schedule
3(i)
SEC
Documents; Financial Statements
As
of the
date hereof, the Company has timely filed all SEC Reports, schedules, forms,
statements and other documents required to be filed by it under the Securities
Act and the Exchange Act in the last two years other than: (i) Annual Report
on
Form 10-KSB for the Year Ended December 31, 2004, which was filed on April
29,
2005; (ii) Current Report on From 8-K, which was filed on July 27, 2005; and
(iii) Quarterly Report on Form 10-QSB for the Quarterly Period Ended June 30,
2005 which was filed on September 14, 2005.
-45-
Schedule
3(p)
Equity
Capitalization
In
connection with the Company's November and December 2005 Series A-1 Convertible
Preferred Stock financing, as of June 28, 2006, warrants to purchase 13,323,332
shares of Common Stock at exercise prices of $1.75 and $2.00 per share are
issued and outstanding. As a result of the anti-dilution provisions contained
in
such warrants, when this transaction is completed the exercises price of the
warrants issued in the November and December 2005 financing will be reduced
to
$1.25 and the number of shares underlying such warrants shall be increased
to
equal the aggregate amount of cash that the Company would have received if
all
of the $1.75 warrants and $2.00 warrants were exercised.
-46-
Schedule
3(v)
Intellectual
Property Rights
ProNetworkTV,
Inc. ("PT")
filed
a trademark application on May 23, 2005, with the United States Patent and
Trademarks Office for the xxxx "SmartVideo" in connection with computer
communication services, namely communication by electronic computer terminals,
cellular telephones, electronic on-line services in the nature of providing
communications links which transfer the website used to web pages via global
interactive networks for the transfer and transmission of messages, documents,
images, music, video and data. The Company, however, believes that it owns
the
xxxx "SmartVideo" because it has continuously used the xxxx in the same channels
of trade as claimed by PT prior to PT's use of the xxxx and the filing of PT's
trademark application.
-47-
