Exhibit 10-a
SECURITIES PURCHASE AGREEMENT
Securities Purchase Agreement dated as of February 14, 2005 (this
"Agreement") by and between Ultradata Systems, Incorporated, a Delaware
corporation, with principal executive offices located at 0000 Xxxxxxx
Xxxxxxxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000 (the "Company"), and Golden
Gate Investors, Inc. ("Buyer").
WHEREAS, Buyer desires to purchase from the Company, and the Company
desires to issue and sell to Buyer, upon the terms and subject to the
conditions of this Agreement, the Convertible Debenture of the
Company in the aggregate principal amount of $300,000 (the "Debenture");
and
WHEREAS, in conjunction with the Debenture, the Company has issued a
Warrant to Purchase Common Stock to the Buyer (the "Warrant or Conversion
Warrant"); and
WHEREAS, upon the terms and subject to the conditions set forth in
the Debenture and the Warrant, the Debenture and Warrant are convertible
and exercisable, respectively, into shares of the Company's Common Stock
(the "Common Stock");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
I. PURCHASE AND SALE OF DEBENTURE
A. Transaction. Buyer hereby agrees to purchase from the
Company, and the Company has offered and hereby agrees to issue and sell
to Buyer in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Debenture.
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B. Purchase Price; Form of Payment. The purchase price for the
Debenture to be purchased by Buyer hereunder shall be $300,000 (the
"Purchase Price"). Simultaneously with the execution of this Agreement,
Buyer shall pay $150,000 of the Purchase Price (the "Initial Purchase
Price") by wire transfer of immediately available funds to the Company.
Simultaneously with the execution of this Agreement, the Company shall
deliver the Convertible Debenture and the Conversion Warrants (which shall
have been duly authorized, issued and executed I/N/O Buyer or, if the
Company otherwise has been notified, I/N/O Buyer's nominee). Upon
notification and verification that the Registration Statement for the
Conversion Shares (as defined below) and the shares of Common Stock
issuable upon exercise of the Conversion Warrants (the "Warrant Shares")
has been declared effective by the Securities and Exchange Commission, and
such shares can legally be issued to Buyer, Buyer shall immediately send
via wire the remainder of the Purchase Price.
II. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to and covenants and agrees with the
Company as follows:
A. Buyer is purchasing the Debenture and the Common Stock
issuable upon conversion or redemption of the Debenture (the "Conversion
Shares" and, collectively with the Debenture and the Warrant Shares, the
"Securities") for its own account, for investment purposes only and not
with a view towards or in connection with the public sale or distribution
thereof in violation of the Securities Act.
B. Buyer is (i) an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Securities Act, (ii) experienced in
making investments of the kind contemplated by this Agreement, (iii)
capable, by reason of its business and financial experience, of evaluating
the relative merits and risks of an investment in the Securities, and (iv)
able to afford the loss of its investment in the Securities.
C. Buyer understands that the Securities are being offered and
sold by the Company in reliance on an exemption from the registration
requirements of the Securities Act and equivalent state securities and
"blue sky" laws, and that the Company is relying upon the accuracy of, and
Buyer's compliance with, Buyer's representations, warranties and covenants
set forth in this Agreement to determine the availability of such
exemption and the eligibility of Buyer to purchase the Securities;
D. Buyer understands that the Securities have not been approved
or disapproved by the Securities and Exchange Commission (the
"Commission") or any state or provincial securities commission.
E. This Agreement has been duly and validly authorized, executed
and delivered by Buyer and is a valid and binding agreement of Buyer
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and
except as rights to indemnity and contribution may be limited by federal
or state securities laws or the public policy underlying such laws.
III. THE COMPANY'S REPRESENTATIONS
The Company represents and warrants to Buyer that:
A. Capitalization.
1. The authorized capital stock of the Company consists of
__________ shares of Common Stock and _________ shares of Series A
Preferred Stock of which __________ shares and __________ shares,
respectively, are issued and outstanding as of the date hereof and are
fully paid and nonassessable. The amount, exercise, conversion or
subscription price and expiration date for each outstanding option and
other security or agreement to purchase shares of Common Stock is
accurately set forth on Schedule III.A.1.
2. The Conversion Shares and the Warrant Shares have been
duly and validly authorized and reserved for issuance by the Company, and,
when issued by the Company upon conversion of the Debenture, will be duly
and validly issued, fully paid and nonassessable and will not subject the
holder thereof to personal liability by reason of being such holder.
3. Except as disclosed on Schedule III.A.3., there are no
preemptive, subscription, "call," right of first refusal or other similar
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rights to acquire any capital stock of the Company or other voting
securities of the Company that have been issued or granted to any person
and no other obligations of the Company to issue, grant, extend or enter
into any security, option, warrant, "call," right, commitment, agreement,
arrangement or undertaking with respect to any of their respective capital
stock.
B. Organization; Reporting Company Status.
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state or jurisdiction
in which it is incorporated and is duly qualified as a foreign corporation
in all jurisdictions in which the failure so to qualify would reasonably
be expected to have a material adverse effect on the business, properties,
prospects, condition (financial or otherwise) or results of operations of
the Company or on the consummation of any of the transactions contemplated
by this Agreement (a "Material Adverse Effect").
2. The Company is subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Common Stock is traded on the OTC Bulletin Board service of the National
Association of Securities Dealers, Inc. ("OTCBB") and the Company has not
received any notice regarding, and to its knowledge there is no threat of,
the termination or discontinuance of the eligibility of the Common Stock
for such trading.
C. Authorization. The Company (i) has duly and validly
authorized and reserved for issuance shares of Common Stock, which is a
number sufficient for the conversion of the Debenture and the exercise of
the Conversion Warrant and (ii) at all times from and after the date
hereof shall have a sufficient number of shares of Common Stock duly and
validly authorized and reserved for issuance to satisfy the conversion of
the Debenture in full and the exercise of the Conversion Warrant. The
Company understands and acknowledges the potentially dilutive effect on
the Common Stock of the issuance of the Conversion Shares and the Warrant
Shares. The Company further acknowledges that its obligation to issue
Conversion Shares upon conversion of the Debenture and the exercise of the
Conversion Warrant and the Initial Warrant in accordance with this
Agreement is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other
stockholders of the Company and notwithstanding the commencement of any
case under 11 U.S.C. Sec. 101 et seq. (the "Bankruptcy Code"). In the event
the Company is a debtor under the Bankruptcy Code, the Company hereby
waives to the fullest extent permitted any rights to relief it may have
under 11 U.S.C. Sec. 362 in respect of the conversion of the Debenture. The
Company agrees, without cost or expense to Buyer, to take or consent to
any and all action necessary to effectuate relief under 11 U.S.C. Sec. 362.
D. Authority; Validity and Enforceability. The Company has the
requisite corporate power and authority to enter into the Documents (as
such term is hereinafter defined) and to perform all of its obligations
hereunder and thereunder (including the issuance, sale and delivery to
Buyer of the Securities). The execution, delivery and performance by the
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Company of the Documents and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Debenture and the issuance and reservation
for issuance of the Conversion Shares and the Warrant Shares) have been
duly and validly authorized by all necessary corporate action on the part
of the Company. Each of the Documents has been duly and validly executed
and delivered by the Company and each Document constitutes a valid and
binding obligation of the Company enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and except as rights to indemnity
and contribution may be limited by federal or state securities laws or the
public policy underlying such laws. The Securities have been duly and
validly authorized for issuance by the Company and, when executed and
delivered by the Company, will be valid and binding obligations of the
Company enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally. For purposes of this Agreement, the term
"Documents" means (i) this Agreement; (ii) the Registration Rights
Agreement dated as of even date herewith between the Company and Buyer,
(iii) the Debenture; and (iv) the Conversion Warrant.
E. Validity of Issuance of the Securities. The Debenture, the
Conversion Shares upon their issuance in accordance with the Debenture,
and the Warrant Shares will be validly issued and outstanding, fully paid
and nonassessable, and not subject to any preemptive rights, rights of
first refusal, tag-along rights, drag-along rights or other similar
rights.
F. Non-contravention. The execution and delivery by the Company
of the Documents, the issuance of the Securities, and the consummation by
the Company of the other transactions contemplated hereby and thereby do
not, and compliance with the provisions of this Agreement and other
Documents will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or loss of a material benefit under, or result in the creation
of any Lien (as such term is hereinafter defined) upon any of the
properties or assets of the Company or any of its Subsidiaries under, or
result in the termination of, or require that any consent be obtained or
any notice be given with respect to (i) the Articles or Certificate of
Incorporation or By-Laws of the Company or the comparable charter or
organizational documents of any of its Subsidiaries, in each case as
amended to the date of this Agreement, (ii) any loan or credit agreement,
Debenture, bond, mortgage, indenture, lease, contract or other agreement,
instrument or permit applicable to the Company or any of its Subsidiaries
or their respective properties or assets or (iii) any Law (as such term is
hereinafter defined) applicable to, or any judgment, decree or order of
any court or government body having jurisdiction over, the Company or any
of its Subsidiaries or any of their respective properties or assets.
G. Approvals. No authorization, approval or consent of any court
or public or governmental authority is required to be obtained by the
Company for the issuance and sale of the Securities to Buyer as
contemplated by this Agreement, except such authorizations, approvals and
consents as have been obtained by the Company prior to the date hereof.
H. Commission Filings. The Company has properly and timely filed
with the Commission all reports, proxy statements, forms and other
documents required to be filed with the Commission under the Securities
Act and the Exchange Act since becoming subject to such Acts (the
"Commission Filings"). As of their respective dates, (i) the Commission
Filings complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
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regulations of the Commission promulgated thereunder applicable to such
Commission Filings and (ii) none of the Commission Filings contained at
the time of its filing any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in the Commission Filings, as of the dates of such
documents, were true and complete in all material respects and complied
with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP") (except in the case of unaudited statements permitted by
Form 10-Q under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and
fairly presented the consolidated financial position of the Company and
its Subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments
that in the aggregate are not material and to any other adjustment
described therein).
I. Full Disclosure. There is no fact known to the Company (other
than general economic or industry conditions known to the public
generally) that has not been fully disclosed in the Commission Filings
that (i) reasonably could be expected to have a Material Adverse Effect or
(ii) reasonably could be expected to materially and adversely affect the
ability of the Company to perform its obligations pursuant to the
Documents.
J. Absence of Events of Default. No "Event of Default" (as
defined in any agreement or instrument to which the Company is a party)
and no event which, with notice, lapse of time or both, would constitute
an Event of Default (as so defined), has occurred and is continuing.
K. Securities Law Matters. Assuming the accuracy of the
representations and warranties of Buyer set forth in Article II, the offer
and sale by the Company of the Securities is exempt from (i) the
registration and prospectus delivery requirements of the Securities Act
and the rules and regulations of the Commission thereunder and (ii) the
registration and/or qualification provisions of all applicable state and
provincial securities and "blue sky" laws. The Company shall not directly
or indirectly take, and shall not permit any of its directors, officers or
Affiliates directly or indirectly to take, any action (including, without
limitation, any offering or sale to any person or entity of any security
similar to the Debenture) which will make unavailable the exemption from
Securities Act registration being relied upon by the Company for the offer
and sale to Buyer of the Debenture, the Conversion Shares and the Warrant
Shares as contemplated by this Agreement. No form of general solicitation
or advertising has been used or authorized by the Company or any of its
officers, directors or Affiliates in connection with the offer or sale of
the Debenture (and the Conversion Shares) as contemplated by this
Agreement or any other agreement to which the Company is a party.
L. Registration Rights. Except as set forth on Schedule III.L.,
no Person has, and as of the Closing (as such term is hereinafter
defined), no Person shall have, any demand, "piggy-back" or other rights
to cause the Company to file any registration statement under the
Securities Act relating to any of its securities or to participate in any
such registration statement.
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M. Interest. The timely payment of interest on the Debenture is
not prohibited by the Articles or Certificate of Incorporation or By-Laws
of the Company, in each case as amended to the date of this Agreement, or
any agreement, contract, document or other undertaking to which the
Company is a party.
N. No Misrepresentation. No representation or warranty of the
Company contained in this Agreement or any of the other Documents, any
schedule, annex or exhibit hereto or thereto or any agreement, instrument
or certificate furnished by the Company to Buyer pursuant to this
Agreement contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
O. Finder's Fee. There is no finder's fee, brokerage commission
or like payment in connection with the transactions contemplated by this
Agreement for which Buyer is liable or responsible.
IV. CERTAIN COVENANTS AND ACKNOWLEDGMENTS
A. Filings. The Company shall make all necessary Commission
Filings and "blue sky" filings required to be made by the Company in
connection with the sale of the Securities to Buyer as required by all
applicable Laws, and shall provide a copy thereof to Buyer promptly after
such filing.
B. Reporting Status. So long as Buyer beneficially owns any of
the Securities, the Company shall timely file all reports required to be
filed by it with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
C. Listing. Except to the extent the Company lists its Common
Stock on The New York Stock Exchange, The American Stock Exchange or The
Nasdaq Stock Market, the Company shall use its best efforts to maintain
its listing of the Common Stock on OTCBB. If the Common Stock is delisted
from OTCBB, the Company will use its best efforts to list the Common Stock
on the most liquid national securities exchange or quotation system that
the Common Stock is qualified to be listed on.
D. Reserved Conversion Common Stock. The Company at all times
from and after the date hereof shall have such number of shares of Common
Stock duly and validly authorized and reserved for issuance as shall be
sufficient for the conversion in full of the Debenture and the exercise of
the Conversion Warrant.
E. Information. Each of the parties hereto acknowledges and
agrees that Buyer shall not be provided with, nor be given access to, any
material non-public information relating to the Company.
F. Accounting and Reserves. The Company shall maintain a
standard and uniform system of accounting and shall keep proper books and
records and accounts in which full, true, and correct entries shall be
made of its transactions, all in accordance with GAAP applied on
consistent basis through all periods, and shall set aside on such books
for each fiscal year all such reserves for depreciation, obsolescence,
amortization, bad debts and other purposes in connection with its
operations as are required by such principles so applied.
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G. Transactions with Affiliates. So long as the Debenture is
outstanding, neither the Company nor any of its Subsidiaries shall,
directly or indirectly, enter into any material transaction or agreement
with any stockholder, officer, director or Affiliate of the Company or
family member of any officer, director or Affiliate of the Company, unless
the transaction or agreement is (i) reviewed and approved by a majority of
Disinterested Directors (as such term is hereinafter defined) and (ii) on
terms no less favorable to the Company or the applicable Subsidiary than
those obtainable from a nonaffiliated person. A "Disinterested Director"
shall mean a director of the Company who is not and has not been an
officer or employee of the Company and who is not a member of the family
of, controlled by or under common control with, any such officer or
employee.
H. Certain Restrictions. So long as the Debenture is
outstanding, no dividends shall be declared or paid or set apart for
payment nor shall any other distribution be declared or made upon any
capital stock of the Company, nor shall any capital stock of the Company
be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of shares of Common Stock made for purposes
of an employee incentive or benefit plan (including a stock option plan)
of the Company or pursuant to any of the security agreements listed on
Schedule IV.H, for any consideration by the Company, directly or
indirectly, nor shall any moneys be paid to or made available for a
sinking fund for the redemption of any Common Stock of any such stock.
I. Short Selling. So long as the Debenture is outstanding,
Buyer agrees and covenants on its behalf and on behalf of its affiliates
that neither Buyer nor its affiliates shall at any time engage in any
short sales with respect to the Company's Common Stock, or sell put
options or similar instruments with respect to the Company's Common Stock.
V. ISSUANCE OF COMMON STOCK
A. The Company undertakes and agrees that no instruction other
than the instructions referred to in this Article V and customary stop
transfer instructions prior to the registration and sale of the Common
Stock pursuant to an effective Securities Act registration statement shall
be given to its transfer agent for the Conversion Shares and the Warrant
Shares and that the Conversion Shares and the Warrant Shares shall
otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement, the Registration Rights
Agreement and applicable law. Nothing contained in this Section V.A.
shall affect in any way Buyer's obligations and agreement to comply with
all applicable securities laws upon resale of such Common Stock.
B. Buyer shall have the right to convert the Debenture and
exercise the Warrant by telecopying an executed and completed Conversion
Notice (as such term is defined in the Debenture) or Warrant Notice of
Exercise (as such term is defined in the Warrant) to the Company. Each
date on which a Conversion Notice or Warrant Notice of Exercise is
telecopied to and received by the Company in accordance with the
provisions hereof shall be deemed a Conversion Date (as such term is
defined in the Debenture). The Company shall cause the transfer agent to
transmit the certificates evidencing the Common Stock issuable upon
conversion of the Debenture (together with a new debenture, if any,
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representing the principal amount of the Debenture not being so converted)
or exercise of the Warrant (together with a new Warrant, if any,
representing the amount of the Warrant not being so exercised) to Buyer
via express courier, or if a Registration Statement covering the Common
Stock has been declared effective by the SEC by electronic transfer,
within three (3) business days after receipt by the Company of the
Conversion Notice or Warrant Notice of Exercise (the "Delivery Date").
C. Upon the conversion of the Debenture or exercise of the
Warrant or part thereof, the Company shall, at its own cost and expense,
take all necessary action (including the issuance of an opinion of
counsel) to assure that the Company's transfer agent shall issue stock
certificates in the name of Buyer (or its nominee) or such other persons
as designated by Buyer and in such denominations to be specified at
conversion representing the number of shares of common stock issuable upon
such conversion or exercise. The Company warrants that the Conversion
Shares and Warrant Shares will be unlegended, free-trading, and freely
transferable, and will not contain a legend restricting the resale or
transferability of the Company Common Stock provided the Conversion Shares
and Warrant Shares are being sold pursuant to an effective registration
statement covering the Common Stock to be sold or is otherwise exempt from
registration when sold.
D. The Company understands that a delay in the delivery of the
Common Stock in the form required pursuant to this section, or the
Mandatory Redemption Amount described in Section E hereof, beyond the
Delivery Date or Mandatory Redemption Payment Date (as hereinafter
defined) could result in economic loss to the Buyer. As compensation to
the Buyer for such loss, the Company agrees to pay late payments to the
Buyer for late issuance of Common Stock in the form required pursuant to
Section C hereof upon Conversion of the Debenture or late payment of the
Mandatory Redemption Amount, in the amount of $100 per business day after
the Delivery Date or Mandatory Redemption Payment Date, as the case may
be, for each $10,000 of Debenture principal amount being converted or
redeemed. The Company shall pay any payments incurred under this Section
in immediately available funds upon demand. Furthermore, in addition to
any other remedies which may be available to the Buyer, in the event that
the Company fails for any reason to effect delivery of the Common Stock by
the Delivery Date or make payment by the Mandatory Redemption Payment
Date, the Buyer will be entitled to revoke all or part of the relevant
Notice of Conversion or rescind all or part of the notice of Mandatory
Redemption by delivery of a notice to such effect to the Company whereupon
the Company and the Buyer shall each be restored to their respective
positions immediately prior to the delivery of such notice, except that
late payment charges described above shall be payable through the date
notice of revocation or rescission is given to the Company.
E. Mandatory Redemption. In the event the Company is prohibited
from issuing Common Stock, or fails to timely deliver Common Stock on a
Delivery Date, or upon the occurrence of an Event of Default (as defined
in the Debenture) or for any reason other than pursuant to the limitations
set forth herein, or upon the occurrence of an Event of Default as defined
in the Debenture, then at the Buyer's election, the Company must pay to
the Buyer ten (10) business days after request by the Buyer or on the
Delivery Date (if requested by the Buyer) a sum of money determined by
multiplying up to the outstanding principal amount of the Debenture
designated by the Buyer by 100% for a period of six months after the
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Closing Date, increasing to 140% thereafter, together with accrued but
unpaid interest thereon ("Mandatory Redemption Payment"). The Mandatory
Redemption Payment must be received by the Buyer on the same date as the
Company Common Stock otherwise deliverable or within ten (10) business
days after request, whichever is sooner ("Mandatory Redemption Payment
Date"). Upon receipt of the Mandatory Redemption Payment, the
corresponding Debenture principal and interest will be deemed paid and no
longer outstanding.
F. Buy-In. In addition to any other rights available to the
Buyer, if the Company fails to deliver to the Buyer such Common Stock
issuable upon conversion of a Debenture or exercise of a Warrant by the
Delivery Date and if ten (10) days after the Delivery Date the Buyer
purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Buyer of the Common
Stock which the Buyer anticipated receiving upon such conversion (a "Buy-
In"), then the Company shall pay in cash to the Buyer (in addition to any
remedies available to or elected by the Buyer) the amount by which (A) the
Buyer's total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (B) the aggregate
principal and/or interest amount of the Debenture or Warrant for which
such conversion or exercise was not timely honored, together with interest
thereon at a rate of 15% per annum, accruing until such amount and any
accrued interest thereon is paid in full (which amount shall be paid as
liquidated damages and not as a penalty). For example, if the Buyer
purchases shares of Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted conversion of $10,000 of
Debenture or Warrant principal and/or interest, the Company shall be
required to pay the Buyer $1,000, plus interest. The Buyer shall provide
the Company written notice indicating the amounts payable to the Buyer in
respect of the Buy-In.
G. The Securities shall be delivered by the Company to the Buyer
pursuant to Section I.B. hereof on a "delivery-against-payment basis" at
the Closing.
VI. CLOSING DATE
The Closing shall occur by the delivery: (i) to the Buyer of the
certificate evidencing the Debenture and all other Agreements, and (ii) to
the Company the Purchase Price.
VII. CONDITIONS TO THE COMPANY'S OBLIGATIONS
Buyer understands that the Company's obligation to sell the
Debenture on the Closing Date to Buyer pursuant to this Agreement is
conditioned upon:
A. Delivery by Buyer to the Company of the Initial Purchase
Price;
B. The accuracy on the Closing Date of the representations and
warranties of Buyer contained in this Agreement as if made on the Closing
Date (except for representations and warranties which, by their express
terms, speak as of and relate to a specified date, in which case such
accuracy shall be measured as of such specified date) and the performance
by Buyer in all material respects on or before the Closing Date of all
covenants and agreements of Buyer required to be performed by it pursuant
to this Agreement on or before the Closing Date; and
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C. There shall not be in effect any Law or order, ruling,
judgment or writ of any court or public or governmental authority
restraining, enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement.
VIII. CONDITIONS TO BUYER'S OBLIGATIONS
The Company understands that Buyer's obligation to purchase the
Securities on the Closing Date pursuant to this Agreement is conditioned
upon:
A. Delivery by the Company of the Debenture, the Conversion
Warrant and the other Agreements (I/N/O Buyer or I/N/O Buyer's nominee);
B. The accuracy on the Closing Date of the representations and
warranties of the Company contained in this Agreement as if made on the
Closing Date (except for representations and warranties which, by their
express terms, speak as of and relate to a specified date, in which case
such accuracy shall be measured as of such specified date) and the
performance by the Company in all respects on or before the Closing Date
of all covenants and agreements of the Company required to be performed by
it pursuant to this Agreement on or before the Closing Date, all of which
shall be confirmed to Buyer by delivery of the certificate of the chief
executive officer of the Company to that effect;
C. There not having occurred (i) any general suspension of
trading in, or limitation on prices listed for, the Common Stock on the
OTCBB/Pink Sheet, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States or
any of its territories, protectorates or possessions or (iv) in the case
of the foregoing existing at the date of this Agreement, a material
acceleration or worsening thereof;
D. There not having occurred any event or development, and there
being in existence no condition, having or which reasonably and
foreseeably could have a Material Adverse Effect;
E. There shall not be in effect any Law, order, ruling, judgment
or writ of any court or public or governmental authority restraining,
enjoining or otherwise prohibiting any of the transactions contemplated by
this Agreement;
F. The Company shall have obtained all consents, approvals or
waivers from governmental authorities and third persons necessary for the
execution, delivery and performance of the Documents and the transactions
contemplated thereby, all without material cost to the Company;
G. Buyer shall have received such additional documents,
certificates, payment, assignments, transfers and other deliveries as it
or its legal counsel may reasonably request and as are customary to effect
a closing of the matters herein contemplated;
H. Delivery by the Company of an enforceability opinion from its
outside counsel in form and substance satisfactory to Buyer.
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IX. SURVIVAL; INDEMNIFICATION
A. The representations, warranties and covenants made by each of
the Company and Buyer in this Agreement, the annexes, schedules and
exhibits hereto and in each instrument, agreement and certificate entered
into and delivered by them pursuant to this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby. In
the event of a breach or violation of any of such representations,
warranties or covenants, the party to whom such representations,
warranties or covenants have been made shall have all rights and remedies
for such breach or violation available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, irrespective of any
investigation made by or on behalf of such party on or prior to the
Closing Date.
B. The Company hereby agrees to indemnify and hold harmless
Buyer, its affiliates and their respective officers, directors, partners
and members (collectively, the "Buyer Indemnitees") from and against any
and all losses, claims, damages, judgments, penalties, liabilities and
deficiencies (collectively, "Losses") and agrees to reimburse Buyer
Indemnitees for all out-of-pocket expenses (including the fees and
expenses of legal counsel), in each case promptly as incurred by Buyer
Indemnitees and to the extent arising out of or in connection with:
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1. any misrepresentation, omission of fact or breach of any
of the Company's representations or warranties contained in this
Agreement or the other Documents, or the annexes, schedules or
exhibits hereto or thereto or any instrument, agreement or
certificate entered into or delivered by the Company pursuant to
this Agreement or the other Documents;
2. any failure by the Company to perform any of its
covenants, agreements, undertakings or obligations set forth in this
Agreement or the other Documents or any instrument, certificate or
agreement entered into or delivered by the Company pursuant to this
Agreement or the other Documents;
3. the purchase of the Debenture, the conversion of the
Debenture, the payment of interest on the Debenture, the issuance of
the Warrant Shares, the consummation of the transactions
contemplated by this Agreement and the other Documents, the use of
any of the proceeds of the Purchase Price by the Company, the
purchase or ownership of any or all of the Securities, the
performance by the parties hereto of their respective obligations
hereunder and under the Documents or any claim, litigation,
investigation, proceedings or governmental action relating to any of
the foregoing, whether or not Buyer is a party thereto; or
4. resales of the Common Stock by Buyer in the manner and
as contemplated by this Agreement and the Registration Rights
Agreement.
C. Buyer hereby agrees to indemnify and hold harmless the
Company, its Affiliates and their respective officers, directors, partners
and members (collectively, the "Company Indemnitees") from and against any
and all Losses, and agrees to reimburse the Company Indemnitees for all
out-of-pocket expenses (including the fees and expenses of legal counsel),
in each case promptly as incurred by the Company Indemnitees and to the
extent arising out of or in connection with:
1. any misrepresentation, omission of fact or breach of any
of Buyer's representations or warranties contained in this Agreement
or the other Documents, or the annexes, schedules or exhibits hereto
or thereto or any instrument, agreement or certificate entered into
or delivered by Buyer pursuant to this Agreement or the other
Documents; or
2. any failure by Buyer to perform in any material respect
any of its covenants, agreements, undertakings or obligations set
forth in this Agreement or the other Documents or any instrument,
certificate or agreement entered into or delivered by Buyer pursuant
to this Agreement or the other Documents.
D. Promptly after receipt by either party hereto seeking
indemnification pursuant to this Article IX (an "Indemnified Party") of
written notice of any investigation, claim, proceeding or other action in
respect of which indemnification is being sought (each, a "Claim"), the
Indemnified Party promptly shall notify the party against whom
indemnification pursuant to this Article IX is being sought (the
"Indemnifying Party") of the commencement thereof, but the omission so to
notify the Indemnifying Party shall not relieve it from any liability that
it otherwise may have to the Indemnified Party except to the extent that
the Indemnifying Party is materially prejudiced and forfeits substantive
rights or defenses by reason of such failure. In connection with any
Claim as to which both the Indemnifying Party and the Indemnified Party
are parties, the Indemnifying Party shall be entitled to assume the
defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the
right to employ separate legal counsel and to participate in the defense
of such Claim, and the Indemnifying Party shall bear the reasonable fees,
out-of-pocket costs and expenses of such separate legal counsel to the
Indemnified Party if (and only if): (x) the Indemnifying Party shall have
agreed to pay such fees, out-of-pocket costs and expenses, (y) the
Indemnified Party and the Indemnifying Party reasonably shall have
concluded that representation of the Indemnified Party and the
Indemnifying Party by the same legal counsel would not be appropriate due
to actual or, as reasonably determined by legal counsel to the Indemnified
Party, potentially differing interests between such parties in the conduct
of the defense of such Claim, or if there may be legal defenses available
to the Indemnified Party that are in addition to or disparate from those
available to the Indemnifying Party or (z) the Indemnifying Party shall
have failed to employ legal counsel reasonably satisfactory to the
Indemnified Party within a reasonable period of time after notice of the
commencement of such Claim. If the Indemnified Party employs separate
legal counsel in circumstances other than as described in clauses (x), (y)
or (z) above, the fees, costs and expenses of such legal counsel shall be
borne exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one firm of
legal counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnifying Party shall not, without the prior written
consent of the Indemnified Party (which consent shall not unreasonably be
withheld), settle or compromise any Claim or consent to the entry of any
judgment that does not include an unconditional release of the Indemnified
Party from all liabilities with respect to such Claim or judgment.
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E. In the event one party hereunder should have a claim for
indemnification that does not involve a claim or demand being asserted by
a third party, the Indemnified Party promptly shall deliver notice of such
claim to the Indemnifying Party. If the Indemnified Party disputes the
claim, such dispute shall be resolved by mutual agreement of the
Indemnified Party and the Indemnifying Party or by binding arbitration
conducted in accordance with the procedures and rules of the American
Arbitration Association. Judgment upon any award rendered by any
arbitrators may be entered in any court having competent jurisdiction
thereof.
X. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California, without regard to the conflicts
of law principles of such state.
XI. SUBMISSION TO JURISDICTION
Each of the parties hereto consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the City of San
Diego or the state courts of the State of California sitting in the City
of San Diego in connection with any dispute arising under this Agreement
and the other Documents. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may effectively do so,
any defense of an inconvenient forum or improper venue to the maintenance
of such action or proceeding in any such court and any right of
jurisdiction on account of its place of residence or domicile. Each party
hereto irrevocably and unconditionally consents to the service of any and
all process in any such action or proceeding in such courts by the mailing
of copies of such process by registered or certified mail (return receipt
requested), postage prepaid, at its address specified in Article XVII.
Each party hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
XII. WAIVER OF JURY TRIAL
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND OTHER
DOCUMENTS. EACH PARTY HERETO (i) CERTIFIES THAT NEITHER OF THEIR
RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS HEREIN.
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XIII. COUNTERPARTS; EXECUTION
This Agreement may be executed in counterparts, each of which when
so executed and delivered shall be an original, but both of which
counterparts shall together constitute one and the same instrument. A
facsimile transmission of this signed Agreement shall be legal and binding
on both parties hereto.
XIV. HEADINGS
The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
XV. SEVERABILITY
In the event any one or more of the provisions contained in this
Agreement or in the other Documents should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein or therein shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
XVI. ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS
This Agreement and the Documents constitute the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of such parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed
in writing by both parties. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
XVII. NOTICES
Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in
writing and shall be delivered personally, or sent by telecopier machine
or by a nationally recognized overnight courier service, and shall be
deemed given when so delivered personally, or by telecopier machine or
overnight courier service as follows:
A. if to the Company, to:
Ultradata Systems, Incorporated
0000 Xxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
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B. if to Buyer, to:
Golden Gate Investors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
The Company or Buyer may change the foregoing address by notice given
pursuant to this Article XVII.
XVIII. CONFIDENTIALITY
Each of the Company and Buyer agrees to keep confidential and not to
disclose to or use for the benefit of any third party the terms of this
Agreement or any other information which at any time is communicated by
the other party as being confidential without the prior written approval
of the other party; provide, however, that this provision shall not apply
to information which, at the time of disclosure, is already part of the
public domain (except by breach of this Agreement) and information which
is required to be disclosed by law (including, without limitation,
pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act and
the Exchange Act).
XIX. ASSIGNMENT
This Agreement shall not be assignable by either of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed and delivered on the date first above written.
Ultradata Systems, Incorporated Golden Gate Investors, Inc.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxx Xxxx
Title: Chief Executive Officer Investment Portfolio Manager
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SCHEDULE III.L.
REGISTRATION RIGHTS
Name
