Exhibit 10.1
================================================================================
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
LEVEL 8 SYSTEMS, INC.,
AND
THE PURCHASERS LISTED ON SCHEDULE I
DATED AS OF JANUARY 16, 2002
================================================================================
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated
---------
as of January 16, 2002, by and among XXXXX 0 SYSTEMS, INC., a Delaware
corporation (the "Company"), and the various purchasers listed on Schedule I
-------
hereto (each referred to herein as a "Purchaser" and, collectively, the
---------
"Purchasers").
----------
WHEREAS, the Company and the Purchasers are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by Rule 506 under Regulation D as promulgated by the
United States Securities and Exchange Commission (the "Commission") under
----------
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act");
--------------
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to acquire from the Company, shares of common stock of the
Company, par value $.001 per share (the "Common Stock"), and a stock purchase
------------
warrant (each a "Warrant", and, collectively, the "Warrants"), in the form of
------- --------
Exhibit A annexed hereto to purchase shares of the Company's Common Stock; and
---------
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form of Exhibit B attached hereto (the
---------
"Registration Rights Agreement") pursuant to which the Company has agreed to
-----------------------------
provide certain registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter, the Company and the Purchasers hereby
agree as follows:
ARTICLE I.
PURCHASE AND SALE
1.1 Purchase and Sale.
-----------------
On the Closing Date (as defined below), subject to the terms and conditions set
forth herein, the Company shall issue and sell to each Purchaser and each
Purchaser, severally and not jointly, shall purchase from the Company the shares
of Common Stock as set forth on Schedule I (the "Shares") and a Warrant
---------- ------
exercisable for the amount of Common Stock as set forth on Schedule I for such
----------
Purchaser. The aggregate purchase price for the Shares and Warrant purchased by
the Purchasers shall be $3,572,928.
1.2 Closing.
-------
a. The Closing. The closing (the "Closing") of the purchase and sale
----------- -------
of the Common Stock and the Warrants shall take place at the offices of Powell,
Goldstein, Xxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000, immediately following the execution hereof or such later date or
different location as the parties shall agree, but in no event prior to the date
that the conditions set forth in Section 4.1 have been satisfied or waived by
the appropriate party (such date of the Closing, the "Closing Date"). At the
------------
Closing:
(i) Each Purchaser shall deliver to the Company (1) this
Agreement, duly executed by such Purchaser, (2) the Registration Rights
Agreement, duly executed by such Purchaser and (3) its portion of the purchase
price as set forth next to its name on Schedule I in United States dollars in
----------
immediately available funds to an account or accounts designated in writing by
the Company; and
(ii) The Company shall deliver to each Purchaser (1) this
Agreement, duly executed by the Company, (2) the Registration Rights Agreement,
duly executed by the Company, (3) a Warrant representing the Purchaser's right
to acquire the number of shares of Common Stock as set forth on Schedule I
----------
hereto registered in the name of such Purchaser, (4) a certificate evidencing
the number of shares of Common Stock purchased by such Purchaser as set forth on
Schedule I hereto, registered in the name of such Purchaser and (5) a legal
----------
opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel to the Company, in
agreed form, addressed to the Purchasers.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to each of the Purchasers that the statements contained in this
Section 2.1 are true, correct and complete as of the date hereof, and will be
true correct and complete as of the Closing Date (unless specifically made as of
another date), except as specified to the contrary in
2
the corresponding paragraph of the disclosure schedule prepared by the Company
accompanying this Agreement (the "Company Disclosure Schedules"):
----------------------------
a. Organization and Qualification. The Company duly incorporated,
------------------------------
validly existing and in good standing under the laws of Delaware, with the
requisite corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. Except as set forth on
Schedule 2.1(a), the Company is duly qualified as a foreign corporation to do
---------------
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of any of this
Agreement or the Transaction Documents (as defined in Section 2.1(b)) or any of
the transactions contemplated hereby or thereby, (y) have or result in a
material adverse effect on the results of operations, assets, or financial
condition of the Company, taken as a whole or (z) impair the Company's ability
to perform fully on a timely basis its obligations under any Transaction
Document (any of (x), (y) or (z), being a "Material Adverse Effect"). The
-----------------------
Company has made available to the Purchaser true and correct copies of the
Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "Certificate of Incorporation"), and the Company's Bylaws, as in
----------------------------
effect on the date hereof (the "Bylaws").
------
b. Authorization; Enforcement. The Company has the requisite
--------------------------
corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Registration Rights Agreement and the
Warrants (collectively, the "Transaction Documents"), and otherwise to carry out
---------------------
its obligations hereunder and thereunder. The execution and delivery of each of
this Agreement and the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action by the Company. Each of this
Agreement and the Transaction Documents has been duly executed by the Company
and when delivered in accordance with the terms hereof will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application and
except that rights to indemnification and contribution may be limited by Federal
or state securities laws or public policy relating thereto.
c. Capitalization. As of the date hereof, the authorized capital
--------------
stock of the Company is as set forth in Schedule 2.1(c). All of such outstanding
---------------
shares of capital stock have been, or upon issuance will be, validly authorized
and issued, fully paid and nonassessable. No securities of the Company are
entitled to preemptive or similar rights, and no Person (as hereinafter defined)
has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction
Documents. Except as a result of the purchase and sale of the Shares and
Warrant, there are no outstanding options, warrants, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
subsidiary is or
3
may become bound to issue additional shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock. The issue and
sale of the Shares and Warrants will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such securities.
d. Authorization and Validity; Issuance of Shares. The Shares and the
----------------------------------------------
shares of Common Stock issuable upon exercise of the Warrants (the "Warrant
-------
Shares") are and will at all times hereafter continue to be duly authorized and
------
reserved for issuance and, when issued and paid for in accordance with this
Agreement and the Transaction Documents, will be validly issued, fully paid and
non-assessable, free and clear of all liens.
e. No Conflicts. The execution, delivery and performance of this
------------
Agreement and each of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including the issuance of the Warrant Shares) do not and will not (i) conflict
with or violate any provision of the Certificate of Incorporation, Bylaws or
other organizational documents of the Company, (ii) subject to obtaining the
consents referred to in Section 2.1(f), 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, patent, patent license or instrument
(evidencing a Company debt or otherwise) to which the Company is a party or by
which any property or asset of the Company is bound or affected, except where
such conflict or violation has not resulted or would not reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Effect, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including Federal and state securities laws and
regulations and the rules and regulations of the principal market or exchange on
which the Common Stock is traded or listed), or by which any material property
or asset of the Company is bound, except where such conflict has not resulted or
would not reasonably be expected to result, individually or in the aggregate, in
a Material Adverse Effect.
f. Consents and Approvals. The Company is not required to obtain any
----------------------
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, regulatory or self regulatory agency, or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement or the Transaction Documents, other than (i) the filing of a
registration statement with the Commission, which shall be filed in accordance
with and in the time periods set forth in the Registration Rights Agreement,
(ii) the application(s) or any letter(s) acceptable to the Nasdaq National
Market ("Nasdaq") for the listing of the Common Stock and the Warrant Shares
------
with Nasdaq (and with any other national securities exchange or market on which
the Common Stock is then listed), and (iii) any filings, notices or
registrations under applicable Federal or state securities laws (together with
the consents, waivers, authorizations, orders, notices and filings referred to
on Schedule 2.1(f), the "Required Approvals"), except where failure to do so has
--------------- ------------------
not resulted or would not reasonably result, individually, or in the aggregate,
in a Material Adverse Effect. "Person" means an individual or corporation,
------
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability
4
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
g. Litigation; Proceedings. Except as specifically set forth on
-----------------------
Schedule 2.1(h) or in the SEC Documents (as hereinafter defined), there is no
---------------
action, suit, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
of its subsidiaries or any of their respective properties before or by any
court, governmental or administrative agency or regulatory authority (Federal,
state, county, local or foreign) (collectively, an "Action") which (i) adversely
------
affects or challenges the legality, validity or enforceability of any of this
Agreement or the Transaction Documents or (ii) would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any subsidiary, nor, to the knowledge of the Company, any officer
thereof, is or has been, nor, to the knowledge of the Company, any director
thereof is or has been for the last three years, the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and, to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director that was a director of the Company at any time during the last three
years or officer of the Company. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by
the Company or any subsidiary under the Exchange Act or the Securities Act.
h. No Default or Violation. The Company (i) is not in default under
-----------------------
or in violation of any indenture, loan or other credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound and which is required to be included as an exhibit to any
SEC Document (as defined in Section 2.1(j)) or will be required to be included
as an exhibit to the Company's next filing under either the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) is in
------------
violation of any order of any court, arbitrator or governmental body applicable
to it, (iii) is in violation of any statute, rule or regulation of any
governmental authority to which it is subject, (iv) is in default under or in
violation of its Certificate of Incorporation, Bylaws or other organizational
documents, respectively in the case of (i), (ii) and (iii), except where such
violations have not resulted or would not reasonably result, individually or in
the aggregate, in a Material Adverse Effect.
i. Private Offering. The Company and all Persons acting on its behalf
----------------
have not made, directly or indirectly, and will not make, offers or sales of any
securities or solicited any offers to buy any security under circumstances that
would require registration of the Common Stock or the Warrants or the issuance
of such securities under the Securities Act. Subject to the accuracy and
completeness of the representations and warranties of the Purchasers contained
in Section 2.2, the offer, sale and issuance by the Company to the Purchasers of
each of the Common Stock and the Warrants and the issuance of the Warrant Shares
is exempt from the registration requirements of the Securities Act.
j. SEC Documents; Financial Statements. The Common Stock of the
-----------------------------------
Company is registered pursuant to Section 12(g) of the Exchange Act. Since
December 31, 2000, the Company has filed all reports, schedules, forms,
statements and other documents
5
required to be filed by it, with the Commission, pursuant to Section 13, 14 or
15(d) of the Exchange Act (the foregoing materials and all exhibits included
therein and financial statements and schedules thereto and documents (other than
exhibits to such documents) incorporated by reference therein being collectively
referred to herein as the "SEC Documents"), on a timely basis or has received a
-------------
valid extension of such time of filing and has filed any such SEC Documents
prior to the expiration of any such extension. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved ("GAAP"), except as may be
----
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
k. Material Changes. Since the date of the latest audited financial
----------------
statements included within the SEC Documents, except as specifically disclosed
in the SEC Documents, (i) there has been no event, occurrence or development
that has had or that could result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company's financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
its method of accounting or the identity of its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, and (v) the Company has not issued any
equity securities to any officer, director or affiliate, except pursuant to
existing Company stock option plans. The Company does not have pending before
the Commission any request for confidential treatment of information.
l. Patents and Trademarks. The Company and its subsidiaries have, or
----------------------
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Documents and which the failure to
so have could have, or reasonably be expected to result in, a Material Adverse
Effect (collectively, the "Intellectual Property Rights"). Neither the Company
----------------------------
nor any subsidiary has received a written notice that the Intellectual Property
Rights used by the Company or any subsidiary violates or infringes upon the
rights of any Person which if determined adversely to the Company would,
individually or in the aggregate have a Material Adverse Effect. To the
6
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights.
m. Transactions With Affiliates and Employees. Except as set forth in
------------------------------------------
SEC Documents, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
n. Solvency. Except as set forth in the SEC Documents, based on the
--------
financial condition of the Company as of the Closing Date, (i) the Company's
fair saleable value of its assets exceeds the amount that will be required to be
paid on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company's
assets do not constitute unreasonably small capital to carry on its business for
the current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
o. Form S-3 Eligibility. The Company is eligible to register the
--------------------
resale of its Common Stock and the Warrant Shares for resale by the Purchasers
under Form S-3 promulgated under the Securities Act.
p. Listing and Maintenance Requirements. The Company has not, in the
------------------------------------
two years preceding the date hereof, received notice (written or oral) from the
Nasdaq National Market or any other exchange or market on which the Common Stock
is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such exchange or
market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements. The issuance and sale of the Shares and Warrants
hereunder does not contravene the rules and regulations of the Nasdaq National
Market and no approval of the shareholders of the Company is required for the
Company to issue and deliver to the Purchasers the number of Shares and Warrant
Shares contemplated by this Agreement.
q. Registration Rights. The Company has not granted or agreed to
-------------------
grant to any Person any rights (including "piggy-back" registration rights) to
have any securities of the Company registered with the Commission or any other
governmental authority that have not been satisfied.
7
r. Broker's Fees. No fees or commissions or similar payments with
-------------
respect to the transactions contemplated by this Agreement or the Transaction
Documents have been paid or will be payable by the Company to any third party
broker, financial advisor, finder, investment banker, or bank. The Purchaser
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section 2.1(r) that may be due in connection with the transactions contemplated
by this Agreement and the Transaction Documents.
s. Disclosure. Except for information regarding the transaction
----------
contemplated by this Agreement and the Transaction Documents and the terms and
conditions hereof and thereof, the Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information the Company believes constitutes
material, non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosure provided to the Purchasers
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 light of the circumstances under which they were
made, not misleading.
2.2 Representations and Warranties of the Purchasers. Each of the
-------------------------------------------------
Purchasers, severally and not jointly, hereby represents and warrants to the
Company as follows:
a. Organization; Authority. Such Purchaser, as applicable, is a
-----------------------
corporation or a limited liability company or limited partnership duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation with the requisite power and authority, corporate or
otherwise, to enter into and to consummate the transactions contemplated hereby
and by this Agreement and the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The purchase by such Purchaser, as
applicable, of the shares of Common Stock and the Warrant hereunder has been
duly authorized by all necessary action on the part of such Purchaser. Each of
this Agreement and the Transaction Documents has been duly executed and
delivered by each Purchaser and constitutes the valid and legally binding
obligation of each Purchaser, enforceable against such Purchaser in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and to general principles of equity and
except that rights to indemnification and contribution may be limited by Federal
or state securities laws or public policy relating thereto.
b. Investment Intent. Such Purchaser is acquiring the shares of
-----------------
Common Stock and the Warrant for its own account and not with a present view to
or for distributing or reselling the shares of Common Stock, the Warrant or the
Warrant Shares or any part thereof or interest therein in violation of the
Securities Act. Nothing contained herein shall be deemed a representation or
warranty by such Purchaser to hold the Shares or Warrant or Warrant Shares for
any period of time. Such Purchaser is acquiring the Shares or Warrant or Warrant
Shares hereunder in the ordinary course of its business. Such Purchaser does not
have any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Shares.
8
c. Purchaser Status. At the time such Purchaser was offered the
----------------
Common Stock and the Warrant, and at the Closing Date and each date such
Purchaser exercises the Warrant, (i) it was and will be an "accredited investor"
as defined in Rule 501 under the Securities Act and (ii) such Purchaser, either
alone or together with its representatives, had and will have such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Common Stock, the Warrant and the Warrant Shares. Such Purchaser is not a
registered broker-dealer under Section 15 of the Exchange Act.
d. Reliance. Such Purchaser understands and acknowledges that (i) the
--------
Common Stock, the Warrant and the Warrant Shares are being offered and sold to
the Purchaser without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities Act
under Section 4(2) of the Securities Act or Regulation D promulgated thereunder
and (ii) the availability of such exemption depends in part on, and the Company
will rely upon the accuracy and truthfulness of, the representations set forth
in this Section 2.2 and such Purchaser hereby consents to such reliance.
e. Information. Such Purchaser 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 Common Stock
and the Warrant which have been requested by such Purchaser or its advisors.
Such Purchaser and its advisors, if any, have been afforded the opportunity to
ask questions of the Company. The Purchaser understands that its investment in
the Common Stock and Warrant involves a significant degree of risk. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser's right to rely on the truth, accuracy and completeness of the
Company's representations and warranties contained in this Agreement or the
Transaction Documents.
f. Governmental Review. Such Purchaser understands that no United
-------------------
States Federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Common Stock or
Warrants.
g. Residency. Such Purchaser is a resident of the jurisdiction set
---------
forth immediately beside such Purchaser's name on Schedule I hereto.
----------
The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III.
OTHER AGREEMENTS
3.1 Transfer Restrictions.
---------------------
a. If any Purchaser should decide to dispose of the Common Stock, the
Warrant, or the Warrant Shares held by it, such Purchaser understands and agrees
that it may do
9
so (1) only pursuant to an effective registration statement under the Securities
Act, (2) pursuant to an available exemption from the registration requirements
of the Securities Act, (3) to an affiliate of the Purchaser, or (4) pursuant to
Rule 144 promulgated under the Securities Act ("Rule 144"). In connection with
any transfer of any Common Stock, the Warrant or Warrant Shares other than
pursuant to an effective registration statement, Rule 144, to the Company or to
an affiliate of the Purchasers, the Company may require the transferor thereof
to provide to the Company a written opinion of counsel experienced in the area
of United States securities laws selected by the transferor, the form and
substance of which opinion shall be customary for opinions of counsel in
comparable transactions and reasonably acceptable to the Company, to the effect
that such transfer does not require registration of such transferred securities
under the Securities Act; provided, however, that if the Common Stock, the
Warrant, or Warrant Shares may be sold pursuant to Rule 144(k), no written
opinion of counsel shall be required from any Purchaser if such Purchaser
provides reasonable assurances that such security can be sold pursuant to Rule
144(k). Notwithstanding the foregoing, the Company hereby consents to and agrees
to register any transfer by any Purchaser to an affiliate of such Purchaser,
provided that the transferee certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Any such
transferee shall agree in writing to be bound by the terms of this Agreement and
the Transaction Documents and shall have the rights of a Purchaser under this
Agreement and the Transaction Documents. The Company shall not require an
opinion of counsel in connection with the transfer of the shares of Common
Stock, the Warrant or the Warrant Shares to an affiliate of a Purchaser.
b. The Purchasers agree to the imprinting, so long as is required by
this Section 3.1(b), of the following legend on the Common Stock, the Warrant
and the Warrant Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SHARES.
The Company acknowledges and agrees that a Purchaser may from time to
time pledge pursuant to a bona fide margin agreement or grant a security
interest in some or all of the
10
shares of Common Stock, the Warrant or the Warrant Shares and, if required under
the terms of such arrangement, such Purchaser may transfer pledged or secured
shares of Common Stock, Warrant or Warrant Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of the pledgee, secured party or pledgor shall be
required in connection therewith. Further, no notice shall be required of such
pledge. At the appropriate Purchaser's expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party reasonably
request in connection with a pledge or transfer of the shares of Common Stock,
the Warrant or the Warrant Shares, including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.
Neither the Common Stock, the Warrant, nor the Warrant Shares
shall contain the legend set forth above (or any other legend) (i) while a
registration statement covering the resale of such security is effective under
the Securities Act, (ii) if in the written opinion of counsel to the Company
experienced in the area of United States securities laws such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) or
(iii) if such Common Stock, the Warrant or the Warrant Shares may be sold
pursuant to Rule 144(k). The Company agrees that it will provide any Purchaser,
upon request, with a certificate or certificates representing shares of Common
Stock, the Warrant or the Warrant Shares, free from such legend at such time as
such legend is no longer required hereunder. If such certificate or certificates
had previously been issued with such a legend or any other legend, the Company
shall, upon request and upon the delivery of the legended certificate(s),
reissue such certificate or certificates free of any legend. The Company agrees
that following the effective date of the registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale of the Shares and Warrant Shares by the Purchasers or at such time as
such legend is no longer required under this Section 3.1, it will, no later than
three Trading Days (as such term is defined in the Registration Rights
Agreement) following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Shares and Warrant Shares issued
with a restrictive legend, deliver or cause to be delivered to such Purchaser a
certificate representing such Shares and Warrant Shares that is free from all
restrictive and other legends.
3.2 Stop Transfer Instruction. The Company may not make any notation on
-------------------------
its records or give instructions to any transfer agent of the Company which
enlarge the restrictions on transfer set forth in Section 3.1.
3.3 Reservation of Warrant Shares. The Company at all times shall reserve
-----------------------------
a sufficient number of shares of its authorized but unissued Common Stock to
provide for the full conversion of the Warrant. If at any time the number of
shares of Common Stock authorized and reserved for issuance is insufficient to
cover the number of Warrant Shares issued and issuable upon exercise of the
Warrant (based on the Exercise Price (as defined in the Warrant) of the Warrant
in effect from time to time) without regard to any limitation on exercises, the
Company will promptly take all corporate action necessary to authorize and
reserve such shares including, without limitation, calling a special meeting of
stockholders to authorize additional shares to meet the Company's obligations
under this Section 3.3, in the case of an insufficient number of
11
authorized shares, and using best efforts to obtain stockholder approval of an
increase in such authorized number of shares.
3.4 Furnishing of Information. As long as any Purchaser owns shares of
-------------------------
Common Stock, the Warrant or the Warrant Shares, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act. Upon the request of any such Person, the
Company shall deliver to such Person a written certification of a duly
authorized officer as to whether it has complied with the preceding sentence. As
long as any Purchaser owns shares of Common Stock, the Warrant or the Warrant
Shares, if the Company is not required to file reports pursuant to such laws, it
will prepare and furnish to the Purchasers and make publicly available in
accordance with Rule 144(c) such information as is required for the Purchasers
to sell the Shares under Rule 144.
3.5 Integration. The Company shall not, and shall use its best efforts to
-----------
ensure that no affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the shares of Common Stock hereunder in a manner that would require the
registration under the Securities Act of the sale of the shares Common Stock to
the Purchasers, or that would be integrated with the offer or sale of the Shares
for purposes of the rules and regulations of the Nasdaq National Market, if such
integration would result in a violation of any such rule or regulation.
3.6 Non-Public Information. Except for information regarding the
----------------------
transaction contemplated by this Agreement and the Transaction Documents and the
terms and conditions hereof and thereof, the Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company. Notwithstanding anything to the contrary herein, no
Purchaser shall engage in any trading activity in the Company's securities in
violation of Regulation M of the Exchange Act.
3.7 Use of Proceeds. The Company shall use the net proceeds from the sale
---------------
of the shares of Common Stock hereunder for working capital purposes.
3.8 Best Efforts. Each of the parties hereto shall use its best efforts to
------------
satisfy each of the conditions to be satisfied by it as provided in Article IV
of this Agreement.
3.9 Subsequent Placements.
---------------------
a. From the date hereof until the Effective Date, the Company will
not directly or indirectly, offer, sell or grant any option to purchase (or
announce any offer, sale, grant or any option to purchase) any of its Common
Stock or other securities which entitle the holder thereof to receive Common
Stock, including without limitation any debt, preferred stock
12
or other instrument or security that is, at any time during its life and
under any circumstances, convertible into or exchangeable for Common Stock.
b. The restrictions contained in paragraph (a) of this Section shall
not apply to: (i) the issuance of the Warrant Shares, (ii) the granting of
options, restricted stock, stock appreciation rights or similar instruments to
employees, officers, directors and consultants of the Company pursuant to any
stock option or similar plan duly adopted by the Company or to the issuance of
shares of Common Stock upon exercise of such options or other rights, (iii) the
issuance of up to 141,658 shares of Common Stock issuable pursuant to the
Company's pre-existing obligation to issue shares to a former consultant (as
described on Schedule 2.1(c)); (iv) issuances of shares of Common Stock pursuant
to any acquisition by the Company of the assets or capital stock of a business
pursuant to a merger, asset sale or other business combination; (v) issuances of
shares of Common Stock upon conversion of the Company's Series A1 Convertible
Redeemable Preferred Stock (the "Series A1 Preferred Stock") or the Company's
-------------------------
Series B1 Convertible Redeemable Preferred Stock (the "Series B1 Preferred
-------------------
Stock") (as described on Schedule 2.1(c)); (iv) the issuance of shares of Common
-----
Stock upon the exercise of warrants disclosed on Schedule 2.1(c); or (vi)
issuances of shares of Common Stock in accordance with Section 3.9(c) below.
c. Notwithstanding the foregoing, from the date hereof through the
seventh Trading Day following the date of this Agreement, the Company has the
right to issue and sell shares of Common Stock (a "Subsequent Placement") to the
--------------------
holders of the Series A1 Preferred Stock and Series B1 Preferred Stock
(collectively, the "Preferred Stockholders") on the same terms and conditions as
----------------------
set forth in this Agreement, including the price per share. If the Subsequent
Placement is not consummated for any reason on the terms and conditions set
forth in this Agreement, including the price per share, within such seven
Trading Days then the Company shall not have the right to issue and sell shares
of Common Stock to the Preferred Stockholders. Notwithstanding the foregoing,
the Company may not offer or issue any shares of Common Stock pursuant to a a
Subsequent Placement to the extent that the number of shares of Common Stock
issuable pursuant to the Subsequent Placement, when added to the number of
shares of Common Stock issuable under this Agreement would require the approval
of the shareholders of the Company under the rules and regulations of the Nasdaq
National Market.
ARTICLE IV.
CONDITIONS
4.1 Closing.
-------
a. Conditions Precedent to the Obligation of the Company to Sell the
-----------------------------------------------------------------
Shares of Common Stock and the Warrants. The obligation of the Company to sell
---------------------------------------
the shares of Common Stock and the Warrants is subject to the satisfaction or
waiver by the Company, at or before the Closing Date, of each of the following
conditions:
(i) Accuracy of the Purchasers' Representations and Warranties.
----------------------------------------------------------
The representations and warranties of each Purchaser in this Agreement shall be
true and correct in all material respects as of the date when made and as of the
Closing Date;
13
(ii) Performance by the Purchasers. Each Purchaser shall have
-----------------------------
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or before the Closing Date; and
(iii) No Injunction. No statute, rule, regulation, executive
-------------
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Transaction Documents.
b. Conditions Precedent to the Obligation of the Purchasers to
-----------------------------------------------------------
Purchase the Shares of Common Stock and Warrants at the Closing. The obligation
---------------------------------------------------------------
of each Purchaser hereunder to acquire and pay for the shares of Common Stock
and the Warrant at the Closing is subject to the satisfaction or waiver by
Purchaser, at or before the Closing Date, of each of the following conditions:
(i) Accuracy of the Company's Representations and Warranties. The
--------------------------------------------------------
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all respects as of the date when made and as of the
Closing Date;
(ii) Performance by the Company. The Company shall have performed,
--------------------------
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or before the Closing Date;
(iii) No Injunction. No statute, rule, regulation, executive
-------------
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement and the Transaction Documents;
(iv) Required Approvals. All Required Approvals shall have been
------------------
obtained; and
(v) Shares of Common Stock. The Company shall have duly reserved
----------------------
the number of shares of Common Stock and the number or Warrant Shares issuable
upon the exercise of the Warrants acquired by the Purchasers on the Closing
Date.
ARTICLE V.
INDEMNIFICATION
5.1 Indemnification. The Company will indemnify and hold the Purchasers
---------------
and their directors, officers, shareholders, partners, employees and agents
(each, a "Purchaser Party") harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any misrepresentation, breach or
inaccuracy, or any allegation by a
14
third party that, if true, would constitute a breach or inaccuracy, of any of
the representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents; or (b) any cause of
action, suit or claim brought or made against such Purchaser Party and solely
arising out of or solely resulting from the execution, delivery, performance or
enforcement of this Agreement or any of the other Transaction Documents. The
Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred. Notwithstanding the foregoing, the Company shall not be required to
indemnify any the Purchaser under the terms of this Article V with respect to
any claim or violation for which indemnification is expressly excluded under the
Registration Rights Agreement.
ARTICLE VI.
MISCELLANEOUS
6.1 Entire Agreement. This Agreement, together with the Exhibits and
----------------
Schedules hereto and the Transaction Documents contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters.
6.2 Notices. Whenever it is provided herein that any notice, demand,
-------
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any of the
parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or by telecopy and confirmed by
telecopy answerback addressed as follows:
If to the Company:
Xxxxx 0 Systems, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx Xxxxxx, Xx., Esq.
With a Copy to:
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
If to the Purchasers: To the address set forth on the counterpart signature
page of such Purchaser.
15
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a business day, (b) the next business day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a business day
or later than 6:30 p.m. (New York City time) on any business day, (c) the
business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. As used herein, a "business day" means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to close.
6.3 Amendments; Waivers. No provision of this Agreement may be waived or
-------------------
amended except in a written instrument signed, in the case of an amendment, by
both the Company and each of the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
6.4 Headings. The headings herein are for convenience only, do not
--------
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
6.5 References. References herein to Sections are to Sections of this
----------
Agreement, unless otherwise expressly provided.
6.6 Successors and Assigns; Assignability. Neither this Agreement nor any
-------------------------------------
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by either the Company or the Purchasers without the prior
written consent of the other party. In the event that such prior written consent
is obtained and this Agreement is assigned by either party, all covenants
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
6.7 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.
6.8 Governing Law; Waiver of Jury Trial. All questions concerning the
-----------------------------------
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflicts of law
thereof. Each party agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective
16
affiliates, directors, officers, shareholders, employees or agents) (each a
"Proceeding") shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such Proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for 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 hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
6.9 Survival. The representations, warranties, agreements and covenants
--------
contained herein shall survive following the Closing.
6.10 Execution. This Agreement may be executed in two or more
---------
counterparts, all of which when taken together 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, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
6.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
6.12 Publicity. The Purchasers shall not issue any press release or make
---------
any public disclosure regarding the transactions contemplated hereby unless such
press release or public disclosure is approved by the Company in advance.
Notwithstanding the foregoing, each of the parties hereto may, in documents
required to be filed by it with the SEC or other regulatory bodies, make such
statements with respect to the transactions contemplated hereby as each may be
advised by counsel is legally necessary or advisable, and may make such
disclosure as it is advised by its counsel is required by law.
6.13 Severability. In case any one or more of the provisions of this
------------
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the
17
parties will attempt to agree upon a valid and enforceable provision which shall
be a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.
6.14 Further Assurances. Each party shall do and perform, or cause to
------------------
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
6.15 Replacement of Certificates. If any certificate or instrument
---------------------------
evidencing any shares of Common Stock is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement shares.
6.16 Remedies. In addition to being entitled to exercise all rights
--------
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under this
Agreement or the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach
of obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
6.17 Independent Nature of Purchasers' Obligations and Rights. The
--------------------------------------------------------
obligations of each Purchaser under this Agreement or any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Agreement or any the Transaction Document. Each Purchaser shall be entitled
to independently protect and enforce its rights, including without limitation
the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
6.18 Fees and Expenses. Except as set forth in the Registration Rights
-----------------
Agreement, and except as provided herein, each Party shall pay the fees and
expenses of its advisers, accountants and other experts; provided, however, that
--------- -------
the Company shall pay the reasonable expenses of one legal counsel selected by
each of the Purchasers not to exceed the amount set forth next to such
Purchaser's name on Schedule II.
-----------
18
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons as
of the day and year first above written.
XXXXX 0 SYSTEMS, INC.
By:
------------------------------------
Xxxx Xxxxxx
President
PURCHASERS:
[COUNTERPART SIGNATURE PAGES
FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons as
of the day and year first above written.
PURCHASER
------------------------------------------------
(Name of Purchaser)
By:
----------------------------------------------
(Signature of Purchaser(s))
Name:
--------------------------------------------
(Name of Signatory if Purchaser is an Entity)
Title:
-------------------------------------------
(if Purchaser is an Entity)
Purchase Price: $____________
Address for Notice:
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
With a copy to:
------------------------------------------------
------------------------------------------------
------------------------------------------------
