SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of February
28, 2000, by and among WORLDWIDEWEB XXXXXXXXX.XXX, INC., a corporation organized
under the laws of the State of Florida (the "Company"), with headquarters
located at 0000 X.X. 0xx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, and
each of the purchasers (individually the "Purchaser" and collectively the
"Purchasers") set forth on the execution page hereof (the "Execution Page").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");
B. The Company desires to sell, and the Purchasers desire to purchase,
upon the terms and conditions stated in this Agreement, 11,200 shares of Series
A Convertible Preferred Stock of the Company (the "Preferred Shares") for an
aggregate purchase price of Eleven Million Two Hundred Thousand Dollars
($11,200,000), Two Million Dollars ($2,000,000) of which has been received by
the Company on the date hereof, and which Preferred Shares are evidenced by a
Certificate of Designation in a form attached hereto as Exhibit A (the
"Certificate") and which Preferred Shares are convertible into shares of the
Company's Common Stock, $.001 par value per share (the "Common Stock") at a
conversion price of $4.50 per Share. The Preferred Shares and the Common Stock
issuable upon conversion of the Preferred Shares (the "Common Shares") are
collectively referred to herein as the "Securities;"
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws;
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES
a. Purchase of Preferred Shares. The issuance, sale and purchase of the
Preferred Shares shall occur as of March 31, 2000. On the date of the closing
(the "Closing"), subject to the satisfaction (or waiver) of the relevant
conditions set forth in Section 6 and Section 7 below, the Company shall issue
and sell to each Purchaser, and each Purchaser severally agrees to purchase from
the Company, the Preferred Shares for the relevant purchase price as is set
forth on such Purchaser's Execution Page attached hereto (the "Purchase Price").
Each Purchaser's obligation to purchase its Preferred Shares hereunder is
distinct and separate from each other Purchaser's
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obligation to purchase its Preferred Shares and no Purchaser shall be required
to purchase hereunder more than the number of its Preferred Shares set forth on
such Purchaser's Execution Page hereto notwithstanding any failure by any other
Purchaser to purchase its Preferred Shares hereunder nor shall any Purchaser
have any liability by reason of any such failure by any other Purchaser.
b. Form of Payment- Mechanism of Exchange. At the Closing, each
Purchaser shall pay such Purchaser's Purchase Price hereunder by wire transfer
to the Company, in accordance with the Company's written wiring instructions,
against delivery of the duly executed certificates evidencing the Preferred
Shares being purchased by such Purchaser and the Company shall deliver such
Preferred Shares against delivery of such Purchase Price; provided, however,
that Two Million Dollars ($2,000,000) of the Purchase Price has already been
received by the Company.
c. Closing Date. Subject to the satisfaction (or waiver) of the
relevant conditions thereto set forth in Section 6 and Section 7 below, the date
and time of the issuance and sale of the Shares pursuant to this Agreement shall
be 12:00 noon Eastern Time as of March 31, 2000 or other time as may be mutually
agreed upon by the Company and the Purchasers. The date of the Closing shall
hereinafter be referred to as the "Closing Date." The Closing shall occur at the
offices of Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
2. PURCHASER'S REPRESENTATIONS AND WARRANTIES
Each Purchaser severally, but not jointly, represents and warrants to
the Company as follows:
a. Purchase for Own Account, Etc. Purchaser is purchasing the
Securities for Purchaser's own account and not with a present view towards the
sale or distribution thereof, and Purchaser acknowledges that the Securities may
be sold only pursuant to sales that are exempt from the registration
requirements of the Securities Act and/or sales registered under the Securities
Act. Purchaser understands that Purchaser must bear the economic risk of this
investment indefinitely, unless the Securities are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws or an
exemption from such registration is available, and that the Company has no
present intention of registering any such Securities other than as contemplated
by the Registration Rights Agreement. Notwithstanding anything in this Section
2(a) to the contrary, by making the representations herein, the Purchaser does
not agree to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act.
b. Accredited Investor Status. Purchaser is an "Accredited Investor" as
that term is defined in Rule 501(a) of Regulation D.
c. Reliance on Exemptions. Purchaser understands that the Securities
are being offered and sold to Purchaser in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and
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accuracy of, and Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.
d. Information. Purchaser and its counsel have been furnished all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
specifically requested by Purchaser or its counsel. Purchaser and its counsel
have been afforded the opportunity to ask questions of the Company and have
received what Purchaser believes to be satisfactory answers to any such
inquiries. Neither such inquiries nor any other due diligence investigation
conducted by Purchaser or its counsel or any of its representatives shall
modify, amend or affect Purchaser's right to rely on the Company's
representations and warranties contained in Section 3 below. Purchaser
understands that Purchaser's investment in the Securities involves a high degree
of risk.
e. Governmental Review. 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 Securities.
f. Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (a) subsequently registered thereunder, or (b)
Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred under an exemption from such
registration, or (c) sold under Rule 144 promulgated under the Securities Act
(or a successor rule) ("Rule 144"), or (d) sold or transferred to an affiliate
of Purchaser and such sale or transfer is pursuant to an exemption from such
registration or pursuant to such registration; and (ii) neither the Company nor
any other person is under any obligation to register such Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case, other than pursuant to the
Registration Rights Agreement).
g. Legends. Purchaser understands that until such time as the Shares
have been registered under the Securities Act (including registration pursuant
to Rule 416 thereunder) as contemplated by the Registration Rights Agreement or
otherwise may be sold by Purchaser under Rule 144, the certificates for the
Shares may bear a restrictive legend in substantially the following form:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any state of the United States. The securities represented hereby may
not be offered or sold in the absence of an effective registration
statement for the securities under applicable securities laws unless
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offered, sold or transferred under an available exemption from the
registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by state securities laws, (a) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder), or (b) such holder provides the Company with
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act or
(c) such holder provides the Company with reasonable assurances that such
Security has been sold under Rule 144 or can be sold under Rule 144(k).
Purchaser agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, pursuant to an effective
registration statement or under an exemption from the registration requirements
of the Securities Act. In the event the above legend is removed from any
Security and thereafter the effectiveness of a registration statement covering
such Security is suspended or the Company determines that a supplement or
amendment thereto is required by applicable securities laws, then upon
reasonable advance notice to Purchaser the Company may require that the above
legend be placed on any such Security and Purchaser shall cooperate in the
prompt replacement of such legend. Such legend shall be removed when such
Security may be sold pursuant to an effective registration statement or sold
under Rule 144.
h. Authorization; Enforcement. This Agreement, the Certificate and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of Purchaser and are valid and binding agreements of
Purchaser enforceable in accordance with their terms.
i. Residency. Purchaser is a resident of the jurisdiction set forth
under the Purchaser's name on the Execution Page hereto executed by Purchaser.
j. Acknowledgments Regarding Placement Agent. Purchaser acknowledges
that The Zanett Securities Corporation is acting as placement agent (the
"Placement Agent") for the Securities being offered hereby and will be
compensated by the Company for acting in such capacity. Purchaser further
acknowledges that the Placement Agent has acted solely as placement agent in
connection with the offering of the Securities by the Company, that the
information and data provided to Purchaser and referred to in subsection (d)
above or otherwise in connection with the transactions contemplated hereby have
not been subjected to independent verification by the Placement Agent, and that
the Placement Agent makes no representation or warranty with respect to the
accuracy or completeness of such information, data or other related disclosure
material. Purchaser further acknowledges that in making its decision to enter
into this Agreement and purchase the Securities it has relied on the Company's
representations and warranties contained in Section 3 below and on its own
examination of the Company and the terms of, and consequences of holding, the
Securities. Purchaser further acknowledges that the provisions of this Section
2(j) are for the benefit of, and may be enforced by, the Placement Agent.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted. The Company and each of its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect. "Material Adverse Effect" means any material adverse effect on (i) the
Securities, (ii) the ability of the Company to perform its obligations hereunder
and under the Certificate or the Registration Rights Agreement or (iii) the
business, operations, properties, prospects or financial condition of the
Company and its subsidiaries, taken as a whole.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Certificate and the Registration Rights Agreement, to issue
and sell the Preferred Shares in accordance with the terms hereof and thereof,
to issue the Common Shares upon conversion of the Preferred Shares in accordance
with the terms thereof subject to (i) the execution, delivery and performance of
this Agreement, the Certificate and the Registration Rights Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Preferred Shares and
the issuance and reservation for issuance of the Common Shares) have been duly
authorized by the Company's Board of Directors, and no further consent or
authorization of the Company, its Board of Directors or its shareholders is
required and (ii) this Agreement constitutes, and, upon execution and delivery
by the Company of the Registration Rights Agreement, such agreements will
constitute, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms.
c. Stockholder Authorization. The Company believes that neither the
execution, delivery or performance of its obligations under this Agreement, the
Certificate or the Registration Rights Agreement by the Company nor the
consummation by it of the transactions contemplated hereby or thereby
(including, without limitation, the issuance of the Preferred Shares or the
issuance or reservation for issuance of the Common Shares) require any consent
or authorization of the Company's shareholders, including but not limited to
consent under Rule 4460(i) promulgated by the National Association of Securities
Dealers, Inc. (the "NASD") or any similar rule.
d. Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Preferred Shares) exercisable
for, or convertible into or exchangeable for any shares of capital stock and the
number
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of shares to be reserved for issuance upon conversion of the Preferred Shares is
set forth on Schedule 3(d). All of such outstanding shares of capital stock have
been, or upon issuance will be, validly issued, fully paid and nonassessable. No
shares of capital stock of the Company (including the Preferred Shares and the
Common Shares) are, and will not be, subject to preemptive rights or any other
similar rights of the shareholders of the Company or any liens or encumbrances.
Except for the Securities and as disclosed in Schedule 3(d), as of the date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its subsidiaries, or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries, and (ii) there are no agreements or arrangements under which the
Company or any of its subsidiaries is obligated to register the sale of any of
its or their securities under the Securities Act (except the Registration Rights
Agreement); provided, however, that if any securities are disclosed on Schedule
3(d) which the Company is obligated to register for sale, the Securityholders
shall not conduct any sale (the "Sale") of those securities (the "Scheduled
Securities") beginning on the date hereof unless they shall have first delivered
to Zanett Capital Corp. at least ten (10) business days prior to the closing of
such Sale, written notice describing the proposed Sale, including the terms and
conditions thereof, and providing Zanett Capital Corp. and its affiliates, an
option during the ten (10) business day period following delivery of such notice
to purchase the entire amount of the Scheduled Securities being sold in the Sale
on the same terms as contemplated by such Sale. In addition, if Zanett Capital
Corp. waives its right of first refusal on any sale of the Scheduled Securities,
the holder of the Scheduled Securities cannot sell more than ten percent (10%)
of their monthly holdings of the Scheduled Securities per month, thereafter,
until all such Scheduled Securities are sold. Except as set forth on Schedule
3(d), there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the issuance of the Securities in
accordance with the terms of this Agreement or the Certificate. The Company has
furnished to each Purchaser true and correct copies of the Company's Certificate
of Incorporation as in effect on the date hereof ("Certificate of
Incorporation"), the Company's By-laws as in effect on the date hereof (the
"By-laws"), and all other instruments and agreements governing securities
convertible into or exercisable or exchangeable for capital stock of the
Company. On the Closing Date, respectively, except for the issuance of some or
all of the Securities as contemplated hereby, there are no changes to the
representations and warranties contained in this Section 3(d). The officer's
certificate referred to in Section 7(a)(iv) and Section 7(b)(iii) shall contain
a written update of Schedule 3(d) as of the Closing Date.
e. Issuance of Shares. The Preferred Shares are duly authorized and
reserved for issuance, and, upon conversion of the Preferred Shares in
accordance with, and subject to the limitations set forth in the terms thereof,
the Common Shares will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights or other similar rights of shareholders of the Company and
will not impose personal liability upon the holder thereof.
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f. No Conflicts. The execution, delivery and performance of this
Agreement, the Certificate and the Registration Rights Agreement by the Company,
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance, as applicable, of the Preferred Shares and the Common Shares) will not
(i) result in a violation of the Certificate of Incorporation or By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including U.S. federal and state securities laws and regulations)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries is bound or affected (except,
with respect to clause (ii), for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its subsidiaries is in violation of its Certificate of
Incorporation, By-laws or other organizational documents and neither the Company
nor any of its subsidiaries is in default (and no event has occurred which, with
notice or lapse of time or both, would put the Company or any of its
subsidiaries in default), nor has there occurred any event giving others (with
notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, except for actual or possible
violations, defaults or rights as would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its
subsidiaries are not being conducted, and shall not be conducted so long as each
Purchaser owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity, except for actual or possible violations,
if any, the sanctions for which either singly or in the aggregate would not have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required under the Securities Act and any applicable state securities
laws, the Company is not required to obtain any consent, approval, authorization
or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement, the Certificate
or the Registration Rights Agreement, in each case in accordance with the terms
hereof or thereof. The Common Stock is listed for trading on the Nasdaq
Electronic Bulletin Board ( the "Bulletin Board"), and the Company is not in
violation of the listing requirements of the Bulletin Board and does not
reasonably anticipate that the Common Stock will be delisted by the Bulletin
Board for the foreseeable future, nor is aware of any basis for such delisting.
g. SEC Documents, Financial Statements. Since March 31, 1998, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the United States Securities and
Exchange Commission ("SEC") pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the
foregoing filed prior to the date hereof and after the First Filing Date, and
all exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). The Company has delivered to Zanett Capital
Corp. true and complete copies of the SEC Documents, except for the exhibits and
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schedules thereto and the documents incorporated therein. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Documents is, or has
been, required to be updated or amended under applicable law. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared in
accordance with U.S. generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the consolidated financial position of the Company and its consolidated
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 immaterial year-end audit adjustments). Except as set
forth in the financial statements of the Company included in the SEC Documents
filed prior to the date hereof, the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to the date of such financial statements and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such financial statements, which liabilities and obligations
referred to in clauses (i) and (ii), individually or in the aggregate, are not
material to the financial condition or operating results of the Company.
h. Absence of Certain Changes. Since March 31, 1999, there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or prospects
of the Company, except as disclosed in Schedule 3(h) or the Company's quarterly
or periodic reports filed under the Securities Exchange Act of 1934, as amended.
i. Absence of Litigation. Except as disclosed in the SEC Documents
filed prior to the date hereof, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body including, without limitation, the
Securities and Exchange Commission or NASDAQ, pending or, to the knowledge of
the Company or any of its subsidiaries, threatened against or affecting the
Company, any of its subsidiaries, or any of their respective directors or
officers in their capacities as such which will have a Material Adverse Effect.
To the best of the knowledge of the Company, there are no facts which, if known
by a potential claimant or governmental authority, could give rise to a claim or
proceeding which, if asserted or conducted with results unfavorable to the
Company or any of its subsidiaries, could have a Material Adverse Effect.
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j. Intellectual Property. Each of the Company and its subsidiaries owns
or is licensed to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright applications,
licenses, permits, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other similar rights and proprietary knowledge (collectively, "Intangibles")
necessary for the conduct of its business as now being conducted. To the best
knowledge of the Company, neither the Company nor any subsidiary of the Company
infringes or is in conflict with any right of any other person with respect to
any Intangibles which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
Except as set forth on Schedule 3(j), neither the Company nor any of its
subsidiaries has received written notice of any pending conflict with or
infringement upon such third party Intangibles. Neither the Company nor any of
its subsidiaries has entered into any consent, indemnification, forbearance to
xxx or settlement agreements with respect to the validity of the Company's or
its subsidiaries' ownership or right to use its Intangibles and, to the best
knowledge of the Company, there is no reasonable basis for any such claim to be
successful. The Intangibles are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company and its subsidiaries have
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Intangibles used pursuant to
licenses. To the best knowledge of the Company, no person is infringing on or
violating the Intangibles owned or used by the Company of its subsidiaries.
k. Foreign Corrupt Practices. Neither the Company, nor any of its
subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977;
or made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
l. Disclosure. All information relating to or concerning the Company
set forth in this Agreement or provided to each Purchaser pursuant to Section
2(d) hereof and otherwise in connection with the transactions contemplated
hereby is true and correct in all material respects and the Company has not
omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or exists with
respect to the Company or its subsidiaries or their respective businesses,
properties, prospects, operations or financial conditions, which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date hereof by the Company under the Securities Act with respect to a primary
issuance of the Company's securities.
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m. Acknowledgment Regarding the Purchasers' Purchase of the Securities.
The Company acknowledges and agrees that each of the Purchasers is not acting as
a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement or the transactions contemplated hereby, and the
relationship between the Company and each Purchaser is "arms length" and that
any statement made by any Purchaser or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to such Purchaser's purchase
of Securities and has not been relied upon by the Company, its officers or
directors in any way, except as provided for or contemplated in Section 2
hereof. The Company further represents to each Purchaser that the Company's
decision to enter into this Agreement has been based solely on an independent
evaluation by the Company and its representatives.
n. No General Solicitation. Neither the Company nor any distributor
participating on the Company's behalf in the transactions contemplated hereby
(if any) nor any person acting for the Company, or any such distributor, has
conducted any "general solicitation," as such term is defined in Regulation D,
with respect to any of the Securities being offered hereby.
o. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Securities being offered hereby under the Securities Act or cause this offering
of Securities to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act or any applicable stockholder
approval provisions, including, without limitation, Rule 4460(i) of the NASD or
any similar rule.
p. No Brokers. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby, except for dealings with Zanett Securities Corp., whose
commissions and fees will be paid by the Company.
q. Tax Status. Except as set forth in the SEC Documents filed prior to
the date hereof or on Schedule 3(q), the Company and each of its subsidiaries
has made or filed all federal, state and local income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its subsidiaries has
set aside on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has not executed a waiver with respect to any statute of limitations relating to
the assessment or
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collection of any federal, state or local tax. None of the Company's tax returns
has been or is being audited by any taxing authority.
r. Title. The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3(r) or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries. Any real property and facilities held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and Section 7 of this
Agreement.
b. Form D; Blue Sky Laws. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the Purchaser
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States or obtain exemption therefrom, and shall provide
evidence of any such action so taken to the Purchaser on or prior to the Closing
Date. Within two trading days after the Closing, the Company agrees to file a
Form 8-K concerning this Agreement and the transactions contemplated hereby,
which Form 8-K shall attach this Agreement and its Exhibits as exhibits to such
Form 8-K.
c. Reporting Status. So long as the Purchaser beneficially owns any of
the Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the Exchange Act, and the Company shall not terminate
its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would permit such
termination.
d. Use of Proceeds; Limitation on Acquisitions. The Company shall use
the proceeds from the sale of the Preferred Shares as set forth on Schedule
4(d); provided, further, that the Company shall not use such proceeds (i) to
repurchase any shares of Common Stock of the Company, (ii) to engage in any type
of investment activity similar to that conducted on the date hereof, (iii) to
make loans or engage in transactions with its directors, officers, employees,
shareholders or their family members and affiliates (as such term is defined in
Rule 12b-2 of the Exchange Act) of such persons or the Company or (iv) to
acquire any stock of or ownership interest of any kind in, or, except in the
ordinary course of business, acquire any assets or property of any
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other business entity whatsoever. The Company shall not use any working capital
to acquire any stock of or ownership interest of any kind in, or, except in the
ordinary course of business, acquire any assets or property of any other
business entity whatsoever without the written consent of Zanett Capital Corp.,
except for any acquisitions of stocks or assets which do not exceed, in the
aggregate, Two Hundred Fifty Thousand Dollars ($250,000).
e. Additional Equity Capital; Right of First Offer; Call Option.
(i) The Company agrees that during the period beginning on the
date hereof and ending on the date which is 240 days following the Closing Date
(the "Lock-Up Period"), the Company will not, without the prior written consent
of Zanett Capital Corp., contract with any party to obtain additional financing
in which any equity or equity-linked securities are issued (including any debt
financing with an equity component) ("Future Offerings"). In addition, the
Company will not conduct any Future Offering during the period beginning on the
date hereof and ending 120 days following the expiration of the Lock-Up Period,
unless it shall have first delivered to Zanett Capital Corp., at least ten (10)
business days prior to the closing of such Future Offering, written notice
describing the proposed Future Offering, including the terms and conditions
thereof, and provided Zanett Capital Corp. and its affiliates an option during
the ten (10) business day period following delivery of such notice to purchase
all of the securities being offered in the Future Offering on the same terms as
contemplated by such Future Offering (the limitations referred to in this and
the immediately preceding sentence are collectively referred to as the "Capital
Raising Limitations"); provided, however, that in the event more than one
Purchaser desires to purchase such securities, (a) the interested Purchasers may
allocate such Future Offering among themselves by agreement among such
Purchasers or, in the event such Purchasers cannot reach an agreement in such
period, such Future Offering shall be allocated among them on a pro rata basis
equal to the percentage each such Purchaser's Purchase Price bears to the sum of
the Purchase Prices of such interested Purchasers. The Capital Raising
Limitations shall not apply to any transaction involving issuances of securities
as consideration in a merger, consolidation or acquisition of assets, or in
connection with any strategic partnership or joint venture (the primary purpose
of which is not to raise equity capital), or as consideration for the
acquisition of a business, product or license by the Company. The Capital
Raising Limitations also shall not apply to (i) the issuance of securities
pursuant to an underwritten public offering, (ii) the issuance of securities
upon exercise or conversion of the Company's options, warrants or other
convertible securities outstanding as of the date hereof or (iii) the grant of
additional options or warrants, or the issuance of additional securities, under
any duly authorized Company stock option or restricted stock plan for the
benefit of the Company's employees or directors.
(ii) At any time from the Closing Date until eighteen (18)
months after the Closing Date (the "Call Option Period"), the Purchasers have
the right to purchase from the Company up to an additional 2,222,222 shares of
Common Stock at a purchase price of $7.50 per share (the "Call Option"). The
Call Option may be exercised by the holders of a majority in face amount of the
Preferred Shares at any time during the Call Option Period, and to the extent
that all Purchasers choose not to participate in the Call Option, the remaining
Purchasers so choosing to
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participate in the Call Option shall be entitled to participate on a pro rata
basis based upon the amount of Preferred Shares purchased hereunder relative to
all holders of Preferred Shares participating in the Call Option. The purchase
of Common Stock pursuant to the Call Option shall be evidenced by documents and
instruments containing customary terms and conditions.
f. Expenses. The Company shall pay to each Purchaser, at the Closing,
reimbursement for the expenses reasonably incurred by such Purchaser and its
affiliates and advisors in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other agreements to be executed
in connection herewith, including, without limitation, such Purchaser's and its
affiliates' and advisors' reasonable due diligence and attorneys' fees and
expenses (the "Expenses"). In addition, from time to time thereafter, upon each
Purchaser's written request, the Company shall pay to such Purchaser such
additional Expenses, if any, not covered by such payment, in each case to the
extent reasonably incurred by such Purchaser in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other agreements
to be executed in connection herewith. Notwithstanding the foregoing, the
Company shall not be obligated to reimburse the Purchasers for more than $50,000
pursuant to this Section 4(f).
g. Financial Information. The Company agrees to send the following
reports to each Purchaser until such Purchaser transfers, assigns or sells all
of its Securities: (i) within ten (10) days after the filing with the SEC, a
copy of its Annual Report on Form 10-KSB, its Quarterly Reports on Form 10-QSB,
its proxy statements and any Current Reports on Form 8-K; and (ii) within one
(1) day after release, copies of all press releases issued by the Company or any
of its subsidiaries.
h. Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
Common Shares to provide for the full conversion of the Preferred Shares as
otherwise required by the Certificate.
i. Listing. The Company shall promptly secure the listing of the Common
Shares issuable upon the conversion of the Preferred Shares, subject to the
limitations contained therein upon the Bulletin Board, or each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Common Shares from time to time issuable upon conversion of the
Preferred Shares. The Company will take all action necessary to continue the
listing and trading of all of its Common Stock on the Bulletin Board and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the NASD and such exchanges, as
applicable.
j. Corporate Existence. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
Certificate (except as otherwise provided therein) and the agreements and
instruments entered into in connection herewith regardless of whether or not the
Company would have had a sufficient
-13-
number of Common Shares authorized and available for issuance in order to effect
the conversion of the Preferred Shares outstanding as of the date of such
transaction and (ii) is a publicly traded corporation whose common stock is
listed for trading on the NASDAQ, NYSE or AMEX. Notwithstanding the foregoing,
the Company covenants and agrees that it will not engage in any merger,
consolidation or sale of all or substantially all of its assets at any time
prior to the effectiveness of the registration statement required to be filed
pursuant to the Registration Rights Agreement without (A) providing Zanett
Capital Corp. with written notice of such transaction at least sixty (60) days
prior to the consummation of the transaction and (B) obtaining the written
consent of the Purchasers holding a majority, in face amount, of the Preferred
Shares on or before the 10th day after the delivery of such notice by the
Company.
k. No Integrated Offerings. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of Securities to be integrated with any
other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
l. Shareholders' Meeting. If required, the Company shall call a meeting
of its shareholders to be held as promptly as practicable and in any event
within one hundred twenty (120) days of the Closing Date for the purpose of
voting upon and approving this Agreement, the Certificate and Registration
Rights Agreement and the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Securities. The Company
shall, through its Board of Directors, recommend to its shareholders approval of
such matters. The Company shall use its best efforts to solicit from its
shareholders proxies in favor of such matters sufficient to comply with all
relevant legal requirements, including, without limitation, Rule 4460(i)
promulgated by the NASD.
m. Certain Trading Restrictions. So long as the Company is in
compliance in all material respects with its obligations to the Purchasers under
this Agreement, the Certificate and the Registration Rights Agreement, each
Purchaser agrees that from the date of this Agreement until the date the
Registration Statement is declared effective by the SEC, it will not engage in
any short sales or other hedging transactions relating to the Common Shares.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company shall instruct its transfer agent to issue certificates,
registered in the name of each Purchaser or its nominee, for the Common Shares
in such amounts as specified from time to time by such Purchaser to the Company
upon conversion of the Preferred Shares. To the extent and during the periods
provided in Section 2(f) and Section 2(g) of this Agreement, all such
certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement.
b. The Company warrants that no instruction other than such
instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) hereof in the case of the transfer of the Common
-14-
Shares prior to registration of the Common Shares under the Securities Act or
without an exemption therefrom, will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement. Nothing in this Section shall affect in
any way each Purchaser's obligations and agreement set forth in Section 2(g)
hereof to resell the Securities pursuant to an effective registration statement
or under an exemption from the registration requirements of applicable
securities law.
c. If any Purchaser provides the Company with an opinion of counsel,
which opinion of counsel shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from registration, or any Purchaser provides the Company with
reasonable assurances that such Securities may be sold under Rule 144 or such
Securities may be sold pursuant to an effective registration statement, the
Company shall permit the transfer, and, in the case of the Shares, promptly
instruct its transfer agent to issue one or more certificates in such name and
in such denominations as specified by such Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Preferred
Shares to each Purchaser hereunder is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions thereto, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion.
a. Each Purchaser shall have executed the signature page to this
Agreement and the Registration Rights Agreement, and delivered the same to the
Company.
b. Each Purchaser shall have delivered such Purchaser's Purchase Price
in accordance with Section 1(b) above.
c. The representations and warranties of each Purchaser shall be true
and correct as of the date when made and as of the Closing Date as though made
at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true and correct as
of such date), and each Purchaser shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by such Purchaser
at or prior to the Closing Date.
d. 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 or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
-15-
e. This Agreement, the Certificate and Registration Rights
Agreement and the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Securities, shall have been approved and
adopted by the shareholders of the Company in compliance with all relevant legal
requirements.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase such Purchaser's
Preferred Shares hereunder, at the Closing, is subject to the satisfaction, at
or before the Closing Date, of the following condition, provided that this
condition is for such Purchaser's sole benefit and may be waived by such
Purchaser at any time in such Purchaser's sole discretion:
This Agreement, the Certificate and Registration Rights Agreement and
the transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Securities, shall have been approved and adopted by the
shareholders of the Company, if necessary, in compliance with all relevant legal
requirements.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in New York, New York in any suit or proceeding based
on or arising under this Agreement and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company further agrees that service of process upon
the Company mailed by first class mail shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the right of any Purchaser to serve process in any
other manner permitted by law. The Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof.
-16-
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor any Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and Zanett Capital Corp.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
If to the Company:
WorldWideWeb Xxxxxxxxx.xxx
0000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telecopy: 000-000-0000
Attention: Smiley Sansoni
with a copy to:
Atlas Xxxxxxxx Trop & Borkson, P.A.
New River Center, Suite 1900
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esquire
Telecopy: 000-000-0000
If to any Purchaser, to the address set forth under such Purchaser's
name on the signature page hereto executed by such Purchaser.
-17-
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Except as
provided herein, neither the Company nor any Purchaser shall assign this
Agreement or any rights or obligations hereunder. Notwithstanding the foregoing,
each Purchaser may assign its rights hereunder to any of its "affiliates," as
that term is defined under the Exchange Act, without the consent of the Company
or to any other person or entity with the consent of the Company. This provision
shall not limit any Purchaser's right to transfer the Securities pursuant to the
terms of this Agreement, the Certificate or the Registration Rights Agreement or
to assign such Purchaser's rights hereunder and/or thereunder to any such
transferee. In addition, and notwithstanding anything to the contrary contained
in this Agreement, the Certificate or the Registration Rights Agreement, the
Securities may be pledged and all rights of Purchaser under this Agreement or
any other agreement or document related to the transaction contemplated hereby
may be assigned, without further consent of the Company, to a bona fide pledgee
in connection with a Purchaser's margin or brokerage accounts.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in Sections 3, 4, 5 and 8 shall survive the
Closing hereunder notwithstanding any due diligence investigation conducted by
or on behalf of any Purchaser. Moreover, none of the representations and
warranties made by the Company herein shall act as a waiver of any rights or
remedies any Purchaser may have under applicable federal or state securities
laws. The Company agrees to indemnify and hold harmless each Purchaser and each
other holder of the Securities and all of their shareholders, officers,
directors, employees, partners, members, agents and direct or indirect investors
and affiliates and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in this Agreement, the Certificate, the Registration Rights Agreement or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in this Agreement, the Certificate, the Registration Rights Agreement or any
other certificate, instrument or document contemplated hereby or thereby, (c)
any cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement, the Certificate, the Registration Rights
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, (d) any transaction financed or to be financed in whole or in part,
-18-
directly or indirectly, with the proceeds of the issuance of the Securities or
(e) the status of such Purchaser or holder of the Securities as an investor in
the Company. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
j. Publicity. The Company and Zanett Capital Corp. shall have the right
to approve before issuance any press releases, SEC or the Bulletin Board
filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Purchaser, to make any press release or SEC or
the Bulletin Board filings with respect to such transactions as is required by
applicable law and regulations (although Zanett Capital Corp. shall be consulted
by the Company in connection with any such press release prior to its release
and shall be provided with a copy thereof).
k. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. Termination. In the event that the Closing Date shall not have
occurred on or before March 31, 2000, unless the parties agree otherwise, this
Agreement shall terminate at the close of business on such date. Notwithstanding
any termination of this Agreement, any party not in breach of this Agreement
shall preserve all rights and remedies it may have against another party hereto
for a breach of this Agreement prior to or relating to the termination hereof.
m. Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement, the Certificate
and the Registration Rights Agreement. As such, the language used herein and
therein shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any party to this Agreement.
n. Equitable Relief. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to each Purchaser by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations hereunder (including, but not limited to, its obligations pursuant
to Section 5 hereof) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement (including,
but not limited to, its obligations pursuant to Section 5 hereof), that each
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-20-
IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.
WORLDWIDEWEB XXXXXXXXX.XXX
By:
Name:
Title:
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PURCHASER: PURCHASE PRICE
ZANETT LOMBARDIER MASTER FUND L.P.
By:_____________________________
Name:
Title:
RESIDENCE: Cayman Islands
ADDRESS: x/x Xxxxxxx Xxxxxxx (Xxxxxx) Ltd.
Caledonian House, P.O. Box 1100
Georgetown, Grand Cayman
Cayman Islands
with copies of all notices to:
The Zanett Securities Corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Claudio Guazonni
Telecopy: (000) 000-0000
SUBSCRIPTION AMOUNT
Closing
Number of Shares: 11,200
Purchase Price ($1,000 per Share): $11,200,000
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