NETFABRIC TECHNOLOGIES, INC., D/B/A UCA SERVICES, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT March 12, 2009
NETFABRIC
TECHNOLOGIES, INC., D/B/A UCA SERVICES, INC.
March
12, 2009
NETFABRIC
TECHNOLOGIES, INC., D/B/A UCA SERVICES, INC.
This
Convertible Note Purchase Agreement (the “Agreement”) is made
as of the 12th day of
March, 2009 (the “Effective Date”), by
and among NetFabric Technologies, Inc., d/b/a UCA Services, Inc., a New Jersey corporation
(the “Company”), Netfabric
Holdings Inc., a Delaware corporation (the “Guarantor”) and
Fortify Infrastructure Services, Inc., a Delaware corporation (the “Purchaser”).
RECITALS
The
Company desires to issue and sell and the Purchasers desire to purchase the
convertible promissory note attached to this Agreement as Exhibit A (the “Note”) which shall be
cancelable and convertible on the terms stated therein. The Note and
the equity securities issuable upon conversion thereof (and the securities
issuable upon conversion of such equity
securities) are collectively referred to herein as the “Securities.”
AGREEMENT
In
consideration of the mutual promises contained herein and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties to
this Agreement, intending to be legally bound, agree as follows:
1. Purchase
and Sale of Note.
(a) Sale and
Issuance of Note. At Closing (as
defined below), the Purchaser agrees to provide a bridge loan to the Company,
pursuant to the terms and conditions of this Agreement and the Note, in the
amount of $5,000,000.00 (the “Purchase Price”) to
allow the Company to use for working capital purposes as well as repay in full
the outstanding liabilities of the Company set forth on Schedule 1 attached
hereto. Accordingly, subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase at the Closing, and the Company agrees to sell and
issue to the Purchaser, a Note in the principal amount equal to the Purchase
Price as specified on Exhibit A to this
Agreement.
(b) Closing;
Delivery. The purchase and sale of the
Note shall take place at the offices of Xxxxx Law Firm, PC, 0000 Xx Xxxxxx Xxxx,
Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000, at 10 a.m., on March 12, 2009, or at
such other time and place as the Company and the Purchaser mutually agree upon,
orally or in writing (which time and place are designated as the “Closing”). At
the Closing:
(i) The
Purchaser shall deliver the Purchase Price, payable by wire transfer to the bank
account(s) of: (i) each of the creditor(s) in such amounts set forth opposite
their name(s) on Schedule 1 attached
hereto (the “Creditors”), and (ii)
the Company’s bank account in the amount set forth on Schedule 1;
and
(ii) The
Company shall deliver to the Purchaser the Note and a duly executed settlement
and release agreement, payoff letter or other instrument satisfactory in form
and substance to the Purchaser in its sole discretion evidencing the release by
the Creditors of any and all liens and encumbrances on the Company’s and the
Guarantor’s assets (including the Shares).
(iii) The
Company shall deliver to the Purchase an amended certificate of incorporation
(the “Amended
Certificate”), in substantially the form attached hereto as Schedule 2,
authorizing the creation of _________ shares of preferred stock. The Amended
Certificate shall have been ratified by the Company’s board of directors and
approved by the Company’s shareholders, and filed with the Secretary of State of
New Jersey.
2. Stock
Purchase Agreement. The Purchaser understands
and agrees that the conversion of the Note into equity securities of the
Company may require the Purchaser’s execution of certain agreements (in form
reasonably agreeable to the Purchaser) relating to the purchase and sale of such
securities as well as registration, co-sale and voting rights, if any, relating
to such equity securities.
3. Credit
Agreement. The Purchaser
agrees to extend a credit facility to the Company in an amount not to
exceed $1,000,000.00, from which the Company may draw down for working capital
purposes, on the terms and conditions set forth in the credit agreement attached
to this agreement as Exhibit B (the “Credit
Agreement”). Amounts drawn on the credit facility shall be
secured as provided in Section 4 hereof.
4.
Security
Interest and Stock Pledge. The indebtedness
represented by the Note and the Credit Agreement and all of the Company’s
obligations arising under the Note and Credit Agreement shall be secured by (i)
all of the assets of the Company and the Guarantor in accordance with the
provisions of the security agreement in substantially the form attached to this
Agreement as Exhibit
C (the “Security Agreement”),
and (ii) a pledge by the Guarantor of all of the equity securities of the
Company currently owned or hereafter acquired by the Guarantor (the “Shares”) in
accordance with the provisions of a stock pledge agreement in substantially the
form attached to this Agreement as Exhibit D (the “Pledge
Agreement”).
5. Option
Agreement. In connection
with the execution of this Agreement, the Note, the Credit Agreement, the
Security Agreement and the Pledge Agreement, the Guarantor and the Purchaser
shall enter into an option agreement (the “Option Agreement”),
in substantially the form attached to this Agreement as Exhibit E, pursuant
to which Guarantor shall grant to the Purchaser the option to purchase the
Shares in accordance with the terms and conditions set forth in the Option
Agreement (the “Acquisition”).
6. Majority
Stockholder Proxy. This Agreement and the agreements attached as exhibits
hereto are collectively referred to herein as the “Transaction
Agreements.” In connection with the transactions contemplated by the
Option Agreement, Guarantor shall obtain and deliver to the Purchaser at or
prior to the Closing a stockholder agreement and irrevocable proxy (the “Proxy”), in
substantially the form attached to this Agreement as Exhibit F, from the
Guarantor’s stockholders holding at least 51% of the outstanding stock (the
“Majority
Stockholders”) of the Purchaser, evidencing the consent by the Majority
Stockholders to the Acquisition and the related transactions contemplated by the
Transaction Agreements as described in an information statement to be delivered
by Guarantor to its stockholders.
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7. Post-Closing
Covenants of Company and Guarantor.
(a) As
long as any portion of the Note is outstanding, and except as contemplated in
the Transaction Agreements, the Company shall not, without the prior written
consent of the Purchaser incur any indebtedness or obligation in excess of
Twenty Five Thousand Dollars ($25,000.00) or act as a guarantor or surety for
any indebtedness or obligation for any party (including Guarantor).
(b) As
long as any portion of the Note is outstanding, the Company shall provide the
Purchaser with (i) monthly unaudited financial statements (balance sheet,
statement of operations and statement of cash flows), and (ii) upon Purchaser’s
request, the right to review and inspect the Company’s books and records
provided however that Purchaser shall give the Company forty-eight (48) hours
notice of such request.
(c) As
long as any portion of the Note is outstanding, the Company shall not remit any
dividends or make any distribution of cash or property to the Guarantor with
respect to the stock of the Company or otherwise make any advance to
Guarantor.
8. Representations
and Warranties of the Company. In this
Agreement, any reference to any event, change, condition or effect being “material” with
respect to any entity or group of entities means any material event, change,
condition or effect related to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of such entity or group of
entities. In this Agreement, any reference to a “Material Adverse
Effect” with respect to any entity or group of entities means any event,
change or effect that, when taken individually or together with all other
adverse changes and effects, is or is reasonably likely to be materially adverse
to the condition (financial or otherwise), properties, assets, liabilities,
business, operations, results of or prospects of such entity and its
subsidiaries, taken as a whole, or to prevent or materially delay consummation
of the transactions contemplated under this Agreement or otherwise to prevent
such entity and its subsidiaries from performing their obligations under this
Agreement.
In this
Agreement, any reference to “knowledge” means an
individual will be deemed to have knowledge of a particular fact or other matter
if: (i) that individual is actually aware of that fact or matter; or (ii) a
prudent individual could be expected to discover or otherwise become aware of
that fact or matter in the course of conducting a reasonable comprehensive
investigation regarding the accuracy of any representation or warranty contained
in this Agreement. A party (that is not an individual) will be deemed
to have knowledge of a particular fact or other matter if any individual who is
serving as a director, officer, executive or manager, partner, executor or
trustee of that party (or in any similar capacity) has, or at any time had,
knowledge of that fact or other matter (as set forth in (i) and (ii) of this
definition), and any such individual (and any individual party to this
Agreement) will be deemed to have conducted a reasonably comprehensive
investigation regarding the accuracy of the representations and warranties made
herein by that party or individual.
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Except as
disclosed in a document of the same date as this Agreement and delivered by the
Company to Purchaser prior to the execution and delivery of this Agreement and
referring to the representations and warranties in this Agreement (the “Company Disclosure
Schedule”), the Company represents and warrants to Purchaser, as of the
Closing:
(a) Organization
Standing and Power; Subsidiaries. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey. The Company has the requisite corporate power
and authority and all necessary government approvals to own, lease and operate
its properties and to carry on its business as now being conducted and as
proposed to be conducted, except where the failure to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. Except as set forth on Schedule 8(a), the
Company currently has no subsidiaries and has had no subsidiaries since its
inception. Other than the transactions contemplated by the
Transaction Agreements, there are no outstanding subscriptions, options,
warrants, puts, calls, rights, exchangeable or convertible securities or other
commitments or agreements of any character relating to the issued or unissued
capital stock of the Company, or otherwise obligating the Company to issue,
transfer, sell, purchase, redeem or otherwise acquire any such
securities. Except as set forth in the Company Disclosure Schedule,
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, limited liability
company, joint venture or other business association or entity.
(b) Certificate of
Incorporation and Bylaws. The Company has delivered a true and
correct copy of its Certificate of Incorporation and Bylaws or other charter
documents, each as amended to date, to Purchaser. The Company is not
in violation of any of the provisions of its Certificate of Incorporation or
Bylaws or equivalent organizational documents.
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(c) Capital
Structure. The authorized capital stock of the Company
consists of 5,000,000 shares of Common Stock, of which there are issued and
outstanding as of the close of business on the date hereof, 3,000,000 shares of
Common Stock. There are no other outstanding shares of capital
stock or voting securities and no outstanding commitments to issue any shares of
capital stock or voting securities of the Company. All outstanding
shares of the Company’s capital stock are duly authorized, validly issued, fully
paid and non-assessable and are free of any liens or encumbrances other than any
liens or encumbrances created by or imposed upon the holders thereof, and are
not subject to preemptive rights or rights of first refusal created by statute,
the Certificate of Incorporation or Bylaws of the Company or any agreement to
which the Company is a party or by which it is bound. All outstanding
shares of the Company’s Common Stock were issued in compliance with all
applicable federal and state securities laws. As of the close of
business on the Effective Date, the Company has not reserved, issued or granted
any shares of Common Stock for issuance to employees and consultants pursuant to
a Company Stock Plan (the “Plan”). Except
(i) for the rights created pursuant to this Agreement, (ii) for the
Company’s right to repurchase any unvested shares under the Plan and (iii) as
set forth in this Section 8(c), there are no options, warrants, calls, rights,
commitments, agreements or arrangements of any character to which the Company is
a party or by which the Company is bound relating to the issued or unissued
capital stock of the Company or obligating the Company to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of capital stock of the Company or obligating the Company
to grant, extend, accelerate the vesting of, change the price of, or otherwise
amend or enter into any such option, warrant, call, right, commitment or
agreement. There are no contracts, commitments or agreements relating
to voting, purchase or sale of the Company’s capital stock (i) between or among
the Company and any of its stockholders and (ii) between or among any of the
Company’s stockholders. True and complete copies of all agreements
and instruments relating to or issued under the Plan have been made available to
Purchaser and such agreements and instruments have not been amended, modified or
supplemented, and there are no agreements to amend, modify or supplement such
agreements or instruments in any case from the form made available to
Purchaser.
(d) Authority. The
Company has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. The Company’s Board of
Directors has approved this Agreement and issuance of the Securities
hereunder. This Agreement has been duly executed and delivered by the
Company and assuming due authorization, execution and delivery by Purchaser,
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.
(e) No
Conflicts; Required Filings and Consents.
(i) The
execution and delivery of this Agreement by the Company does not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any
provision of the Certificate of Incorporation or Bylaws of the Company or any of
its subsidiaries, as amended, or (ii) any material mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its properties or assets.
(ii) No
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality (“Governmental Entity”)
is required by or with respect to the Company in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws; and
(ii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on the Company and would not prevent, or materially alter or delay any of
the transactions contemplated by this Agreement.
-5-
(f) Financial
Statements. Section 8(f) of
the Company Disclosure Schedule includes a true, correct and complete copy of
the Company’s audited financial statements for the fiscal year ended December
31, 2006, a draft copy of the Company’s audited financial statements for the
fiscal year ended December 31, 2007, a draft of its unaudited financial
statements (balance sheet, statement of operations and statement of cash flows)
on a consolidated basis as of September 30, 2008, and a draft of the Company’s
unaudited financial statements (balance sheet, statement of operations and
statement of cash flows) as of December 31, 2008 (collectively, the “Financial
Statements”). The Financial Statements have been prepared in
accordance with generally accepted accounting principles (“GAAP”) (except that
the unaudited financial statements do not have notes thereto) applied on a
consistent basis throughout the periods indicated and with each
other. The Financial Statements accurately set out and describe the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein, subject to normal year-end audit
adjustments. The Company maintains and will continue to maintain a
standard system of accounting established and administered in accordance with
GAAP.
(g) Absence
of Undisclosed Liabilities. Except as set forth in Schedule
8(g), the Company has no material obligations or liabilities of any nature
(matured or unmatured, fixed or contingent) other than (i) those set forth
or adequately provided for in the Balance Sheet for the period ended December
31, 2008 (the “Company
Balance Sheet”), (ii) those incurred in the ordinary course of
business and not required to be set forth in the Company Balance Sheet under
GAAP, (iii) those incurred in the ordinary course of business since the
Company Balance Sheet Date and consistent with past practice, and
(iv) those incurred for professional fees in connection with the execution
of this Agreement.
(h) Absence
of Certain Changes. Except as set forth in Section 8(h) of the
Company Disclosure Schedule, since December 31, 2008 ( the “Company Balance Sheet
Date”) there has not been, occurred or arisen any:
(i)
transaction by the Company, other than transactions in connection with
elimination of intercompany accounts, except in the ordinary course of business
as conducted on that date and consistent with past practices;
(ii) amendments
or changes to the Certificate of Incorporation or Bylaws of the Company (except
as contemplated by the Transaction Agreements);
(iii)
capital expenditure or commitment by the Company in any individual amount
exceeding $10,000.00 or in the aggregate, exceeding $50,000.00;
(iv) destruction
of, damage to, or loss of any assets (including, without limitation, intangible
assets), business or customer of the Company (whether or not covered by
insurance) which would constitute a Material Adverse Effect;
-6-
(v) labor
trouble or claim of wrongful discharge or other unlawful labor practice or
action;
(vi) change
in accounting methods or practices (including any change in depreciation or
amortization policies or rates, any change in policies in making or reversing
accruals) by the Company;
(vii) revaluation
by the Company of any of its assets;
(viii)
declaration, setting aside, or payment of a dividend or other distribution
in respect to the capital stock of the Company, or any direct or indirect
redemption, purchase or other acquisition by the Company of any of its capital
stock, except repurchases of the Company Common Stock from terminated Company
employees or consultants at the original per share purchase price of such
shares;
(ix) increase
in the salary or other compensation payable or to become payable by the Company
to any officers, directors, employees or consultants of the Company, except in
the ordinary course of business consistent with past practice, or the
declaration, payment, or commitment or obligation of any kind for the payment by
the Company of a bonus or other additional salary or compensation to any such
person except as otherwise contemplated by this Agreement, or other than as set
forth in Section 8(p) below, the establishment of any bonus, insurance, deferred
compensation, pension, retirement, profit sharing, stock option (including
without limitation, the granting of stock options, stock appreciation rights,
performance awards), stock purchase or other employee benefit plan;
(x)
sale, lease, license or other disposition of any of the assets or properties of
the Company, except in the ordinary course of business and not in excess of
$10,000.00, in the aggregate;
(xi) termination
or material amendment of any material contract, agreement or license (including
any distribution agreement) to which the Company is a party or by which it is
bound;
(xii) loan
by the Company to any person or entity, or guaranty by the Company of any loan,
except for (i) travel or similar advances made to employees in connection
with their employment duties in the ordinary course of business, consistent with
past practice and (ii) trade payables not in excess of $50,000.00 in the
aggregate and in the ordinary course of business, consistent with past
practice;
(xiii)
waiver or release of any right or claim of the Company, except for inter company
balances and doubtful allowances, including any write-off or other compromise of
any account receivable of the Company in excess of $50,000.00 in the
aggregate;
(xiv) commencement
or notice or threat of commencement of any lawsuit or proceeding against or, to
the Company’s or the Company’s officers’ or directors’ knowledge, investigation
of the Company or its affairs;
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(xv) to
the Company’s knowledge, notice of any claim of ownership by a third party of
the Company’s Intellectual Property (as defined in Section 8(m) below) or, to
Company’s knowledge, of infringement by the Company of any third party’s
Intellectual Property rights;
(xvi) issuance
or sale by the Company of any of its shares of capital stock, or securities
exchangeable, convertible or exercisable therefor, or of any other of its
securities, other than as contemplated by the Transaction
Agreements;
(xvii) material
changes in pricing or royalties set or charged by the Company to its customers
or licensees or in pricing or royalties set or charged by persons who have
licensed Intellectual Property to the Company;
(xviii) to
the Company’s knowledge, any event or condition of any character that has or
could reasonably be expected to have a Material Adverse Effect on the Company;
or
(xix) agreement
by the Company, or any of its officers or employees on its behalf to do any of
the things described in the preceding clauses (i) through (xviii) (other than
negotiations with Purchaser and its representatives regarding the transactions
contemplated by this Agreement).
(i) Litigation. Except
as set forth on Schedule 8(i), there
is no private or governmental action, suit, proceeding, claim, arbitration or
investigation pending before any agency, court or tribunal, foreign or domestic,
or, to the Company’s knowledge, threatened against the Company or any of its
properties or any of its officers or directors (in their capacities as such)
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on the Company. There is no judgment, decree
or order against the Company or, to the Company’s knowledge, any of its
directors or officers (in their capacities as such), that could prevent, enjoin,
or materially alter or delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on the Company. All litigation to which the Company is a party
(or, to the knowledge of the Company, threatened to become a party) is disclosed
in the Company Disclosure Schedule.
(j) Restrictions
on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon the Company which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any current or future business practice of the Company, any acquisition of
property by the Company or the overall conduct of business by the Company as
currently conducted or as proposed to be conducted by the
Company. The Company has not entered into any agreement under which
it is restricted from selling, licensing or otherwise distributing any of its
products to any class of customers, in any geographic area, during any period of
time or in any segment of the market.
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(k) Permits;
Company Products; Regulation.
(i) The
Company is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders necessary for the Company to own, lease and operate its properties or to
carry on its business as it is now being conducted (the “Company
Authorizations”) and no suspension or cancellation of any Company
Authorization is pending or, to the Company’s knowledge, threatened, except
where the failure to have, or the suspension or cancellation of, any Company
Authorization would not have a Material Adverse Effect on the
Company. The Company is not in conflict with, or in default or
violation of, (i) any laws applicable to the Company or by which any
property or asset of the Company is bound or affected, (ii) any Company
Authorization or (iii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company is a party or by which the Company or any property or asset
of the Company is bound or affected, except for any such conflict, default or
violation that would not, individually or in the aggregate have a Material
Adverse Effect on the Company.
(ii) Except
as would not have a Material Adverse Effect on the Company, since January 31,
2009, there have been no written notices, citations or decisions by any
governmental or regulatory body that any product produced, manufactured,
marketed or distributed at any time by the Company or by any agent on behalf of
the Company (the “Products”) is
defective or fails to meet any applicable standards promulgated by any such
governmental or regulatory body. To the knowledge of the Company, the
Company has complied in all material respects with the laws, regulations,
policies, procedures and specifications with respect to the design, manufacture,
labeling, testing and inspection of the Products. Except as disclosed
in Section 8(k)(ii) of the Company Disclosure Schedule, since January 31, 2009,
there have been no recalls, field notifications or seizures ordered or, to the
Company’s knowledge, threatened by any such governmental or regulatory body with
respect to any of the Products.
(iii) The
Company has obtained, in all countries where either the Company or any agent of
the Company is marketing or has marketed the Company’s Products, all applicable
licenses, registrations, approvals, clearances and authorizations required by
local, state or federal agencies in such countries regulating the safety,
effectiveness and market clearance of the Products currently or previously
marketed by the Company or its agents in such countries, except for any such
failures as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. The Company has identified and made available
for examination by Purchaser all information relating to regulation of its
Products, including licenses, registrations, approvals, permits, device listing,
inspections, the Company’s recalls and product actions, audits and the Company’s
ongoing field tests. The Company has
identified in writing to Purchaser all international locations where regulatory
information and documents are kept.
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(l) Title to
Property.
(i) The
Company has good and marketable title to all of its properties, interests in
properties and assets, real and personal, reflected in the Company Balance Sheet
or acquired after the Company Balance Sheet Date (except properties, interests
in properties and assets sold or otherwise disposed of since the Company Balance
Sheet Date in the ordinary course of business), or with respect to leased
properties and assets, valid leasehold interests in, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any kind or character,
except (i) the lien of current taxes not yet due and payable,
(ii) such imperfections of title, liens and easements as do not and will
not materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties and (iii) liens securing debt which is reflected
on the Company Balance Sheet. The plants, property and equipment of
the Company that are used in the operations of its business are in good
operating condition and repair. All properties used in the operations
of the Company are reflected in the Company Balance Sheet to the extent GAAP
requires the same to be reflected. Section 8(l)(i) of the Company
Disclosure Schedule sets forth a true, correct and complete list of all real
property owned or leased by the Company, the name of the lessor, the date of the
lease and each amendment thereto and the aggregate annual rental and other fees
payable under such lease. Such leases are in good standing, are valid
and effective in accordance with their respective terms, and there is not under
any such leases any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default).
(ii) Section
8(l)(ii) of the Company Disclosure Schedule also sets forth a true, correct and
complete list of all equipment (the “Equipment”) owned or
leased by the Company, and such Equipment is, taken as a whole,
(i) adequate for the conduct of the Company’s business, consistent with its
past practice and (ii) in good operating condition (except for ordinary
wear and tear).
(m) Intellectual
Property.
(i) The
Company owns, or is licensed or otherwise possesses legally enforceable rights
to use all patents, patent rights, trademarks, trademark rights, trade names,
trade name rights, service marks, copyrights, and any applications for any of
the foregoing, net lists, schematics, industrial models, inventions, technology,
know-how, trade secrets, inventory, ideas, algorithms, processes, computer
software programs or applications (in both source code and object code form),
and tangible or intangible proprietary information or material (“Intellectual
Property”) that are used or proposed to be used in the business of the
Company as currently conducted or as proposed to be conducted by the Company,
except to the extent that the failure to have such rights has not had and could
not reasonably be expected to have a Material Adverse Effect on the
Company.
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(ii) Section
8(m) of the Company Disclosure Schedule lists (i) all patents and patent
applications and all registered and unregistered trademarks, trade names and
service marks, registered and unregistered copyrights, and mask work rights,
included in the Intellectual Property, including the jurisdictions in which each
such Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (ii) all
licenses, sublicenses and other agreements to which the Company is a party and
pursuant to which any person is authorized to use any Intellectual Property, and
(iii) all licenses, sublicenses and other agreements as to which the
Company is a party and pursuant to which the Company is authorized to use any
third party patents, trademarks or copyrights, including software (“Third Party Intellectual
Property Rights”) which are incorporated in, are, or form a part of any
products of the Company that are, individually or in the aggregate, material to
the business of the Company. The Company is not in violation of any
license, sublicense or agreement described in Section 8(m) of the Company
Disclosure Schedule. The execution and delivery of this Agreement by
the Company and the consummation of the transactions contemplated hereby, will
neither cause the Company to be in violation or default under any such license,
sublicense or agreement, nor entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or
agreement. Except as set forth in Section 8(m) of the Company
Disclosure Schedule, the Company is the sole and exclusive owner or licensee of,
with all right, title and interest in and to (free and clear of any liens), the
Intellectual Property, and has sole and exclusive rights (and is not
contractually obligated to pay any compensation to any third party in respect
thereof) to the use thereof or the material covered thereby in connection with
the services or products in respect of which Intellectual Property is being
used.
(iii) To
the Company’s knowledge, there is no material unauthorized use, disclosure,
infringement or misappropriation of any Intellectual Property rights of the
Company, any trade secret material to the Company or any Intellectual Property
right of any third party to the extent licensed by or through the Company, by
any third party, including any employee or former employee of the
Company. The Company has not entered into any agreement to indemnify
any other person against any charge of infringement of any Intellectual
Property, other than indemnification provisions contained in purchase orders
arising in the ordinary course of business.
(iv) The
Company is not or will not be as a result of the execution and delivery of this
Agreement or the performance of its obligations under this Agreement, in breach
of any license, sublicense or other agreement relating to the Intellectual
Property or Third Party Intellectual Property Rights, the breach of which would
have a Material Adverse Effect on the Company.
(v) To
the Company’s knowledge, all patents, registered trademarks, service marks and
copyrights held by the Company are valid and existing and there is no assertion
or claim (or basis therefor) challenging the validity of any Intellectual
Property of the Company. The Company has not been sued in any suit,
action or proceeding which involves a claim of infringement of any patents,
trademarks, service marks, copyrights or violation of any trade secret or other
proprietary right of any third party. Neither the conduct of the
business of the Company as currently conducted or contemplated nor the
manufacture, sale, licensing or use of any of the products of the Company as now
manufactured, sold or licensed or used, nor the use in any way of the
Intellectual Property in the manufacture, use, sale or licensing by the Company
of any products currently proposed, infringes on or will infringe or conflict
with, in any way, any license, trademark, trademark right, trade name, trade
name right, patent, patent right, industrial model, invention, service xxxx or
copyright of any third party that, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on the
Company. All registered trademarks, service marks and copyrights held
by the Company are valid and subsisting. To the Company’s knowledge,
no third party is challenging the ownership by the Company, or validity or
effectiveness of, any of the Intellectual Property. The Company has
not brought any action, suit or proceeding for infringement of Intellectual
Property or breach of any license or agreement involving Intellectual Property
against any third party. There are no pending, or to the best of the Company’s
knowledge, threatened interference, re-examinations, oppositions or nullities
involving any patents, patent rights or applications therefor of the Company,
except such as may have been commenced by the Company. There is no
breach or violation of or threatened or actual loss of rights under any licenses
to which the Company is a party.
-11-
(vi) The
Company has secured valid written assignments from all consultants and employees
who contributed to the creation or development of Intellectual Property of the
rights to such contributions that the Company does not already own by operation
of law.
(vii) The
Company has taken all necessary and appropriate steps to protect and preserve
the confidentiality of all Intellectual Property not otherwise protected by
patents, patent applications or copyright (“Confidential
Information”). The Company has a policy requiring each of its
employees and contractors to execute proprietary information and confidentiality
agreements substantially in the Company’s standard forms and all current and
former employees and contractors of the Company have executed such an
agreement. All use, disclosure or appropriation of Confidential
Information owned by the Company by or to a third party has been pursuant to the
terms of a written agreement between the Company and such third
party. All use, disclosure or appropriation of Confidential
Information not owned by the Company has been pursuant to the terms of a written
agreement between the Company and the owner of such Confidential Information, or
is otherwise lawful.
(n) Environmental
Matters.
(i) The
following terms shall be defined as follows:
(A) “Environmental
and Safety Laws”
shall mean any federal, state or local laws, ordinances, codes, regulations,
rules, policies and orders, as each may be amended from time to time, that are
intended to assure the protection of the environment, or that classify,
regulate, call for the remediation of, require reporting with respect to, or
list or define air, water, groundwater, solid waste, hazardous or toxic
substances, materials, wastes, pollutants or contaminants; which regulate the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Materials (as defined below) or materials containing Hazardous
Materials; or which are intended to assure the protection, safety and good
health of employees, workers or other persons, including the
public.
(B) “Hazardous
Materials” shall
mean any toxic or hazardous substance, material or waste or any pollutant or
contaminant, or infectious or radioactive substance or material, including
without limitation, those substances, materials and wastes defined in or
regulated under any Environmental and Safety Laws; petroleum or petroleum
products including crude oil or any fractions thereof; natural gas, synthetic
gas, or any mixtures thereof; radon; asbestos; or any other pollutant or
contaminant
(C) “Property” shall mean all real property
leased or owned by the Company either currently or in the past.
-12-
(D) “Facilities” shall mean all buildings and
improvements on the Property of the Company.
(ii) The
Company represents and warrants as follows: (i) no methylene
chloride or asbestos is contained in or has been used at or released from the
Facilities; (ii) all Hazardous Materials and wastes have been disposed of
in accordance with all Environmental and Safety Laws; and (iii) the Company
has received no notice (verbal or written) of any noncompliance of the
Facilities or of its past or present operations with Environmental and Safety
Laws; (iv) no notices, administrative actions or suits are pending or
threatened relating to Hazardous Materials or a violation of any Environmental
and Safety Laws; (v) the Company is not a potentially responsible party
under the federal Comprehensive Environmental Response, Compensation and
Liability Act (“CERCLA”), or state
analog statute, arising out of events occurring prior to the Closing;
(vi) there has not been in the past, and there is not now, any
contamination, disposal, spilling, dumping, incineration, discharge, storage,
treatment or handling of Hazardous Materials on, under or migrating to or from
the Facilities or Property (including without limitation, soils and surface and
ground waters); (vii) there have not been in the past, and are not now, any
underground tanks or underground improvements at, on or under the Property
including without limitation, treatment or storage tanks, sumps, or water, gas
or oil xxxxx; (viii) there are no polychlorinated biphenyls (“PCBs”) deposited,
stored, disposed of or located on the Property or Facilities or any equipment on
the Property containing PCBs at levels in excess of 50 parts per million;
(ix) there is no formaldehyde on the Property or in the Facilities, nor any
insulating material containing urea formaldehyde in the Facilities; (x) the
Facilities and the Company’s uses and activities therein have at all times
complied with all Environmental and Safety Laws; (xi) the Company has all
the permits and licenses required to be issued and is in full compliance with
the terms and conditions of those permits; and (xii) the Company is not
liable for any off-site contamination under any Environmental and Safety
Laws.
(o) Taxes.
(i) For
purposes of this Section 8(o) and other provisions of this Agreement relating to
Taxes, the following definitions shall apply:
(A) The
term “Taxes” shall mean all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof,
(A) imposed by any federal, territorial, state, local or foreign government
or any agency or political subdivision of any such government, which taxes shall
include, without limiting the generality of the foregoing, all income or profits
taxes (including but not limited to, federal, state and foreign income taxes),
payroll and employee withholding taxes, unemployment insurance contributions,
social security taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, withholding taxes, business license
taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers’ compensation, and other Tax of any
kind whatsoever, which are required to be paid, withheld or collected, in an
aggregate amount in excess of $10,000, (B) any liability for the payment of
amounts referred to in (A) as a result of being a member of any affiliated,
consolidated, combined or unitary group, or (C) any liability for amounts
referred to in (A) or (B) as a result of any obligations to indemnify another
person.
-13-
(B) The
term “Returns”
shall mean all reports, estimates, declarations of estimated tax, information
statements and returns required to be filed in connection with any Taxes,
including information returns with respect to backup withholding and
other payments to third parties.
(ii) Except
as set forth on Schedule 8(o), all
Returns required to be filed by or on behalf of the Company have been duly filed
on a timely basis and such Returns are true, complete and
correct. All Taxes shown to be payable on such Returns or on
subsequent assessments with respect thereto, and all payments of estimated Taxes
required to be made by or on behalf of the Company under Section 6655 of the
Code or comparable provisions of state, local or foreign law, have been paid in
full on a timely basis, and no other Taxes are payable by the Company with
respect to items or periods covered by such Returns (whether or not shown on or
reportable on such Returns). The Company has withheld and paid over
all Taxes required to have been withheld and paid over, and complied with all
information reporting and backup withholding in connection with amounts paid or
owing to any employee, creditor, independent contractor, or other third
party. There are no liens on any of the assets of the Company with
respect to Taxes, other than liens for Taxes not yet due and payable or for
Taxes that the Company is contesting in good faith through appropriate
proceedings. The Company has not at any time been a member of an
affiliated group of corporations filing consolidated, combined or unitary income
or franchise tax returns for a period for which the statute of limitations for
any Tax potentially applicable as a result of such membership has not expired
other than an affiliated group the common parent of which is the
Guarantor.
(iii) The
amount of the Company’s liabilities for unpaid Taxes for all periods through the
date of the Financial Statements does not, in the aggregate, exceed the amount
of the current liability accruals for Taxes reflected on the Financial
Statements, and the Financial Statements properly accrue in accordance with GAAP
all liabilities for Taxes of the Company payable after the date of the Financial
Statements attributable to transactions and events occurring prior to such
date. No liability for Taxes of the Company has been incurred or
material amount of taxable income has been realized (or prior to and including
the Closing will be incurred or realized) since such date other than in the
ordinary course of business.
(iv) Purchaser
has been furnished by the Company with true and complete copies of (i) all
relevant portions of income tax audit reports, statements of deficiencies,
closing or other agreements received by or on behalf of the Company relating to
Taxes, and (ii) all federal, state and foreign income or franchise tax
returns and state sales and use tax Returns for or including the Company for all
periods since six
(6) full years preceding the date of this Agreement.
(v) No
audit of the Returns of or including the Company by a government or taxing
authority is in process, threatened or, to the Company’s knowledge, pending
(either in writing or orally, formally or informally). No
deficiencies exist or have been asserted (either in writing or orally, formally
or informally) or are expected to be asserted with respect to Taxes of the
Company, and the Company has not received notice (either in writing or orally,
formally or informally) nor does it expect to receive notice that it has not
filed a Return or paid Taxes required to be filed or paid. The
Company is not a party to any action or proceeding for assessment or collection
of Taxes, nor, to the Company’s knowledge, has such event been asserted or
threatened (either in writing or orally, formally or informally) against the
Company, or any of its assets. No waiver or extension of any statute
of limitations is in effect with respect to Taxes or Returns of the
Company. The Company has disclosed on its federal and state income
and franchise tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Code Section 6662 or
comparable provisions of applicable state tax laws.
-14-
(vi) The
Company is not (nor has it ever been) a party to any tax sharing
agreement. Since April 16, 1997, the Company has not been
a distributing corporation or a controlled corporation in a transaction
described in Section 355(a) of the Code.
(vii) The
Company is not, nor has it been, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the
Code. The Company is not a “consenting corporation” under Section
341(f) of the Code. The Company has not entered into any compensatory
agreements with respect to the performance of services which payment thereunder
would result in a nondeductible expense to the Company pursuant to Section 280G
or 162(m) of the Code or an excise tax to the recipient of such payment pursuant
to Section 4999 of the Code. The Company has not agreed to, nor is it
required to make, any adjustment under Code Section 481(a) by reason of, a
change in accounting method, and the Company will not otherwise have any income
reportable for a period ending after the Closing attributable to a transaction
or other event (e.g., an installment sale) occurring prior to the Closing with
respect to which the Company received the economic benefit prior to the
Closing. The Company is not, nor has it been, a “reporting
corporation” subject to the information reporting and record maintenance
requirements of Section 6038A and the regulations thereunder.
(viii) The
Company Disclosure Schedule contains accurate and complete information regarding
the Company’s net operating losses for federal and each state tax
purposes. The Company has no net operating losses or credit
carryovers or other tax attributes currently subject to limitation under
Sections 382, 383, or 384 of the Code.
(ix) The
Company shall not have any liability for Taxes of any person other than the
Company under (a) Treas. Reg. Section 1502-6 (or any similar provision of state,
local, or foreign law), (b) as a transferee or successor, (c) by contract, or
(d) otherwise.
(x)
With respect to each option and share of restricted stock, the Company and
the Stockholders warrant and represent that each such option has been granted
with an exercise price no lower than “fair market value” (determined in
accordance with Treas. Reg. Section 1.409A-1(b)(vi)) as of the grant date and
that each such grant does not provide for a deferral of compensation under Code
section 409A. Each Company Employee Plan (as defined in Section 8(p)
hereof) that is a “nonqualified deferred compensation plan” (as defined in Code
Section 409A(d)(1)) has been operated since January 1, 2005, in good faith
compliance with Code Section 409A and the rules and regulations issued
thereunder. No Company Employee Plan that is a “nonqualified deferred
compensation plan” has been materially modified (as determined under Treas. Reg.
Section 1.409A-6) after October 3, 2004. The Company is not a party
to, and is not otherwise obligated under, any Contract, plan or arrangement that
provides for the gross-up of the Tax imposed by Section 409A(a)(1)(B) of the
Code.
-15-
(p) Employee
Benefit Plans.
(i) Schedule
8(p) lists, with respect to the Company and any trade or business (whether or
not incorporated) which is treated as a single employer with the Company (an
“ERISA
Affiliate”) within the meaning of Section 414(b), (c), (m) or (o) of
the Code, (i) all employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)),
(ii) each loan to a non-officer employee in excess of $10,000, loans to
officers and directors and any stock option, stock purchase, phantom stock,
stock appreciation right, supplemental retirement, severance, sabbatical,
medical, dental, vision care, disability, employee relocation, cafeteria benefit
(Code Section 125) or dependent care (Code Section 129), life
insurance or accident insurance plans, programs or arrangements, (iii) all
contracts and agreements relating to employment that provide for annual
compensation in excess of $100,000 and all severance agreements, with any of the
directors, officers or employees of the Company (other than, in each case, any
such contract or agreement that is terminable by the Company at will or without
penalty or other adverse consequence), (iv) all bonus, pension, profit
sharing, savings, deferred compensation or incentive plans, programs or
arrangements, (v) other fringe or employee benefit plans, programs or
arrangements that apply to senior management of the Company and that do not
generally apply to all employees, and (vi) any current or former employment
or executive compensation or severance agreements, written or otherwise, as to
which unsatisfied obligations of the Company of greater than $50,000 remain for
the benefit of, or relating to, any present or former employee, consultant or
director of the Company (together, the “Company Employee
Plans”).
(ii) The
Company has furnished to Purchaser a copy of each of the Company Employee Plans
and related plan documents (including trust documents, insurance policies or
contracts, employee booklets, summary plan descriptions and other authorizing
documents, and, to the extent still in its possession, any material employee
communications relating thereto) and has, with respect to each Company Employee
Plan which is subject to ERISA reporting requirements, provided copies of the
Form 5500 reports filed for the last three plan years. Any
Company Employee Plan intended to be qualified under Section 401(a) of the
Code has either obtained from the Internal Revenue Service an opinion letter or
favorable determination letter as to its initial qualified status under the
Code, including all amendments to the Code effected by the Tax Reform Act of
1986 and subsequent legislation; may rely on an opinion letter issued to a
prototype plan sponsor with respect to a standardized plan adopted by the
Company in accordance with the requirements for such reliance; or has applied to
the Internal Revenue Service for such a determination letter (or has time
remaining to apply for such a determination letter) prior to the expiration of
the requisite period under applicable Treasury Regulations or Internal Revenue
Service pronouncements in which to apply for such determination letter and to
make any amendments necessary to obtain a favorable determination with respect
to all periods since the date of adoption of such Company Employee
Plan. The Company has also furnished Purchaser with the most recent
Internal Revenue Service determination letter issued with respect to each such
the Company Employee Plan, and nothing has occurred since the issuance of each
such letter which could reasonably be expected to cause the loss of the
tax-qualified status of any the Company Employee Plan subject to Code Section
401(a).
-16-
(iii) Except
as set forth in Section 8(p)(iii) of the Company Disclosure Schedule,
(i) none of Company Employee Plans promises or provides retiree medical or
other retiree welfare or life insurance benefits to any person; (ii) there
has been no “prohibited
transaction,” as such term is defined in Section 406 of ERISA and Section
4975 of the Code, and not exempt under Section 408 of ERISA or Section 4975 of
the Code, with respect to any Company Employee Plan, which could reasonably be
expected to have, in the aggregate, a Material Adverse Effect; (iii) each
Company Employee Plan has been administered in accordance with its terms and in
compliance with the requirements prescribed by any and all statutes, rules and
regulations (including ERISA and the Code), except as would not have, in the
aggregate, a Material Adverse Effect, and the Company or ERISA Affiliate have
performed all obligations required to be performed by them under, are not in any
material respect in default, under or violation of, and have no knowledge of any
material default or violation by any other party to, any of the Company Employee
Plans; (iv) neither the Company nor any ERISA Affiliate is subject to any
liability or penalty under Sections 4976 through 4980D of the Code or
Title I of ERISA with respect to any of the Company Employee Plans;
(v) all material contributions required to be made by the Company or any
ERISA Affiliate to any Company Employee Plan have been made on or before their
due dates and a reasonable amount has been accrued for contributions to each
Company Employee Plan for the current plan years; (vi) with respect to each
Company Employee Plan, no “reportable event”
within the meaning of Section 4043 of ERISA (excluding any such event for
which the thirty (30) day notice requirement has been waived under the
regulations to Section 4043 of ERISA) nor any event described in
Section 4062, 4063 or 4041 or ERISA has occurred; (vii) no Company
Employee Plan is covered by, and neither the Company nor any ERISA Affiliate has
incurred or expects to incur any direct or indirect liability under, arising out
of or by operation of Title IV of ERISA in connection with the termination
of, or an employee’s withdrawal from, any Company Employee Plan or other
retirement plan or arrangement, and no fact or event exists that could give rise
to any such liability, or under Section 412 of the Code; and (viii) no
compensation paid or payable to any employee of the Company has been, or will
be, non-deductible by reason of application of Section 162(m) or 280G of the
Code. With respect to each Company Employee Plan subject to ERISA as
either an employee pension plan within the meaning of Section 3(2) of ERISA
or an employee welfare benefit plan within the meaning of Section 3(1) of
ERISA, the Company has prepared in good faith and timely filed all requisite
governmental reports (which were true and correct as of the date filed) and has
properly and timely filed and distributed or posted all notices and reports to
employees required to be filed, distributed or posted with respect to each such
the Company Employee Plan. No suit, administrative proceeding, action
or other litigation has been brought, or to the best knowledge of the Company is
threatened, against or with respect to any such the Company Employee Plan,
including any audit or inquiry by the IRS or United States Department of
Labor. Neither the Company nor any ERISA Affiliate is a party to, or
has made any contribution to or otherwise incurred any obligation under, any
“multiemployer
plan” as defined in Section 3(37) of ERISA.
-17-
(iv)
With respect to each Company Employee Plan, the Company has complied with
(i) the applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and the
regulations thereunder or any similar applicable state law, (ii) the applicable
requirements of the Health Insurance Portability Amendments Act (“HIPAA”) and
the regulations thereunder and (iii) the applicable requirements of the
Family Medical Leave Act of 1993 and the regulations thereunder or any similar
applicable state law, except to the extent that failure to comply would not, in
the aggregate, have a Material Adverse Effect.
(v) Except
as set forth on Schedule 8(p), the
consummation of the transactions contemplated by this Agreement will not
(i) entitle any current or former employee or other service provider of the
Company or any ERISA Affiliate to severance benefits or any other payment
(including, without limitation, unemployment compensation, golden parachute or
bonus), except as expressly provided in this Agreement, or (ii) accelerate
the time of payment or vesting of any such benefits, or increase the amount of
compensation due any such employee or service provider.
(vi) There
has been no amendment to, written interpretation or announcement (whether or not
written) by the Company or any ERISA Affiliate relating to, or change in
participation or coverage under, any Company Employee Plan which would
materially increase the expense of maintaining such Plan above the level of
expense incurred with respect to that Plan for the most recent fiscal year
included in the Company’s financial statements.
(q) Effect on
Other Certain Agreements . Except as set forth on Schedule
8(q), neither the execution and delivery of this Agreement or the Transaction
Agreements nor the consummation of the transactions contemplated hereby or
thereby will (i) result in any payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or employee of the Company, (ii) materially
increase any benefits otherwise payable by the Company or (iii) result in
the acceleration of the time of payment or vesting of any such
benefits.
(r) Employee
Matters.
(i)
Except as set forth on Schedule 8(r), the Company
is in compliance in all material respects with all currently applicable laws and
regulations respecting employment, discrimination in employment, terms and
conditions of employment, wages, hours and occupational safety and health and
employment practices, and is not engaged in any unfair labor
practice. There are no pending claims against the Company under any
workers compensation plan or policy or for long term disability. The
Company does not have any material obligations under COBRA or any similar state
law with respect to any former employees or qualifying beneficiaries
thereunder. There are no controversies pending or, to the Company’s
knowledge, threatened, between the Company and any of its employees or former
employees, which controversies have or could reasonably be expected to have a
Material Adverse Effect on the Company. The Company is not a party to
any collective bargaining agreement or other labor unions contract nor does the
Company know of any activities or proceedings of any labor union or organize any
such employees. The Company has not incurred any liability under, and
has complied in all respects with, the Worker Adjustment Retraining Notification
Act (the “WARN
Act”), and no fact or event exists that could give rise to liability
under the WARN Act. Section 8(r) of the Company Disclosure Schedule
contains a list of all employees who are currently on a leave of absence
(whether paid or unpaid), the reasons therefor, the expected return date, and
whether reemployment of such employee is guaranteed by contract or statute, and
a list of all employees who have requested a leave of absence to commence at any
time after the date of this Agreement, the reason therefor, the expected length
of such leave, and whether reemployment of such employee is guaranteed by
contract or statute.
-18-
(ii) The
Company is in compliance with all federal, state and local laws governing the
employment and sponsorship of foreign nationals employed by the Company and is
not required to make any filing with or give any notice to, or to obtain any
consent from, any governmental body in connection with employment by the Company
of any employee who is a foreign national. There is no pending legal proceeding,
and no governmental agency has threatened to commence any legal proceeding,
against the Company or that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with the
employment by the Company of any employee who is a foreign
national. There is no order, writ, injunction or decree which has
been entered against the Company preventing or delaying the employment by the
Company of any employee who is a foreign national.
(s) Material
Contracts.
(i) Section
8(s)(i) of the Company Disclosure Schedule contains a list of all contracts and
agreements to which the Company is a party and that are material to the
business, results of operations, or condition (financial or otherwise), of the
Company (such contracts, agreements and arrangements as are required to be set
forth in Section 8(s)(i) of the Company Disclosure Schedule being referred to
herein collectively as the “Material
Contracts”). “Material Contracts”
shall include, without limitation, the following and shall be categorized in the
Company Disclosure Schedule as follows:
(A) each
contract and agreement (other than routine purchase orders and pricing quotes in
the ordinary course of business covering a period of less than one year) for the
purchase of inventory, spare parts, other materials or personal property with
any supplier or for the furnishing of services to the Company under the terms of
which the Company: (A) paid or otherwise gave consideration of
more than $5,000.00 in the aggregate during the calendar year ended
December 31, 2008, (B) is likely to pay or otherwise give
consideration of more than $5,000.00 in the aggregate over the remaining term of
such contract or (C) cannot be canceled by the Company without penalty or
further payment of less than $5,000.00;
(B) each
customer contract and agreement (other than routine purchase orders, pricing
quotes with open acceptance and other tender bids, in each case, entered into in
the ordinary course of business and covering a period of less than one year) to
which the Company is a party which (A) involved consideration of more than
$5,000.00 in the aggregate during the calendar year ended December 31,
2008, (B) is likely to pay or otherwise give consideration of more than
$5,000.00 in the aggregate over the remaining term of such contract or
(C) cannot be canceled by the Company without penalty or further payment of
less than $5,000.00;
-19-
(C) (A) all
distributor, manufacturer’s representative, broker, franchise, agency and dealer
contracts and agreements to which the Company is a party (specifying on a
matrix, in the case of distributor agreements, the name of the distributor,
product, territory, termination date and exclusivity provisions) and
(B) all sales promotion, market research, marketing and advertising
contracts and agreements to which the Company is a party
which: (1) involved consideration of more than $5,000.00 in the
aggregate during the calendar year ended December 31, 2008 or (2) are
likely to involve consideration of more than $5,000.00 in the aggregate over the
remaining term of the contract;
(D) all
management contracts with independent contractors or consultants (or similar
arrangements) to which the Company is a party and which (A) involved
consideration or more than $5,000.00 in the aggregate during the calendar year
ended December 31, 2008, (B) is likely to pay or otherwise give
consideration of more than $5,000.00 in the aggregate over the remaining term of
such contract, or (C) cannot be canceled by the Company without penalty or
further payment of less than $5,000.00;
(E) all
contracts and agreements (excluding routine checking account overdraft
agreements involving xxxxx cash amounts) under which the Company has created,
incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
indebtedness or under which the Company has imposed (or may impose) a security
interest or lien on any of their respective assets, whether tangible or
intangible, to secure indebtedness;
(F)
all contracts and agreements that limit the ability of the Company to
compete in any line of business or with any person or in any geographic area or
during any period of time, or to solicit any customer or client;
(G) all
contracts and agreements between or among the Company, on the one hand, and any
affiliate of the Company, on the other hand:
(H) all
contracts and agreements to which the Company is a party under which it has
agreed to supply products to a customer at specified prices, whether directly or
through a specific distributor, manufacturer’s representative or dealer;
and
(I)
all other contracts or agreements (A) which are material to the Company or
the conduct of their respective businesses or (B) the absence of which
would have a Material Adverse Effect on the Company or (C) which are
believed by the Company to be of unique value even though not material to the
business of the Company.
(ii) Except
as would not, individually or in the aggregate, have a Material Adverse Effect
on the Company, each Company license and each Material Contract, is a legal,
valid and binding agreement, and none of the Company licenses or Material
Contracts is in default by its terms or has been canceled by the other party;
the Company is not in receipt of any claim of default under any such agreement;
and the Company does not anticipate any termination of or change to, or receipt
of a proposal with respect to, any such agreement as a result of the
transactions contemplated by this Agreement. The Company has
furnished Purchaser with true and complete copies of all such agreements
together with all amendments, waivers or other changes thereto.
-20-
(t) Interested
Party Transactions. Except as set forth on Schedule 8(t), the
Company is not directly or indirectly indebted to any director, officer,
employee or agent of the Company (each of the foregoing, an “Interested Party”)
(except for amounts due as normal salaries and bonuses and in reimbursement of
ordinary expenses), nor is the Company directly or indirectly indebted to any
members of the immediate families of any Interested Party, and no such
Interested Parties or members of their immediate families are directly or
indirectly indebted to the Company. No Interested Parties
have any direct or indirect ownership or financial interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation which competes with the
Company except that Interested Parties and members of their families may own
stock in (but not exceeding two percent (2%) of the outstanding capital stock
of) any publicly traded companies that may compete with the
Company. No Interested Party or any members of their immediate
families are, directly or indirectly, interested in any material contract with
the Company. The Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
(u) Insurance. The
Company has policies of insurance and bonds of the type and in the amounts
customarily carried by persons conducting businesses or owning assets similar to
those of the Company. There is no material claim pending under any of
such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. All premiums
due and payable under all such policies and bonds have been paid and the Company
is otherwise in compliance with the terms of such policies and
bonds. The Company has no knowledge of any threatened termination of,
or material premium increase with respect to, any of such policies.
(v) Compliance
With Laws. The Company has complied with, is not in violation
of, and has not received any notices of violation with respect to, any federal,
state, local or foreign statute, law or regulation with respect to the conduct
of its business, or the ownership or operation of its business, except for such
violations or failures to comply as could not reasonably be expected to have a
Material Adverse Effect on the Company.
(w) Minute
Books. The minute books of the Company made available to
Purchaser contain a complete summary of all meetings of directors and
stockholders or actions by written consent since the time of incorporation of
the Company through the date of this Agreement, and reflect all transactions
referred to in such minutes accurately in all material respects.
(x) Complete
Copies of Materials. The Company has delivered or made
available true and complete copies of each document which has been requested by
Purchaser or its counsel in connection with their legal and accounting review of
the Company.
(y) Brokers’
and Finders’ Fees. The Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders’ fees or
agents’ commissions or investment bankers’ fees or any similar charges in
connection with this Agreement or any transaction contemplated
hereby.
-21-
(z) Board and
Stockholder Approval. The Board of Directors of the Company
has unanimously (i) approved this Agreement and the Transaction Agreements
and the transactions contemplated hereunder and thereunder, and
(ii) determined that the purchase of the Securities by Purchaser is in the
best interests of the stockholders of the Company. Guarantor has
obtained Proxies from the Majority Stockholders.
(aa) Inventory. The
inventories shown on the Financial Statements or thereafter acquired by the
Company consist of items of a quantity and quality usable or salable in the
ordinary course of business. Since January 31, 2009, the Company has
continued to replenish inventories in a normal and customary manner consistent
with past practice. The Company has not received written or oral
notice that it will experience in the foreseeable future any difficulty in
obtaining, in the desired quantity and quality and at a reasonable price and
upon reasonable terms and conditions, the raw materials, supplies or component
products required for the manufacture, assembly or production of its
products. The values at which inventories are carried reflect the
inventory valuation policy of the Company, which is consistent with its past
practice and in accordance with GAAP applied on a consistent
basis. Due provision has been made on the books of the Company in the
ordinary course of business consistent with past practice to provide for all
slow-moving, obsolete, or unusable inventories at their estimated useful scrap
values and such inventory reserves are adequate to provide for such slow-moving,
obsolete or unusable inventory and inventory shrinkage.
(bb) Accounts
Receivable.
(i) The
Company has made available to Purchaser a list of all accounts receivable of the
Company reflected on the Financial Statements (“Accounts Receivable”)
along with a range of days elapsed since invoice.
(ii) All
Accounts Receivable of the Company arose in the ordinary course of business and
are carried at values determined in accordance with GAAP consistently
applied. No person has any lien on any of such Accounts Receivable
and no request or agreement for deduction or discount has been made with respect
to any of such Accounts Receivable.
(iii) All
of the inventories of the Company reflected in the Financial Statements and the
Company’s books and records on the date hereof were purchased, acquired or
produced in the ordinary and regular course of business and in a manner
consistent with the Company’s regular inventory practices and are set forth on
the Company’s books and records in accordance with the practices and principles
of the Company consistent with the method of treating said items in prior
periods. None of the inventory of the Company reflected on the
Financial Statements or on the Company’s books and records as of the date hereof
(in either case net of the reserve therefor) is obsolete, defective or in excess
of the needs of the business of the Company reasonably anticipated for the
normal operation of the business consistent with past practice and outstanding
customer contracts. The presentation of inventory on the Financial
Statements conforms to GAAP and such inventory is stated at the lower of cost or
net realizable value.
-22-
(cc) Customers
and Suppliers. As of the date hereof, no customer which
individually accounted for more than ten percent (10%) of the Company’s gross
revenues during the twelve (12) month period preceding the date hereof, and no
supplier of the Company, has canceled or otherwise terminated, or made any
written threat to the Company to cancel or otherwise terminate its relationship
with the Company, or has at any time on or after December 31, 2008 decreased
materially its services or supplies to the Company in the case of any such
supplier, or its usage of the services or products of the Company in the case of
such customer, and to the Company’s knowledge, no such supplier or customer
intends to cancel or otherwise terminate its relationship with the Company or to
decrease materially its services or supplies to the Company or its usage of the
services or products of the Company, as the case may be. From and
after the date hereof, no customer which individually accounted for more than
ten percent (10%) of the Company’s gross revenues during the twelve (12) month
period preceding the Closing, has canceled or otherwise terminated, or made any
written threat to the Company to cancel or otherwise terminate, for any reason,
including without limitation the consummation of the transactions by this
Agreement, its relationship with the Company, and to the Company’s knowledge, no
such customer intends to cancel or otherwise terminate its relationship with the
Company or to decrease materially its usage of the services or products of the
Company. The Company has not knowingly breached, so as to provide a
benefit to the Company that was not intended by the parties, any agreement with,
or engaged in any fraudulent conduct with respect to, any customer or supplier
of the Company.
(dd) Third
Party Consents. The Company shall have obtained all consents
or approvals needed from any third party in order to effect this Agreement or
any of the transactions contemplated hereby.
(ee) No
Commitments Regarding Future Products. The Company has
made no sales to customers that are contingent upon providing future
enhancements of existing products, to add features not presently available on
existing products or to otherwise enhance the performance of its existing
products (other than beta or similar arrangements pursuant to which the
Company’s customers from time to time test or evaluate products). The
products the Company has delivered to customers substantially comply with
published specifications for such products and the Company has not received
material complaints from customers about its products that remain
unresolved. Section 8(ee) of the Company Disclosure Schedule
accurately sets forth a complete list of products in development (exclusive of
mere enhancements to and additional features for existing
products).
(ff) Representations
Complete. None of the representations or warranties made by
the Company in this Agreement or in any attachment hereto, including the Company
Disclosure Schedule, or certificate furnished by the Company pursuant to this
Agreement, when all such documents are read together in their entirety, contains
or will contain at the Closing any untrue statement of a material fact, or omits
or will omit at the Closing to state any material fact necessary in order to
make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.
9. Representations
and Warranties of the Guarantor. Guarantor hereby
represents and warrants to the Purchaser that:
(a) Organization,
Good Standing and Qualification. The Guarantor is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted.
-23-
(b) Authorization. All corporate
action on the part of the Guarantor, its officers, directors and stockholders
necessary for the authorization, execution and delivery of the Transaction
Agreements and the performance of all obligations of the Guarantor hereunder and
thereunder has been taken or will be taken prior to the Closing. The
Transaction Agreements, when executed and delivered by the Guarantor, shall
constitute valid and legally binding obligations of the Guarantor, enforceable
against the Guarantor in accordance with their terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and other laws of general application affecting enforcement of
creditors’ rights generally, as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable
remedies.
10. Representations
and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Company that:
(a) Purchase
Entirely for Own Account. The Securities to
be acquired by the Purchaser will be acquired for investment for the Purchaser’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the
same. The Purchaser has not been formed for the specific purpose of
acquiring any of the Securities.
(b) Knowledge. The Purchaser is
aware of the Company’s business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the securities.
(c) Restricted
Securities. The Purchaser
understands that the Securities have not been, and will not be, registered under
the Securities Act of 1933, as amended (the “Securities Act”), by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Purchaser’s representations as expressed
herein. The Purchaser understands that the Securities are “restricted
securities” under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that the
Company has no obligation to register or qualify the Securities for
resale. The Purchaser further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of sale, the
holding period for the Securities, and on requirements relating to the Company
which are outside of the Purchaser’s control, and which the Company is under no
obligation and may not be able to satisfy.
(d) No Public
Market. The Purchaser
understands that no public market now exists for any of the securities issued by
the Company, that the Company has made no assurances that a public market will
ever exist for the Securities.
-24-
(e) Legends. The Purchaser
understands that the Securities, and any securities issued in respect thereof or
exchange therefor, may bear one or all of the following legends:
(i) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”
(ii) Any
legend required by the Blue Sky laws of any state to the extent such laws are
applicable to the shares represented by the certificate so
legended.
(f) Accredited
Investor. The
Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
11. Conditions
of the Purchaser’s Obligations at Closing. The obligations
of the Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
(a) Execution
and Delivery of Transaction Agreements. The Company and/or the
Guarantor (if applicable) shall have executed and delivered the Transaction
Agreements to the Purchaser.
(b) Representations
and Warranties. The
representations and warranties of the Company contained in Section 8 and
the representations of the Guarantor contained in Section 9 shall be true on and
as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
(c) Qualifications. All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to this
Agreement shall be obtained and effective as of the Closing.
(d) Amended
Certificate. The Company shall have delivered to Purchaser the
Amended Certificate.
12. Conditions
of the Company’s Obligations at Closing. The obligations
of the Company to the Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
(a) Representations
and Warranties. The
representations and warranties of the Purchaser contained in Section 10
shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the
Closing.
-25-
(b) Qualifications. All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to this
Agreement shall be obtained and effective as of the Closing.
(c) Delivery
of Form W-8 BEN or Form W-9. The Purchaser shall have
completed and delivered to the Company a validly executed IRS Form W-8 BEN or
IRS Form W-9, as applicable, which forms are attached as Exhibit G to this
Agreement.
13. Default.
(a) Events of
Default. The occurrence of any one or more of the following
events, conditions or state of affairs shall constitute an Event of Default
hereunder and under the Note:
(i)
The Company shall fail to pay as and when due any principal or interest
under the Note or the Credit Agreement.
(ii) If
the Company or the Guarantor shall breach or default in connection with any of
the representations, warranties, covenants or obligations contained the
Transaction Agreements.
(iii) If
the Company makes an assignment for the benefit of creditors generally, offers a
composition or extension to creditors, or makes or sends notice of an intended
bulk sale of any business or assets now or hereafter owned or conducted by the
Company.
(iv) Upon
the commencement of any action for the dissolution or liquidation of the
Company, or the commencement of any case or proceeding for reorganization or
liquidation of the Company’s debts under Title 11 of the United States Code as
now or hereafter in effect, or any successor statute, or any other state or
federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against the Company; provided, however, that the
Company shall have sixty (60) days to obtain the dismissal or discharge of any
involuntary proceeding filed against it and the Agent may seek adequate
protection in any bankruptcy proceeding.
(v) Upon
the appointment of a receiver, liquidator, custodian, trustee or similar
official or fiduciary for the Company or for a material portion of any property
of the Company.
14. Miscellaneous.
(a) Successors
and Assigns. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
-26-
(b) Governing
Law. This Agreement
and all acts and transactions pursuant hereto and the rights and obligations of
the parties hereto shall be governed, construed and interpreted in accordance
with the laws of the State of Delaware, without giving effect to principles of
conflicts of law.
(c) Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument.
(d) Titles
and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.
(e) Notices. Any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, or forty-eight (48) hours after being
deposited in the U.S. mail as certified or registered mail with postage prepaid,
if such notice is addressed to the party to be notified at such party’s address
or facsimile number as set forth below or as
subsequently modified by written notice.
(f) Finder’s
Fee. Each party
represents that it neither is nor will be obligated for any finder’s fee or
commission in connection with this transaction. The Purchaser agrees
to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finder’s fee (and the costs
and expenses of defending against such liability or asserted liability) for
which the Purchaser or any of its officers, employees, or representatives is
responsible. The Company and the Guarantor agree to indemnify and
hold harmless the Purchaser from any liability for any commission or
compensation in the nature of a finder’s fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company,
the Guarantor or any of their respective officers, employees or representatives
is responsible.
(g) Amendments
and Waivers. Any term of this
Agreement may only be amended with the written consent of the parties
hereto. Any amendment or waiver effected in accordance with this
Section 14(g) shall be binding upon the Purchaser and each transferee of the
Securities, each future holder of all such Securities, and the
Company.
(h) Severability. If one or more
provisions of this Agreement are held to be unenforceable
under applicable law, the parties agree to renegotiate such provision in good
faith, in order to maintain the economic position enjoyed by each party as close
as possible to that under the provision rendered unenforceable. In
the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded
from this Agreement, (ii) the balance of the Agreement shall be interpreted
as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.
(i) Entire
Agreement. This Agreement,
and the documents referred to herein constitute the entire agreement between the
parties hereto pertaining to the subject matter hereof, and any and all other
written or oral agreements existing between the parties hereto are expressly
canceled.
-27-
(j) Exculpation
Among Purchasers. The Purchaser
acknowledges that it is not relying upon any person, firm or corporation, other
than (a) the Company and its officers and directors, and (b) the Guarantor and
its officers and directors in making its investment or decision to invest in the
Company.
(k) Corporate
Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO
EXEMPT.
-28-
The
parties have executed this Convertible Note Purchase Agreement as of
the date first written above.
|
COMPANY:
|
||
|
UCA
Services, Inc., d/b/a Netfabric
|
||
|
Technologies,
Inc.
|
||
|
By:/s/
|
||
|
Xxxxx Xxxx, CEO
|
||
| Address: 000 Xxxxxx Xxxx Xxxx | ||
| Xxxxxxxxxx, XX 00000 | ||
|
Facsimile
Number: 000-000-0000
|
||
|
GUARANTOR:
|
||
|
By:/s/
|
||
|
Xxxxx Xxxx, CEO
|
||
| Address: 000 Xxxxxx Xxxx Xxxx | ||
| Xxxxxxxxxx, XX 00000 | ||
|
Facsimile
Number: 000-000-0000
|
||
|
PURCHASER:
|
||
|
Fortify
Infrastructure Services, Inc.
|
||
|
By:/s/
|
||
|
Name:
Xxxxxxxx Xxxxxxxxxx
|
||
| Address: 0000 Xxxxx Xxxxxx, Xxxxx X | ||
| Xxxxx Xxxxx, XX 00000 | ||
|
Facsimile
Number: 000-000-0000
|
||
SIGNATURE
PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT
LIST OF
SCHEDULES/EXHIBITS
|
Schedule
l -
|
Schedule
of Liabilities/Creditors to be Paid at Closing
|
|
Schedule
2-
|
Amended
Certificate
|
|
Exhibit A
-
|
Form
of Promissory Note
|
|
Exhibit
B -
|
Credit
Agreement
|
|
Exhibit
C -
|
Security
Agreement
|
|
Exhibit
D -
|
Pledge
Agreement
|
|
Exhibit
E -
|
Option
Agreement
|
|
Exhibit
F -
|
Form
of Proxy
|
|
Exhibit
G -
|
W-9
|
SCHEDULE
1
SCHEDULE OF
LIABILITIES
At Closing, the creditors of the
Company set forth below shall be paid by Purchaser the amounts set forth
opposite their names, representing payment in full of the total amount of
liabilities and indebtedness of the Company outstanding as of the Closing
Date:
|
Name
and Address
|
Amount
|
|
SCHEDULE
2
AMENDED
CERTIFICATE
-3-
EXHIBIT
A
FORM
OF CONVERTIBLE PROMISSORY NOTE
-4-
EXHIBIT
B
CREDIT
AGREEMENT
EXHIBIT
C
SECURITY
AGREEMENT
EXHIBIT
D
PLEDGE
AGREEMENT
EXHIBIT
E
OPTION
AGREEMENT
EXHIBIT
F
FORM
OF PROXY
EXHIBIT
G
FORM
W-9
Non-Profiled
Document
-10-
