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SECURITIES PURCHASE AGREEMENT
among
NETSOL INTERNATIONAL, INC.
and
THE INVESTORS SIGNATORY HERETO
Dated as of January 8, 2001
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SECURITIES PURCHASE AGREEMENT together with any schedules and
exhibits attached hereto (this "AGREEMENT"), dated as of January 8, 2001,
among NetSol International, Inc., a Nevada corporation (the "COMPANY"), and
the investors signatory hereto (each such investor is a "PURCHASER" and all
such investors are, collectively, the "PURCHASERS").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and Rule 506 promulgated thereunder, the
Company desires to issue and sell to the Purchasers and the Purchasers,
severally and not jointly, desire to purchase from the Company, shares of the
Company's common stock, $.001 par value per share (the "COMMON STOCK"), and
certain other securities of the Company as more fully described in this
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained
in this Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and the Purchasers
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1. CLOSING; SETTLEMENT DATES.
Subject to the terms and conditions set forth in this Agreement, the
Company shall issue and sell to the Purchasers and the Purchasers shall
severally purchase shares of Common Stock ("SHARES") and warrants to purchase
Shares ("WARRANTS") for an aggregate purchase price of $2,000,000 (the
"PURCHASE PRICE"). The purchase and sale of the Shares and Warrants hereunder
shall be closed (the "CLOSING") at the offices of Xxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx & Xxxxxx LLP ("XXXXXXXX XXXXXXXXX"), 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, on the execution date of this Agreement. The
Closing shall take place on the two dates described in Sections 1.1(i) and
1.1(iii) below.
(i) THE FIRST CLOSING DATE. On the date of execution of this Agreement
(the "FIRST CLOSING DATE"), the parties shall deliver or shall cause
to be delivered the following: (A) the Company shall deliver to each
Purchaser: (1) a stock certificate of the Company, registered in the
name of such Purchaser, representing a number of Shares equal to the
quotient obtained by dividing (x) 50% of the portion of the Purchase
Price indicated below such Purchaser's signature to this Agreement
by (y) the First Closing Date Per Share Purchase Price (as defined
below), (2) a Warrant, in the form of EXHIBIT C, registered in the
name of such Purchaser, pursuant to which such Purchaser shall have
the right to acquire upon the terms thereof at an exercise price per
share equal to 125% of the First Closing Date Per Share Purchase
Price, a number of shares of Common Stock equal to the quotient
obtained by dividing (x) 30% of the Purchase Price to be paid by
such Purchaser on the First Closing Date pursuant to clause (B)
below in this paragraph and (y) the First Closing Date Per Share
Purchase Price; (3) an executed Registration Rights Agreement, dated
the date of this Agreement, among the Company and the Purchasers, in
the form of EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), (4) Transfer Agent Instructions,
in the form of EXHIBIT B, executed by the Company and delivered to
and acknowledged in writing by the Company's transfer agent (the
"TRANSFER AGENT INSTRUCTIONS"), (5) the legal opinion of Xxxxxxx &
XxXxxxxx, outside counsel to the Company, in agreed form, and (6) an
executed copy of this Agreement; and (B) each Purchaser shall
deliver to the Company: (1) 50% of the portion of the Purchase Price
set forth under such Purchaser's signature to this Agreement (less
the monies set forth in Section 4.1) in United States dollars in
immediately available funds by wire transfer to an account
designated in writing by the Company for such purpose, (2) an
executed Registration Rights Agreement and (3) an executed copy of
this Agreement. The parties acknowledge and agree that the Purchase
Price paid by such Purchaser on the First Closing Date in accordance
with Section 1.1(i) (including as paid for purposes of this Section,
all monies deducted from the amount paid as set forth in Section
4.1) will be deemed to be consideration paid for the Shares to be
issued to such Purchaser pursuant to Section 1.1(i)(A)(1) and the
Shares, if any, to be issued to such Purchaser pursuant to Section
1.1(ii)(A).
(ii) THE FIRST SETTLEMENT DATE. On the twelfth Trading Day following the
First Closing Date (including the First Closing Date) (the "FIRST
SETTLEMENT DATE"), the Company shall deliver to each Purchaser: (A)
a stock certificate of the Company, registered in the name of such
Purchaser, representing a number of Shares equal to the amount
obtained by subtracting (x) the quotient obtained by dividing the
Purchase Price paid by such Purchaser on the First Closing Date in
accordance with Section 1.1(i) by the First Closing Date Per Share
Purchase Price (including as paid for purposes of this Section, all
monies deducted from the amount paid as set forth in Section 4.1),
from (y) the quotient obtained by dividing the Purchase Price paid
by such Purchaser on the First Closing Date in accordance with
Section 1.1(i) (including as paid for purposes of this Section, all
monies deducted from the amount paid as set forth in Section 4.1) by
the First Settlement Date Per Share Purchase Price (if the
difference obtained by subtracting the quotient of item (ii)(A)(x)of
this paragraph from the product of item (ii)(A)(y)of this paragraph
is a negative number, then the parties agree that such Purchaser
shall not be obligated to return Shares to the Company), (B) a
Warrant, in the form of EXHIBIT C, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to
acquire upon the terms thereof at an exercise price per share equal
to 125% of the First Settlement Date Per Share Purchase Price, a
number of shares of Common Stock equal to the amount obtained by
subtracting (x) the quotient obtained by dividing 30% of the
Purchase Price paid by such Purchaser on the First Closing Date in
accordance with Section 1.1(i) by the First Closing Date Per Share
Purchase Price, from (y) the quotient obtained by dividing 30% of
the Purchase Price paid by such Purchaser on the First Closing Date
in accordance with Section 1.1(i) (including as paid for purposes of
this Section, all monies deducted from the amount paid as set forth
in Section 4.1) by the First Settlement Date Per Share Purchase
Price (if the difference obtained by subtracting the quotient of
item (ii)(B)(x) of this paragraph from the quotient of item
(ii)(B)(y) of this paragraph is a negative number, then the parties
agree that such Purchaser shall not be obligated to return the
Warrant issued to it on the First Closing Date for re-issuance in a
lower amount).
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(iii) THE SECOND CLOSING DATE. On the 30th Trading Day following (and
including) the First Closing Date, or such earlier date as may be
indicated in writing by Deephaven (the "SECOND CLOSING DATE"): (A)
the Company will deliver to each Purchaser: (1) a stock certificate
of the Company, registered in the name of such Purchaser,
representing a number of Shares equal to the quotient obtained by
dividing (x) 50% of the portion of the Purchase Price indicated
below such Purchaser's signature to this Agreement by (y) the Second
Closing Date Per Share Purchase Price (as defined below), (2) a
Warrant, in the form of EXHIBIT C, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to
acquire upon the terms thereof at an exercise price per share equal
to 125% of the Second Closing Date Per Share Purchase Price, a
number of shares of Common Stock equal to the quotient obtained by
dividing (x) 30% of the Purchase Price to be paid by such Purchaser
on the Second Closing Date pursuant to clause (B) below in this
paragraph by (y) the Second Closing Date Per Share Purchase Price,
and (B) each Purchaser shall deliver 50% of the portion of the
Purchase Price set forth under such Purchaser's signature to this
Agreement in United States dollars in immediately available funds by
wire transfer to an account designated in writing by the Company for
such purpose. The parties acknowledge and agree that the Purchase
Price paid by such Purchaser on the Second Closing Date in
accordance with Section 1.1(iii) will be deemed to be consideration
paid for the Shares to be issued to such Purchaser pursuant to
Section 1.1(iii)(A)(1) and the Shares, if any, that may be issued to
such Purchaser pursuant to Section 1.1(iv)(A). Notwithstanding
anything to the contrary contained herein, a Purchaser shall not be
obligated to acquire Shares or Warrants on the Second Closing Date
or Second Settlement Date (as defined below) if there shall have
occurred and be continuing an Event Under Section 3.17(a)(b).
However, the obligations of the Company under the Transaction
Documents shall not be affected by such non-acquisition.
(iv) THE SECOND SETTLEMENT DATE. On the twelfth Trading Day following the
Second Closing Date (including the Second Closing Date) (the "SECOND
SETTLEMENT DATE"), the Company shall deliver to each Purchaser: (A)
a stock certificate of the Company, registered in the name of such
Purchaser, representing a number of Shares equal to the amount
obtained by subtracting (x) the quotient obtained by dividing the
Purchase Price paid by such Purchaser on the Second Closing Date in
accordance with Section 1.1(iii) by the Second Closing Date Per
Share Purchase Price, from (y) the quotient obtained by dividing the
Purchase Price paid by such Purchaser on the Second Closing Date in
accordance with Section 1.1(iii) by the Second Settlement Date Per
Share Purchase Price (if the difference obtained by subtracting the
quotient of item (iv)(A)(x)of this paragraph from the product of
item (iv)(A)(y)of this paragraph is a negative number, then the
parties agree that such Purchaser shall not be obligated to return
Shares to the Company), (B) a Warrant, in the form of EXHIBIT C,
registered in the name of such Purchaser, pursuant to which such
Purchaser shall have the right to acquire upon the terms thereof at
an exercise price per share equal to 125% of the Second Settlement
Date Per Share Purchase Price, a number of shares of Common Stock
equal to the amount obtained by subtracting (x) the quotient
obtained by dividing 30% of the Purchase Price paid by such
Purchaser on the Second Closing Date in accordance with Section
1.1(iii) by the Second Closing Date Per Share Purchase Price, from
(y) the quotient obtained by dividing 30% of the Purchase Price paid
by such Purchaser on
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the Second Closing Date in accordance with Section 1.1(iii) by the
Second Settlement Date Per Share Purchase Price (if the difference
obtained by subtracting the quotient of item (iv)(B)(x) of this
paragraph from the quotient of item (iv)(B)(y) of this paragraph is
a negative number, then the parties agree that such Purchaser shall
not be obligated to return the Warrant issued to it on the Second
Closing Date for re-issuance in a lower amount).
1.2. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1.2.
(a) "BID PRICE" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on
the NASDAQ (as reported at approximately 4:15 p.m. (New
York City time) on such date for regular session trading)
or on any Subsequent Market (as defined herein) on which
the Common Stock is then listed or quoted, as reported by
Bloomberg Information Services, Inc. (or any successor
entity succeeding to its function of reporting prices), or
if there is no such price on such date, then the closing
bid price on the NASDAQ (as reported at approximately 4:15
p.m. (New York City time) on such date for regular session
trading) or on such Subsequent Market on the date nearest
preceding such date, as reported by Bloomberg Information
Services, Inc. (or any successor entity succeeding to its
function of reporting prices), or (b) if the Common Stock
is not then listed or quoted on the Nasdaq or a Subsequent
Market, the closing bid price for a share of Common Stock
in the over-the-counter market, as reported by the
National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of
reporting prices) at the close of business on such date,
or (c) if the Common Stock is not then reported by the
National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of
reporting prices), then the average of the "Pink Sheet"
quotes for the relevant conversion period, as determined
in good faith by the Holder, or (d) if the Common Stock is
not then publicly traded the fair market value of a share
of Common Stock as determined by an Appraiser selected in
good faith by Deephaven.
(b) "BUSINESS DAY" means any day except Saturday, Sunday and
any day which shall be a federal legal holiday or a day on
which banking institutions in the State of New York or
California are authorized or required by law or other
governmental action to close.
(c) "CLOSING DATE" means either of the First Closing Date or
Second Closing Date.
(d) "DEEPHAVEN" means Deephaven Private Placement Trading
Ltd.
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(e) "FIRST CLOSING DATE PER SHARE PURCHASE PRICE" means the
lesser of (a) 85% of the average Bid Price for the 10
Trading Days immediately preceding the First Closing Date
and (b) the Bid Price on the Trading Day immediately
preceding the First Closing Date.
(f) "FIRST OFFER PER SHARE PURCHASE PRICE" means the lesser
of (a) $10.00 (subject to equitable adjustment in the
event of any stock splits of the Common Stock and similar
events prior to the date that any offer under Section
3.16(a) is accepted) and (b) 85% of the average Bid Price
for the 21 Trading Days immediately following the date of
the delivery by the Company of an offer, if any, under
Section 3.16(a).
(g) "FIRST SETTLEMENT DATE PER SHARE PURCHASE PRICE" means
the lesser of (a) 85% of the average Bid Price for the 21
Trading Days comprising the ten Trading Days immediately
preceding the Closing Date, the Closing Date and the ten
Trading Days immediately following the Closing Date and
(b) the Bid Price on the Trading Day immediately preceding
the Closing Date.
(h) "NASDAQ" means the Nasdaq SmallCap Market.
(i) "PERSON" means an individual or corporation,
partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company,
joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
(j) "SECOND CLOSING DATE PER SHARE PURCHASE PRICE" means the
lesser of (a) 85% of the average Bid Price for the 10
Trading Days immediately preceding the Second Closing Date
and (b) the Bid Price on the Trading Day immediately
preceding the Second Closing Date.
(k) "SECOND OFFER PER SHARE PURCHASE PRICE" means the lesser
of (a) $10.00 (subject to equitable adjustment in the
event of any stock splits of the Common Stock or similar
events prior to the date of any offer under Section
3.16(b) is accepted) and (b) 85% of the average Bid Price
for the 21 Trading Days immediately following the date of
the delivery by the Company of an offer, if any, under
Section 3.16(b).
(l) "SECOND SETTLEMENT DATE PER SHARE PURCHASE PRICE" means
the lesser of (a) 85% of the average Bid Price for the 21
Trading Days comprising the ten Trading Days immediately
preceding the Second Settlement Date and the ten Trading
Days immediately following the Second Settlement Date and
(b) the Bid Price on the Trading Day immediately preceding
the Second Settlement Date.
(m) "SUBSEQUENT MARKET" shall mean any of the New York Stock
Exchange,American Stock Exchange, or Nasdaq National
Market.
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(n) "TRADING DAY" means (a) a day on which the Common Stock
is traded on the NASDAQ or on the Subsequent Market on
which the Common Stock is then listed or quoted, as the
case may be, or (b) if the Common Stock is not listed on
the NASDAQ or a Subsequent Market, a day on which the
Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board , or (c) if the Common
Stock is not quoted on the OTC Bulletin Board, a day on
which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); PROVIDED,
that in the event that the Common Stock is not listed or
quoted as set forth in (a), (b) and (c) hereof, then
Trading Day shall mean a Business Day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to the Purchasers:
(a) ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly incorporated, validly existing and in
good standing under the laws of the State of Nevada, with
the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as
currently conducted. The Company has no subsidiaries other
than as set forth in SCHEDULE 2.1(a) (collectively, the
"SUBSIDIARIES"). Each of the Subsidiaries is an entity,
duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of
its incorporation or organization (as applicable), with
the requisite power and authority to own and use its
properties and assets and to carry on its business as
currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or
in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of the Securities (as
defined below), this Agreement, the Registration Rights
Agreement, the Transfer Agent Instructions or the Warrants
(collectively, the "TRANSACTION DOCUMENTS"), (y) have or
result in a material adverse effect on the results of
operations, assets, prospects, or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a
whole, or (z) adversely impair the Company's ability to
perform fully on a timely basis its obligations under any
of the Transaction Documents (any of (x), (y) or (z), a
"MATERIAL ADVERSE EFFECT").
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(b) AUTHORIZATION; ENFORCEMENT. The Company has the
requisite corporate power and authority to enter into and
to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each
of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated
thereby have been duly authorized by all necessary action
on the part of the Company and no further action is
required by the Company. Each of the Transaction Documents
has been duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. Neither
the Company nor any Subsidiary is in violation of any of
the provisions of its respective certificate or articles
of incorporation, by-laws or other organizational or
charter documents.
(c) CAPITALIZATION. The number of authorized, issued and
outstanding capital stock of the Company is set forth in
SCHEDULE 2.1(c). Except as disclosed in SCHEDULE 2.1(c),
the Company owns all of the capital stock of each
Subsidiary. No shares of Common Stock are entitled to
preemptive or similar rights, nor is any holder of the
securities of the Company entitled to preemptive or
similar rights arising out of any agreement or
understanding with the Company or any Subsidiary by virtue
of any of the Transaction Documents. Except as a result of
the purchase and sale of the Securities (as defined below)
hereunder and under the Warrants and except as disclosed
in SCHEDULE 2.1(c), there are no outstanding options,
warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings, or arrangements by
which the Company or any Subsidiary is or may become bound
to issue additional shares of Common Stock, or securities
or rights convertible or exchangeable into shares of
Common Stock. The issue and sale of the Securities, will
not obligate the Company to issue shares of Common Stock
or other securities to any Person other than the Purchaser
and will not result in a right of any holder of Company
securities to adjust the exercise or conversion or reset
price under such securities.
(d) ISSUANCE OF THE SECURITIES. The Securities are duly
authorized and, when issued and paid for in accordance
with the terms hereof and the Warrants, shall have been
duly and validly issued, fully paid and nonassessable,
free and clear of all liens, encumbrances and rights of
first refusal of any kind (collectively, "LIENS"). The
Company has reserved a sufficient number of duly
authorized shares of Common Stock to issue all of the
Shares and for issuance upon exercise in full of the
Warrants. Prior to
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any offer of First Offered Shares and Second Offered
Shares (as defined in Sections 3.16(a) and (b),
respectively), the Company will reserve for issuance to
Deephaven a number of shares of Common Stock equal to the
number of First Offered Shares and Second Offered Shares.
The shares of Common Stock issuable upon exercise of the
Warrants are referred to herein as the "UNDERLYING
SHARES." The Shares, the Warrants, the Underlying Shares,
the Adjustment Shares (as defined in Section 3.14) the
First Offered Shares and Second Offered Shares are
collectively referred to herein as, the "SECURITIES."
(e) NO CONFLICTS. The execution, delivery and performance of
the Transaction Documents by the Company and the
consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with
or violate any provision of the Company's or any
Subsidiary's certificate or articles of incorporation,
bylaws or other charter documents (each as amended through
the date hereof), or (ii) subject to obtaining the
Required Approvals (as defined below), conflict with, or
constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or
give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, instrument
(evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii)
result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and
(iii), as could not, individually or in the aggregate,
have or result in a Material Adverse Effect. The business
of the Company is not being conducted in violation of any
law, ordinance or regulation of any governmental
authority, except for violations which, individually or in
the aggregate, could not have or result in a Material
Adverse Effect. The Company shall indemnify and hold
harmless the Purchasers, their employees, officers,
directors, agents and partners, and their respective
Affiliates, from and against all claims, losses, damages,
costs (including the costs of preparation and attorney's
fees) and expenses suffered in respect of any breach of
this representation and warranty, as such losses, damages,
costs, fees and expenses are incurred.
(f) FILINGS, CONSENTS AND APPROVALS. Neither the Company nor
any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal,
state, local or other governmental authority or other
Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents,
other than (i) the filings required pursuant to
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Section 3.10, (ii) the filing with the Securities and
Exchange Commission (the "COMMISSION") of a registration
statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale of
the Shares and the Underlying Shares by the Purchasers
(the "UNDERLYING SHARES REGISTRATION STATEMENT"), (iii)
the application(s) to the NASDAQ for the listing of the
Underlying Shares for trading on the NASDAQ (and with any
other national securities exchange or market on which the
Common Stock is then listed) in the time and manner
required thereby, and (iv) applicable Blue Sky filings
(collectively, the "REQUIRED APPROVALS").
(g) LITIGATION; PROCEEDINGS. There is no action, suit,
inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its
Subsidiaries or any of their respective properties before
or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal,
state, county, local or foreign) (collectively, an
"ACTION") which (i) adversely affects or challenges the
legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if
there were an unfavorable decision, individually or in the
aggregate, have or result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any
Action involving (A) a claim of violation of or liability
under federal or state securities laws or (B) a claim of
breach of fiduciary duty; (iv) the Company does not have
pending before the Commission any request for confidential
treatment of information and the Company has no knowledge
of any expected such request that would be made prior to
the Effectiveness Date (as defined in the Registration
Rights Agreement); and (v) there has not been, and to the
best of the Company's knowledge there is not pending or
contemplated, any investigation by the Commission
involving the Company or any current or former director or
officer of the Company.
(h) NO DEFAULT OR VIOLATION. Neither the Company nor any
Subsidiary (i) is in default under or in violation of (and
no event has occurred which has not been waived which,
with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim
that it is in default under or that it is in violation of,
any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which
it or any of its properties is bound, (ii) is in violation
of any order of any court, arbitrator or governmental
body, or (iii) is in violation of any statute, rule or
regulation of any governmental authority, in each case of
clauses (i), (ii) or (iii) above, except as could not
individually or in the aggregate, have or result in a
Material Adverse Effect.
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(i) PRIVATE OFFERING. Assuming the accuracy of the
representations and warranties of the Purchasers set forth
in Sections 2.2(b)-(g), the offer, issuance and sale of
the Shares, the Warrants and the Warrants Shares being
issued to the Purchasers on the First Closing Date, First
Settlement Date, Second Closing Date, Second Settlement
Date as contemplated hereby and the issuance and sale of
the Adjustment Shares are exempt from the registration
requirements of the Securities Act. Neither the Company
nor any Person acting on its behalf has taken or is, to
the knowledge of the Company, contemplating taking any
action which could subject the offering, issuance or sale
of such Securities to the registration requirements of the
Securities Act including soliciting any offer to buy or
sell such Securities by means of any form of general
solicitation or advertising.
(j) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law to
file such material) (the foregoing materials being
collectively referred to herein as the "SEC REPORTS" and,
together with the Schedules to this Agreement, the
"DISCLOSURE MATERIALS") on a timely basis or has received
a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
All material agreements to which the Company is a party or
to which the property or assets of the Company are subject
have been filed as exhibits to the SEC Reports as required
under the Exchange Act. The financial statements of the
Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the
rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent
basis during the periods involved ("GAAP"), except as may
be otherwise specified in such financial statements or the
notes thereto, and fairly present in all material respects
the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to
normal, immaterial, year-end audit adjustments. Since
January 1, 2000, except as specifically disclosed in the
SEC Reports, (a) there has been no event, occurrence or
development that has or that could result in a
-10-
Material Adverse Effect, (b) the Company has not incurred
any liabilities (contingent or otherwise) other than (x)
liabilities incurred in the ordinary course of business
consistent with past practice and (y) liabilities not
required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in
filings made with the Commission, (c) the Company has not
altered its method of accounting or the identity of its
auditors, (d) the Company has not declared or made any
payment or distribution of cash or other property to its
stockholders or officers or directors (other than in
compliance with existing Company stock option plans) with
respect to its capital stock, or purchased, redeemed (or
made any agreements to purchase or redeem) any shares of
its capital stock and (e) the Company has not issued or
committed to issue shares of Common Stock or securities
that are convertible or exchangeable into, or give holders
thereof the right to receive, shares of Common Stock.
(k) INVESTMENT COMPANY. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities
Act) of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(l) CERTAIN FEES. Except for certain fees payable by the
Company to Jesup & Xxxxxx Securities Corporation, no fees
or commissions will be payable by the Company to any
broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with
respect to the transactions contemplated by this
Agreement. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by
or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection
with the transactions contemplated by this Agreement. The
Company shall indemnify and hold harmless the Purchasers,
their employees, officers, directors, agents, and
partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the
costs of preparation and attorney's fees) and expenses
suffered in respect of any such claimed or existing fees,
as such losses, damages, costs, fees and expenses are
incurred.
(m) FORM S-3 ELIGIBILITY. The Company is eligible to
register its Common Stock for resale under Form S-3
promulgated under the Securities Act.
(n) LISTING AND MAINTENANCE REQUIREMENTS. Except as set
forth in the SEC Reports, the Company has not, in the two
years preceding the date hereof received notice (written
or oral) from the NASDAQ, any stock exchange, market or
trading facility on which the Common Stock is or has been
listed (or on which it has been quoted) to the effect that
the Company is not in compliance with the listing or
maintenance requirements of such exchange, market or
trading facility. The Company is, and has no reason to
-11-
believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and
maintenance requirements.
(o) PATENTS AND TRADEMARKS. The Company and its Subsidiaries
have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and rights which
are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and
which the failure to so have would have a Material Adverse
Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS").
Neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights used
by the Company or its Subsidiaries violates or infringes
upon the rights of any Person. To the best knowledge of
the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by
another Person of any of the Intellectual Property Rights.
(p) REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as
set forth on Schedule 6(b) to the Registration Rights
Agreement, the Company has not granted or agreed to grant
to any Person any rights (including "piggy-back"
registration rights) to have any securities of the Company
registered with the Commission or any other governmental
authority which has not been satisfied. Except as set
forth on Schedule 6(b) to the Registration Rights
Agreement, no Person has any right of first refusal,
preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by
the Transaction Documents.
(q) REGULATORY PERMITS. The Company and its Subsidiaries
possess all certificates, authorizations and permits
issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports,
except where the failure to possess such permits could
not, individually or in the aggregate, have or result in a
Material Adverse Effect ("MATERIAL PERMITS"), and neither
the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or
modification of any Material Permit.
(r) TITLE. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned
by them which is material to the business of the Company
and its Subsidiaries and good and marketable title in all
personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case
free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not
interfere with the use made and proposed to be made of
such property by the Company and its Subsidiaries. Any
real property and facilities held under lease by the
Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and
its Subsidiaries
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are in compliance and do not interfere with the use made
and proposed to be made of such property and buildings by
the Company and its Subsidiaries.
(s) LABOR RELATIONS. No material labor problem exists or, to
the knowledge of the Company, is imminent with respect to
any of the employees of the Company.
(t) SOLVENCY. Based on the financial condition of the
Company as of the Closing Date, (i) the Company's fair
saleable value of its assets exceeds the amount that will
be required to be paid on or in respect of the Company's
existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company's
assets do not constitute unreasonably small capital to
carry on its business for the current fiscal year as now
conducted and as proposed to be conducted including its
capital needs taking into account the particular capital
requirements of the business conducted by the Company, and
project capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were
it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its
debt).
(u) APPLICATION OF TAKEOVER PROTECTIONS. The Company and its
Board of Directors have taken all necessary action, if
any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other
similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter
documents) or the laws of its state of incorporation that
is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under this
Agreement, including without limitation the Company's
issuance of the Securities and the Purchasers' ownership
of the Securities.
(v) DISCLOSURE. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the
Purchasers or its agents or counsel with any information
that constitutes or might constitute material non-public
information. The Company understands and confirms that the
Purchasers shall be relying on the foregoing
representations in effecting transactions in securities of
the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this
Agreement, furnished by or on behalf of the Company are
true and correct and do not contain any untrue statement
of a material fact or omit to state any material fact
necessary
-13-
in order to make the statements made therein, in light of
the circumstances under which they were made, not
misleading.
2.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each
Purchaser hereby for itself and for no other Purchaser, represents and
warrants to the Company as follows:
(a) ORGANIZATION; AUTHORITY. Such Purchaser, if an entity,
is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership
power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The
purchase by such Purchaser of the Securities to be
acquired by it hereunder has been duly authorized by all
necessary action on the part of such Purchaser. Each of
this Agreement and the Registration Rights Agreement has
been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance
with its terms.
(b) INVESTMENT INTENT. Such Purchaser is acquiring the
Securities as principal for its own account for investment
purposes only and not with a view to or for distributing
or reselling such Securities or any part thereof, without
prejudice, however, to such Purchaser's right, subject to
the provisions of this Agreement, the Registration Rights
Agreement and the Warrants, at all times to sell or
otherwise dispose of all or any part of such Securities in
compliance with applicable securities laws. Nothing
contained herein shall be deemed a representation or
warranty by such Purchaser to hold Securities for any
period of time. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such
Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute the
Securities.
(c) PURCHASER STATUS. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is, and
at each exercise date under its respective Warrants, it
will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act.
(d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either
alone or together with its representatives, has such
knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the
merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of
such investment.
-14-
(e) ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT.
Such Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.
(f) ACCESS TO INFORMATION. Such Purchaser acknowledges that
it has reviewed the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and
conditions of the offering of the Securities and the
merits and risks of investing in the Securities; (ii)
access to information about the Company and the Company's
financial condition, results of operations, business,
properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity
to obtain such additional information which the Company
possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment
decision with respect to the investment and to verify the
accuracy and completeness of the information contained in
the Disclosure Materials. Neither such inquiries nor any
other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify,
amend or affect such Purchaser's right to rely on the
truth, accuracy and completeness of the Disclosure
Materials and the Company's representations and warranties
contained in the Transaction Documents.
(g) GENERAL SOLICITATION. Such Purchaser is not purchasing
the Securities as a result of or subsequent to any
advertisement, article, notice or other communication
regarding such Securities published in any newspaper,
magazine or similar media or broadcast over television or
radio or presented at any seminar or any other general
solicitation or general advertisement.
(h) RELIANCE. Such Purchaser understands and acknowledges
that (i) the Shares, Warrants and Warrants Shares issuable
on the First Closing Date, the First Settlement Date, the
Second Closing Date, the Second Settlement Date and the
Adjustment Shares are being offered and sold to it without
registration under the Securities Act in a private
placement that is exempt from the registration provisions
of the Securities Act and (ii) the availability of such
exemption, depends in part on, and the Company will rely
upon the accuracy and truthfulness of, the foregoing
representations and such Purchaser hereby consents to such
reliance.
The Company acknowledges and agrees that no Purchaser makes or
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.2.
-15-
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1. TRANSFER RESTRICTIONS. Securities may only be disposed
of pursuant to an effective registration statement under the
Securities Act, to the Company or pursuant to an available
exemption from or in a transaction not subject to the
registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities
laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or to the
Company, except as otherwise set forth herein, the Company may
require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to
the Company, to the effect that such transfer does not require
registration of such transferred Securities under the
Securities Act. Any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the
Registration Rights Agreement and, if such transfer is of all
or a portion of the Warrants held by such Purchaser, as a
Holder of the Warrants (as defined therein).
(a) The Shares, the Warrants and any Warrant Shares issued
while there is not an effective Underlying Shares Registration
Statement shall be issued with the following legend:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE EXERCISABLE] HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY.
(c) However, Underlying Shares issued when there is an
effective Underlying Shares Registration Statement or when such
legend is not required under the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the
Commission) shall not contain the legend set forth above nor any
other legend. The Company shall cause its counsel to issue the legal
opinion included in the Transfer Agent Instructions to the Company's
transfer agent on the date that an Underlying Shares Registration
Statement is declared effective by the Commission (such date, the
"EFFECTIVE DATE"). The Company agrees that following the Effective
Date, it will, no later than three Trading Days following the
delivery by a Purchaser to the Company of a certificate or
-16-
certificates representing Shares or Underlying Shares issued with a
restrictive legend, deliver to such Purchaser certificates
representing such Shares or Underlying Shares which shall be free
from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent
of the Company which enlarge the restrictions of transfer set forth
in this Section.
3.2. ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that
the issuance of Underlying Shares upon exercise of the
Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain
market conditions. The Company further acknowledges that its
obligation to issue Underlying Shares upon exercise of the
Warrants pursuant to the terms thereof is unconditional and
absolute, subject to the limitations set forth in the
Warrants, regardless of the effect of any such dilution.
3.3. FURNISHING OF INFORMATION. As long as the Purchasers own
Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company
after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. As long as the Purchasers own Securities, if
the Company is not required to file reports pursuant to such
sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act such information as is
required for the Purchasers to sell the Securities under Rule
144 promulgated under the Securities Act. The Company further
covenants that it will take such further action as any holder
of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell
Underlying Shares without registration under the Securities
Act within the limitation of the exemptions provided by Rule
144 promulgated under the Securities Act, including causing
its attorneys to render and deliver any legal opinion required
under such rule or by the transfer agent of the Common Stock
or clearing broker for the Purchaser in order to permit a
Purchaser to sell shares under Rule 144. Upon the request of
any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to
whether it has complied with such requirements.
3.4. INTEGRATION. The Company shall not, and shall use its best
efforts to ensure that, no Affiliate of the Company shall,
sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer
or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the
Securities to the Purchasers, or that would be integrated with
the offer or sale of the Securities for the purposes of the
rules and regulations of NASDAQ.
3.5. INCREASE IN AUTHORIZED SHARES. If on any date the Company
would be, if a notice of exercise were to be delivered on such
date, precluded from issuing the number of Underlying Shares
issuable upon exercise in full of the Warrants due to the
unavailability of a sufficient number of authorized but
unissued or reserved
-17-
shares of Common Stock, then the Board of Directors of the
Company shall promptly prepare and mail to the stockholders of
the Company proxy materials requesting authorization to amend
the Company's certificate or articles of incorporation to
increase the number of shares of Common Stock which the
Company is authorized to issue so as to provide enough shares
for issuance under the Warrants. In connection therewith, the
Board of Directors shall (a) adopt proper resolutions
authorizing such increase, (b) recommend to and otherwise use
its best efforts to promptly and duly obtain stockholder
approval to carry out such resolutions (and hold a special
meeting of the stockholders no later than the earlier to occur
of the 60th day after delivery of the proxy materials relating
to such meeting and the 90th day after request by a holder of
Warrants to issue the number of Underlying Shares in
accordance with the terms hereof) and (c) within five Business
Days of obtaining such stockholder authorization, file an
appropriate amendment to the Company's certificate or articles
of incorporation to evidence such increase.
3.6. RESERVATION AND LISTING OF UNDERLYING SHARES. (a) The
Company shall take such steps as may be required to cause the
listing of the Shares, Warrant Shares, Adjustment Shares, if
any, First Offered Shares, if any, and Second Offered Shares
(if any) on the NASDAQ and such other exchange, market or
quotation facility on which the Common Stock is traded.
(b) The Company shall maintain a reserve of shares of Common Stock for
issuance upon exercise in full of the Warrants in accordance with this
Agreement and the Warrants, respectively, in such amount as may be
required to fulfill its obligations in full under the Warrants.
3.7. USE OF PROCEEDS. The Company shall use the net proceeds
from the sale of the Securities hereunder for working capital
purposes and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables in the
ordinary course of the Company's business and prior
practices), to redeem any Company equity or equity-equivalent
securities or to settle any outstanding litigation.
3.8. EXERCISE OBLIGATIONS. The Company shall honor exercises of
the Warrants and shall deliver Underlying Shares in accordance
with the terms, conditions and time periods set forth in the
Warrants.
3.9. SUBSEQUENT FINANCINGS; LIMITATION ON REGISTRATION. (a)
Prior to the 270th day after the Second Closing Date, other
than to Deephaven or an Affiliate thereof, the Company shall
not offer, sell, grant any option to purchase or offer, sell
or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any
option to purchase or other disposition) any Common Stock or
any equity or equity equivalent securities (including any
equity, debt or other instrument that is at any time over the
life thereof convertible into or exchangeable for Common
Stock), and the Company will cause its Subsidiaries not to
offer, sell or issue during
-18-
such period any of such Subsidiary's securities which provide
the holder thereof the right to receive any Common Stock
(collectively, "COMMON STOCK EQUIVALENTS"), unless otherwise
agreed to in writing by the Company and Deephaven. In
furtherance of this restriction, other than to Deephaven or an
Affiliate thereof, prior to the 270th day following the Second
Closing Date, the Company may not enter into any equity line
or similar financing arrangement or issue or agree to issue
any shares of its Common Stock or any Common Stock Equivalents
pursuant to any equity line or similar type of financing,
unless otherwise agreed to in writing by the Company and
Deephaven.
(b) From the date of this Agreement through the 180th day following the
Effective Date, other than to Deephaven or an Affiliate thereof, the
Company shall not directly or indirectly, offer, sell, grant any option
to purchase, or otherwise dispose of (or announce any offer, sale,
grant of any option to purchase or other disposition) any Common Stock
or Common Stock Equivalents, unless (A) the Company delivers to
Deephaven a written notice (the "SUBSEQUENT PLACEMENT NOTICE") of its
intention to effect such Subsequent Placement, which Subsequent
Placement Notice shall describe in reasonable detail the proposed terms
of such Subsequent Placement, the amount of proceeds intended to be
raised thereunder, the Person with whom such Subsequent Placement shall
be effected, and attached to which shall Placement Trading Ltd. shall
not have notified the Company by 6:30 p.m. (New York City time) on the
fifth Trading Day after its receipt of the Subsequent Placement
Notice of its willingness to provide (or to cause its sole designee
to provide), subject to completion of mutually acceptable
documentation, financing to the Company on the same terms set forth
in the Subsequent Placement Notice. If Deephaven shall fail to
notify the Company of its intention to enter into such negotiations
within such time period, the Company may effect the Subsequent
Placement substantially upon the terms and to the Persons (or
Affiliates of such Persons) set forth in the Subsequent Placement
Notice; PROVIDED, that the Company shall provide Deephaven with a
second Subsequent Placement Notice, and Deephaven shall again have
the right of first refusal set forth above in this paragraph (b), if
the Subsequent Placement subject to the initial Subsequent Placement
Notice shall not have been consummated for any reason on the terms
set forth in such Subsequent Placement Notice within 40 Trading Days
after the date of the initial Subsequent Placement Notice with the
Person (or an Affiliate of such Person) identified in the Subsequent
Placement Notice.
(c) Except to register (x) the Registrable Securities (as defined in
the Registration Rights Agreement), (y) securities of the Company
permitted pursuant to Section 6(c) of the Registration Rights
Agreement to be registered in the Underlying Shares Registration
Statement, and (z) Common Stock permitted to be issued pursuant to
Section 3.9(e), the Company may not until the 180th day after the
Effective Date file a registration statement to register any of its
securities.
(d) The restrictive periods set forth in Sections 3.9 (a)-(c) shall be
extended for the number of days during such periods (A) in which
trading in the Common Stock is suspended by any securities exchange
or market or quotation system on which the Common Stock is then
listed, or (B) following the Effective Date that the Registration
Statement is not
-19-
effective, or (C) following the Effective Date, that the prospectus
included in the Registration Statement may not be used by the
holders thereof for the resale of Registrable Securities.
(e) The restrictions contained in Section 3.9 (a)-(c) shall not apply
to (i) the granting of options or warrants to employees, officers and
directors of the Company, and the issuance of Common Stock upon
exercise of such options or warrants granted under any stock option
plan heretofore or hereinafter duly adopted by the Company and (ii)
shares of Common Stock issuable upon exercise of any currently
outstanding warrants and other outstanding convertible securities of
the Company, in each case as and to the extent disclosed in SCHEDULE
2.1(c) (but not as to any amendments or modifications of the terms
of such securities after the date of this Agreement, including
"back-dated" agreements).
3.10. CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The
Company shall: (i) on the Second Settlement Date issue a press
release acceptable to the Purchasers disclosing the
transactions contemplated hereby, (ii) file with the
Commission a Report on Form 8-K disclosing the transactions
contemplated hereby in the time and manner required under the
Exchange Act, and (iii) timely file with the Commission a Form
D promulgated under the Securities Act. The Company shall, no
less than two Business Days prior to the filing of any
disclosure required by clauses (ii) and (iii) above, provide a
copy thereof to the Purchasers for their review. The Company
and the Purchasers shall consult with each other in issuing
any other press releases or otherwise making public statements
or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with
respect to the transactions contemplated hereby and neither
party shall issue any such press release or otherwise make any
such public statement, filings or other communications without
the prior written consent of the other, except if such
disclosure is required by law or stock market regulation, in
which such case the disclosing party shall promptly provide
the other party with prior notice of such public statement,
filing or other communication. In the event that there is any
offer and sale of First Offered Shares or Second Offered
Shares, the Company shall, by the third Trading Day following
each such sale, prepare and file with the Commission, a
supplement to the applicable registration statement under
which such shares are offered to disclose any such offer and
sale.
3.11. REIMBURSEMENT. If any Purchaser becomes involved in any
capacity in any action, proceeding or investigation brought by
or against any Person, including stockholders of the Company,
solely as a result of acquiring the Securities under this
Agreement, the Company will reimburse such Purchaser for its
reasonable legal and other expenses (including the cost of any
investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms
and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation,
and partners, directors,
-20-
agents, employees and controlling persons (if any), as the
case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the
Company, the Purchasers and any such Affiliate and any such
Person. The Company also agrees that neither the Purchasers
nor any such Affiliates, partners, directors, agents,
employees or controlling persons shall have any liability to
the Company or any Person asserting claims on behalf of or in
right of the Company solely as a result of acquiring the
Securities under this Agreement.
3.12. SHAREHOLDER RIGHTS PLAN. No claim will be made or enforced
by the Company or any other Person that any Purchaser is an
"Acquiring Person" under any shareholders rights plan or
similar plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger
the provisions of any such plan or arrangement, by virtue of
receiving Securities or shares of Common Stock under the
Transaction Documents.
3.13. DISCLOSURE OF MATERIAL NON-PUBLIC INFORMATION. The Company
shall not and shall cause each of its Affiliates and other
Persons acting on behalf of the Company not to divulge to any
Purchaser any information that it believes to be material
non-public information unless such Purchaser has agreed in
writing to receive such information. The Company agrees to
comply with Regulation FD, promulgated under the Exchange Act.
3.14. ADJUSTMENT TO PURCHASE PRICE UPON ISSUANCE OF COMMON STOCK
OR EQUIVALENTS. If prior to the 180th Trading Day following
the Second Closing Date, (a) the Company shall issue or agree
to issue shares of Common Stock at a price (i) with respect to
the Shares issued on the First Closing Date, below the First
Closing Date Per Share Purchase Price, (ii) with respect to
the Shares issued on the First Settlement Date, below the
First Settlement Date Per Share Purchase Price, (iii) with
respect to the Shares issued on the Second Closing Date, below
the Second Closing Date Per Share Purchase Price, or (iv) with
respect to the Shares issued on the Second Settlement Date,
below the Second Settlement Date Per Share Purchase Price, or
(b) the Company shall issue any Common Stock Equivalents or
shall enter an agreement to issue Common Stock Equivalents,
that entitle any Person to acquire shares of Common Stock at a
price per share less than (i) with respect to the Shares
issued on the First Closing Date, below the First Closing Date
Per Share Purchase Price, (iii) with respect to the Shares
issued on the First Settlement Date, below the First
Settlement Date Per Share Purchase Price or (iv) with respect
to the Shares issued on the Second Closing Date, below the
Second Closing Date Per Share Purchase Price, (ii) with
respect to the Shares issued on the Second Settlement Date,
below the Second Settlement Date Per Share Purchase Price (if
the holder of the Common Stock or Common Stock Equivalent so
issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants,
options or rights issued in connection with such issuance, be
entitled to receive shares of Common Stock at
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a price less than the applicable Per Share Purchase Price,
such issuance shall be deemed to have occurred for less than
the applicable Per Share Purchase Price), then the applicable
Per Share Purchase Price shall be deemed adjusted to equal the
price at which the triggering shares of Common Stock or Common
Stock Equivalents were deemed issued under this Section and
the Company shall, within two Trading Days of the date of such
issuance or agreement to issue Common Stock or Common Stock
Equivalents, issue and deliver to each Purchaser a number of
shares of Common Stock (such shares, the "ADJUSTMENT SHARES")
equal to (1) the number of Shares that would have been issued
to such Purchaser on the First Closing Date, Second Closing
Date, First Settlement Date or Second Settlement Date (as the
case may be) at the lower per share purchase price at which
the triggering shares of Common Stock or Common Stock
Equivalents were deemed issued under this Section minus (2)
the number of Shares actually issued to such Purchaser on the
First Closing Date, Second Closing Date, First Settlement Date
or Second Settlement Date (as the case may be). The Company
shall notify the Purchasers in writing of its issuance of any
such Common Stock Equivalents by the end of the day on which
the Common Stock or Common Stock Equivalents first issued. The
adjustment set forth in this Section shall occur on the date
of the issuance of the Common Stock Equivalent at issue, and
the Purchasers shall not have to await the conversion,
exchange or other adjustment or resetting provision applicable
to such Common Stock Equivalent. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are
issued. If the Company has an effective primary shelf
registration statement covering shares of its Common Stock at
the time of issuance of any Adjustment Shares, then such
issuance shall be made under such registration statement and
shall, notwithstanding anything to the contrary set forth
herein, be made free of all restrictive legends. If no such
registration statement is then effective, the Adjustment
Shares shall be entitled to full piggy-back registration
rights on all future or then pending Company registration
statements, PROVIDED, THAT, in the event that any Adjustment
Shares are not included within a registration statement filed
by the Company by the 60th day following the issuance of such
Adjustment Shares, then the Company shall undertake to file a
registration statement covering the resale by the Purchasers
(or their transferees) of such Adjustment Shares by the 20th
day following such 60th day period, such registration
statement shall be treated as a "Registration Statement" under
the Registration Rights Agreement and the Purchasers and the
Company shall be accorded the obligations and rights under
such Agreement with respect to such registration statement.
This paragraph shall not apply with respect to (i) the
granting of options or warrants to employees, officers,
directors and consultants of the Company, and the issuance of
Common Stock upon exercise of such options or warrants granted
under any stock option plan heretofore or hereinafter duly
adopted by the Company, (ii) a Strategic Transaction (as
defined below), (iii) the issuance of shares of Common Stock
pursuant to a bone fide underwritten public offering (which
public offering shall have an aggregate offering price of not
less than twenty million dollars) of the Common Stock (it
being understood that equity line transactions, including any
on- going warrant financing, or any similar arrangements shall
not constitute a bonafide underwritten offering of
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the Common Stock for the purposes hereof). A "STRATEGIC
TRANSACTION" shall mean a transaction or relationship in which
the Company issues shares of Common Stock to a Person which
is, itself or through its subsidiaries, an operating company
in a business related to the business of the Company and in
which the Company receives material benefits in addition to
the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary
business is investing in securities.
3.15. CERTAIN TRADING RESTRICTIONS. Each Purchaser agrees that
it will not enter into any Short Sales (as hereinafter
defined) while it still holds Shares issued to it on a Closing
Date or a Settlement Date. For purposes of this Section, a
"Short Sale" by a Purchaser shall mean a sale of Common Stock
by such Purchaser that is marked as a short sale and that is
made at a time when there is no equivalent offsetting long
position in Common Stock held by such Purchaser. For purposes
of determining whether there is an equivalent offsetting long
position in Common Stock held by a Purchaser, Underlying
Shares that may be acquired under Warrants held by such
Purchaser shall be deemed to be held long by such Purchaser.
3.16. SUBSEQUENT OFFERS TO ACQUIRE COMMON STOCK. (a) The Company
agrees that on the later of (i) the 20th Trading Day following
the date, if any, that there has been declared effective by
the Commission a primary shelf registration statement of the
Company covering shares of Common Stock and (ii) the 20th
Trading Day following the Effective Date, it shall deliver to
Deephaven an offer to buy shares of Common Stock under such
registration statement (the "FIRST OFFERED SHARES") at an
aggregate purchase price equal to $2,000,000. The offer to
acquire First Offered Shares may be accepted by Deephaven by
delivery to the Company of a written acceptance by the fifth
Trading Day following the receipt of such offer. The number of
First Offered Shares that would be so offered shall equal
$2,000,000 divided by the First Offer Per Share Purchase
Price. If such offer is timely accepted by Deephaven, then on
the 22nd Trading Day following the date of such offer, the
Company shall issue and deliver to Deephaven (A) the First
Offered Shares, free of all restrictive legends, and (B) a
Warrant, in the form of EXHIBIT C except that Underlying
Shares thereunder shall never be issued with any restrictive
legend), registered in the name of Deephaven, pursuant to
which Deephaven shall have the right to acquire upon the terms
and at an Exercise Price equal to 125% of the First Offer Per
Share Purchase Price a number of shares of Common Stock equal
to the quotient obtained by dividing (x) $600,000 by (y) the
First Offer Per Share Purchase Price; and Deephaven shall
deliver to the Company $2,000,000 by wire transfer of
immediately available funds to an account designated for such
purpose by the Company. In the event that the First Offer
Purchase Price is equal to or less than $7.00 (as adjusted
equitably to reflect any stock splits of the Common Stock
prior to the closing of the issue and sale of the First
Offered Shares) then, notwithstanding its acceptance of the
offer, Deephaven shall not be obligated to acquire any First
Offered Shares. The purchase price for any First Offered
Shares shall be subject to adjustment and a subsequent
issuance obligation by the Company that mirrors the adjustment
and
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issuance obligations under Section 3.14 with respect to
Shares, except that the applicable comparison price shall be
the First Offer Per Share Purchase Price.
(b) The Company agrees that if (i) at least 120 days shall have
elapsed from the Second Settlement Date, (ii) a primary shelf
registration statement of the Company covering shares of Common
Stock is then effective,(iii) the closing sales price of the Common
Stock as reported by NASDAQ on the exceeds the Second Settlement
Date Per Share Purchase Price, and (iv) the Effective Date shall
have occurred at least 20 Trading Days prior to such date of
determination then the Company shall, on the day following the date,
if any, that the conditions set forth in clauses (i) - (iv) have
been satisfied, deliver to Deephaven an offer to buy additional
shares of Common Stock under such registration statement (the
"SECOND OFFERED SHARES") at an aggregate purchase price equal to
$4,000,000. The offer to acquire Second Offered Shares may be
accepted by Deephaven by delivery to the Company of a written
acceptance by the fifth Trading Day following the receipt of such
offer. The number of Second Offered Shares that would be so offered
shall equal $4,000,000 divided by the Second Offer Per Share
Purchase Price. If such offer is timely accepted by Deephaven, then
on the 22nd Trading Day following the date of such offer, the
Company shall issue and deliver to Deephaven (A) the Second Offered
Shares, free of all restrictive legends, and (B) a Warrant, in the
form of EXHIBIT C except that Underlying Shares thereunder shall
never be issued with any restrictive legend), registered in the name
of Deephaven, pursuant to which Deephaven shall have the right to
acquire upon the terms and at an Exercise Price equal to 125% of the
Second Offer Per Share Purchase Price a number of shares of Common
Stock equal to the quotient obtained by dividing (x) $1,200,000 by
(y) the Second Offer Per Share Purchase Price; and Deephaven shall
deliver to the Company $4,000,000 by wire transfer of immediately
available funds to an account designated for such purpose by the
Company. In the event that the Second Offer Purchase Price is equal
to or less than $7.00 (as adjusted equitably to reflect any stock
splits of the Common Stock prior to the closing of the issue and
sale of the Second Offered Shares) then, notwithstanding its
acceptance of the offer, Deephaven shall not be obligated to acquire
any Second Offered Shares. The purchase price for any Second Offered
Shares shall be subject to adjustment and a subsequent issuance
obligation by the Company that mirrors the adjustment and issuance
obligations described under Section 3.14 with respect to Shares,
except that the applicable comparison price shall be the Second
Offer Per Share Purchase Price.
3.17. PUT EVENT. Upon the occurrence of any of the following
events (each, an "EVENT"), a Purchaser may provide the Company
with a notice (an "EVENT NOTICE ") requiring the Company to
reacquire all or a portion of the Shares, First Offered Shares
or Second Offered Shares (if any) which such Purchaser
acquired hereunder and then still holds at a put price ("PUT
PRICE") per share equal to the greater of (i) the purchase
price per share paid by the Purchaser for such shares and (ii)
the closing sales price per share for such shares on the date
of the Event Notice or date of the payment in full of the Put
Price, whichever is greatest (if there is no closing sales
price on such date, then the last closing sales price reported
for the Common Stock shall de the closing sales price
calculated for such purpose):
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(a) immediately prior to an assignment by the Company for the
benefit of creditors or commencement of a voluntary case under Title
11 of the United States Code, or an entering into of an order for
relief in an involuntary case under Title 11 of the United States
Code, or adoption by the Company of a plan of liquidation or
dissolution;
(b) the Common Stock fails to be listed or quoted for trading on the
NASDAQ for a period of three Trading Days (which need not be
consecutive Trading Days) or the Company shall enter into an
agreement to sell all or substantially all of its assets or shall
enter into an agreement to merge or combine the Company with or into
another entity in which transaction the Company will not be the
surviving entity;
(c) after the Effective Date, a holder of Registrable Securities is
not permitted to sell Registrable Securities under the Underlying
Shares Registration Statement for any reason for fifteen Trading
Days (whether or not consecutive) and;
(d) the Effective Date does not occur on or prior to the 180th day
following the Closing Date.
The Company shall pay the Put Price by the fifth Trading Day
following the date of the delivery of the Event Notice. Interest shall
accrue on the aggregate Put Price from the date such amount is due until
paid in full at the rate of 15% per annum (or such lesser maximum amount
that is permitted to be paid by applicable law), to accrue daily from
the date such payment is due hereunder through and including the date of
payment. Any Event Notice may be rescinded by the delivering Purchaser
at any time prior to its receipt of the full Put Price.
ARTICLE IV
MISCELLANEOUS
4.1. FEES AND EXPENSES. On the First Closing Date, the Company
shall reimburse the Purchasers for their legal fees and
expenses incurred in connection with the preparation and
negotiation of the Transaction Documents by paying to Xxxxxxxx
Xxxxxxxxx $25,000 (less $5,000 delivered previously to
Xxxxxxxx Xxxxxxxxx) for the preparation and negotiation of the
Transaction Documents and $1,500 at the closing, if any, of
the issuance and sale of First and Second Offered Shares. The
amount contemplated by the immediately preceding sentence
shall be retained by the Purchasers and shall not be delivered
to the Company on the First Closing Date. Other than the
amount contemplated herein and except as otherwise set forth
in the Registration Rights Agreement, each party shall pay the
fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall
pay all stamp and other taxes and duties levied in connection
with the issuance of the Securities.
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4.2. ENTIRE AGREEMENT; AMENDMENTS. The Transaction Documents,
together with the Exhibits and Schedules thereto and Transfer
Agent Instructions, contain the entire understanding of the
parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
4.3. NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m.
(New York City time) on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30
p.m. (New York City time) on any date and earlier than 11:59
p.m. (New York City time) on such date, (iii) the Business Day
following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall
be as follows:
If to the Company: NetSol International, Inc.
00000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Chief Financial Officer
With a copy to: Xxxxxxx & XxXxxxxx
000 Xxxxx Xxxx., 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to a Purchaser: To the address set forth under
such Purchaser's name on the
signature pages hereto
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
4.4. AMENDMENTS; WAIVERS. No provision of this Agreement may be
waived or amended except in a written instrument signed, in
the case of an amendment, by the Company and each of the
Purchasers or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought, except that
Sections 3.9, 3.14, 3.15 and 3.16 may be amended in a writing
signed by each of Deephaven Private Placement Trading Ltd. and
the Company. No waiver of any default with respect to
-26-
any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
4.5. HEADINGS. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
4.6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties and their
successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without
the prior written consent of the Purchasers. Except as set
forth in Section 3.1(a), the Purchasers may not assign this
Agreement or any of the rights or obligations hereunder
without the consent of the Company. This provision shall not
limit any Purchaser's right to transfer securities or transfer
or assign rights under the Registration Rights Agreement.
4.7. NO THIRD-PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other
Person.
4.8. GOVERNING LAW. The corporate laws of the State of Nevada
shall govern all issues concerning the relative rights of the
Company and its stockholders. All questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law. Each party irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If
either party shall commence an action or
-27-
proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its' attorneys fees and
other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
4.9. SURVIVAL. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the
delivery and exercise of the Warrants.
4.10. EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be
considered one and the same agreement and shall become
effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile transmission, such
signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such
facsimile signature page were an original thereof.
4.11. SEVERABILITY. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any
respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be
affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
4.12. REMEDIES. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery
of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance
of any such obligation the defense that a remedy at law would
be adequate.
4.13. INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.
The obligations of each Purchaser under any Transaction
Document is several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained
herein or in any Transaction Document, and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated
by the Transaction Document. Each Purchaser shall be entitled
to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or
out of the
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other Transaction Documents, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
4.14. No Purchaser may become a party to this Agreement or
acquire Shares or Warrants without the prior consent of
Deephaven.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
NETSOL INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: CEO
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
DEEPHAVEN PRIVATE PLACEMENT TRADING LTD.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director Private Placement Trading
Purchase Price: $2,000,000
Address for Notice:
Address for Notice:
Deephaven Private Placement Trading Ltd.
c/o Deephaven Capital Management LLC
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxxx
With a copy to: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
