SERIES F CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement ("Agreement") is made as of
this 24th day of May, 1999 by and between Sedona Corporation, a Pennsylvania
corporation (the "Company") and The Tang Fund, with an address at 000 Xxxxx
Xxxxxx, 0xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1_ Purchase and Sale of Convertible Preferred Stock.
1_1 Investment by the Investor. Subject to the terms
and conditions of this Agreement, at the Closing (as hereinafter
defined), the Company will issue and sell to the Investor, and the
Investor will purchase, up to an aggregate of 500 shares (the
"Securities") of the Class A, Series F Convertible Preferred Stock, par
value $2.00 per share, of the Company (the "Series F Stock") having the
terms set forth in the Articles of Amendment of the Company, the form
of such Articles of Amendment attached hereto as Exhibit A (the
"Articles of Amendment"), at a purchase price per share of $1,000, for
an aggregate purchase price of $500,000 (the "Investment Amount"). For
purposes of this Agreement, the "Closing Price" shall be $1.41.
1_2 Closing. The purchase and sale of the Securities
(the "Closing") shall take place at the offices of Company on May 24,
1999 (the "Closing Date").
1_3 Use of Proceeds. The Company will use the
proceeds from the sale of the Series F Stock for working capital
purposes.
2_ Representations and Warranties of the Company. The Company
hereby represents and warrants to, and agrees with, the Investor,
except as set forth on the disclosure schedules attached hereto, which
exceptions shall be deemed to be representations and warranties as if
made hereunder, as follows:
2_1 Organization, Good Standing and Qualification.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania. The
Company has all requisite power and authority to carry on its business
as now conducted and as proposed to be conducted. The Company has all
requisite power and authority to enter into and perform this Agreement
and the transactions contemplated hereby and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the failure so to qualify could have a material adverse effect on its
business, properties, operations, earnings, assets, liabilities,
condition (financial or otherwise) or prospects (collectively,
"Condition").
2_2 Capitalization.
_a_ After giving effect to the
transactions contemplated by the Agreement, and immediately after
the Closing, the capital stock of the Company, as authorized by the
Articles of Incorporation and the Articles of Amendment, will consist
of: (i) 50,000,000 shares of Common Stock, (A) 21,545,346 shares of
which are issued and outstanding, (B) 3,000,000 shares of which are
reserved for issuance to key employees, non-employee directors and
consultants of the Company under the Company's 1992 Long-Term
Incentive Plan, as amended, (C) 500,000 shares of which are reserved
for conversion of the outstanding Class A Preferred Stock, Series
A, par value $2.00 per share (the "Series A Preferred Stock"),
(D) 1,648,915 shares of which remain reserved for conversion of the
outstanding Series E Preferred Stock ("Series E Preferred Stock"),
(E) 2,754,322 shares of which are reserved for exercise of warrants
issued in connection with the Series E Preferred Stock, (F)
approximately 939,130 shares of which are reserved for
conversion of the Class A, Series B Stock (the "Series B Preferred
Stock"), (G) 3,000,016 shares of which are reserved for the exercise of
outstanding warrants issued in connection with the Class A Preferred
Stock, Series D (the "Series D Preferred Stock"), (H) 3,923,043 shares
of which are reserved for the exercise of other outstanding warrants,
including warrants issued in connection with the Class A Preferred
Stock, Series C (the "Series C Preferred Stock"), and (I) 1,000,000
shares of which are reserved for conversion of the Class F Stock; (ii)
2,000,000 shares of Class B Preferred Stock, none of which are issued
and outstanding or available for reissuance; and (iii) 1,000,000 shares
of Class A Preferred Stock, (A) 500,000 shares of which have been
designated Series A Preferred Stock, all of which are issued and
outstanding, (B) 5,000 shares of which have been designated Series B
Preferred Stock, 1,000 shares of which are issued and outstanding, (C)
5,200 shares of which have been designated Series E Preferred Stock,
2,313 shares of which are issued and outstanding, (D) 125,000 shares of
which have been designated as Series C Preferred Stock, none of which
are issued and outstanding or available for reissuance, (E) 3,300
shares of which have been designated as Series D Preferred Stock, none
of which are issued and outstanding or available for reissuance, and
(F) 1,000 shares of which have been designated as Series F Stock, 1,000
of which are issued and outstanding. The rights, privileges and
preferences of the Class B Preferred Stock, the Class A Preferred Stock
(including, without limitation, the Series F Stock) and the Common
Stock are as stated in the Articles of Incorporation and the Articles
of Amendment.
_b_ Except for Common Stock reserved
for issuance as described in subsection (a) above, as of the Closing,
the Company will not (i) have outstanding any capital stock or other
securities convertible into or exchangeable for any shares of its
capital stock and, except as otherwise contained in the Articles of
Incorporation, the Articles of Amendment or pursuant to the terms of
any of the Purchase Documents, as defined in section 2.3 below, no
person will have any righ to subscribe for or to purchase
(including conversion or preemptive rights), or any options for the
purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, any calls, commitments or other claims of any
character relating to, any capital stock or any stock or securities
convertible into or exchangeable for any capital stock of the Company;
(ii) have any capital stock, equity interests or other securities
reserved for issuance for any purpose; or (iii) be subject to any
obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock or any convertible
securities, rights or options of the type described in the preceding
clause (i). All of the issued and outstanding shares of Common
Stock, Class B Preferred Stock and Class A Preferred Stock (including,
without limitation, the Series B Stock) have been duly and validly
issued and are fully paid and nonassessable and all of the shares of
Conversion Stock and the Warrant Shares, when issued as contemplated
hereby, will be validly issued, fully paid and nonassessable. To the
best knowledge of the Company, there are no agreements among the
Company's stockholders with respect to the voting or transfer of the
Company's capital stock, other than the agreements regarding transfer
contained herein. Schedule I attached hereto includes a complete
and correct list of the name of each of the Company's current and
former officers, directors, employees or Persons that beneficially own
in excess of 5.0% of the outstanding equity interest of the Company
(each, a "Principal Owner") and the number of shares of Common Stock
owned by each such Principal Owner as of the Closing Date.
2_3 Authority; Execution and Delivery; Requisite
Consents; Nonviolation. The Company has, and as of the Closing will
have, all requisite power and authority to execute, deliver and perform
this Agreement and each other document or instrument executed by it, or
any of its officers, in connection herewith or therewith or pursuant
hereto or thereto (this Agreement, together with all of the foregoing
documents and instruments, are sometimes collectively referred to
herein as the "Purchase Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the other Purchase Documents and the
consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary action on the part of
the Company. This Agreement and each of the other Purchase Documents
that has been executed as of the date hereof are, and each of the
Purchase Documents will be as of the Closing, duly executed and
delivered by the Company and the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors' rights in general or by general principles
of equity. The execution, delivery and performance of this Agreement
and the other Purchase Documents, the consummation by the Company of
the transactions contemplated hereby and thereby (including, without
limitation, the offer, sale and delivery by the Company of the
Securities) will not: (a) except for the filing of the Articles of
Amendment, require the consent, license, permit, waiver, approval,
authorization or other action of, by or with respect to, or
registration, declaration or filing with, any court or governmental
authority, department, commission, board, bureau, agency or
instrumentality, domestic or foreign ("Governmental Authority") or any
other individual, partnership, corporation, unincorporated organization
or association, limited liability company, trust or other entity
(collectively, a "Person"); (b) violate or conflict with any provision
of the Articles of Incorporation, the Articles of Amendment or the
By-laws of the Company, a complete and correct copy of which has been
provided to counsel to the Investor; or (c) constitute a default (with
or without notice or lapse of time or both) under, violate or conflict
with, or give rise to a right of termination, cancellation or
acceleration or to a loss of a material benefit under any Law (as
defined in Section 2.6 below), Permit (as defined in Section 2.6
below), Order (as defined in Section 2.5 below), or contract,
agreement, arrangement or understanding, written or oral, to which the
Company is or hereafter may be a party or by which the Company or its
properties are or hereafter may be bound.
2_4 Subsidiaries. Except as set forth on Schedule
2.4, the Company has no subsidiaries and does not, and prior to the
Closing will not, own or control, directly or indirectly, any
partnership interests, stock or other equity interests in any
partnership, corporation or other entity or any voting rights or right
to control the policies and direction of any partnership, corporation
or other entity.
2_5 Litigation. There is no action, suit, proceeding,
investigation or governmental approval process (collectively,
"Actions") pending or, to the best knowledge of the Company, threatened
against it, or affecting any of its properties or assets (including,
without limitation, any of its Permits) which individually or in the
aggregate could have a material adverse effect on its Condition, nor is
there any basis for any such Action. To the best knowledge of the
Company, there is no Action against any of its directors, officers or
employees in connection with its business which, in the event of an
adverse judgment against any such Person, could have a material adverse
effect on the Condition of the Company, nor is there any basis for any
such Action. The foregoing includes, without limitation, any Action
pending or, to the Company's best knowledge, threatened (or any basis
therefor known to the Company) involving the prior employment of any
employees of the Company, their use in connection with the business of
the Company of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any
agreements with prior employers. Neither the Company nor any of its
assets or properties, nor, in connection with its business, any of its
directors, officers or employees, is subject to any order, judgment,
writ, injunction, decree, ruling or decision (collectively, an "Order")
of any Governmental Authority which is material to the Condition of the
Company. There is no Action by the Company currently pending or which
the Company intends to initiate which is material to its Condition.
2_6 Compliance with Laws; Permits. Assuming the
accuracy of the representations made by the Investor pursuant to
Section 3 hereof, the offer and sale of the Securities to the Investor
will be in compliance with all applicable federal and state securities
laws. The Company has not violated or failed to comply with, in any
material respect, any statute, law, ordinance, rule, regulation or
policy of any Governmental Authority (collectively, "Laws") to which it
or any of its properties or assets is subject. The Company has all
permits, licenses, orders, certificates, authorizations and approvals
of any Governmental Authority (collectively, the "Permits") that are
material to the conduct of its business as presently conducted and as
proposed to be conducted; all such Permits are, and as of the Closing
will be, in full force and effect; no violations or notices of failure
to comply have been issued or recorded in respect of any such Permits;
and the Company has no knowledge of any reason why such Permits may be
revoked or suspended. All applications, reports, notices and other
documents required to be filed by the Company with all Governmental
Authorities have been timely filed and are complete and correct in all
material respects as filed or as amended prior to the date hereof. With
respect to any required Permits, applications for which are either
pending or contemplated to be made pursuant to the business strategy of
the Company, the Company knows of no reason why such Permits should not
be approved and granted by the appropriate Governmental Authority.
Neither the Company nor any of its officers, employees or agents has
made any illegal or improper payments to, or provided any illegal or
improper inducement for, any governmental official or other Person in
an attempt to influence any such Person to take or to refrain from
taking any action relating to the Company.
2_7 Absence of Certain Changes or Events. Since
December 31, 1998, there has been no change in the Condition of the
Company, except for changes in the ordinary course of business
consistent with past practice which have not been, in the aggregate,
materially adverse to the Company.
2_8 Title to Assets. The Company has good and
marketable title to all of its owned assets and properties, free and
clear of any liens, pledges, security interests, claims, encumbrances
or other restrictions of any kind (collectively, "Liens"). With respect
to any assets or properties it leases, the Company holds a valid and
subsisting leasehold interest therein, free and clear of any Liens, is
in compliance, in all material respects, with the terms of the
applicable lease, and enjoys peaceful and undisturbed possession under
such lease. All of the assets and properties of the Company that are
material to the conduct of business as presently conducted or as
proposed to be conducted by it are in good operating condition and
repair, subject to ordinary wear and tear. The inventory of the Company
is in good and marketable condition, does not and will not include any
material quantity of items which are obsolete, damaged or slow moving,
and is salable (or may be leased) in the normal course of business as
currently conducted by it, at current applicable prices and within
normal inventory "turn" experience.
2_9 Contracts. True and correct copies of all
contracts, agreements, notes, instruments, franchises, leases,
licenses, commitments, arrangements or understanding, written or oral
(collectively, "Contracts") which are material to the Condition of the
Company have been made available to the Investor. All of the Contracts
are in full force and effect and constitute legal, valid and binding
obligations of the Company and, to the best knowledge of the Company,
the other parties thereto; the Company and, to the best knowledge of
the Company, each other party thereto, has performed in all material
respects all obligations required to be performed by it under the
Contracts, and no material violation or default exists in respect
thereof, nor any event that with notice or lapse of time, or both,
would constitute a default thereof, on the part of the Company or, to
the best knowledge of the Company, any other party thereto; none of the
Contracts is currently being renegotiated; and the validity,
effectiveness and continuation of all Contracts will not be materially
adversely affected by the transactions contemplated by this Agreement.
2_10 Intellectual Property. (a) (i) The Company owns,
or has the right to use, all United States and foreign patents,
trademarks, service marks, trade names, brand names, computer software
and programs, franchises, technology, know-how and processes, and
registered copyrights, and any applications for any of the foregoing
(collectively, the "Intellectual Property") of any kind in which the
Company has an interest or which is otherwise used in, or relates to
its business. Schedule II hereto contains a true, correct and complete
list of all registered trademarks and service marks, all reserved trade
names, all registered copyrights and all filed patent applications and
issued patents that are used in the Company's business or are otherwise
necessary for the conduct of its business as heretofore conducted and
all licenses or agreements that in any way affect the rights of the
Company to any of its Intellectual Property or any trade secret
material (the "Intellectual Property Licenses").
(ii) Subject to the limitations set forth
in the Intellectual Property Licenses, the Company has all right, title and
interest in all of the owned Intellectual Property, free and clear of all Liens.
The Company owns or has the exclusive or non-exclusive right to use all
Intellectual Property or trade secrets necessary to conduct its business as
now being conducted or as proposed to be conducted. The Company owns or
possesses sufficient licenses or other rights to use all Intellectual Property
covered by its patents or patent applications necessary to conduct its
business as now being conducted and as proposed to be conducted by the Company.
(iii) The Company has not disclosed, other
than in the ordinary course of business and consistent with past practice and
pursuant to the Intellectual Property Licenses, any proprietary information
relating to the Intellectual Property or the Intellectual Property Licenses
to any person other than the Investor. The Company has at all times maintained
reasonable procedures to protect and have enforced all of its trade secrets.
The Company has disclosed trade secrets to other Persons solely as required
for the conduct of its business and solely under nondisclosure agreements that
are enforceable by the Company. Other than pursuant to the Intellectual
Property Licenses, the Company is not under any contractual or other obligation
to disclose any proprietary information relating to the Intellectual Property,
any trade secret material to the Company or the Intellectual Property Licenses,
nor, to the best knowledge of the Company, is any other party to the
Intellectual Property Licenses under any such obligation to disclose proprietary
information included in or relating to Intellectual Property, any trade secret
material to the Company or the Intellectual Property Licenses to any Person,
and no event has taken place, including the execution and delivery of this
Agreement and the transactions contemplated hereby or any related change in
the business activities of the Company, that would give rise to such obligation.
(iv) The consummation of the transactions
contemplated hereby will not alter, adversely affect or impair the rights of
the Company to any of the Intellectual Property, any trade secret material
to it, or under any of the Intellectual Property Licenses.
(b) (i) No claim with respect to the
Intellectual Property, any trade secret material to the Company, or any
Intellectual Property License which would adversely affect the ability of the
Company to conduct its business as presently conducted and as proposed to be
conducted is currently pending or, to the best knowledge of the Company,
has been asserted, or overtly threatened by any Person, nor does the Company
know of any grounds for any claim against the Company, (A) to the effect
that any operation or activity of the Company presently occurring or
contemplated, including, inter alia, the manufacture, use or sale of any
product, device, instrument, or other material made or used according to
the patents or patent applications included in the Intellectual Property or
Intellectual Property Licenses, infringes or misappropriates any United States
or foreign copyright, patent, trademark, service xxxx or trade secret;
(B) to the effect that any other Person infringes on the Intellectual
Property or misappropriates any trade secret or know-how or other proprietary
rights material to the Company; (C) challenging the ownership, validity or
effectiveness of any of the Intellectual Property or trade secret material of
the Company; or (D) challenging the license of the Company or other legally
enforceable right under, any Intellectual Property or the Intellectual Property
Licenses.
(ii) The Company is not aware of any
presently existing United States or foreign patents or any patent applications
which if issued as patents would be infringed by any activity contemplated by
the Company.
(c) (i) The United States and foreign
patents and patent applications owned by the Company listed in Schedule II
hereto (the "Patents and Applications") as part of the Intellectual Property
have been properly prepared and filed on behalf of the Company as named
therein and are being diligently pursued by the Company. The inventions
described in the Patents and Applications are assigned or licensed to the
Company and no other entity or individual has any right or claim in any of
the inventions, Patents and Applications or any patents to be issued therefrom,
except as set forth in the Intellectual Property Licenses. To the Company's
best knowledge, there are no defects in any of the Patents and
Applications that would cause any of them to be held invalid or unenforceable.
All relevant prior art of which the Company is aware has been filed in the
Patents and Applications.
(ii) The Company has delivered to the
Investor all information in its possession or of which it has knowledge
concerning the Patents and Applications and has no knowledge of any objection or
proceeding, pending or threatened, that would affect the validity of any patent
issued pursuant thereto. The Company has furnished to the Investor all prior
art, of which it presently has knowledge, that may be material to the validity
or enforceability of the patent claims being prosecuted in the Patents and
Applications.
(iii) Except in connection with the
prosecution of the patent applications listed in Schedule II hereto, there are
no pending judicial or governmental proceedings, including but not limited
to interferences and oppositions, relating to any of the Patents and
Applications or any other proprietary information to which the Company is a
party or by which any property (such term "property" specifically to include
rights pursuant to licenses or options or other rights to acquire licenses)
of the Company is subject, and no such proceedings are threatened or
contemplated by Governmental Authorities or other Persons.
(d) Nothing has come to the attention of the
Company that has caused it to believe that this Section 2.10, as of the date
hereof and as of the Closing, contains any untrue statement of a material
fact or omits to state a material fact required to b e stated herein or
necessary to make the statements herein not misleading.
2_11 Insurance. The Company has in full force and
effect all insurance policies as are sufficient for compliance with all
requirements of Law and applicable agreements.
2_12 Labor Union Activities; Employee Relations. No
employee of the Company is represented by any labor union or covered by
any collective bargaining agreement; nor, to the best knowledge of the
Company, has any labor union sought to represent any of its employees
of the Company. There is no strike or other labor dispute involving the
Company pending, or to the best knowledge of the Company, threatened.
To the best knowledge of the Company, no officer or key employee
intends to terminate his employment with it. To the best knowledge of
the Company, no officer or key employee of it is a party to or bound by
any Contract, or subject to any restrictions (including, without
limitation, any non-competition restriction), which would restrict the
right of such person to participate in the affairs of the Company.
2_13 ERISA. The Company does not maintain (nor has it
ever maintained) nor does it have (nor has it ever had) any obligation
under (including, without limitation, any obligation to contribute to)
an employee benefit plan as described in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2_14 Taxes. All federal, state, city, county, local
and foreign income, franchise, sales, use and value added tax returns
and reports, and all other material tax returns and reports required to
be filed by the Company in those or in any other jurisdiction
(collectively, "Returns") have been timely filed. All such Returns are
true, correct and complete in all material respects. All taxes,
assessments, fees, interest, penalties and other charges with respect
thereto (collectively, "Taxes") due or claimed to be due from the
Company have been paid except to the extent reserved against on the
Company's financial statements. No income tax return of the Company has
been audited by the applicable Governmental Authority, and there are in
effect no waivers of the applicable statute of limitations for Taxes in
any jurisdiction for the Company for any period.
2_15 Environmental Matters. The business, assets and
properties of the Company are and have been operated and maintained in
compliance with all applicable federal, state, city, county and local
environmental protection laws and regulations (collectively, the
"Environmental Laws"). No event has occurred which, with or without the
passage of time or the giving of notice, or both, would constitute
non-compliance by the Company with, or a violation by the Company of,
the Environmental Laws. The Company has not caused or permitted to
exist, as a result of an intentional or unintentional act or omission,
a disposal, discharge or release of solid wastes, pollutants or
hazardous substances, on or from any site which currently is or
formerly was owned, leased, occupied or used by it, except where such
disposal, discharge or release was in compliance with the Environmental
Laws.
2_16 Books and Records. The books of account, ledgers
and records of the Company accurately and completely reflect in all
material respects all information relating to its business, the nature,
acquisition, maintenance, location and collection of its assets, and
the nature of all transactions giving rise to its obligations or
accounts receivable. The minute books of the Company fully set forth
all action taken by its Board of Directors, stockholders and, if any,
executive committee (or other committee thereof).
2_17 Transactions with Affiliates. Except as set
forth on Schedule 2.17, the Company has not had any direct or indirect
dealings with any Principal Owner or with any of such Principal Owner's
Affiliates, associates or relatives. The Company has no obligation to
or claim against any Principal Owner, or any of such Principal Owner's
Affiliates, associates or relatives, and no such Person has any
obligation to or claim against the Company. All products, services or
benefits provided to the Company by any such Person, or provided by the
Company to any such Person are provided at a charge equal to the fair
market value of such products, services or benefits. No Principal
Owner, nor any of such Principal Owner's Affiliates, associates or
relatives, has any direct or indirect interest of any kind in any
business or entity which is competitive with the Company. "Affiliate"
of a specified Person shall mean a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Person specified.
2_18 Registration Rights. Except as set forth on
Schedule 2.18, no Person has, and as of the Closing no Person shall
have, demand, "piggy-back" or other rights to cause the Company to file
any registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), relating to any of its securities or to
participate in any such registration statement.
2_19 No Brokers or Finders. Except as set forth on
Schedule 2.19, neither the Company nor any of its respective Affiliates
has entered or will enter into any agreement pursuant to which the
Company or the Investor will be liable, as a result of the transactions
contemplated by this Agreement or any of the Purchase Documents, for
any claim of any person for any commission, fee or other compensation
as finder or broker and the Company agrees to indemnify the Investor
for any liability resulting from any such agreement.
2_20 Investment Company Act. The Company is not an
"investment company" nor is the Company directly or indirectly
controlled by or acting on behalf of any Person which is an "Investment
Company" within the meaning of the Investment Company Act of 1940, as
amended.
2_21 Disclosure. In connection with the purchase of
the Securities by the Investors as contemplated hereby, the Company
has, to its knowledge, disclosed to the Investor all material facts and
information concerning the Company, its Condition and the Securities,
and has not, to its knowledge, made any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements contained herein or in any of the other Purchase
Documents not misleading.
2_22 Year 2000 Compliance. The Company has reviewed
its products, business and operations which could be adversely affected
by the risk that computer applications developed, marketed, sold and
delivered or used by the Company may be unable to recognize and
properly perform date-sensitive functions involving dates prior to and
after December 31, 1999 (the "Year 2000 Problem"). The Company's
products and services provided or delivered to its customers and the
Company's internal information and business systems will be able to
perform properly date-sensitive functions for all dates before and
after January 1, 2000. In addition, the Company has surveyed those
vendors, suppliers and other third parties (collectively, the "Outside
Parties") with which the Company does business and whose failure to
adequately address the Year 2000 Problem could have a material adverse
effect on the Condition of the Company. Based upon the aforementioned
internal review and surveys of the Outside Parties, the Year 2000
Problem has not resulted in, and is not reasonably expected to have, a
material adverse effect on the Condition of the Company.
2_23 SEC Documents. The Company has filed, pursuant
to the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), all SEC Documents (as defined below)
required to be filed with respect to the business and operations of the
Company under each of the Securities Act and Exchange Act, and the
respective rules and regulations thereunder, and all of the SEC
Documents complied in all material respects with all applicable
requirements of the Securities Act or the Exchange Act, as the case may
be, and the appropriate act and the rules and regulations thereunder in
effect on the date each such report was filed. At the respective dates
they were filed, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company
included in the SEC Documents complied as to the form in all material
respects with the applicable accounting requirements and the published
rules and regulations of the Securities and Exchange Commission with
respect thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied throughout
the period involved (except as may be indicated therein or in the notes
thereto) and fairly present the consolidated financial position,
results of operations and cash flows of the Company as of the dates or
for the periods indicated therein, subject, in the case of the
unaudited statements, to normal year-end adjustments and the absence of
certain footnote disclosures. "SEC Documents" means all material forms,
statements, reports and documents (including all exhibits, amendments
and supplements thereto) required to be filed with respect to the
business and operations of the Company under each of the Securities Act
and the Exchange Act, and the respective rules and regulations
thereunder.
3 Representations and Warranties of the Investor. The
Investor hereby represents and warrants to, and agrees with, the
Company as follows:
3_1 The Investor is, and as of the Closing will be,
duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization.
3_2 Authorization. The Investor has, and as of the
Closing will have, all requisite power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, have been duly and validly authorized by all necessary action
on the part of the Investor. This Agreement has been duly executed and
delivered by the Investor and constitutes its legal, valid and binding
obligation, enforceable against the Investor in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors' rights in general or by general principles
of equity.
3_3 No Legal Bar; Conflicts. Neither the execution
and delivery of this Agreement, nor the consummation by the Investor of
the transactions contemplated hereby, violates any law, statute,
ordinance, regulation, order, judgment or decree of any court or
governmental agency applicable to the Investor, or violates, or
conflicts with, any contract, commitment, agreement, understanding or
arrangement of any kind to which the Investor is a party or by which
the Investor is bound.
3_4 No Litigation. No action, suit or proceeding
against the Investor relating to the consummation of any of the
transactions contemplated by this Agreement nor any governmental action
against the Investor seeking to delay or enjoin any such transactions
is pending or, to the Investor's knowledge, threatened.
3_5 Investment Intent. The Investor (i) is an
accredited investor within the meaning of Rule 501(a) under the
Securities Act, (ii) is aware of the limits on resale imposed by virtue
of the nature of the transactions contemplated by this Agreement and is
aware that the certificates representing the Investor's respective
ownership of Series F Stock will bear related restrictive legends and
(iii) except as otherwise set forth herein, is acquiring the shares of
the Company hereunder without registration under the Securities Act in
reliance on the exemption from registration contained in Section 4(2)
of the Securities Act, for investment for its own account, and not with
a view toward, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling such
shares. The Investor has been given the opportunity to ask questions
of, and receive answers from, the officers of the Company regarding the
Company, its current and proposed business operations and the Series F
Stock, and the officers of the Company have made available to the
Investor all documents and information that the Investor has requested
relating to an investment in the Company. The Investor has been
represented by competent legal counsel in connection with its purchase
of the Series F Stock and acknowledges that the Company has relied upon
the Investor's representations in this Section 3 in offering and
selling Series F Stock to the Investor.
3_6 No Brokers or Finders. Neither the Investor nor
any of its respective Affiliates has entered or will enter into any
agreement pursuant to which the Investor or the Company will be liable,
as a result of the transactions contemplated by this Agreement or any
of the Purchase Documents, for any claim of any person for any
commission, fee or other compensation as finder or broker and the
Investor agrees to indemnify the Company for any liability resulting
from any such agreement.
3_7 Economic Risk; Restricted Securities. The
Investor recognizes that the investment in the Securities involves a
number of significant risks. The foregoing, however, does not limit or
modify the representations, warranties and agreements of the Company in
Section 2 of this Agreement or the right of the Investor to rely
thereon. The Investor is able to bear the economic risks of an
investment in the Securities for an indefinite period of time, has no
need for liquidity in such investment and, at the present time, can
afford a complete loss of such investment.
3_8 Hedging Activities. The Investor has no intention
to engage in, or has any agreement to engage in, any hedging
transactions (including, but not limited to, short sales, put and call
options, cashless collar transactions or other forms of derivative
security transactions) with respect to the Common Stock.
4 Conditions of the Investor's Obligations at Closing. The
obligation of the Investor to purchase the Securities to be purchased
by it at the Closing is subject to the fulfillment to the Investor's
satisfaction, prior to or at the Closing, of each of the following
conditions:
4_1 Representations and Warranties. The
representations and warranties of the Company contained in this
Agreement and the other Purchase Documents shall be true and correct in
all material respects on and as of the date of the Closing as if made
on and as of such date.
4_2 Filing of Articles of Amendment. The Articles of
Amendment shall have been adopted by the Board of Directors of the
Company and filed with the Secretary of State of the Commonwealth of
Pennsylvania.
4_3 Performance. The Company shall have performed and
complied with all agreements and conditions required by this Agreement
and the other Purchase Documents to be performed or complied with by it
prior to or at the Closing.
4_4 Stock Certificates. Etc. At the Closing, the
Company shall have tendered to the Investor a certificate representing
the Investor's shares of Series F Stock, all in form and substance
satisfactory to the Investor and sufficient to transfer to and vest in
the Investor good and valid title to the Securities, free and clear of
any Lien.
4_5 Conduct of Business. The Company shall carry on
its business diligently and shall not make or institute any unusual
methods of management, accounting or operation, except as agreed to in
writing by the Investor. All of the property of the Company shall be
used, operated, repaired and maintained in a normal business manner
consistent with past practice
4_6 Compliance With Laws. The Company will comply in
all material respects with all laws and regulations which are
applicable to it, its ownership of its assets or to the conduct of its
business and will perform and comply in all material respects with all
contracts, commitments and obligations by which it is bound.
4_7 No Material Adverse Change. There shall
not have occurred any material adverse change in the Condition of
the Company.
4_8 Consents. The Company shall have obtained all
consents, approvals or waivers from Governmental Authorities and third
Persons necessary for the execution, delivery and performance of this
Agreement, the other Purchase Documents and the Articles of Amendment,
and the transactions contemplated hereby and thereby, all without
material cost or other adverse consequences to the Company. Without
limiting the generality of the foregoing, if applicable, each of the
Company's existing stockholders shall have waived any preemptive right
or right of first offer any such stockholder may have to purchase any
of the Securities.
4_9 No Litigation. There shall not be any Action of
or before any Governmental Authority or other Person pending or
threatened with respect to this Agreement, the other Purchase Documents
or the transactions contemplated hereby or thereby or which might
materially adversely affect the Condition of the Company.
4_10 Opinion of Counsel. The Investor shall have
received from Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP an opinion of counsel
dated as of the Closing Date, in the form attached hereto as Exhibit C.
4_11 Compliance Certificate. The Investor shall have
received a certificate dated as of the day of the Closing executed by
the President and the Chief Financial Officer of the Company certifying
that the conditions specified in this Section 4 have been fulfilled.
4_12 Related Documents. The Purchase Documents shall
have been executed and delivered by each of the parties thereto and in
full force and effect, and the Articles of Amendment, and all
amendments thereto, if any, shall have been filed with the Secretary of
State of the Commonwealth of Pennsylvania and shall be in full force
and effect.
4_13 Due Diligence. The Investor shall have
completed its business, financial and legal due diligence to its
satisfaction, in its sole judgment.
4_14 Proceedings and Documents. All proceedings in
connection with the transactions contemplated hereby and all documents
and instruments incident to such transactions shall be satisfactory in
substance and form to the Investor and its counsel, in all material
respects, and the Investor shall have received all such counterpart
originals or certified or other copies of such documents as the
Investor may reasonably request.
If at the Closing the Company fails to tender to the Investor
the documents specified herein which are required to be delivered to the
Investor at the Closing or if at the Closing any of the conditions specified in
this Section 4 shall not have been fulfilled to the Investor's reasonable
satisfaction, the Investor shall, at its election, be relieved of all further
obligations under this Agreement.
5 Conditions of the Company's Obligations at Closing. The
obligations of the Company to the Investor under this Agreement are
subject to the fulfillment, prior to or at the Closing, of each of the
following conditions:
5_1 Representations and Warranties. The
representations and warranties of the Investor contained in this
Agreement shall be true and correct in all material respects on and as
of the date of the Closing as if made on and as of such date.
5_2 Payment of Purchase Price. The Investor shall
have delivered to the Company the purchase price specified in Section 1
hereof.
5_3 No Litigation. There shall not be any Action of
or before any Governmental Authority or other Person pending or
threatened with respect to this Agreement or the transactions
contemplated hereby.
5_4 Proceedings and Documents. All proceedings in
connection with the transactions contemplated hereby and all documents
and instruments incident to such transactions shall be satisfactory in
substance and form to the Company and its counsel, and the Company
shall have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
If at the Closing the Investor fails to tender to the Company
the payment or documents specified herein which are required to be delivered to
the Company at the Closing or if at the Closing any of the conditions specified
in this Section 5 shall not have been fulfilled to the Company's reasonable
satisfaction, the Company shall, at its election, be relieved of all further
obligations to the Investor under this Agreement.
6 Certain Post-Closing Covenants of the Company. The
Company covenants and agrees with the Investor as follows:
6_1 Board Meetings; Observer Rights. The Company will
use its best efforts to ensure that its Board of Directors holds
meetings no less than four times per year. The Company shall give to
the Investor notice of each meeting of the Board of Directors of the
Company and of each committee thereof at the same time and in the same
manner as notice is given to the directors of the Company. One designee
of the Investor shall be entitled to attend in person, as an observer,
all meetings held in person and to listen to telephone meetings of the
Board of Directors of the Company and of each committee thereof solely
for the purpose of allowing the Investor to have current information
with respect to the affairs of the Company. The Company shall provide
to the Investor, in connection with each meeting its observer designee
is entitled to attend, whether or not present at such meeting, copies
of all notices, minutes, consents and all other materials or
information that it provides to the directors with respect to such
meeting, at the time such materials and information are given to its
directors (except that materials and information provided to directors
of the Company at meetings at which a designee of the Investor is not
present shall be provided to the Investor promptly after the meeting).
If the Board of Directors of the Company or any committee thereof
proposes to take any action by written consent in lieu of a meeting,
the Company shall give written notice thereof to the Investor prior to
the effective date of such consent describing in reasonable detail the
nature and substance of such action. The Company shall bear all
reasonable travel and related expenses incurred by the observer
designee of the Investor associated with attending meetings. The
Investor's observer rights under this Section 6.1 shall terminate in
the event the Investor holds less than 100 shares of Series F Stock.
6_2 Annual Meetings. The Company will hold an annual
meeting of all stockholders at which information with respect to its
business will be furnished and discussed.
6_3 Information. The Investor and its assignees shall
be entitled to receive, and the Company agrees to provide to the
Investor and its assignees, the following:
_a_ Financial and Related Data.
(i) As soon as available, but in any event not later
than forty-five (45) days after the end of each fiscal quarter, the
Company shall deliver to the Investor its Quarterly Report on Form
10-Q.
(ii) As soon as available, but in any event within
ninety (90) days after the end of each fiscal year of the Company, the
Company shall deliver to the Investor its Annual Report on Form 10-K.
(iii) Promptly, but in any event within ten (10)
days, after any distribution to its stockholders generally or to
specific stockholders by agreement, to its directors, to prospective
investors or to the financial community of an annual report, proxy
statement, registration statement or other similar report or
communication, a copy of each such report, proxy statement,
registration statement or other similar report or communication; and
promptly, but in any event within ten (10) days after any filing with
the Securities and Exchange Commission or with any national securities
exchange or with the National Association of Securities Dealers, Inc.,
of any publicly available annual or periodic or special report or proxy
statement or registration statement, a copy of such report or
statement; and promptly, but in any event within two (2) business days,
after released, copies of all press releases and other statements made
available generally by the Company to the public concerning material
developments.
(iv) From time to time, and promptly, such additional
information and financial data regarding results of operations,
financial condition, business, affairs or prospects of the Company,
which the Investor may reasonably request. Notwithstanding the
foregoing, the Company shall not be required to disclose to the
Investor material non-public information as determined in good faith by
the Board of Directors.
_b_ Access to Properties. The Company
shall permit representatives designated by the Investor, upon
reasonable prior notice to the Company, to visit and inspect each
of the Company's properties, Notwithstanding the foregoing, the
Company shall not be required to disclose to the Investor material non-
public information as determined in good faith by the Board of
Directors to examine its respective corporate and financial records
(and make copies thereof or extracts therefrom), to discuss its
respective affairs, finances and accounts with the Company's directors
and officers, and, through the President or chief financial officer
of the Company's, as the case may be, its key employees and
accountants, all at such reasonable times as may be requested by the
Investor.
6_4 Exemption from Investment Company Act. The
Company shall conduct its business so that it shall not become an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
6_5 Accounting and Reserves. The Company shall
maintain a standard and uniform system of accounting and shall keep
proper books and records and accounts in which full, true and correct
entries shall be made of its transactions, all in accordance with GAAP
applied on a consistent basis through all periods, and shall set aside
on such books for each fiscal year all such proper reserves for
depreciation, obsolescence, amortization, bad debts and other purposes
in connection with its operations as are required by such principles so
applied.
6_6 Transactions with Affiliates. Except for
arrangements for development research involving aggregate amounts less
than $60,000, the Company shall not, directly or indirectly, enter into
any transaction or agreement with any stockholder of the Company or any
Affiliate of the Company, unless the transaction or agreement is (i)
reviewed and approved by a majority of Disinterested Directors (as
defined below) and (ii) on terms no less favorable to the Company than
those obtainable from a non-Affiliated Person. A "Disinterested
Director" shall mean an individual who is not and who has not been an
officer or employee of the Company and who is not a member of the
family of, controlled by or under common control with, any such officer
or employee.
6_7 Additional Covenants.
_a_ The Company shall timely file all
such SEC Documents required to be filed by it pursuant to the Exchange
Act in order to permit sales under Rule 144 of the Securities Act.
_b_ During any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act,
the Company shall make available information required to be provided
by Rule 144A(d)(4), upon request.
_c_ Upon the request of the Investor
and the certification of the Investor that it qualifies under Rule
144(k) of the Securities Act, the Company shall, without further
requirement, remove all restrictive legends from the Investor's
securities, insofar as such restrictions relate to the transfer of
such securities under the Securities Act.
6_8 Issuance of Warrants. In the event that upon the
first anniversary of the Closing Date (the "Anniversary Date") the
average of the closing prices of the Common Stock on the Nasdaq
SmallCap Market (or such other quotation system or securities exchange
upon which the Company's Common Stock is then traded) as reported by
the Nasdaq Stock Market on the 25 consecutive trading days immediately
preceding the Anniversary Date (the "Anniversary Price") is less than
1.45 times the Closing Price, the Company shall grant to the Investor
five-year warrants ("Warrants") to purchase, at an exercise price equal
to the Anniversary Price, such number of shares of the Common Stock as
determined in accordance with the following formula:
--------- ----------------- --- ---------------------------
W= I x ((1.45 x CP) - AP)
--------------- ---------------------------
(1.00) 0.45 x CP
--------- ----------------- --- ---------------------------
where:
W = the number of Warrants issuable pursuant to this Section 6.8.
I = the Investment Amount.
CP = the Closing Price.
AP = the Anniversary Price.
The form of such Warrants is attached hereto as Exhibit D. It is understood and
agreed that in no event shall the Anniversary Price be deemed to be less than
$1.00.
6_9 Registration of Shares of Conversion Stock
and the Warrant Shares.
_a_ The Company agrees to register the
shares of Conversion Stock by filing a registration Statement on
Form S-3 (or any successor form thereto) with respect to the shares of
Conversion Stock and using its best efforts to have such registration
statement declared effective on or prior to the Anniversary Date.
The Company shall cause such registration statement to remain
effective for three (3) years following the Anniversary Date.
_b_ The Company agrees to use its best
efforts to register the Warrant Shares by filing a registration
statement on Form S-3 (or any successor form thereto), as soon as
practicable after the Anniversary Date, but in no event later than
thirty (30) days after the Anniversary Date, and using its best efforts
to h ave such registration statement become effective as soon as
practicable. The Company shall cause such registration statement
to remain effective for three (3) years following the Anniversary Date.
_c_ In the event the Company fails to
satisfy its obligations to the Investor under this Section 6.9, the
Company shall be obligated to pay to the Investor liquidated damages
in an amount equal to six percent (6%) per month (or any part thereof),
compounded monthly, on the Investment Amount, until such time the
Company is no longer in breach of this Section 6.9. Any payments due to
the Investor pursuant to this Section 6.9(c) shall be made no later
than the fifteenth (15th) day of the month following the month in
which such liquidated damages were incurred.
6_10 Stockholder Approval. In the event the aggregate
number of shares of Common Stock issuable upon the conversion of the
Securities, the Warrants and any other securities that may be
integrated therewith exceeds 19.9% of the Company's issued and
outstanding capital stock as of the Closing Date, the Company shall use
its best efforts to obtain stockholder approval as required by NASD
Rule 4310(c)(25)(H)(i) as soon as practicable. Until such stockholder
approval is obtained, the maximum number of shares of Common Stock
issuable upon conversion of the Series F Stock and upon exercise of the
Warrants shall not exceed 19.9% of the Company's issued and outstanding
capital stock as of the Closing Date. In the event such stockholder
approval is not obtained by the Anniversary Date then, at any time
after the Anniversary Date until such time such stockholder approval is
obtained, out of any assets of the Company legally available therefor,
the Investor shall have the right to require to Company to redeem
shares of the Series F Stock (the "Redeemed Shares") at a price per
share equal to the closing price of the Common Stock on the Nasdaq
SmallCap Market (or such other quotation system or securities exchange
upon which the Company's Common Stock is then traded) less the
Conversion Price (as defined in the Articles of Amendment) then in
effect. The Company shall pay the Investor for the Redeemed Shares
within five (5) business days after the demand for redemption is made
by the Investor. Such amounts payable to the Investor under this
Section 6.10 shall accrue interest at 8% per annum after such 5-day
period and such accrued interest shall be payable on demand of the
Investor.
6.11 Exchange Right. For the first ninety (90) days following
the Closing Date, if Company shall raise capital or complete any
financing that includes options, warrants, debt or other instruments
exercisable or convertible into equity of the Company with rights and
preferences that vary from the Series F Stock (the "New Security"),
Investor shall have the right, but not the requirement, to exchange all
(but not less than all) of the Series F Stock for an amount of the New
Securities equal to the Investment Amount. Company shall be required to
notify Investor of the proposed issuance of any New Security, and
Investor shall have a period of ten (10) days following such notice to
notify the Company in writing of his intent to exercise his right to
exchange the Series F Stock for the New Securities. In the event that
Investor fails to respond to the Company within such ten (10) day
period, such failure to respond shall be deemed to be a waiver of the
exchange right by Investor. The Company's notice under this Section
6.11 shall include all terms of the proposed New Securities and related
documentation to enable Investor to make an informed decision. The
Company shall make its appropriate officers and representatives
available to Investor and his representatives to make full and
reasonable inquiry into the terms of the New Securities.
7_ Certain Post-Closing Covenants of the Investor. The
Investor covenants and agrees with the Company as follows:
7_1 Hedging Activities. The Investor shall not engage
in any hedging transactions (including short sales, put and call
options, cashless collar transactions or other forms of derivative
security transactions) with respect to the Common Stock that may have
an impact on the market price of the Common Stock.
7_2 Limitation on Sales. Except for block sales of
25,000 shares or more, commencing on the Anniversary Date, during any
10-day trading period, the Investor agrees that all sales of shares of
Conversion Stock or Warrant Shares, if any, made by the Investor during
such 10-day trading period shall not exceed twenty-five percent (25%)
of total reported sales of shares of Common Stock during the
immediately preceding 10-day trading period. Notwithstanding the
foregoing, in the event there are additional Investors purchasing the
Series F Stock at the Closing each such Investor shall be entitled to
sell only such Investor's pro rata share of such shares of Conversion
Stock or Warrant Shares, as the case may be, determined in accordance
with the Investment Amount paid by each such Investor compared to the
Total Investment Amount. The "Total Investment Amount" shall mean the
sum of all Investment Amounts paid by each Investor purchasing the
Series F Stock at the Closing.
8_ Miscellaneous.
8_1 Expenses. The Company will each bear all
reasonable legal and other expenses incurred by the Investor with
respect to the execution of this Agreement and the execution of each of
the Purchase Documents.
8_2 Publicity. Except as may be required by Law, or
in connection with a public offering, the Company shall neither use the
name of, nor make reference to, the Investor or any of its Affiliates
in any press release or in any public manner without the Investor's
prior written consent.
8_3 Indemnification. The Company agrees to indemnify
the Investor and each officer, director, employee, agent, partner,
stockholder and Affiliate of the Investor (collectively, the
"Indemnified Parties") for, and hold each Indemnified Party harmless
from and against: (i) any and all damages, losses, claims and other
liabilities of any and every kind, including, without limitation,
judgments and costs of settlement, and (ii) any and all out-of-pocket
costs and expenses of any and every kind, including, without
limitation, reasonable fees and disbursements of counsel for such
Indemnified Parties (all of which expenses periodically shall be
reimbursed as incurred), in each case, arising out of or suffered or
incurred in connection with any of the following: (a) any
misrepresentation or any breach of any warranty made by the Company
herein or in any of the other Purchase Documents, (b) any breach or
non-fulfillment of any covenant or agreement made by the Company herein
or in any of the other Purchase Documents, and (c) any claim relating
to or arising out of a violation of applicable federal or state
securities laws by the Company in connection with the sale of the
Securities by the Company to the Investor.
8_4 Survival. All representations, warranties,
covenants and agreements contained in or made pursuant to this
Agreement or contained in any certificate delivered pursuant to this
Agreement, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any party
hereto, and shall survive the transfer and payment for the Securities
and the consummation of the transactions contemplated hereby; provided,
however, that the representations and warranties of the parties set
forth in Sections 2 and 3 shall survive until May __, 2000.
8_5 Assignment. This Agreement and all the provisions
hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns, if any,
except that neither this Agreement nor any rights or obligations
hereunder shall be assigned or delegated by the Company without the
prior written consent of the Investor. After the Closing, except as set
forth on Schedule 8.5, the Investor and its successors and assigns may,
without the consent of the Company, assign this Agreement and the
Investor's rights hereunder and under the other Purchase Documents
(including, without limitation, the Securities purchased by the
Investor), in whole or in part, to (i) any Affiliate of the Investor;
(ii) any other transferee of at least 20% of the Securities acquired by
the Investor; or (iii) in connection with an estate transfer, provided,
however, that the Company shall not be required to permit such
Assignment if such Assignment is in violation of federal securities
regulations or relevant state "blue sky" laws.
8_6 Amendment; Waiver. Any term, covenant, agreement
or condition of this Agreement may be amended, and compliance therewith
may be waived (either generally or in a particular circumstance and
either retroactively or prospectively), by one or more substantially
concurrent written instruments signed by the Company and by the
Investor. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon the Investor and the Company.
8_7 Applicable Law. The laws of the State of New York
shall govern the interpretation, validity and performance of the terms
of this Agreement, regardless of the law that might be applied under
principles of conflicts of law.
8_8 Judicial Proceedings. Any judicial proceeding
involving any dispute, controversy or claim arising out of or relating
to this Agreement or the rights or interests of the Investor or the
Company or the breach or alleged breach of this Agreement, whether
arising during or at or after the termination of this Agreement (each
of the foregoing disputes, controversies and claims hereinafter
referred to as an "agreement dispute"), shall be brought only in a
federal or state court located in the state of New York, and each of
the parties hereto (i) unconditionally accepts the exclusive
jurisdiction of such courts and any related appellate court and
irrevocably agrees to be bound by any judgment rendered thereby and
(ii) irrevocably waives any objection such party may now have or
hereafter has as to the venue of any such proceeding brought in such a
court or that such court is an inconvenient forum. Each of the parties
hereto hereby waives trial by jury in any judicial proceeding to which
they are parties involving an agreement dispute.
8_9 Notices. All notices and other communications
provided for herein shall be dated and in writing and shall be deemed
to have been duly given (x) on the date of delivery, if delivered
personally or by telecopier, receipt confirmed, (y) on the second
following business day, if delivered by a recognized overnight courier
service, or (z) seven days after mailing, if sent by registered or
certified, return receipt requested, postage prepaid, in each case, to
the party to whom it is directed at the following address (or at such
other address as any party hereto shall hereafter specify by notice in
writing to the other parties hereto):
(i) If to the Company, to it at the following address:
Sedona Corporation
000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
0000 Xxx Xxxxxx, X.X., 00xx Xxxxx Xxxx
Xxxxxxxxxx, XX 2005
Attention Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier (000) 000-0000
(ii) If to the Investor, to him at the following
address:
The Tang Fund
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx LLP
0 Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx XxxXxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
8_10 Integration. This Agreement and the documents
referred to herein or delivered pursuant hereto or pursuant to such
documents, including all exhibits and schedules, contain the entire
understanding of the parties with respect to their subject matter and
supersede all prior agreements and understandings between the parties
with respect to their subject matter.
8_11 Severability. Each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.
8_12 Descriptive Headings. The section and other
headings contained in this Agreement are for convenience of reference
only and shall not affect the meaning or interpretation of this
Agreement.
8_13 Counterparts. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written:
COMPANY:
Sedona Corporation
By:_________________________________
Name: Xxxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
INVESTOR:
The Tang Fund
By:_________________________________
Name:
Title:
