XXXXXXXXXXXX.XXX, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 9th
day of August, 1999, by and between XxxxxxxxXxxx.xxx, Inc., a Delaware
corporation (the "Company"), and
("Investor"), with reference to the following facts:
A. This Agreement is one of a number of stock purchase agreements (the
"Purchase Agreements") pursuant to which certain investors, including Investor
(collectively, the "Investors") are purchasing, in the aggregate, 1,687,500
shares of the Company's Common Stock, $.001 par value (the "Common Stock"), as
more particularly set forth on EXHIBIT A hereto (the "Financing").
B. The Company and Investor wish to enter into this Agreement to set
forth the terms of Investor's purchase of Common Stock from the Company pursuant
to the Financing.
NOW THEREFORE, BE IT RESOLVED, that the parties hereto, intending to be
legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms
and conditions of this Agreement, Investor agrees to purchase, and the Company
agrees to sell and issue to Investor at the Closing (as defined in Section
1.2(a) below), shares of the Company's Common Stock for the purchase
price of $1.60 per share. The shares of Common Stock issued to Investor pursuant
to this Agreement shall hereinafter be referred to as the "Shares."
1.2 CLOSING.
(a) Subject to the satisfaction or waiver of the
conditions set forth in Sections 4 and 5 hereof, the purchase and sale of the
Shares shall take place at the offices of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, a
Professional Corporation, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx,
Xxxxxxxxxx, at 10:00 a.m., on August 9, 1999, or at such other time and place as
the Company and Investor mutually agree upon, either orally or in writing (which
time and place are designated as the "Closing").
(b) Subject to the terms of this Agreement, at the
Closing, the Company shall deliver to Investor a certificate representing the
Shares against payment of the purchase price therefor by wire transfer of funds
pursuant to the wire transfer instructions attached hereto as EXHIBIT B.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Investor 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 State of Delaware and has all requisite corporate power and
authority: (i) to own and operate its properties and
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assets; (ii) carry on its business as now conducted and as presently proposed to
be conducted; execute and deliver this Agreement and (iii) issue and sell the
Shares and to carry out the provisions of this Agreement. The Company is duly
qualified and authorized to transact business and is in good standing as a
foreign corporation in each jurisdiction where the nature of its activities and
of its properties makes such qualification necessary, except where failure to so
qualify would not have a material adverse effect upon the Company.
2.2 CAPITALIZATION. The authorized capital stock of the
Company consists of 60,000,000 shares of Common Stock, $.001 par value, and
15,000,000 shares of Preferred Stock, $.001 par value, of which 5,000,000 are
designated as Series A Preferred Stock. Immediately prior to the Closing, there
will be issued and outstanding 23,010,874 shares of Common Stock and 3,330,586
shares of Series A Preferred Stock. Immediately following the Closing all issued
and outstanding shares of the Company's capital stock (a) will have been duly
authorized, validly issued, fully paid and non-assessable and (b) will have been
issued in compliance in all material respects with federal and state securities
laws. The Company has reserved 3,330,586 shares of Common Stock for issuance
upon the conversion of the Series A Preferred Stock, and has reserved an
aggregate of 5,700,000 shares for issuance pursuant to the Company's 1999 Stock
Incentive Plan, 1997 Stock Option Plan and 1995 Stock Option Plan, of which
3,763,000 shares are subject to currently outstanding options. The Company has
also reserved 500,000 shares of Common Stock for issuance pursuant to the
Company's 1999 Employee Stock Purchase Plan, none of which have been issued. The
Company also has warrants to purchase 3,378,641 shares of Common Stock
outstanding as of the date hereof. The Company intends to effect a one-for-four
reverse stock split shortly after the Closing. Except as described in this
Section 2.2, in the SEC Filings (as defined in Section 2.28 below) or in the
Private Placement Memorandum, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock. Except as
disclosed in the SEC Filings or in the Private Placement Memorandum, the Company
is not a party or subject to any agreement or understanding, and to the
Company's knowledge there is no agreement or understanding between any person
and/or entities, which affects or relates to the voting or giving of written
consents with respect to any security or by a director of the Company. The
Company has no obligation, contingent or otherwise, to redeem or repurchase any
equity securities or any security that is a combination of debt and equity
(collectively, "EQUITY SECURITIES").
2.3 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of the
Company's obligations hereunder and the authorization, issuance, sale and
delivery of the Shares has been taken or will be taken prior to the Closing.
This Agreement when executed and delivered by the Company, shall constitute a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, or (iii) to the extent the indemnification
provisions in Section 6.4 below may be limited by applicable federal or state
securities law.
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2.4 SUBSIDIARIES. Except for the Company's wholly-owned
subsidiary, QCS Development Company, S.A., the Company does not currently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity.
2.5 VALID ISSUANCE OF THE SHARES; COMPLIANCE WITH SECURITIES
LAWS. The sale of the Shares is not subject to any preemptive right or rights of
first refusal that have not been waived and, when issued, sold and delivered in
compliance with the provisions of this Agreement and the Certificate of
Incorporation, the Shares will be duly and validly issued, fully paid and
nonassessable and will be free of any liens, encumbrances, and restrictions on
transfer other than restrictions on transfer under this Agreement and applicable
state and federal securities laws. Assuming the accuracy of the representations
and warranties of the Investors set forth in this Agreement and the other
Purchase Agreements, the offer, sale and issuance of the Shares as contemplated
by this Agreement are exempt from the registration requirements of the
Securities Act, and have been registered or qualified (or are exempt from
registration or qualification) under the registration, permit, or qualification
requirements under all applicable state securities laws.
2.6 GOVERNMENTAL CONSENTS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any federal, state or local governmental authority, required on
the part of the Company in connection with the valid execution and delivery of
this Agreement, the offer, sale or issuance of the Shares, or the consummation
of any other transaction contemplated hereby have been obtained, or will be
effective at the Closing, except for notices required or permitted to be filed
with certain state and federal securities commissions after the Closing, which
notices will be filed on a timely basis.
2.7 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company or any of its subsidiaries that questions the validity of
this Agreement or the right of the Company to enter into it, or to consummate
the transactions contemplated hereby, or that might result, either individually
or in the aggregate, in any material adverse changes in the assets, condition or
affairs of the Company, financially or otherwise, or any change in the current
equity ownership of the Company, nor is the Company aware that there is any
basis for the foregoing. The foregoing includes, without limitation, actions
pending or to the Company's knowledge threatened (or any basis therefor known to
the Company) involving the prior employment of any of the Company's employees,
their use in connection with the Company's business of any information or
techniques allegedly proprietary to any of their former employers. Neither the
Company nor any of its subsidiaries is a party or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company or any of its subsidiaries currently pending or which the Company
or any of its subsidiaries intends to initiate.
2.8 INTELLECTUAL PROPERTY. The Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and proprietary rights and
processes necessary for its business without any conflict with, or infringement
of, the rights of others. The Company has not granted any options, licenses or
agreements of any kind with respect to the patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information and other
proprietary rights and processes used in its business, except limited licenses
to IBM and its customers pursuant to its agreements with such persons. The
Company has not received any communications alleging that the Company has
violated or, by conducting its
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business, would violate any of the patents, trademarks, service marks, trade
names, copyrights, trade secrets or other proprietary rights or processes of any
other person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interest of the Company or that would
conflict with the Company's business. To the Company's knowledge, neither the
execution or delivery of this Agreement, nor, the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as proposed, will conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee is now obligated. The
Company does not believe it is or will be necessary to use any inventions of any
of its employees (or persons it currently intends to hire) made prior to their
employment by the Company.
2.9 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any provisions of its Certificate of Incorporation,
Bylaws or of any instrument, judgment, order, writ, decree or contract to which
it is a party or by which it is bound or, to its knowledge, of any provision of
federal or state statute, rule or regulation applicable to the Company. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby or thereby will not (i) result in any such
violation or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the
Company or (ii) require the Company to obtain any consent, approval or action
of, make any filing with, or give any notice to any person as a result or under
the terms of, or relieve any third party of any obligation to the Company under
any such provision, instrument, judgment, order, writ, decree or contract, other
than the waiver of certain rights of first refusal and registration rights by
the holders of the Company's Series A Preferred Stock, which have been or will
be obtained prior to the Closing. The Company has avoided every condition, and
has not performed any act, the occurrence of which would result in the Company's
loss of any material right granted under any license, distribution agreement or
other agreement.
2.10 AGREEMENTS; ACTION.
(a) Except as disclosed in the SEC Filings or in the
Private Placement Memorandum, there are no (i) agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof, or (ii) agreements (whether written or
oral and including all amendments thereto) to which the Company is a party or by
which the Company or any of its assets is bound that are material to the Company
(collectively, "MATERIAL AGREEMENTS").
(b) Each Material Agreement is in full force and
effect and is valid, binding and enforceable in accordance with its terms as to
the Company and, to the knowledge of the Company, as to each other party
thereto; (ii) there exists no material breach or material default (or event that
with notice or lapse of time would constitute a material breach or material
default) on the part of the Company or, to the knowledge of the Company, on the
part of any other party under any Material Agreement; (iii) the Company has not
received a written notice of termination or default under any Material
Agreement; and (iv) as of the date of this Agreement, no party to an agreement
under which the Company acquired a substantial portion of its assets has
asserted any claim for indemnification under such agreement.
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(c) The Company has not engaged in the past three (3)
months in any substantive discussion (i) with any representative of any
corporation or corporations regarding the merger of the Company with or into any
such corporation or corporations, (ii) with any representative of any
corporation, partnership, association or other business entity or any individual
regarding the sale, conveyance or disposition of all or substantially all of the
assets of the Company or a transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company would be
disposed of, or (iii) regarding any other form of liquidation, dissolution or
winding up of the Company.
2.11 NO CONFLICT OF INTEREST. The Company is not indebted,
directly or indirectly, to any of its officers or directors or to their
respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees. None of the Company's officers
or directors, or any members of their immediate families, are, directly or
indirectly, indebted to the Company (other than in connection with purchases of
the Company's stock) or to the Company's knowledge have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company except that officers, directors
and/or stockholders of the Company may own stock in (but not exceeding two
percent of the outstanding capital stock of) any publicly traded company that
may compete with the Company. None of the Company's officers or directors or any
members of their immediate families are, directly or indirectly, interested in
any material contract with the Company. The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.
2.12 RIGHTS OF REGISTRATION AND VOTING RIGHTS. Except as
contemplated in this Agreement or as disclosed in the SEC Filings or in the
Private Placement Memorandum, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity. To the
Company's knowledge, no stockholder of the Company has entered into any
agreements with respect to the voting of capital shares of the Company.
2.13 TITLE TO PROPERTY AND ASSETS. The Company owns its
property and assets free and clear of all mortgages, liens, loans and
encumbrances, except such encumbrances and liens which arise in the ordinary
course of business and do not materially impair the Company's ownership or use
of such property or assets. With respect to the property and assets it leases,
the Company is in compliance with all material terms of such leases and, to its
knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances.
2.14 FINANCIAL STATEMENTS. The financial statements (including
balance sheet and statement of operations) of the Company contained in the SEC
Filings and the Private Placement Memorandum (collectively, the "FINANCIAL
STATEMENTS") were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated, and
fairly present the financial condition and operating results of the Company as
of the dates, and for the periods, indicated therein, subject to normal year-end
audit adjustments. Except as set forth in the Financial Statements or in the
Private Placement Memorandum, the Company has no material liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to March 31, 1999 and (ii) obligations incurred in
the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Financial Statements,
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which, in both cases, individually or in the aggregate are not material to the
financial condition or operating results of the Company.
2.15 CHANGES. Since March 31, 1999, except as disclosed in the
SEC Filings or the Private Placement Memorandum (provided that such exception
shall not apply to subsections (a), (e), (h) or (m) of this Section, or to
subsection (n) as it applies to such subsections), there has not been:
(a) any change in the assets, liabilities, financial
condition or operating results of the Company from that reflected in the
Financial Statements, except for operating losses consistent with past results
and except for changes in the ordinary course of business that have not been, in
the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the business,
properties, prospects, or financial condition of the Company;
(c) any waiver or compromise by the Company of a
valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim,
or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and that is not material to the business,
properties, prospects or financial condition of the Company;
(e) any material change to a material contract or
agreement by which the Company or any of its assets is bound or subject, except
for the pending amendments to the Company's agreements with IBM Corp., as
described on page 45 of the Private Placement Memorandum;
(f) any material change in any compensation
arrangement or agreement with any employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any material resignation or termination of
employment of any officer or key employee of the Company; and the Company is not
aware of any impending resignation or termination of employment of any such
officer or key employee;
(i) any material mortgage, pledge, transfer of a
security interest in, or lien, created by the Company, with respect to any of
its material properties or assets, except liens for taxes not yet due or
payable;
(j) any loans or guarantees made by the Company to or
for the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
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(k) any declaration, setting aside or payment or
other distribution in respect to any of the Company's capital stock, or any
direct or indirect redemption, purchase, or other acquisition of any of such
stock by the Company;
(l) any declaration or payment of any dividend or
other distribution of the assets of the Company;
(m) to the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company; or
(n) any arrangement or commitment by the Company to
do any of the things described in this Section 2.15.
2.16 EMPLOYEE BENEFIT PLANS. Except as disclosed in the SEC
Filings or in the Private Placement Memorandum, the Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
2.17 TAX RETURNS AND PAYMENTS. The Company has filed all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects. The Company has paid all taxes and other
assessments due.
2.18 INSURANCE. The Company has in full force and effect fire
and casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its tangible
properties that might be damaged or destroyed.
2.19 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the knowledge of
the Company, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the knowledge of the Company threatened, which could have
a material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company, nor is the Company aware of any
labor organization activity involving its employees. Except as disclosed in the
SEC Filings or the Private Placement Memorandum, the employment of each officer
and employee of the Company is terminable at the will of the Company. To its
knowledge, the Company has complied in all material respects with all applicable
state and federal equal employment opportunity laws and with other laws related
to employment.
2.20 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT
AGREEMENTS. Each employee, consultant and officer of the Company has executed an
agreement with the Company regarding confidentiality and proprietary information
substantially in the form or forms delivered to the counsel for the Investors.
The Company is not aware that any of its employees or consultants is in
violation thereof, and the Company will use its best efforts to prevent any such
violation.
2.21 PERMITS. The Company and each of its subsidiaries has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business, the lack of which could materially and adversely affect
the business, properties, prospect;, or financial condition of the
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Company. The Company is not in default in any material respect under any of such
franchises, permits, licenses or other similar authority.
2.22 CORPORATE DOCUMENTS. The Certificate of Incorporation and
Bylaws of the Company are in the form provided to Investor. The copy of the
minute books of the Company made available to the Investor contains minutes of
all meetings of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the date of
incorporation (except for those meetings for which minutes have not yet been
drafted, in which cases agendas have been made available) and reflects all
actions by the directors (and any committee of directors) and stockholders with
respect to all transactions referred to in such minutes accurately in all
material respects. The stock transfer ledgers and other similar records of the
Company as made available to the Investors prior to the execution of this
Agreement accurately reflect all record transfers prior to the execution of this
Agreement in the capital stock of the Company.
2.23 ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
2.24 OFFERING. Subject in part to the truth and accuracy of
the representations and warranties of the Investors set forth in the Purchase
Agreements, the offer, sale and issuance of the Shares as contemplated by this
Agreement are exempt from the registration requirements of the Securities Act
and any applicable state securities laws, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.25 INVESTMENT COMPANY. The Company is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
2.26 YEAR 2000. To the Company's knowledge, after reasonable
inquiry, all of the Company's software products, devices and programs will
operate prior to, during and after the calendar year 2000 A.D. without material
error relating to date data that represents or references different centuries or
more than one century other than such errors which have not had nor would
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Company's business as presently conducted or as proposed
to be conducted.
2.27 PRIVATE PLACEMENT MEMORANDUM. The Confidential Private
Placement Memorandum dated June 14, 1999 (the "Private Placement Memorandum")
previously delivered to Investor has been prepared in good faith by the Company
and does not contain any untrue statement of a material fact nor does it omit to
state any material fact necessary to make the statements made therein not
misleading, it being understood that such Private Placement Memorandum was
prepared in connection with a Preferred Stock financing, rather than the
Financing. With respect to projections distributed concurrently with the Private
Placement Memorandum, the Company represents only that such projections were
prepared in good faith and that the Company believes there is a reasonable basis
for such projections.
2.28 SEC FILINGS. The Company's Annual Report on Form 10-KSB
for the transition period from July 1, 1998 to March 31, 1999 filed with the
Securities and Exchange
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Commission (the "SEC") on June 21, 1999, and the Company's definitive proxy
materials filed with the SEC on June 17, 1999, including all exhibits to such
filings (collectively, the "SEC Filings") as of the respective dates of filing,
were accurate and complete in all material respects and complied in all material
respects with the rules, regulations and interpretations of the SEC.
2.29 FULL DISCLOSURE. The Company has provided Investor with
all the information that Investor has requested for deciding whether to purchase
the Shares. Neither this Agreement nor the representations and warranties
contained herein, nor any other written statements or certificates made or
delivered in connection herewith, when read together, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF INVESTOR.
Investor hereby represents and warrants to the Company as follows:
3.1 LEGAL POWER. Investor has the power and authority to enter
into this Agreement, to purchase the Shares hereunder and to carry out and
perform its obligations under the terms of this Agreement.
3.2 DUE EXECUTION. This Agreement has been duly authorized,
executed and delivered by Investor, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding obligation of Investor,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, or (iii) to the extent the indemnification
provisions in Section 6.4 below may be limited by applicable federal or state
securities law.
3.3 INFORMATION. Investor represents that Investor has had the
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the Shares and the business, properties, prospects and
financial condition of the Company. The foregoing, however, does not limit or
modify the representations and warranties of the Company in Section 2 of this
Agreement or the right of Investor to rely thereon. Investor represents that, in
making its investment decision with respect to the Shares, it has relied solely
upon information supplied by the Company and its own investigation of such
information and other material as it deemed relevant to such investment
decision, and Investor has not relied upon any information or representation of
any third party, including specifically Xxxxxxx & Company ("Xxxxxxx") and its
officers, directors, employees and agents, in making such investment decision.
3.4 INVESTMENT REPRESENTATIONS.
(a) Investor is acquiring the Shares for its own
account, not as nominee or agent, for investment and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act of 1933, as amended (the "Securities Act").
(b) Investor understands that (i) the Shares have not
been registered under the Securities Act by reason of a specific exemption
therefrom, that the securities are "restricted
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securities" and the Investor must hold the Shares indefinitely, and that it
must, therefore, bear the economic risk of such investment indefinitely, unless
a subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration; (ii) each certificate representing the Shares
will be endorsed with the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"1933 ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF
THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF
THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE 1933 ACT."
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no such opinion of counsel shall
be necessary if the sale, transfer or assignment is made either (A) pursuant to
SEC Rule 144 and the Investor provides the Company with evidence reasonably
satisfactory to the Company and its counsel that the proposed transaction
satisfies the requirements of Rule 144, or (B) by means of a distribution from a
partnership, limited liability company or other entity to its beneficial owners.
The Company agrees to remove the foregoing legend from any securities if the
requirements of SEC Rule 144(k) (or any successor rule or regulation) apply with
respect to such securities and the Company and its counsel are provided with
reasonably satisfactory evidence that the requirements of Rule 144(k) apply.
(c) Investor has not been offered the Shares by any
form of advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by such media.
(d) Investor is a "qualified institutional buyer"
within the meaning of SEC Rule 144A, as presently in effect.
(e) Investor has such knowledge and experience in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of acquisition of the Shares and of making an informed
investment decision with respect thereto.
(f) Investor's principal address is as set forth on
the signature page hereto, and it does not reside in any state of the United
States other than the state specified in its address on the signature page.
(g) Investor has read and understands the matters
under the heading "Risk Factors" in the Private Placement Memorandum, and
understands that an investment in the Shares is
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speculative and involves a high degree of risk of loss of all or part of
Investor's investment therein. Investor understands that various statements
contained in the Private Placement Memorandum and the projections delivered
concurrently therewith are "forward looking statements" that involve risk and
uncertainty, and has read and understands the cautionary language with respect
thereto set forth on pages 16 and 17 of the Private Placement Memorandum and on
page 1 of such projections.
(h) Investor understands that the foregoing
representations and warranties are to be relied upon by the Company as a basis
for exemption of the sale of the Shares from the applicable registration or
qualification requirements under the Securities Act, under the securities laws
of all applicable states and for other purposes. In the event any of such
representations and warranties become inaccurate or untrue prior to the Closing,
the Investor will promptly notify the Company.
4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of Investor under subsection 1.1 of this Agreement are
subject to the fulfillment on or before the Closing, of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing with the same force and effect as
though such representations and warranties had been made on and as of the
Closing.
4.2 PERFORMANCE OF OBLIGATIONS. The Company shall have
performed and complied with all agreements, obligations and conditions contained
herein that are required to be performed or complied with by it on or prior to
the Closing.
4.3 COMPLIANCE CERTIFICATE. The Company shall deliver to
Investor at the Closing a Certificate, executed by the President and Chief
Executive Officer of the Company, certifying that the conditions specified in
subsections 4.1, 4.2, and 4.4 through 4.6 have been fulfilled.
4.4 CONSENTS; QUALIFICATIONS. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement. All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with and prior to the lawful issuance and sale of the Shares pursuant
to this Agreement shall have been duly obtained and shall be effective as of the
Closing.
4.5 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents and instruments incident thereto shall be reasonably satisfactory
in form and substance to Investor, which shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
4.6 OPINION OF COMPANY COUNSEL. Investor shall have received
from Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, counsel for the Company, an opinion, dated
the date of the Closing and addressed to the Investors, in a form mutually
agreed upon by counsel for the Company and counsel to
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Xxxxxxx & Company, Inc., the Company's placement agent, covering matters
generally addressed in legal opinions given in connection with institutional
private placement transactions.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to Investor under this Agreement are
subject to the fulfillment, on or before the Closing, of each of the following
conditions by Investor:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investor contained in Section 3 hereof shall be true and correct
in all material respects on and as of the Closing with the same force and effect
as though such representations and warranties had been made on and as of the
Closing.
5.2 QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with and prior to the lawful
issuance and sale of the Shares pursuant to this Agreement shall be duly
obtained and shall be effective as of the Closing.
5.3 PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by Investor on or prior to the
Closing shall have been performed or complied with in all material respects.
6. REGISTRATION OF SHARES.
6.1 REQUIRED REGISTRATION. Within forty-five (45) days
following the Closing, the Company shall prepare and file with the SEC a
registration statement on Form S-3 under the Securities Act, covering all of the
shares of Common Stock issued to the Investors in the Financing (the
"Registrable Stock"), and shall use its best efforts to cause such registration
statement to become effective as expeditiously as possible and to remain
effective until the earlier to occur of the date (a) the Registrable Stock
covered thereby has been sold, or (b) twelve (12) months following the Closing.
Notwithstanding the foregoing, if the Company is or becomes ineligible to use
Form S-3, the Company shall promptly prepare and file such registration
statement on Form SB-2 or, if unavailable, Form S-1.
6.2 REGISTRATION PROCEDURES. When the Company effects the
registration of the Registrable Stock under the Securities Act pursuant to
Section 6.1 hereof, the Company will, at its expense, as expeditiously as
possible:
(a) In accordance with the Securities Act and the
rules and regulations of the Commission, prepare and file with the SEC a
registration statement with respect to such securities and use its best efforts
to cause such registration statement to become and remain effective for the
period described in Section 6.1, and prepare and file with the SEC such
amendments to such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration statement
effective for such period and such registration statement and prospectus
accurate and complete for such period;
(b) Furnish to Investor such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and any supplement thereto and such
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other documents as Investor may reasonably request in order to facilitate the
public offering and sale of such securities;
(c) Use its best efforts to register or qualify the
securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as Investor may reasonably request within
twenty (20) days following the original filing of such registration statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified;
(d) Notify Investor, promptly after it shall receive
notice thereof, of the date and time when such registration statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(e) Notify Investor promptly of any request by the
SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(f) Prepare and promptly file with the SEC, and
promptly notify Investor of the need for, and filing of, such amendments or
supplements to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities Act, any
event has occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(g) In case Investor is required to deliver a
prospectus at a time when the prospectus then in circulation is not in
compliance with the Securities Act or the rules and regulations of the SEC,
prepare promptly upon request such amendments or supplements to such
registration statement and such prospectus as may be necessary in order for such
prospectus to comply with the requirements of the Securities Act and such rules
and regulations;
(h) Advise Investor, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and
(i) Deliver to Investor, as promptly as practicable
after filing with the SEC, any document which is incorporated by reference in
the registration statement.
6.3 EXPENSES. With respect to any registration effected
pursuant to Section 6.1 hereof, the Company agrees to bear all fees, costs and
expenses of and incidental to such registration and the public offering in
connection therewith. The fees, costs and expenses of registration to be borne
as provided in this Section 6.3 shall include, without limitation, all
registration, filing and NASD fees, exchange listing fees, printing expenses,
fees and disbursements of counsel and accountants for the Company and one
counsel for all Investors including shares in such registration (not to exceed
$15,000), and all legal fees and disbursements and other expenses of complying
with state securities or
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blue sky laws of any jurisdictions in which the securities to be offered are to
be registered or qualified. Any selling expenses, including discounts and
commissions, shall be the responsibility of Investor.
6.4 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless
Investor and any person who controls Investor within the meaning of the
Securities Act, and any officer, director, employee, agent, partner or affiliate
of Investor, from and against, and will reimburse Investor and each such
controlling person, officer, director, employee, agent, partner and affiliate
with respect to, any and all claims, actions, demands, losses, damages,
liabilities, costs and expenses to which Investor or any such controlling person
or any such officer, director, employee, agent, partner or affiliate may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent that any such claim, action, demand, loss, damage, liability, cost or
expense is caused by an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity in all material respects with
information furnished to the Company in writing by Investor or such controlling
person or such officer, director, employee, agent, partner or affiliate in
writing specifically for use in the preparation thereof.
(b) Investor will indemnify and hold harmless the
Company, and any person who controls the Company within the meaning of the
Securities Act, from and against, and will reimburse the Company and such
controlling persons with respect to, any and all losses, damages, liabilities,
costs or expenses to which the Company or such controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, or are
caused by the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in conformity in all material respects with information furnished by
Investor to the Company in writing specifically for use in the preparation
thereof. Notwithstanding the foregoing, the liability of Investor pursuant to
this subsection (b) shall be limited to an amount equal to the net per share
sale price multiplied by the number of shares of Registrable Stock sold by
Investor pursuant to the registration statement which gives rise to such
obligation to indemnify (less the aggregate amount of any damages which Investor
has otherwise been required to pay in respect of such losses, damages,
liabilities, costs or expenses or any substantially similar losses, damages,
liabilities, costs or expenses arising from the sale of such Registrable Stock).
(c) Promptly after receipt by a party indemnified
pursuant to the provisions of paragraph (a) or (b) of this Section 6.4 of notice
of the commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of paragraph (a)
or (b), notify the
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indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6.4 and shall not
relieve the indemnifying party from liability under this Section 6.4 except to
the extent that such indemnifying party is materially prejudiced by such
omission. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party pursuant to the provisions of such paragraph
(a) or (b) for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided however that an indemnified party (together
with all other indemnified parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. No indemnifying party shall be liable to an
indemnified party for any settlement of any action or claim without the consent
of the indemnifying party which consent shall not be unreasonably withheld. No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a complete and
unconditional release from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in subsection
(a) or (b) of this Section 6.4 is held by a court of competent jurisdiction to
be unavailable to a party to be indemnified with respect to any claims, actions,
demands, losses, damages, liabilities, costs or expenses referred to therein,
then each indemnifying party under any such subsection, in lieu of indemnifying
such indemnified party thereunder, hereby agrees to contribute to the amount
paid or payable by such indemnified party as a result of such claims, actions,
demands, losses, damages, liabilities, costs or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions which resulted in such claims, actions, demands, losses,
damages, liabilities, costs or expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Investor and the Company agree that it would
not be just or equitable if contribution pursuant to this Subsection 6.4(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the preceding
two sentences. Notwithstanding the other provisions of this Section 6.4(d), the
amount Investor shall be obligated to contribute pursuant to this subsection (d)
shall be limited to an amount equal to the net per share sale price multiplied
by the number of shares of Registrable Stock sold by Investor pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which Investor has otherwise been required
to pay in respect of such claim, action, demand, loss, damage, liability, cost
or expense or any substantially similar claim, action, demand, loss, damage,
liability, cost or expense arising from the sale of such Registrable Stock). No
person
-15-
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution hereunder from any person
who was not guilty of such fraudulent misrepresentation.
6.5 REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT. The Company
shall timely file such information, documents and reports as the SEC may require
or prescribe under Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Company acknowledges and agrees that the
purposes of the requirements contained in this Section 6.5 are (a) to enable
Investor to comply with the current public information requirement contained in
paragraph (c) of Rule 144 should Investor ever wish to dispose of any of the
Registrable Stock without registration under the Securities Act in reliance upon
Rule 144 (or any other similar exemptive provision) and (b) to qualify the
Company for the use of registration statements on Form S-3.
6.6 INVESTOR INFORMATION. The Company may require Investor to
furnish the Company such information with respect to Investor and the
distribution of the Registrable Stock as the Company may from time to time
reasonably request in writing as shall be required by law or by the SEC in
connection therewith.
6.7 NASDAQ LISTING. The Company shall, as soon as practicable
following the first date it is eligible for listing on the Nasdaq Stock Market,
prepare and file an application for such listing and use commercially reasonable
efforts to obtain such listing as soon as practicable.
7. OTHER COVENANTS OF THE COMPANY
7.1 REMUNERATION TO SHAREHOLDERS. The Company shall not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise to any Investor or
other shareholder of the Company as consideration for or as an inducement to
entering into by any Investor or other shareholder of the Company of any waiver
or amendment of any of the terms and provisions of this Agreement or the
Certificate of Incorporation which affects Investor's rights, unless such
remuneration is concurrently paid, on the same terms, ratably to Investor
provided Investor grants such waiver or agrees to such amendment, as applicable.
7.2 INVESTMENT COMPANY STATUS. The Company shall not become an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the 1940 Act. In the event the Company breaches the
foregoing, the Company shall forthwith notify the Investors and shall take
immediate corrective action to remedy such breach.
8. MISCELLANEOUS.
8.1 ENTIRE AGREEMENT. This Agreement, the Exhibits hereto, and
the documents referred to herein constitute the full and entire understanding
and agreement between the parties and no party shall be liable or bound to any
to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.
8.2 SURVIVAL OF WARRANTIES; INDEMNIFICATION. Unless otherwise
set forth in this Agreement, the warranties, representations and agreements of
the Company and the Investor contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall in no way
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be affected by any investigation of the subject matter thereof made by or on
behalf of Investor or the Company.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including permitted transferees of any Shares sold hereunder). Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
8.4 GOVERNING LAW; JURISDICTION AND VENUE; ATTORNEY'S FEES.
This Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed by and construed under the
laws of the State of California without reference to principles of conflicts of
laws. If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorney's and expert witness fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
8.5 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
8.6 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.7 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
overnight courier or five days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified (a) if to the Company, at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx
Xxxx, Xxxxxxxxxx 00000, or (b) if to Investor, at the address indicated for
Investor on Exhibit A hereto, or at such address as such party may designate by
ten days advance written notice to the other party.
8.8 FINDERS' FEES. Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' fee to any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which Investor or any of its officers, partners, employees or
representatives is responsible. The Company agrees to indemnify and hold
harmless Investor from any liability for any commission or compensation in the
nature of a finders' fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company or any of its officers, employees or representatives is
responsible. The Company and the Investor each acknowledge and agree that
Xxxxxxx is entitled to the compensation payable by the Company with respect to
the purchase of the Shares as set forth in the Private Placement Memorandum and
that Xxxxxxx has not acted as an "underwriter," as that term is defined in the
Securities Act, with respect to the Shares.
-17-
8.9 EXPENSES. Irrespective of whether the Closing is effected,
subject to the provisions of Section 6, the Company and Investor shall each pay
all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement.
8.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investor. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any securities purchased under this Agreement that are then
outstanding (including securities into which such securities have been
converted), each future holder of such securities (unless such securities are
sold in a public offering), and the Company.
8.11 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and the balance of the
Agreement shall be enforceable in accordance with its terms.
8.12 INFORMATION CONFIDENTIAL. Investor acknowledges that the
information received by it pursuant hereto is confidential and for Investor's
use only, and it will refrain from using such information or reproducing,
disclosing, or disseminating such information to any other person other than (i)
Investor's board of directors, investment advisers, attorneys, accountants,
consultants and other professionals to the extent necessary to obtain their
services in connection with Investor's investment in the Company, provided that
such persons agree to hold such information confidential as provided in this
section, (ii) to any prospective Investor of any shares of the Company owned by
Investor as long as such prospective Investor agrees in writing to be bound by
the confidentiality provisions as provided in this section, (iii) to any of
Investor's affiliates, provided that such affiliates agree to hold such
information confidential as provided in this section, or (iv) as required by
applicable law or regulation, regulatory body, stock exchange, court or
administrative order, or any listing or trading agreement concerning Investor or
the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
COMPANY:
XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx Xxxxx,
Chief Executive Officer and President
INVESTOR:
By:
-----------------------------------------
Printed Name:
-------------------------------
Title:
--------------------------------------
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EXHIBIT A
INVESTORS
NUMBER OF PURCHASE PRICE
NAME AND ADDRESS SHARES ($)
----------------------------------------- ------------- --------------
Seligman New Technologies Fund, Inc. 1,687,500 $2,700,000
c/o J&W Xxxxxxxx Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Seligman Investment Opportunities (Master) 187,500 300,000
Fund-NTV Portfolio
c/o J&W Xxxxxxxx Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wallington Investments Ltd. 625,000 1,000,000
c/o Nomina Financial Services, Ltd.
Xxxxxxxxxxxxxx 0
X.X. Xxx 000
XX-0000 Xxxxxx Xxxxxxxxxxx
Oakwood Holdings Ltd. 625,000 1,000,000
c/o Nomina Financial Services, Ltd.
Xxxxxxxxxxxxxx 0
X.X. Xxx 000
XX-0000 Xxxxxx Xxxxxxxxxxx
Manasa Corporation 187,500 300,000
c/o V. & X. Xxxx
P.O. Box 165726
Achrafieh, Beirut, Lebanon
UT Technology Partners LDC 250,000 400,000
c/o Xxxxxxxxx Xxxxx Capital
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
UT Capital Partners International LDC 62,500 100,000
c/o Xxxxxxxxx Xxxxx Capital
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Cazenove Nominees Limited 150,000 240,000
00 Xxxxxxxxxx Xxxx
Xxxxxx XX0X 0XX Xxxxxxx
Xxxxxxx and S. Bleichroeder, Inc. 625,000 1,000,000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx & Company, Inc. 417,750 668,400
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Growth Fund 156,250 250,000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lord Gavron 26,250 42,000
c/o Mercury Asset Management Ltd.
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Xxxx Xxxxx 31,625 50,600
00000 Xxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
------------- --------------
TOTALS 5,031,875 $8,051,000
------------- --------------
------------- --------------
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