PURCHASE AGREEMENT
Exhibit 99.1
THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 29th day of June, 2007 by
and among PlanetOut Inc., a Delaware corporation (the “Company”), and the Investors set forth on
the signature pages affixed hereto (each an “Investor” and collectively the “Investors”).
Recitals
A. The Company and the Investors are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by the provisions of Regulation D (“Regulation
D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended; and
B. The Investors wish to purchase from the Company, and the Company wishes to sell and issue
to the Investors, upon the terms and conditions stated in this Agreement, an aggregate of up to
22,782,609 shares (the “Shares”) of the Company’s Common Stock, par value $0.001 per share
(together with any securities into which the Shares may be reclassified the “Common Stock”), at
purchase price of $1.15 per share (prior to giving effect to the Reverse Split, as defined below);
and
C. Contemporaneous with the sale of the Shares, the parties hereto will execute and deliver a
Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration
Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder,
and applicable state securities laws.
In consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Affiliate” means, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries Controls, is controlled by, or is under common
control with, such Person.
“Amendment and Waiver Agreement” means the agreement of forbearance, amendment and
waiver among the Company and the holders of the ORIX Debt, substantially in the form attached
hereto as Exhibit B, pursuant to which the holders of the ORIX Debt forbear
from declaring any event of default or exercising any remedies under the terms of the ORIX Debt.
“Business Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.
“Collateral” has the meaning set forth in Section 6.3(e).
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock, including without
limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any
time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.
“Company’s Knowledge” means the actual knowledge of the executive officers (as defined
in Rule 405 under the 0000 Xxx) of the Company, after due inquiry.
“Confidential Information” means trade secrets, confidential information and know-how
(including but not limited to ideas, formulae, compositions, processes, procedures and techniques,
research and development information, computer program code, performance specifications, support
documentation, drawings, specifications, designs, business and marketing plans, and customer and
supplier lists and related information).
“Control” (including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
“D&O Lock-Up Agreements” mean agreements by each director and executive officer of the
Company listed on Exhibit C attached hereto, in substantially the form attached hereto as
Exhibit D, pursuant to which such persons shall agree not to sell or otherwise dispose of
shares of the Company’s Common Stock directly or indirectly for a period commencing on the date
hereof and ending on the Effective Date.
“Effective Date” means the date on which the Registration Statement is declared
effective by the SEC.
“Effectiveness Deadline” means the date on which the Registration Statement is
required to be declared effective by the SEC under the terms of the Registration Rights Agreement.
“Indebtedness” means any liability or obligation (i) for borrowed money, (ii)
evidenced by bonds, debentures, notes, or other similar instruments, (iii) in respect of letters of
credit or other similar instruments (or reimbursement obligations with respect thereto), except
letters of credit or other similar instruments issued to secure payment of trade payables or
obligations in respect of workers’ compensation, unemployment insurance and other social
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security laws or regulation, all arising in the ordinary course of business consistent with past
practices, (iv) to pay the deferred purchase price of property or services, except trade payables
arising in the ordinary course of business consistent with past practices, (v) as lessee under
capitalized leases, (vi) secured by a lien, claim, charge, security interest, mortgage or other
encumbrance on any asset of the Company or a Subsidiary, whether or not such obligation is assumed
by the Company or such Subsidiary.
“Intellectual Property” means all of the following: (i) patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not reduced to
practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos,
slogans and Internet domain names, together with all goodwill associated with each of the
foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals
for any of the foregoing; and (v) proprietary computer software (including but not limited to data,
data bases and documentation).
“LPI Debt” means all Indebtedness (together with any accrued and unpaid interest due
thereon) of the Company and its Subsidiaries represented by those certain 10% Promissory Notes in
the aggregate principal amount of $7,074,521, dated November 8, 2005 and payable to Lipo
Liquidating Corp. (f/k/a “LPI Media, Inc”) and Speco Liquidating Corp. (f/k/a “SpecPub, Inc.”).
“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise), business, or prospects of
the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
its obligations under the Transaction Documents.
“Nasdaq” means The Nasdaq Global Market.
“ORIX Debt” means all Indebtedness (together with any accrued and unpaid interest due
thereon) of the Company and its Subsidiaries pursuant to the Loan and Security Agreement, dated
September 28, 2006 (as amended as of the date hereof), by and between the Company and ORIX Venture
Finance, LLC.
“Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.
“Proposal” has the meaning set forth in Section 7.9.
“Purchase Price” means Twenty-Six Million Two Hundred Thousand Dollars ($26,200,000).
“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.
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“Reverse Split” means a reverse split of the Common Stock of not less than
one-for-five and not more than one-for-20 which does not reduce the number of shares of Common
Stock that the Company is authorized to issue.
“SEC Filings” has the meaning set forth in Section 4.6.
“Secured Debt” means, collectively, the LPI Debt and the ORIX Debt.
“SpecPub Business” means the business currently operated by the Company’s Subsidiary,
SpecPub, Inc. and certain similar aspects of the business currently operated through the Company’s
web site, Xxxxxxxxxxxx.xxx, which businesses constitute all of the Company’s lines of business
which produce or sell materials which are adult in nature, sexually explicit or unsuitable for
minors.
“Subsidiary” of any specified Person (for purposes hereof, the “Parent”) means any
other Person, a majority of whose outstanding voting securities or other voting interests
(including voting partnership interests) or, if there are no such voting securities or interests, a
majority of such Person’s outstanding equity interests, are owned, directly or indirectly, by the
Parent.
“Transaction Documents” means this Agreement and the Registration Rights Agreement.
“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date, each of the Investors shall severally, and not jointly, purchase,
and the Company shall sell and issue to the Investors, the Shares in the respective amounts set
forth opposite the Investors’ names on the signature pages attached hereto in exchange for the
Purchase Price as specified in Section 3below.
3. Closing. Unless the Company shall have made other arrangements with a particular
Investor, upon confirmation that the other conditions to closing specified herein have been
satisfied or duly waived by the Investors, the Company shall deliver to Xxxxxxxxxx Xxxxxxx PC, in
trust, a certificate or certificates, registered in such name or names as the Investors may
designate, representing the Shares, with instructions that such certificates are to be held for
release to the Investors only upon payment in full of the Purchase Price to the Company by all the
Investors. Upon such receipt by Xxxxxxxxxx Xxxxxxx PC of the certificates, each Investor shall
promptly, but no more than one Business Day thereafter, cause a wire transfer in same day funds to
be sent to the account of the Company as instructed in writing by the Company, in an amount
representing such Investor’s pro rata portion of the Purchase Price as set forth on the signature
pages to this Agreement. On the date (the “Closing Date”) the Company receives in
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full the Purchase Price, the certificates evidencing the Shares shall be released to the Investors
(the “Closing”). The Closing shall take place at the offices of Xxxxxxxxxx Xxxxxxx PC, 1251 Avenue
of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other location and on such other
date as the Company and the Investors shall mutually agree.
4. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Investors that, except as set forth in the schedules delivered herewith
(collectively, the “Disclosure Schedules”):
4. 1 Organization, Good Standing and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify has not had and
could not reasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are
listed on Schedule 4.1 hereto.
4.2 Authorization. The Company has full power and authority and, except for approval
of the Proposal by its stockholders and the filing and mailing of related proxy materials as
contemplated in Section 7.9, the filing of the Registration Statement as required under the
Registration Rights Agreement and the filing of a Certificate of Amendment to the Company’s Amended
and Restated Certificate of Incorporation with the Secretary of State of Delaware to effect the
Reverse Split, has taken all requisite action on the part of the Company, its officers, directors
and stockholders necessary for (i) the authorization, execution and delivery of the Transaction
Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or
thereunder, (iii) the authorization, issuance (or reservation for issuance) and delivery of the
Shares and (iv) the consummation of the Reverse Split. The Transaction Documents constitute the
legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting creditors’ rights
generally.
4.3 Capitalization. Schedule 4.3 sets forth as of the date hereof (a) the
authorized capital stock of the Company; (b) the number of shares of capital stock issued and
outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock
plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to
securities (other than the Shares) exercisable for, or convertible into or exchangeable for any
shares of capital stock of the Company. All of the issued and outstanding shares of the Company’s
capital stock have been duly authorized and validly issued and are fully paid, nonassessable and
free of pre-emptive rights and were issued in full compliance with applicable state and federal
securities law and any rights of third parties. Except as described on Schedule 4.3, all
of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in
full compliance with applicable state and federal securities law and any rights of
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third parties and are owned by the Company, beneficially and of record, subject to no lien,
encumbrance or other adverse claim. Except as described on Schedule 4.3, no Person is
entitled to pre-emptive or similar statutory or contractual rights with respect to any securities
of the Company. Except as described on Schedule 4.3, there are no outstanding warrants,
options, convertible securities or other rights, agreements or arrangements of any character under
which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities
of any kind and except as contemplated by this Agreement, neither the Company nor any of its
Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind.
Except as described on Schedule 4.3 and except for the Registration Rights Agreement, there
are no voting agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them. Except as described on Schedule
4.3 and except as provided in the Registration Rights Agreement, no Person has the right to
require the Company to register any securities of the Company under the 1933 Act, whether on a
demand basis or in connection with the registration of securities of the Company for its own
account or for the account of any other Person.
Except as described on Schedule 4.3, the issuance and sale of the Shares hereunder
will not obligate the Company to issue shares of Common Stock or other securities to any other
Person (other than the Investors) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.
Except as described in the SEC Filings (as defined below), the Company does not have
outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect
giving any Person the right to purchase any equity interest in the Company upon the occurrence of
certain events.
4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issued
and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and
shall be free and clear of all encumbrances and restrictions (other than those created by the
Investors), except for restrictions on transfer set forth in the Transaction Documents or imposed
by applicable securities laws.
4.5 Consents. Except for approval of the Proposal by its stockholders and the filing
and mailing of related proxy materials as contemplated in Section 7.9 and the filing with the
Delaware Secretary of State of a Certificate of Amendment to the Company’s Amended and Restated
Certificate of Incorporation to effectuate the Reverse Split, the execution, delivery and
performance by the Company of the Transaction Documents and the offer, issuance and sale of the
Shares require no consent of, action by or in respect of, or filing with, any Person, governmental
body, agency, or official other than (i) approvals required to be obtained from Nasdaq, which shall
be obtained and shall be in full force and effect prior to the Closing Date, and (ii) filings that
have been made pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to file within the
applicable time periods. Subject to the accuracy of the representations and warranties of each
Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i)
the issuance and sale of the Shares and (ii) the other transactions
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contemplated by the Transaction Documents from the provisions of any stockholder rights plan or
other “poison pill” arrangement, any anti-takeover, business combination or control share law or
statute binding on the Company or to which the Company or any of its assets and properties may be
subject and any provision of the Company’s Amended and Restated Certificate of Incorporation or
Amended and Restated Bylaws that is or could reasonably be expected to become applicable to the
Investors as a result of the transactions contemplated hereby, including without limitation, the
issuance of the Shares and the ownership, disposition or voting of the Shares by the Investors or
the exercise of any right granted to the Investors pursuant to this Agreement or the other
Transaction Documents.
4.6 Delivery of SEC Filings; Business. The Company has made available to the
Investors through the XXXXX system, true and complete copies of the Company’s most recent Annual
Report on Form 10-K for the fiscal year ended December 31, 2006 (the “10-K”), and all other reports
filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date
hereof (collectively, the “SEC Filings”). The SEC Filings are the only filings required of the
Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in
all material respects only in the business described in the SEC Filings.
4.7 [Reserved]
4.8 No Material Adverse Change. Since December 31, 2006, except for the Reverse Split
and except as identified and described in the SEC Filings or as described on Schedule 4.8,
there has not been:
(i) any change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included in the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, except for changes in the
ordinary course of business which have not had and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;
(ii) any declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or repurchase of any
securities of the Company;
(iii) any material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;
(iv) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a
material right or of a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of business and which is
not material to the assets, properties, financial condition, operating results or business of the
Company and its Subsidiaries taken as a whole;
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(vi) any change or amendment to the Company’s Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws, or material change to any material contract or
arrangement by which the Company or any Subsidiary is bound or to which any of their respective
assets or properties is subject;
(vii) any material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;
(viii) any material transaction entered into by the Company or a Subsidiary other than in the
ordinary course of business;
(ix) the loss of the services of any key employee, or material change in the composition or
duties of the senior management of the Company or any Subsidiary;
(x) the loss or threatened loss of any customer which has had or could reasonably be expected
to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has had or could reasonably be
expected to have a Material Adverse Effect.
4.9 SEC Filings; S-3 Eligibility.
(a) At the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment thereto filed by the Company since January
1, 2004 pursuant to the 1933 Act and the rules and regulations thereunder, as of the date such
statement or amendment became effective, complied as to form in all material respects with the 1933
Act and did not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made therein not
misleading; and each prospectus filed pursuant to Rule 424(b) under the 1933 Act, as of its issue
date and as of the closing of any sale of securities pursuant thereto did not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
(c) The Company is eligible to use Form S-3 to register the Registrable Securities (as such
term is defined in the Registration Rights Agreement) for resale by the Investors as contemplated
by the Registration Rights Agreement, according to the eligibility requirements for the use of Form
S-3 in transactions involving secondary offerings as set forth in General Instructions I.A and
II.B.3 of Form S-3; provided, however that the Company makes no representation or warranty as to
whether such registration will be deemed by
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the SEC to qualify as a secondary offering under Rule 415(a)(1)(i) promulgated under the 1933 Act.
4.10 No Conflict, Breach, Violation or Default. Subject to the approval of the
Proposal by its stockholders as contemplated in Section 7.9, the execution, delivery and
performance of the Transaction Documents by the Company and the issuance and sale of the Shares
will not conflict with or result in a breach or violation of any of the terms and provisions of, or
constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation or
the Company’s Amended and Restated Bylaws, both as in effect on the date hereof (true and complete
copies of which have been made available to the Investors through the XXXXX system), or (ii)(a) any
statute, rule, regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or
properties, or (b) except as described in Schedule 4.10, any material agreement or
instrument to which the Company or any Subsidiary is a party or by which the Company or a
Subsidiary is bound or to which any of their respective assets or properties is subject.
4.11 Tax Matters. The Company and each Subsidiary has timely prepared and filed all
material tax returns required to have been filed by the Company or such Subsidiary with all
appropriate governmental agencies and timely paid all taxes shown thereon as owed by it. The
charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material unpaid assessments against
the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any federal, state or
local taxing authority except for any assessment which is not material to the Company and its
Subsidiaries, taken as a whole. All material taxes and other assessments and levies that the
Company or any Subsidiary is required to withhold or to collect for payment have been duly withheld
and collected and paid to the proper governmental entity or third party when due. There are no tax
liens or claims pending or, to the Company’s Knowledge, threatened against the Company or any
Subsidiary or any of their respective assets or property. There are no outstanding tax sharing
agreements or other such arrangements between the Company and any Subsidiary or other corporation
or entity.
4.12 Title to Properties. Except as disclosed in the SEC Filings, each of the Company
and its Subsidiaries has good and marketable title to all real properties and all other properties
and assets owned by it, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use made or currently planned
to be made thereof by them; and except as disclosed in the SEC Filings, the Company and each
Subsidiary holds any leased real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or currently planned to be made
thereof by them.
4.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess
adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or modification of
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any such certificate, authority or permit that, if determined adversely to the Company or such
Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.
4.14 Labor Matters.
(a) The Company is not a party to or bound by any collective bargaining agreements or other
agreements with labor organizations. The Company has not violated in any material respect any
laws, regulations, orders or contract terms, affecting the collective bargaining rights of
employees, labor organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and
hours.
(b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other
disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions
for election pending or, to the Company’s Knowledge, threatened before the National Labor Relations
Board or any other federal, state or local labor commission relating to the Company’s employees,
(iii) no demand for recognition or certification heretofore made by any labor organization or group
of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the
Company enjoys good labor and employee relations with its employees and labor organizations.
(c) The Company is, and at all times has been, in compliance in all material respects with all
applicable laws respecting employment (including laws relating to classification of employees and
independent contractors) and employment practices, terms and conditions of employment, wages and
hours, and immigration and naturalization. There are no claims pending against the Company before
the Equal Employment Opportunity Commission or any other administrative body or in any court
asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of
1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance
barring discrimination in employment.
(d) Except as disclosed in the SEC Filings or as described on Schedule 4.14, the
Company is not a party to, or bound by, any employment or other contract or agreement that contains
any severance, termination pay or change of control liability or obligation, including, without
limitation, any “excess parachute payment,” as defined in Section 280G(b) of the Internal Revenue
Code.
(e) To the Company’s Knowledge, except as specified in Schedule 4.14, each of the
Company’s employees in the United States is a Person who is either a United States citizen or a
permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company
has no liability for the improper classification by the Company of such employees as independent
contractors or leased employees prior to the Closing.
4.15 Intellectual Property.
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(a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance
in all material respects with all legal requirements (including timely filings, proofs and payments
of fees) and is valid and enforceable. No Intellectual Property of the Company or its Subsidiaries
which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses
as currently conducted has been or is now involved in any cancellation, dispute or litigation, and,
to the Company’s Knowledge, no such action is threatened. No patent of the Company or its
Subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition
proceeding.
(b) All of the licenses and sublicenses and consent, royalty or other agreements concerning
Intellectual Property which are necessary for the conduct of the Company’s and each of its
Subsidiaries’ respective businesses as currently conducted to which the Company or any Subsidiary
is a party or by which any of their assets are bound (other than generally commercially available,
non-custom, off-the-shelf software application programs having a retail acquisition price of less
than $10,000 per license) (collectively, “License Agreements”) are valid and binding obligations of
the Company or its Subsidiaries that are parties thereto and, to the Company’s Knowledge, the other
parties thereto, enforceable in accordance with their terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws affecting the enforcement of creditors’ rights generally, and, to the
Company’s Knowledge, there exists no event or condition which will result in a material violation
or breach of or constitute (with or without due notice or lapse of time or both) a default by the
Company or any of its Subsidiaries under any such License Agreement.
(c) The Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and each of its
Subsidiaries’ respective businesses as currently conducted and for the ownership, maintenance and
operation of the Company’s and its Subsidiaries’ properties and assets, free and clear of all
liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property
and Confidential Information, other than licenses entered into in the ordinary course of the
Company’s and its Subsidiaries’ businesses and other than security interests granted to secure the
Secured Debt. The Company and its Subsidiaries have a valid and enforceable right to use all third
party Intellectual Property and Confidential Information used or held for use in the respective
businesses of the Company and its Subsidiaries, except where failure to have such rights has not
and could not reasonably be expected to have a Material Adverse Effect.
(d) To the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’ businesses
as currently conducted does not infringe or otherwise impair or conflict with (collectively,
“Infringe”) any valid Intellectual Property rights of any third party or any confidentiality
obligation owed to a third party, and, to the Company’s Knowledge, the Intellectual Property and
Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently conducted are not being
Infringed by any third party. There is no litigation or order pending or outstanding or, to the
Company’s Knowledge, threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any
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Intellectual Property or Confidential Information of the Company and its Subsidiaries and the
Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential Information owned
by a third party, and, to the Company’s Knowledge, there is no valid basis for the same.
(e) The consummation of the transactions contemplated hereby and by the other Transaction
Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or
any of its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential
Information which is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted.
(f) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and
its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each
employee, consultant and contractor who has had access to Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted has executed an agreement to maintain the confidentiality of such Confidential
Information and has executed appropriate agreements that are substantially consistent with the
Company’s standard forms thereof. Except under confidentiality obligations, to the Company’s
Knowledge, there has been no material disclosure of any of the Company’s or its Subsidiaries’
Confidential Information to any third party.
4.16 Environmental Matters. Neither the Company nor any Subsidiary is in violation of
any statute, rule, regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), to the Company’s Knowledge, owns or operates
any real property contaminated with any substance that is subject to any Environmental Laws, is
liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject
to any claim relating to any Environmental Laws, which violation, contamination, liability or claim
has had or could reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to the Company’s Knowledge, threatened investigation that
might lead to such a claim.
4.17 Litigation. Except as described in the SEC Filings, there are no pending
material actions, suits or proceedings against or affecting the Company, its Subsidiaries or any of
its or their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are
threatened or contemplated. Neither the Company nor any Subsidiary, nor any director or executive
officer thereof, is or since January 1, 2002 has been the subject of any action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the Company’s Knowledge, there is not pending or
contemplated, any investigation by the SEC involving the Company or any current or former director
or officer of the Company. The SEC has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary under the 1933
Act or the 1934 Act.
4.18 Financial Statements. The financial statements included in each SEC Filing
present fairly, in all material respects, the consolidated financial position of the Company
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as of the dates shown and its consolidated results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis (“GAAP”) (except as may be disclosed
therein or in the notes thereto, and, in the case of quarterly financial statements, as permitted
by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof or as described on Schedule
4.18, neither the Company nor any of its Subsidiaries has incurred any liabilities, contingent
or otherwise, except those incurred in the ordinary course of business, consistent (as to amount
and nature) with past practices since the date of such financial statements, none of which,
individually or in the aggregate, have had or could reasonably be expected to have a Material
Adverse Effect.
4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and
effect insurance coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each Subsidiary, and the Company
reasonably believes such insurance coverage to be adequate against all liabilities, claims and
risks against which it is customary for comparably situated companies to insure. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant increase in cost.
4.20 Compliance with Nasdaq Continued Listing Requirements. The Company is in
compliance with applicable Nasdaq continued listing requirements. Except as described in
Schedule 4.20, there are no proceedings pending or, to the Company’s Knowledge, threatened
against the Company relating to the continued listing of the Common Stock on Nasdaq and the Company
has not received any notice of, nor to the Company’s Knowledge is there any basis for, the
delisting of the Common Stock from Nasdaq.
4.21 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to
any agreement, arrangement or understanding entered into by or on behalf of the Company, other than
as described in Schedule 4.21.
4.22 No Directed Selling Efforts or General Solicitation. Neither the Company nor any
Person acting on its behalf has conducted any general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offer or sale of any of the Shares.
4.23 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any
Company security or solicited any offers to buy any security, under circumstances that would
adversely affect reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the Shares under the 1933
Act.
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4.24 Private Placement. Assuming the accuracy of the Investors’ representations and
warranties in Section 5, the offer and sale of the Shares to the Investors as contemplated hereby
is exempt from the registration requirements of the 1933 Act and applicable state securities laws.
4.25 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to
the Company’s Knowledge, any of their respective current or former stockholders, directors,
officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has
on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect unlawful payments to any
governmental officials or employees from corporate funds; (c) established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious
entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment of any nature; provided,
however that the Investors acknowledge and agree that the foregoing representations are made
without inquiry by the executive officers of the Company of any of the former stockholders of the
Company.
4.26 Transactions with Affiliates. Except as disclosed in the SEC Filings, none of
the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of
the Company is presently a party to any transaction with the Company or any Subsidiary (other than
as holders of stock options and/or warrants, and for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the Company’s
Knowledge, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
4.27 Internal Controls. The Company is in material compliance with the provisions of
the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to the Company. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company has established disclosure
controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material information relating to
the Company, including the Subsidiaries, is made known to the certifying officers by others within
those entities, particularly during the period in which the Company’s most recently filed periodic
report under the 1934 Act, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of
the period covered by
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the most recently filed periodic report under the 1934 Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the 1934 Act the conclusions of
the certifying officers about the effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined in Item 308 of
Regulation S-K) or, to the Company’s Knowledge, in other factors that could significantly affect
the Company’s internal controls. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with GAAP and the applicable
requirements of the 0000 Xxx.
4.28 Disclosures. Except pursuant to non-disclosure agreements entered into between
the Company and each Investor to whom such disclosures have been made, neither the Company nor any
Person acting on its behalf has provided the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public information, other than the
terms of the transactions contemplated hereby.
4.29 Stock Options. With respect to stock options issued pursuant to the Company’s
equity incentive plan(s) (i) each stock option designated by the Company at the time of grant as an
“incentive stock option” under Section 422 of the Internal Revenue Code so qualifies, (ii) except
as disclosed in the SEC Filings, including the financial statements included therein, each grant of
a stock option was duly authorized no later than the date on which the grant of such stock option
was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including,
as applicable, approval by the board of directors of the Company (or a duly constituted and
authorized committee thereof) and any required stockholder approval by the necessary number of
votes or written consents, (iii) each such grant was made in accordance with the material terms of
an equity incentive plan, the 1933 Act and all other applicable laws and regulatory rules or
requirements, and (iv) each such grant was or has now been properly accounted for in accordance
with GAAP in the financial statements (including the related notes) of the Company and disclosed in
the Company’s filings with the SEC in accordance with the 1934 Act and all other applicable laws,
except, in the cases of clauses (i), (ii), (iii) and (iv), for any such failure, violation or
default that would not be material to the Company and its subsidiaries taken as a whole.
4.30 No Disagreements with Accountants. There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between the Company and the
independent registered public accounting firm formerly or presently employed by the Company and the
Company is current with respect to any fees owed to such accounting firm.
4.31 Sufficiency of Cash. Based on the financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of
the Shares hereunder, the Company reasonably expects to have sufficient cash on hand to pay all of
its currently foreseeable expenses for at least the next 12 months.
5. Representations and Warranties of the Investors. Except as set forth in Section
5.12, as to which such representations and warranties are made only by Xxxxx & Company LLC,
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each of the Investors hereby severally, and not jointly, represents and warrants to the Company
that:
5.1 Organization and Existence. Such Investor is a validly existing corporation,
limited partnership or limited liability company and has all requisite corporate, partnership or
limited liability company power and authority to invest in the Shares pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by such Investor of the
Transaction Documents to which such Investor is a party have been duly authorized and will each
constitute the valid and legally binding obligation of such Investor, enforceable against such
Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability, relating to or
affecting creditors’ rights generally.
5.3 Purchase Entirely for Own Account. The Shares to be received by such Investor
hereunder will be acquired for such Investor’s own account or for the account of its investment
advisory clients, not as nominee or agent, and not with a view to the resale or distribution of any
part thereof in violation of the 1933 Act, and such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same in violation of the 1933 Act
without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of
all or any part of such Shares in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the
Shares for any period of time. Such Investor (other than Xxxxx & Company LLC) is not a
broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that
would require it to be so registered.
5.4 Investment Experience. Such Investor acknowledges that it can bear the economic
risk and complete loss of its investment in the Shares and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby.
5.5 Disclosure of Information. Such Investor has had an opportunity to receive all
information related to the Company requested by it and to ask questions of and receive answers from
the Company regarding the Company, its business and the terms and conditions of the offering of the
Shares. Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries
nor any other due diligence investigation conducted by such Investor shall modify, limit or
otherwise affect such Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement.
5.6 Restricted Securities. Such Investor understands that the Shares are
characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without registration under the
1933 Act only in certain limited circumstances.
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5.7 Legends. It is understood that, except as provided below, certificates evidencing
the Shares may bear the following or any similar legend:
(a) “The securities represented hereby may not be transferred unless (i) such securities have
been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities
may be sold pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel
reasonably satisfactory to it that such transfer may lawfully be made without registration under
the Securities Act of 1933 or qualification under applicable state securities laws.”
(b) If required by the authorities of any state in connection with the issuance of sale of the
Shares, the legend required by such state authority.
5.8 Accredited Investor. Such Investor is an accredited investor as defined in Rule
501(a) of Regulation D, as amended, under the 0000 Xxx.
5.9 No General Solicitation. Such Investor did not learn of the investment in the
Shares as a result of any general solicitation or general advertising.
5.10 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to
any agreement, arrangement or understanding entered into by or on behalf of such Investor.
5.11 Prohibited Transactions. Since the earlier of (a) such time when such Investor
was first contacted by the Company or any other Person acting on behalf of the Company regarding
the transactions contemplated hereby or (b) thirty (30) days prior to the date hereof, neither such
Investor nor any Affiliate of such Investor which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Investor’s investments or
trading or information concerning such Investor’s investments, including in respect of the Shares,
or (z) is subject to such Investor’s review or input concerning such Affiliate’s investments or
trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to
effect any short sale, whether or not against the box, established any “put equivalent position”
(as defined in Rule 16a-1(h) under the 0000 Xxx) with respect to the Common Stock, granted any
other right (including, without limitation, any put or call option) with respect to the Common
Stock or with respect to any security that includes, relates to or derived any significant part of
its value from the Common Stock or otherwise sought to hedge its position in the Shares (each, a
“Prohibited Transaction”). Prior to the earliest to occur of (i) the termination of this
Agreement, (ii) the Effective Date or (iii) the Effectiveness Deadline, such Investor shall not,
and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited
Transaction. Such Investor acknowledges that the representations, warranties and covenants
contained in this Section 5.11 are being made for the benefit of the Investors as well as the
Company and that each of the other Investors shall have an independent right to assert any claims
against such Investor arising out of any breach or violation of the provisions of this Section
5.11.
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5.12. Certain Representation Regarding Xxxxx & Company LLC and its Affiliates. Xxxxx
& Company LLC is a registered broker-dealer under the 1934 Act. The Persons listed on Schedule
5.12 are Affiliates or employees of Xxxxx & Company LLC The Shares purchased by such Investors
are being purchased by them in the ordinary course of their respective businesses. Such Investors
have no agreements or understandings, directly or indirectly, with any Person to distribute any
Shares.
6. Conditions to Closing.
6.1 Conditions to the Investors’ Obligations. The obligation of each Investor to
purchase the Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction,
on or prior to the Closing Date, of the following conditions, any of which may be waived by such
Investor (as to itself only):
(a) The representations and warranties made by the Company in Section 4 hereof qualified as to
materiality shall be true and correct at all times prior to and on the Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and correct as of such earlier date, and, the
representations and warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly speaks as of an
earlier date, in which case such representation or warranty shall be true and correct in all
material respects as of such earlier date. The Company shall have performed in all material
respects all obligations and covenants herein required to be performed by it on or prior to the
Closing Date.
(b) The Company shall have obtained any and all consents, permits, approvals, registrations
and waivers necessary or appropriate for consummation of the purchase and sale of the Shares and
the consummation of the other transactions contemplated by the Transaction Documents to be
consummated on or prior to the Closing Date, all of which shall be in full force and effect.
(c) The Company shall have executed and delivered the Registration Rights Agreement.
(d) The Company shall have received confirmation from Nasdaq to the effect that the Shares
have been approved for inclusion in The Nasdaq Global Market upon official notice of issuance.
(e) The Company shall have delivered executed counterparts of the Amendment and Waiver
Agreement.
(f) No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have
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been instituted by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.
(g) The Company shall have delivered a Certificate, executed on behalf of the Company by its
Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to
the fulfillment of the conditions specified in subsections (a), (b), (d), (f) and (j) of this
Section 6.1.
(h) The Company shall have delivered a Certificate, executed on behalf of the Company by its
Secretary, dated as of the Closing Date, certifying (i) the resolutions adopted by the Board of
Directors of the Company (A) approving (1) the transactions contemplated by this Agreement and the
other Transaction Documents, (2) the issuance of the Shares, and (3) the Reverse Split and (B)
calling the Stockholders Meeting (as defined below), (ii) the current versions of the Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws of the Company and (iii) as
to the signatures and authority of persons signing the Transaction Documents and related documents
on behalf of the Company.
(i) The Investors shall have received an opinion from Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx &
Xxxxxx, A Professional Corporation, the Company’s counsel, dated as of the Closing Date, in form
and substance reasonably acceptable to the Investors and addressing such legal matters as the
Investors may reasonably request.
(j) No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any
other governmental or regulatory body with respect to public trading in the Common Stock.
(k) The Company shall have delivered to the Investors executed counterparts of D&O Lock-Up
Agreements between the Company and each of the Persons listed in Exhibit C.
(l) The Company shall have provided evidence reasonably satisfactory to the Investors that,
simultaneous with the Closing, the holders of the Secured Debt shall have delivered into escrow (i)
payoff letters evidencing full and complete satisfaction of the Secured Debt immediately upon
receipt by the Company’s lenders of the payment in full of Secured Debt as contemplated under
Section 7.15 hereof; (ii) executed termination statements on Form UCC-3 or other instruments in
form and substance reasonably satisfactory to the Investors terminating upon such satisfaction of
the Secured Debt any and all security interests in the assets of the Company and its Subsidiaries
securing the Secured Debt; and (iii) all items of collateral of the Company or its Subsidiaries
then in possession of such lenders or subject to their control securing the Secured Debt (the
“Collateral”); and the only condition to the release of such escrow shall be the payment in full of
the Secured Debt.
6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and
issue the Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on
or prior to the Closing Date of the following conditions, any of which may be waived by the
Company:
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(a) The representations and warranties made by the Investors in Section 5 hereof, other than
the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (such
enumerated representations and warranties, the “Investment Representations”), shall be true and
correct in all material respects when made, and shall be true and correct in all material respects
on the Closing Date with the same force and effect as if they had been made on and as of said date.
The Investment Representations shall be true and correct in all respects when made, and shall be
true and correct in all respects on the Closing Date with the same force and effect as if they had
been made on and as of said date. The Investors shall have performed in all material respects all
obligations and covenants herein required to be performed by them on or prior to the Closing Date.
(b) The Investors shall have executed and delivered the Registration Rights Agreement.
(c) The Investors shall have delivered the Purchase Price to the Company.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand, and the Investors, on the other hand, to
effect any Closing shall terminate as follows:
(i) Upon the mutual written consent of the Company and the Investors;
(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the Company;
(iii) By an Investor (with respect to itself only) if any of the conditions set forth in
Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the
Investor; or
(iv) By either the Company or any Investor (with respect to itself only) if the Closing has
not occurred on or prior to July 10, 2007;
provided, however, that, except in the case of clause (i) above, the party seeking to terminate its
obligation to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement or the other Transaction Documents
if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate
its obligation to effect the Closing.
(b) In the event of termination by any Investor of its obligations to effect the Closing
pursuant to this Section 6.3 (such Investor, a “Terminating Investor”), written notice thereof
shall forthwith be given by the Terminating Investor to the Company and the other
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Investors, and each other Investor shall have the right (but not the obligation) to purchase a pro
rata portion of the Terminating Investor’s allocated portion of the total number of Shares to be
acquired by all Investors under this Agreement (or such greater portion of the Terminated
Investor’s allocated portion of the Shares as otherwise agreed to among each of the other Investors
electing to purchase a portion of the Terminated Investor’s allocated portion of the Shares).
Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach
by such party of the terms and provisions of this Agreement or the other Transaction Documents or
to impair the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.
7. Covenants and Agreements of the Company.
7.1 Reports. The Company will furnish to the Investors and/or their assignees such
information relating to the Company and its Subsidiaries as from time to time may reasonably be
requested by the Investors and/or their assignees; provided, however, that the Company shall not
disclose material nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company identifies such
information as being material nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material nonpublic
information for review and any Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect thereto.
7.2 No Conflicting Agreements. The Company will not take any action, enter into any
agreement or make any commitment that would conflict or interfere in any material respect with the
Company’s obligations to the Investors under the Transaction Documents.
7.3 Insurance. The Company shall not materially reduce the insurance coverages
described in Section 4.19.
7.4 Compliance with Laws. The Company will comply in all material respects with all
applicable laws, rules, regulations, orders and decrees of all governmental authorities.
7.5 Listing of Underlying Shares and Related Matters. Promptly following the date
hereof, the Company shall take all necessary action to cause the Shares to be listed on the Nasdaq
Global Market no later than the Closing Date. Further, if the Company applies to have its Common
Stock or other securities traded on any other principal stock exchange or market, it shall include
in such application the Shares and will take such other action as is necessary to cause such Common
Stock to be so listed. The Company will use commercially reasonable efforts to continue the
listing and trading of its Common Stock on the Nasdaq Global Market and, in accordance, therewith,
will use commercially reasonable efforts to comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of such market or exchange, as applicable.
7.6 Termination of Covenants. The provisions of Sections 7.1 through 7.4 shall
terminate and be of no further force and effect on the date on which the Company’s
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obligations under the Registration Rights Agreement to register or maintain the effectiveness of
any registration covering the Registrable Securities (as such term is defined in the Registration
Rights Agreement) shall terminate.
7.7 Removal of Legends. Upon the earlier of (i) registration for resale pursuant to
the Registration Rights Agreement or (ii) Rule 144(k) becoming available the Company (the “Legend
Removal Date”) shall (A) deliver to the transfer agent for the Common Stock (the “Transfer Agent”)
irrevocable instructions that the Transfer Agent shall reissue a certificate representing shares of
Common Stock without legends upon receipt by such Transfer Agent of the legended certificates for
such shares, together with either (1) a customary representation by the Investor that Rule 144(k)
applies to the shares of Common Stock represented thereby or (2) a statement by the Investor that
such Investor has sold the shares of Common Stock represented thereby in accordance with the Plan
of Distribution contained in the Registration Statement, and (B) cause its counsel to deliver to
the Transfer Agent one or more blanket opinions to the effect that the removal of such legends in
such circumstances may be effected under the 1933 Act. From and after the Legend Removal Date,
upon an Investor’s written request, the Company shall promptly cause certificates evidencing the
Investor’s Shares to be replaced with certificates which do not bear such restrictive legends.
When the Company is required to cause an unlegended certificate to replace a previously issued
legended certificate, if: (1) the unlegended certificate is not delivered to an Investor within
three (3) Business Days of submission by that Investor of a legended certificate and supporting
documentation to the Transfer Agent as provided above and (2) prior to the time such unlegended
certificate is received by the Investor, the Investor, or any third party on behalf of such
Investor or for the Investor’s account, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Investor of shares represented
by such certificate (a “Buy-In”), then the Company shall pay in cash to the Investor (for costs
incurred either directly by such Purchaser or on behalf of a third party) the amount by which the
total purchase price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Investor as a result of the sale to
which such Buy-In relates. The Investor shall provide the Company written notice indicating the
amounts payable to the Investor in respect of the Buy-In.
7.8 [reserved]
7.9 Proxy Statement; Stockholders Meeting; Reverse Split. (a) Promptly following the
execution and delivery of this Agreement the Company shall take all action necessary to call a
special meeting of its stockholders (the “Stockholders Meeting”), which shall occur not later than
September 30, 2007 (the “Stockholders Meeting Deadline”), for the purpose of seeking approval of
the Company’s stockholders for the Reverse Split (collectively, the “Proposal”). In connection
therewith, the Company will promptly prepare and file with the SEC proxy materials (including a
proxy statement and form of proxy) for use at the Stockholders Meeting and, after receiving and
reasonably promptly responding to any comments of the SEC thereon, shall promptly mail such proxy
materials to the stockholders of the Company. Each Investor shall promptly furnish in writing to
the Company such information relating to such Investor and its investment in the Company as the
Company may reasonably request for inclusion in the Proxy Statement. The Company will comply with
Section 14(a) of the 1934 Act
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and the rules promulgated thereunder in relation to any proxy statement (as amended or
supplemented, the “Proxy Statement”) and any form of proxy to be sent to the stockholders of the
Company in connection with the Stockholders Meeting, and the Proxy Statement shall not, on the date
that the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to
stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein not
false or misleading, or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which
has become false or misleading. If the Company should discover at any time prior to the
Stockholders Meeting, any event relating to the Company or any of its Subsidiaries or any of their
respective Affiliates, officers or directors that is required to be set forth in a supplement or
amendment to the Proxy Statement, in addition to the Company’s obligations under the 1934 Act, the
Company will promptly inform the Investors thereof.
(b) Subject to their fiduciary obligations under applicable law (as determined in good faith
by the Company’s Board of Directors after consultation with the Company’s outside counsel), the
Company’s Board of Directors shall recommend to the Company’s stockholders that the stockholders
vote in favor of the Proposal (the “Company Board Recommendation”) and take all commercially
reasonable action to solicit the approval of the stockholders for the Proposal unless the Board of
Directors shall have modified, amended or withdrawn the Company Board Recommendation pursuant to
the provisions of the immediately succeeding sentence. The Company covenants that the Board of
Directors of the Company shall not modify, amend or withdraw the Company Board Recommendation
unless the Board of Directors (after consultation with the Company’s outside counsel) shall
determine in the good faith exercise of its business judgment that maintaining the Company Board
Recommendation would violate its fiduciary duty to the Company’s stockholders.
(c) Promptly following receipt of stockholder approval of the Proposal, the Company shall take
all action necessary to effect the Reverse Split.
7.12 Subsequent Equity Sales.
(a) From the date hereof until ninety (90) days after the Effective Date, without the consent
of the Investors, neither the Company nor any Subsidiary shall issue shares of Common Stock or
Common Stock Equivalents (other than the Shares); provided, however, the ninety (90) day period set
forth in this Section shall be extended for the number of days during such period in which (i)
trading in the Common Stock is suspended by any exchange or market on which the Common Stock is
listed or quoted, or (ii) following the Effective Date, the Registration Statement is not effective
or the prospectus included in the Registration Statement may not be used by the Investors for the
resale of the Shares. Notwithstanding the foregoing, the provisions of this Section 7.12(a) shall
not apply to (i) the issuance of Common Stock or Common Stock Equivalents upon the conversion or
exercise of any securities of the Company or a Subsidiary outstanding on the date hereof, provided
that the terms of such security are not amended after the date hereof to decrease the exercise
price or increase the Common Stock or Common Stock Equivalents receivable upon the exercise,
conversion or exchange thereof or (ii)
-23-
the issuance of any Common Stock or Common Stock Equivalents pursuant to any Company equity
incentive plan approved by the Company’s stockholders and in place as of the date hereof.
(b) From the date hereof until such time as no Investor holds any of the Shares, the Company
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing
involving a “Variable Rate Transaction”. The term “Variable Rate Transaction” shall mean a
transaction in which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive additional
shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is
based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at
any time after the initial issuance of such debt or equity securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for the Common Stock or
(ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby
the Company may sell securities at a future determined price.
7.13 Equal Treatment of Investors. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to the Transaction
Documents. For clarification purposes, this provision constitutes a separate right granted to each
Investor by the Company and negotiated separately by each Investor, and is intended for the Company
to treat the Investors as a class and shall not in any way be construed as the Investors acting in
concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.
7.14 Sale of SpecPub Business. The Company shall use its commercially reasonable best
efforts to sell the SpecPub Business to one or more third parties on or prior to December 31, 2007.
7.15 Use of Proceeds. The net proceeds of the sale of the Shares hereunder shall be
used by the Company (i) for working capital and general corporate purposes and (ii) to repay in
full the Secured Debt. The Company shall repay in full, as promptly as practicable but in any
event not more than two Business Days following the Closing Date, all of the obligations of the
Company and its Subsidiaries under the Secured Debt.
7.16 Release of Collateral. Promptly following the repayment of the Secured Debt, the
Company shall take all actions necessary to effect the release of the Collateral, including,
without limitation, the filing of UCC-3 termination statements with in each applicable jurisdiction
and making appropriate filings with the Patent and Trademark Office.
8. Survival and Indemnification.
8.1 Survival. The representations, warranties, covenants and agreements contained in
this Agreement shall survive the Closing; provided, however, that the
-24-
representations and warranties contained herein shall survive the Closing for a period of two
years.
8.2 Indemnification. The Company agrees to indemnify and hold harmless each Investor
and its Affiliates and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without limitation
reasonable attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending or threatened and
the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject
as a result of any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Transaction Documents, and will reimburse any such
Person for all such amounts as they are incurred by such Person.
8.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person
(the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might
give rise to a claim or the commencement of any action, proceeding or investigation in respect of
which indemnity may be sought pursuant to Section 8.2, such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the
payment of all fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its obligations
hereunder except to the extent that the Company is materially prejudiced by such failure to notify.
In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless:
(i) the Company and the Indemnified Person shall have mutually agreed to the retention of such
counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of
both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably withheld, but if
settled with such consent, or if there be a final judgment for the plaintiff, the Company shall
indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of such Indemnified
Person from all liability arising out of such proceeding.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investors, as applicable, provided,
however, that an Investor may assign its rights and delegate its duties hereunder in whole or in
part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction
complying with applicable securities laws without the prior written consent of the
-25-
Company or the other Investors. The provisions of this Agreement shall inure to the benefit of and
be binding upon the respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may also be executed via facsimile, which shall be deemed an
original.
9.3 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.
9.4 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed
given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one Business Day after
delivery to such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten days’ advance
written notice to the other party:
If to the Company:
PlanetOut Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Chief Financial Officer
Fax Number: (000) 000-0000
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Chief Financial Officer
Fax Number: (000) 000-0000
With a copy (not constituting notice) to:
Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx & Xxxxxx,
A Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax Number: (000) 000-0000
A Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax Number: (000) 000-0000
If to the Investors: to the addresses set forth on the signature pages hereto.
-26-
9.5 Expenses. The parties hereto shall pay their own costs and expenses in connection
herewith, except that the Company shall pay the reasonable fees and expenses of Xxxxxxxxxx Xxxxxxx
PC not to exceed $40,000; it being understood that Xxxxxxxxxx Xxxxxxx PC has only rendered legal
advice to the Special Situations Funds participating in this transaction and not to the Company or
any other Investor in connection with the transactions contemplated hereby, and that each of the
Company and each Investor has relied for such matters on the advice of its own respective counsel.
Such expenses shall be paid not later than the Closing Date. The Company shall reimburse the
Investors upon demand for all reasonable out-of-pocket expenses incurred by the Investors,
including without limitation reimbursement of attorneys’ fees and disbursements, in connection with
any amendment, modification or waiver of this Agreement or the other Transaction Documents. In the
event that legal proceedings are commenced by any party to this Agreement against another party to
this Agreement in connection with this Agreement or the other Transaction Documents, the party or
parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro
rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.
9.6 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 the Investors. Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Shares purchased under this Agreement at the time outstanding, each
future holder of all such Shares, and the Company.
9.7 Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the Company (in the case of a release or announcement by the
Investors) or the Investors (in the case of a release or announcement by the Company) (which
consents shall not be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities exchange or securities
market, in which case the Company or the Investors, as the case may be, shall allow the Investors
or the Company, as applicable, to the extent reasonably practicable in the circumstances,
reasonable time to comment on such release or announcement in advance of such issuance. By 8:30
a.m. (New York City time) on the trading day immediately following the Closing Date, the Company
shall issue a press release disclosing the transactions contemplated by this Agreement. No later
than the fourth trading day following the Closing Date, the Company will file a Current Report on
Form 8-K attaching the press release described in the foregoing sentence as well as copies of the
Transaction Documents. In addition, the Company will make such other filings and notices relating
to the Transaction Documents and the transactions contemplated thereby in the manner and time
required by the SEC or Nasdaq.
9.8 Severability. Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof but shall be
interpreted as if it were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction shall not
-27-
invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the Exhibits and the Disclosure
Schedules, and the other Transaction Documents constitute the entire agreement among the parties
hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the subject matter
hereof and thereof.
9.10 Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.
9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York
County and the United States District Court for the Southern District of New York for the purpose
of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.
9.12 Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under any Transaction Document are several and not joint with the obligations of any other
Investor, and no Investor shall be responsible in any way for the performance of the obligations of
any other Investor under any Transaction Document. The decision of each Investor to purchase
Shares pursuant to the Transaction Documents has been made by such Investor independently of any
other Investor. Nothing contained herein or in any Transaction Document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other
Investor has acted as agent for such Investor in connection with making its investment hereunder
and that no Investor will be acting as agent of such Investor in connection with monitoring its
investment in the Shares or enforcing its rights under the
-28-
Transaction Documents. Each Investor shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose. The Company acknowledges that each of the
Investors has been provided with the same Transaction Documents for the purpose of closing a
transaction with multiple Investors and not because it was required or requested to do so by any
Investor.
[signature page follows]
-29-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written.
| The Company: | PLANETOUT INC. | |||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | CEO | |||
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| The Investors: | SPECIAL SITUATIONS FUND III QP, L.P. | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | General Partner | |||
Purchase Price: $4,999,999.90 |
||||
Number of Shares: 4,347,826 |
||||
Address for Notice: |
||||
| 000 Xxxxxxx Xxxxxx | ||||
| Xxxxx 0000 | ||||
| Xxx Xxxx, XX 00000 | ||||
| with a copy to: | ||||
| Xxxxxxxxxx Xxxxxxx PC | ||||
| 00 Xxxxxxxxxx Xxxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| Attn: Xxxx X. Xxxxxxxx, Esq. | ||||
| Telephone: 000.000.0000 | ||||
| Facsimile: 973.597.2400 | ||||
-31-
| SPECIAL SITUATIONS CAYMAN FUND, L.P. | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | General Partner | |||
Purchase Price: $999,999.75 |
||||
Number of Shares: 869,565 |
||||
Address for Notice: |
||||
| 000 Xxxxxxx Xxxxxx | ||||
| Xxxxx 0000 | ||||
| Xxx Xxxx, XX 00000 | ||||
| with a copy to: | ||||
| Xxxxxxxxxx Xxxxxxx PC | ||||
| 00 Xxxxxxxxxx Xxxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| Attn: Xxxx X. Xxxxxxxx, Esq. | ||||
| Telephone: 000.000.0000 | ||||
| Facsimile: 973.597.2400 | ||||
-00-
| XXXXXXX XXXXXXXXXX, X.X.X. | ||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Business Manager | |||
Purchase Price: $5,999,999.65 |
||||
Number of Shares: 5,217.391 |
||||
Address for Notice: |
||||
| 0000 Xxxxxxxx Xxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| Attn: Reports | ||||
| with a copy to: | ||||
| Cascade Investment, L.L.C. | ||||
| 0000 Xxxxxxxx Xxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| Attn: General Counsel | ||||
| Telephone: (000) 000-0000 | ||||
-33-
| XXXXX X. XXXXX TRUST | ||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Trustee | |||
Purchase Price: $999,999.75 |
||||
Number of Shares: 869,565 |
||||
Address for Notice: |
||||
| 00 Xxxx Xxxxxx 0X | ||||
| Xxxxxxx, XX 00000 | ||||
| with a copy to: | ||||
| Xxxxxx Associates, L.P. | ||||
| 0 Xxxxx XxXxxxx | ||||
| Xxxxx 000 | ||||
| Xxxxxxx, 00000 | ||||
| Attn: Xxxxx XxXxxxxxx | ||||
-00-
| XXX Xxxxxxxxxx Partners, L.P. By: PAR Group, L.P., as its general partner |
||||
| By: PAR Capital Management, Inc., as its general partner | ||||
| By: | /s/ Xxx Xxxxxxx | |||
| Name: | Xxx Xxxxxxx | |||
| Title: | Vice President | |||
Purchase Price: $2,750,000.75 |
||||
Number of Shares: 2,391,305 |
||||
Address for Notice:
|
PAR Capital Management, Inc., | |||
| Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxx 0000 | ||||
| Xxxxxx, XX 00000 | ||||
| Attn: Xxxx XxXxxxx | ||||
| Telephone: (000) 000-0000 | ||||
| Facsimile: (000) 000-0000 | ||||
-35-
| SF CAPITAL PARTNERS LTD. | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Managing Director | |||
Initial Purchase Price: $1.15 |
||||
Number of Shares: 4,086,957 |
||||
Purchase Price: $4,700,000.55 |
||||
Address for Notice: |
||||
| SF Capital Partners Ltd. | ||||
| c/x Xxxxx Offshore Management LLC | ||||
| 0000 Xxxxx Xxxx Xxxxx | ||||
| Xx. Xxxxxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxxx | ||||
| Telephone: (000) 000-0000 | ||||
| Facsimile: (000) 000-0000 | ||||
-00-
| X XXXX PRICE ASSOCIATES, INC. Investment Adviser to the Funds on Schedule “A” |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
Purchase Price = $4,499,999.45 |
||||
Number of Shares = 3,913,043 |
||||
Address for Notice:
|
X. Xxxx Price Associates, Inc. | |||
| 000 Xxxx Xxxxx Xxxxxx | ||||
| Xxxxxxxxx, XX 00000 | ||||
| Attn: Xxxxxxx Xxxxxx | ||||
| Phone No. 000-000-0000 | ||||
| Facsimile No. 000-000-0000 | ||||
| E-Mail Address: Xxxxxxx_Xxxxxx@xxxxxxxxxx.xxx | ||||
-37-
| Xxxxx & Company LLC, on behalf of itself and Xxxx X. Xxxxx |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | VP | |||
Purchase Price: $573,508.45 |
||||
Number of Shares: 498,703 |
||||
Address for Notice: |
||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attn: Xxxxx XxXxxxx | ||||
-38-
| Xxxxx SBH II, LLC | ||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Vice Pres. | |||
Purchase Price: $273,097.40 |
||||
Number of Shares: 237,476 |
||||
Address for Notice: |
||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attn: Xxxxx XxXxxxx | ||||
-39-
| HAGC Partners, L.P. | ||||
| By: | /s/ Xxxxxxx Xxxxx III | |||
| Name: | Xxxxxxx Xxxxx III | |||
| Title: | President of GP | |||
Purchase Price: $135,353.85 |
||||
Number of Shares: 117,699 |
||||
Address for Notice: |
||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attn: Xxxxx XxXxxxx | ||||
-40-
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Xxxxx Xxxxxxxxx | ||||
Purchase Price: $95,588.00 |
||||
Number of Shares: 83,120 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-41-
| By: | /s/ Xxx X. Xxxxx | |||
| Xxx Xxxxx | ||||
Purchase Price: $27,310.20 |
||||
Number of Shares: 23,748 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-42-
| By: | /s/ Xxxxx Xxxxxxxxxxxx | |||
| Xxxxx Xxxxxxxxxxxx | ||||
Purchase Price: $27,310.20 |
||||
Number of Shares: 23,748 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-43-
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx | ||||
Purchase Price: $27,310.20 |
||||
Number of Shares: 23,748 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-44-
| By: | /s/ Xxxx Xxxxxxx | |||
| Xxxx Xxxxxxx | ||||
Purchase Price: $41,786.40 |
||||
Number of Shares: 36,336 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-45-
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Xxxxxxx Xxxxxx | ||||
Purchase Price: $12,063.50 |
||||
Number of Shares: 10,490 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-46-
| By: | /s/ Xxxxxxx Xxxxxxxxx | |||
| Xxxxxxx Xxxxxxxxx | ||||
Purchase Price: $36,672.35 |
||||
Number of Shares: 31,889 |
||||
Address for Notice: |
||||
| Xxxxx & Company LLC | ||||
| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
-47-
