EXHIBIT 4.13.13
EPIXTAR CORP.
VOXX CORPORATION
SECURITIES PURCHASE AGREEMENT
APRIL 29, 2005
TABLE OF CONTENTS
PAGE
1. Agreement to Sell and Purchase...........................................................................2
2. Fees and Option..............................................................ERROR! BOOKMARK NOT DEFINED.
3. Closing, Delivery and Payment............................................................................3
3.1 Closing.......................................................................................3
3.2 Delivery......................................................................................3
4. Representations and Warranties of the Company............................................................3
4.1 Organization, Good Standing and Qualification.................................................3
4.2 Subsidiaries..................................................................................4
4.3 Capitalization; Voting Rights.................................................................4
4.4 Authorization; Binding Obligations............................................................5
4.5 Liabilities...................................................................................6
4.6 Agreements; Action............................................................................6
4.7 Obligations to Related Parties................................................................6
4.8 Changes.......................................................................................7
4.9 Title to Properties and Assets; Liens, Etc....................................................8
4.10 Intellectual Property.........................................................................9
4.11 Compliance with Other Instruments.............................................................9
4.12 Litigation...................................................................................10
4.13 Tax Returns and Payments.....................................................................10
4.14 Employees....................................................................................10
4.15 Registration Rights and Voting Rights........................................................11
4.16 Compliance with Laws; Permits................................................................11
4.17 Environmental and Safety Laws................................................................11
4.18 Valid Offering...............................................................................12
4.19 Full Disclosure..............................................................................12
4.20 Insurance....................................................................................12
4.21 SEC Reports..................................................................................12
4.22 Listing......................................................................................13
4.23 No Integrated Offering.......................................................................13
4.24 Stop Transfer................................................................................13
4.25 Dilution.....................................................................................13
4.26 Patriot Act..................................................................................12
5. Representations and Warranties of the Purchasers........................................................14
5.1 No Shorting..................................................................................14
5.2 Requisite Power and Authority................................................................14
5.3 Investment Representations...................................................................14
5.4 Purchasers Bears Economic Risk...............................................................15
5.5 Acquisition for Own Account..................................................................15
5.6 Purchasers Can Protect Its Interest..........................................................15
5.7 Accredited Investor..........................................................................15
5.8 Legends......................................................................................15
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6. Covenants of the Company................................................................................17
6.1 Stop-Orders..................................................................................17
6.2 Listing......................................................................................17
6.3 Market Regulations...........................................................................17
6.4 Reporting Requirements.......................................................................18
6.5 Use of Funds.................................................................................18
6.6 Access to Facilities.........................................................................18
6.7 Taxes........................................................................................18
6.8 Insurance....................................................................................18
6.9 Intellectual Property........................................................................19
6.10 Properties...................................................................................19
6.11 Confidentiality..............................................................................20
6.12 Required Approvals...........................................................................20
6.13 Reissuance of Securities.....................................................................22
6.14 Opinion......................................................................................22
6.15 Margin Stock.................................................................................19
7. Covenants of the Purchasers.............................................................................24
7.1 Confidentiality..............................................................................24
7.2 Non-Public Information.......................................................................24
8. Covenants of the Company and Purchasers Regarding Indemnification.......................................24
8.1 Company Indemnification......................................................................24
8.2 Purchasers's Indemnification.................................................................25
9. Conversion of Convertible Note..........................................................................25
9.1 Mechanics of Conversion......................................................................25
10. Registration Rights.....................................................................................26
10.1 Registration Rights Granted..................................................................26
10.2 Offering Restrictions........................................................................27
11. Miscellaneous...........................................................................................27
11.1 Governing Law................................................................................27
11.2 Survival.....................................................................................28
11.3 Successors...................................................................................28
11.4 Entire Agreement.............................................................................28
11.5 Severability.................................................................................29
11.6 Amendment and Waiver.........................................................................29
11.7 Delays or Omissions..........................................................................29
11.8 Notices......................................................................................29
11.9 Attorneys' Fees..............................................................................30
11.10 Titles and Subtitles.........................................................................30
11.11 Facsimile Signatures; Counterparts...........................................................30
11.12 Broker's Fees................................................................................30
11.13 Construction.................................................................................31
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LIST OF EXHIBITS
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Sands Creditor Parties.............................................................................. Exhibit A
Xxxxxxx Warrantholder Designees..................................................................... Exhibit B-1
Sands Creditor Option Owner Designees Exhibit B-2
Form of Note........................................................................................ Exhibit C
Form of Option...................................................................................... Exhibit D-1
Form of Warrant................................................................................. Exhibit D-2
Form of Opinion................................................................................. Exhibit E
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of April 29, 2005 by and among EPIXTAR CORP., a Florida
corporation ("EPXR"), VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and
VOXX, collectively, the "Company"), and the Sands Creditor parties identified in
Exhibit A attached hereto (collectively, the "Purchasers").
RECITALS
WHEREAS, the Company has authorized the sale to the Purchasers of a
Convertible Term Note in the aggregate principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000) (as amended, modified or supplemented from
time to time, the "Note"), which Note is convertible into shares of either
EPXR's common stock, $0.001 par value per share ("EPXR Common Stock") or VOXX's
common stock, $0.001 par value per share ("VOXX Common Stock" and, together with
the EPXR Common Stock, the "Common Stock"), at the fixed conversion price set
forth in the Note ("Fixed Conversion Price");
WHEREAS, in connection with the transactions provided for herein the
Company wishes to issue a warrant to Xxxxxxx & Company (UK) Ltd. ("Xxxxxxx") and
its designees as set forth in Exhibit B (collectively, the "Warrant Holders") to
purchase an aggregate of 327,409 shares of VOXX's Common Stock (subject to
adjustment as set forth therein) (as amended, modified or supplemented from time
to time, the "Warrant");
WHEREAS, the Company wishes to issue an option to the Purchasers to
purchase an aggregate of 892,935 shares of VOXX's Common Stock (subject to
adjustment as set forth therein) in connection with Purchaser's purchase of the
Note (as amended, modified or supplemented from time to time, the "Option");
WHEREAS, Purchasers desires to purchase the Note and the Option and the
Warrant Holders wish to be issued the Warrant on the terms and conditions set
forth herein; and
WHEREAS, the Company desires to issue and sell the Note, the Warrant
and Option to Purchasers and the Warrant Holders on the terms and conditions set
forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties and covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
111. Agreement to Sell and Purchase. Pursuant to the terms and
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 3), the Company agrees to sell to the Purchasers, and the Purchasers
hereby agrees to purchase from the Company, Notes in the aggregate principal
amount of $1,500,000 convertible in accordance with the terms thereof into
shares of the Company's Common Stock in accordance with the terms of the Note
and this Agreement. The Note purchased on the Closing Date shall be known as the
"Offering." A form of the Note is annexed hereto as Exhibit C and will be
purchased by and in the amounts set forth in Exhibit A. The Note will mature on
the Maturity Date (as defined in the Note). Collectively, the Note, the Option
and the Common Stock issuable in payment of the Note and upon conversion of the
Note and upon exercise of the Warrant and the Option are referred to as the
"Securities."
112. Fees and Option. On the Closing Date:
(a) VOXX will issue and deliver to the Purchasers an Option to
purchase an aggregate of 892,935 shares of VOXX Common Stock pursuant
to Section 1 hereof. The Option must be delivered on the Closing Date.
A form of the Option is annexed hereto as Exhibit D-1 and will be owned
by the Purchasers proportionately to their purchase of the Notes. All
the representations, covenants, warranties, undertakings, and
indemnification, and other rights made or granted to or for the benefit
of the Purchasers by the Company are hereby also made and granted in
respect of the Option and the shares of VOXX Common Stock issuable upon
exercise of the Option (the "Option Shares").
(b) The Company will issue and deliver to the Warrant Holders
a Warrant to purchase an aggregate of 327,409 shares of VOXX Common
Stock pursuant to Section 1 hereof. The Warrant must be delivered on
the Closing Date. A form of the Warrant is annexed hereto as Exhibit
D-2 and will be owned in accordance with the designations set forth in
Exhibit B. All the representations, covenants, warranties,
undertakings, and indemnification, and other rights made or granted to
or for the benefit of the Purchasers by the Company are hereby also
made and granted in respect of the Warrant and the shares of the VOXX's
Common Stock issuable upon exercise of the Warrant (the "Warrant
Shares").
(c) The Company shall (i) pay to Xxxxxxx, for services
rendered in connection with the related Laurus Master Fund, Ltd.
investment in VOXX and related services associated with these
transactions (the "Services"), a closing payment in an amount equal to
$400,000. The foregoing fee is referred to herein as the "Closing
Payment" and (ii) issue the above referenced Warrant to the Warrant
Holders as additional compensation for such Services.
(d) The Company shall reimburse Xxxxxxx for its reasonable
expenses for services rendered to the Purchasers in preparation of this
Agreement and the Related Agreements (as hereinafter defined), and
expenses incurred in connection with the Purchasers's due diligence
review of the Company and all related matters. Amounts required to be
paid under this Section 2(d), to the extent not yet paid, shall be paid
by the Company on the Closing Date. The total amount to be paid by the
Company pursuant to this clause (c) shall be $25,000, such amount to be
paid to Xxxxxxx, which has assisted the Purchasers in connection with
the transactions provided for herein.
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(e) The Closing Payment, the expenses referred to in clause
(d) of this Section 2 (net of deposits previously paid by the Company)
shall be paid at closing out of funds held pursuant to a Funds Escrow
Agreement of even date herewith among the Company, Purchasers, Xxxxxxx
and an Escrow Agent (the "Funds Escrow Agreement") and a disbursement
letter (the "Disbursement Letter").
113. Closing, Delivery and Payment; Certain Closing Conditions.
113.1 Closing. Subject to the terms and conditions herein, the
closing of the transactions contemplated hereby (the "Closing"), shall take
place on the date hereof, at such time or place as the Company and Purchasers
may mutually agree (such date is hereinafter referred to as the "Closing Date").
113.2 Delivery. Pursuant to the Funds Escrow Agreement in the
form attached hereto as Exhibit E, at the Closing on the Closing Date, the
Company will deliver among other things: (i) to the Purchasers,(x) Notes, each
in the form attached as Exhibit A, representing the aggregate principal amount
of $1,500,000, (y) the Option in the form attached as Exhibit D-1 in the
Purchaser's names representing an aggregate amount of 892,935 Option Shares and
(ii) to the Warrant Holders, a Warrant in form attached as Exhibit D-2 in the
Warrant Holders' names representing an aggregate amount of 327,409 Warrant
Shares. Simultaneously, on the Closing Date, the Purchasers will deliver to the
Company, among other things, the amounts set forth in the Disbursement Letter by
certified funds or wire transfer.
3.3 Laurus Documents. The Purchasers shall be satisfied with
the terms and conditions of each Laurus Document (as defined in the
Intercreditor Agreement (as defined below)) and all agreements related thereto.
114. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers as follows (which representations and
warranties are supplemented by the Company's filings under the Securities
Exchange Act of 1934 (collectively, the "Exchange Act Filings"), copies of which
have been provided to the Purchasers):
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114.1 Organization, Good Standing and Qualification. Each of
the Company and each of its Subsidiaries is a corporation, partnership or
limited liability company, as the case may be, duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization. Each of
the Company and each of its Subsidiaries has the corporate power and authority
to own and operate its properties and assets, to execute and deliver (i) this
Agreement, (ii) the Note, the Warrant and the Option to be issued in connection
with this Agreement, (iii) the Master Security Agreement dated as of the date
hereof between the Company, certain Subsidiaries of the Company and the
Purchasers (as amended, modified or supplemented from time to time, the "Master
Security Agreement"), (iv) the EPXR Registration Rights Agreement relating to
the Securities dated as of the date hereof between EPXR and the Purchasers, (v)
the VOXX Registration Rights Agreement relating to the Securities dated as of
the date hereof between VOXX and the Purchasers, (vi) the Guaranty dated as of
the date hereof made by the Company and certain Subsidiaries of the Company (as
amended, modified or supplemented from time to time, the "Guaranty"), (vii) the
Stock Pledge Agreement dated as of the date hereof among the Company, certain
Subsidiaries of the Company and the Purchasers (as amended, modified or
supplemented from time to time, the "Stock Pledge Agreement"), (viii) the Escrow
Agreement dated as of the date hereof among the Company, the Purchasers and the
escrow agent referred to therein, (ix) the Intercreditor and Collateral Agency
Agreement dated as of the date hereof between the Purchasers and Laurus, and
acknowledged to by the Company (as amended, modified or supplemented from time
to time, the "Intercreditor Agreement"), (x) the Foreign Documentation (as
defined below) and (xi) all other agreements related to this Agreement and the
Note and referred to herein (the preceding clauses (ii) through (xi),
collectively, the "Related Agreements"), to issue and sell the Note and the
shares of Common Stock issuable upon conversion of the Note (the "Note Shares"),
to issue and sell the Option and the Option Shares, to issue and sell the
Warrant and the Warrant Shares, and to carry out the provisions of this
Agreement and the Related Agreements and to carry on its business as presently
conducted. Each of the Company and each of its Subsidiaries is duly qualified
and is authorized to do business and is in good standing as a foreign
corporation, partnership or limited liability company, as the case may be, in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so has not, or could not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the business, assets, liabilities, condition (financial or otherwise),
properties, operations or prospects of the Company and it Subsidiaries, taken
individually and as a whole (a "Material Adverse Effect").
114.2 Subsidiaries. Each direct and indirect Subsidiary of the
Company, the direct owner of such Subsidiary and its percentage ownership
thereof, is set forth on Schedule 4.2. No Immaterial Subsidiary owns any assets
(other than immaterial assets) or has any significant operations. For the
purpose of this Agreement, (x) a "Subsidiary" of any person or entity means (i)
a corporation or other entity whose shares of stock or other ownership interests
having ordinary voting power (other than stock or other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other persons or entities
performing similar functions for such person or entity, are owned, directly or
indirectly, by such person or entity or (ii) a corporation or other entity in
which such person or entity owns, directly or indirectly, more than 50% of the
equity interests at such time and (y) the "Immaterial Subsidiaries" shall mean,
collectively, Epixtar Communications Corp., a Florida corporation, Epixtar
Prepaid Communications Corp., a Delaware corporation, Epixtar Solutions Corp., a
Delaware corporation, IMS International, Inc., a Phillippines corporation,
Epixtar International Contact Centers, Ltd., a Mauritius corporation, Epixtar
Information Technology Private, Ltd., a Calcutta corporation, Epixtar
International Contact Center Group, Ltd., a Bermuda corporation, and each
Subsidiary of the Company that is not a Credit Party (as defined below) and does
not own any assets (other than immaterial assets) or have any significant
operations.
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114.3 Capitalization; Voting Rights.
(a) The authorized capital stock of EPXR, as of the date
hereof consists of 60,000,000 shares, of which 50,000,000 are shares of
EPXR Common Stock, par value $0.001 per share, 12,150,356 shares of
which are issued and outstanding, and 10,000,000 are shares of
preferred stock, par value $0.001 per share of which 16,500 shares of
preferred stock are issued and outstanding. The authorized capital
stock of VOXX, as of the date hereof consists of 50,250,000 shares, of
which 50,000,000 are shares of VOXX Common Stock, par value $.001 per
share, 6,900,000 shares of which are issued and outstanding, and
250,000 are shares of preferred stock, par value $.001 per share of
which 0 shares of preferred stock are issued and outstanding. The
authorized capital stock of each Subsidiary of EPXR (other than VOXX)
is set forth on Schedule 4.3.
(b) Except as disclosed on Schedule 4.3, other than: (i) the
shares reserved for issuance under the Company's stock option plans;
and (ii) shares which may be granted pursuant to this Agreement and the
Related Agreements, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first
refusal), proxy or stockholder agreements, or arrangements or
agreements of any kind for the purchase or acquisition from the Company
of any of its securities. Except as disclosed on Schedule 4.3, neither
the offer, issuance or sale of any of the Note, the Warrant or the
Option, or the issuance of any of the Note Shares, the Warrant Shares
or Option Shares, nor the consummation of any transaction contemplated
hereby will result in a change in the price or number of any securities
of the Company outstanding, under anti-dilution or other similar
provisions contained in or affecting any such securities.
(c) All issued and outstanding shares of the Company's Common
Stock: (i) have been duly authorized and validly issued and are fully
paid and nonassessable; and (ii) were issued in compliance with all
applicable state and federal laws concerning the issuance of
securities.
(d) The rights, preferences, privileges and restrictions of
the shares of the Common Stock are as stated in the Company's
Certificate of Incorporation (the "Charter"). The Note Shares, the
Warrant Shares and Option Shares have been duly and validly reserved
for issuance. When issued in compliance with the provisions of this
Agreement and the Company's Charter, the Securities will be validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Securities may be subject to
restrictions on transfer under state and/or federal securities laws as
set forth herein or as otherwise required by such laws at the time a
transfer is proposed.
114.4 Authorization; Binding Obligations. All corporate,
partnership or limited liability company, as the case may be, action on the part
of the Company and each of its Subsidiaries (including the respective officers
and directors) necessary for the authorization of this Agreement and the Related
Agreements, the performance of all obligations of the Company and its
Subsidiaries hereunder and under the other Related Agreements at the Closing
and, the authorization, sale, issuance and delivery of the Note, the Warrant and
the Option has been taken or will be taken prior to the Closing. This Agreement
and the Related Agreements, when executed and delivered and to the extent it is
a party thereto, will be valid and binding obligations of each of the Company
and each of its Subsidiaries, enforceable against each such entity in accordance
with their terms, except:
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(a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; and
(b) general principles of equity that restrict the
availability of equitable or legal remedies.
The sale of the Note and the subsequent conversion of the Note into Note Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with. Neither the
issuance of the Warrant nor the Option nor the subsequent exercise of the
Warrant for Warrant Shares nor the subsequent exercise of the Option for Option
Shares are not and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied with.
114.5 Liabilities. Neither the Company nor any of its
Subsidiaries has any contingent liabilities, except current liabilities incurred
in the ordinary course of business and liabilities disclosed in any Exchange Act
Filings.
114.6 Agreements; Action. Except as set forth on Schedule 4.6
or as disclosed in any Exchange Act Filings:
(a) there are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees
to which the Company or any of its Subsidiaries is a party or by which
it is bound which may involve: (i) obligations (contingent or
otherwise) of, or payments to, the Company in excess of $50,000 (other
than obligations of, or payments to, the Company arising from
agreements entered into in the ordinary course of business); or (ii)
the transfer or license of any patent, copyright, trade secret or other
proprietary right to or from the Company (other than licenses arising
from the purchase of "off the shelf" or other standard products); or
(iii) provisions restricting the development, manufacture or
distribution of the Company's products or services; or (iv)
indemnification by the Company with respect to infringements of
proprietary rights.
(b) Since December 31, 2004, neither the Company nor any of
its Subsidiaries has: (i) declared or paid any dividends, or authorized
or made any distribution upon or with respect to any class or series of
its capital stock; (ii) incurred any indebtedness for money borrowed or
any other liabilities (other than ordinary course obligations)
individually in excess of $50,000 or, in the case of indebtedness
and/or liabilities individually less than $50,000, in excess of
$100,000 in the aggregate; (iii) made any loans or advances to any
person not in excess, individually or in the aggregate, of $100,000,
other than ordinary course advances for travel expenses; or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other
than the sale of its inventory in the ordinary course of business.
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(c) For the purposes of subsections (a) and (b) above, all
indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities the Company has reason to believe are
affiliated therewith) shall be aggregated for the purpose of meeting
the individual minimum dollar amounts of such subsections.
114.7 Obligations to Related Parties. Except as set forth on
Schedule 4.7, there are no obligations of the Company or any of its Subsidiaries
to officers, directors, stockholders or employees of the Company or any of its
Subsidiaries other than:
(a) for payment of salary for services rendered and for bonus
payments;
(b) reimbursement for reasonable expenses incurred on behalf
of the Company and its Subsidiaries;
(c) for other standard employee benefits made generally
available to all employees (including stock option agreements
outstanding under any stock option plan approved by the Board of
Directors of the Company); and
(d) obligations listed in the Company's financial statements
or disclosed in any of its Exchange Act Filings.
Except as described above or set forth on Schedule 4.7, none of the officers,
directors or, to the best of the Company's knowledge, key employees or
stockholders of the Company or any members of their immediate families, are
indebted to the Company, individually or in the aggregate, in excess of $50,000
or have any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the Company, other
than passive investments in publicly traded companies (representing less than
one percent (1%) of such company) which may compete with the Company. Except as
described above, no officer, director or stockholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Company and no agreements, understandings or proposed
transactions are contemplated between the Company and any such person. Except as
set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
114.8 Changes. Since December 31, 2004, except as disclosed in
any Exchange Act Filing or in any Schedule to this Agreement (including Schedule
4.8) or to any of the Related Agreements, there has not been:
(a) any change in the business, assets, liabilities, condition
(financial or otherwise), properties, operations or prospects of the
Company or any of its Subsidiaries, which individually or in the
aggregate has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
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(b) any resignation or termination of any officer, key
employee or group of employees of the Company or any of its
Subsidiaries;
(c) any material change in the contingent obligations of the
Company or any of its Subsidiaries by way of guaranty, endorsement,
indemnity, warranty or otherwise;
(d) any damage, destruction or loss, whether or not covered by
insurance, has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
(e) any waiver by the Company or any of its Subsidiaries of a
valuable right or of a material debt owed to it;
(f) any direct or indirect loans made by the Company or any of
its Subsidiaries to any stockholder, employee, officer or director of
the Company or any of its Subsidiaries, other than advances made in the
ordinary course of business;
(g) any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder of the
Company or any of its Subsidiaries;
(h) any declaration or payment of any dividend or other
distribution of the assets of the Company or any of its Subsidiaries;
(i) any labor organization activity related to the Company or
any of its Subsidiaries;
(j) any debt, obligation or liability incurred, assumed or
guaranteed by the Company or any of its Subsidiaries, except those for
immaterial amounts and for current liabilities incurred in the ordinary
course of business;
(k) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets owned
by the Company or any of its Subsidiaries;
(l) any change in any material agreement to which the Company
or any of its Subsidiaries is a party or by which either the Company or
any of its Subsidiaries is bound which either individually or in the
aggregate has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
(m) any other event or condition of any character that, either
individually or in the aggregate, has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect; or
(n) any arrangement or commitment by the Company or any of its
Subsidiaries to do any of the acts described in subsection (a) through
(m) above.
114.9 Title to Properties and Assets; Liens, Etc. Except as
set forth on Schedule 4.9, each of the Company and each of its Subsidiaries has
good and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than:
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(a) those resulting from taxes which have not yet become
delinquent;
(b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially
impair the operations of the Company or any of its Subsidiaries; and
(c) those that have otherwise arisen in the ordinary course of
business.
All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by the Company and its Subsidiaries are in good operating
condition and repair and are reasonably fit and usable for the purposes for
which they are being used. Except as set forth on Schedule 4.9, the Company and
its Subsidiaries are in compliance with all material terms of each lease to
which it is a party or is otherwise bound.
15.5 Intellectual Property.
(a) Each of the Company and each of its Subsidiaries owns or
possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information
and other proprietary rights and processes necessary for its business
as now conducted and to the Company's knowledge, as presently proposed
to be conducted (the "Intellectual Property"), without any known
infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing
proprietary rights, nor is the Company or any of its Subsidiaries bound
by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary
rights and processes of any other person or entity other than such
licenses or agreements arising from the purchase of "off the shelf" or
standard products.
(b) Neither the Company nor any of its Subsidiaries has
received any communications alleging that the Company or any of its
Subsidiaries has violated any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity, nor is the Company or any of its
Subsidiaries aware of any basis therefor.
(c) The Company does not believe it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any
of its employees made prior to their employment by the Company or any
of its Subsidiaries, except for inventions, trade secrets or
proprietary information that have been rightfully assigned to the
Company or any of its Subsidiaries.
15.6 Compliance with Other Instruments. Neither the Company
nor any of its Subsidiaries is in violation or default of (x) any term of its
Certificate of Incorporation or Bylaws, (y) any term of the Laurus Documents (as
defined in the Intercreditor Agreement) or (z) of any provision of any
indebtedness, mortgage, indenture, contract, agreement or instrument to which it
is party or by which it is bound or of any judgment, decree, order or writ,
which violation or default, in the case of this clause (z), has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. The execution, delivery and performance of and
compliance with this Agreement and the Related Agreements to which it is a
party, and the issuance and sale of the Note by the Company and the other
Securities by the Company each pursuant hereto and thereto, will not, with or
without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term or
provision, or result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of the Company or any of its
Subsidiaries or the suspension, revocation, impairment, forfeiture or
non-renewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
9
15.7 Litigation. Except as set forth on Schedule 4.12
hereto, there is no action, suit, proceeding or investigation pending or, to the
Company's knowledge, currently threatened against the Company or any of its
Subsidiaries that prevents the Company or any of its Subsidiaries from entering
into this Agreement or the other Related Agreements, or from consummating the
transactions contemplated hereby or thereby, or which has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect or any change in the current equity ownership of the
Company or any of its Subsidiaries, nor is the Company aware that there is any
basis to assert any of the foregoing. Neither the Company nor any of its
Subsidiaries is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company or any of its Subsidiaries currently pending or which the Company or any
of its Subsidiaries intends to initiate.
15.8 Tax Returns and Payments. Each of the Company and each
of its Subsidiaries has timely filed all tax returns (federal, state and local)
required to be filed by it. All taxes shown to be due and payable on such
returns, any assessments imposed, and all other taxes due and payable by the
Company or any of its Subsidiaries on or before the Closing, have been paid or
will be paid prior to the time they become delinquent. Except as set forth on
Schedule 4.13, neither the Company nor any of its Subsidiaries has been advised:
(a) that any of its returns, federal, state or other, have
been or are being audited as of the date hereof; or
(b) of any deficiency in assessment or proposed judgment to
its federal, state or other taxes.
The Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.
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15.9 Employees. Except as set forth on Schedule 4.14,
neither the Company nor any of its Subsidiaries has any collective bargaining
agreements with any of its employees. There is no labor union organizing
activity pending or, to the Company's knowledge, threatened with respect to the
Company or any of its Subsidiaries. Except as disclosed in the Exchange Act
Filings or on Schedule 4.14, neither the Company nor any of its Subsidiaries is
a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Company's knowledge, no employee of the Company or any of its Subsidiaries, nor
any consultant with whom the Company or any of its Subsidiaries has contracted,
is in violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company or any of its Subsidiaries
because of the nature of the business to be conducted by the Company or any of
its Subsidiaries; and to the Company's knowledge the continued employment by the
Company or any of its Subsidiaries of its present employees, and the performance
of the Company's and its Subsidiaries' contracts with its independent
contractors, will not result in any such violation. Neither the Company nor any
of its Subsidiaries is aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company or
any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has
received any notice alleging that any such violation has occurred. Except for
employees who have a current effective employment agreement with the Company or
any of its Subsidiaries, and the Company's CEO, no employee of the Company or
any of its Subsidiaries has been granted the right to continued employment by
the Company or any of its Subsidiaries or to any material compensation following
termination of employment with the Company or any of its Subsidiaries. Except as
set forth on Schedule 4.14, the Company is not aware that any officer, key
employee or group of employees intends to terminate his, her or their employment
with the Company or any of its Subsidiaries, nor does the Company or any of its
Subsidiaries have a present intention to terminate the employment of any
officer, key employee or group of employees.
15.10 Registration Rights and Voting Rights. Except as set
forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, neither
the Company nor any of its Subsidiaries is presently under any obligation, and
neither the Company nor any of its Subsidiaries has granted any rights, to
register any of the Company's or its Subsidiaries' presently outstanding
securities or any of its securities that may hereafter be issued. Except as set
forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the
Company's knowledge, no stockholder of the Company or any of its Subsidiaries
has entered into any agreement with respect to the voting of equity securities
of the Company or any of its Subsidiaries.
15.11 Compliance with Laws; Permits. Neither the Company nor
any of its Subsidiaries is in violation of any applicable statute, rule,
regulation, order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its properties which has had, or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of this Agreement or any
other Related Agreement and the issuance of any of the Securities, except such
as has been duly and validly obtained or filed, or with respect to any filings
that must be made after the Closing, as will be filed in a timely manner. Each
of the Company and its Subsidiaries has all material franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
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15.12 Environmental and Safety Laws. Neither the Company nor
any of its Subsidiaries is in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and to
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation. Except as set forth on
Schedule 4.17, no Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by the Company or any of its Subsidiaries or, to
the Company's knowledge, by any other person or entity on any property owned,
leased or used by the Company or any of its Subsidiaries. For the purposes of
the preceding sentence, "Hazardous Materials" shall mean:
(a) materials which are listed or otherwise defined as
"hazardous" or "toxic" under any applicable local, state, federal
and/or foreign laws and regulations that govern the existence and/or
remedy of contamination on property, the protection of the environment
from contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building
materials; or
(b) any petroleum products or nuclear materials.
15.13 Valid Offering. Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
the offer, sale and issuance of the Securities will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.
15.14 Full Disclosure. Each of the Company and each of its
Subsidiaries has provided the Purchasers with all information requested by the
Purchasers in connection with its decision to purchase the Note, the Warrant and
the Option, including all information the Company and its Subsidiaries believe
is reasonably necessary to make such investment decision. Neither this
Agreement, the Related Agreements, the exhibits and schedules hereto and thereto
nor any other document delivered by the Company or any of its Subsidiaries to
Purchasers or its attorneys or agents in connection herewith or therewith or
with the transactions contemplated hereby or thereby, contain any untrue
statement of a material fact nor omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading. Any financial projections
and other estimates provided to the Purchasers by the Company or any of its
Subsidiaries were based on the Company's and its Subsidiaries' experience in the
industry and on assumptions of fact and opinion as to future events which the
Company or any of its Subsidiaries, at the date of the issuance of such
projections or estimates, believed to be reasonable.
15.15 Insurance. Each of the Company and each of its
Subsidiaries has general commercial, product liability, fire and casualty
insurance policies with coverages which the Company believes are customary for
companies similarly situated to the Company and its Subsidiaries in the same or
similar business.
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15.8 SEC Reports. Except as set forth on Schedule 4.21, the
Company has filed all proxy statements, reports and other documents required to
be filed by it under the Securities Xxxxxxxx Xxx 0000, as amended (the "Exchange
Act"). The Company has furnished the Purchasers with copies of: (i) its Annual
Reports on Form 10-KSB for its fiscal year ended December 31, 2004, (ii) its
Quarterly Report on Form 10-QSB for its fiscal quarter ended September 30, 2004
and (iii) the Form 8-K filings which it has made during the fiscal year 2005 to
date (collectively, the "SEC Reports"). Except as set forth on Schedule 4.21,
each SEC Report was, at the time of its filing, in substantial compliance with
the requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
15.9 Listing. EPXR's Common Stock is listed for trading on
the National Association of Securities Dealers Over the Counter Bulletin Board
("NASD OTCBB") and satisfies all requirements for the continuation of such
trading. EPXR has not received any notice that EPXR's Common Stock will not be
eligible to be traded on the NASD OTCBB or that EPXR's Common Stock does not
meet all requirements for such trading.
15.10 No Integrated Offering. Neither the Company, nor any of
its Subsidiaries or affiliates, nor any person acting on its or their behalf,
has directly or indirectly made any offers or sales of any security or solicited
any offers to buy any security under circumstances that would cause the offering
of the Securities pursuant to this Agreement or any of the Related Agreements to
be integrated with prior offerings by the Company (other than in connection with
that certain offering made by the Company to Laurus Master Fund, Ltd. ("Laurus")
pursuant to that certain Securities Purchase Agreement, dated as of the date
hereof (as amended, modified or supplemented from time to time, the "Laurus
Securities Purchase Agreement") and the Related Agreements referred to in the
Laurus Securities Purchase Agreement) for purposes of the Securities Act which
would prevent the Company from selling the Securities pursuant to Rule 506 under
the Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or Subsidiaries take
any action or steps that would cause the offering of the Securities to be
integrated with other offerings.
15.11 Stop Transfer. The Securities are restricted securities
as of the date of this Agreement. Neither the Company nor any of its
Subsidiaries will issue any stop transfer order or other order impeding the sale
and delivery of any of the Securities at such time as the Securities are
registered for public sale or an exemption from registration is available,
except as required by state and federal securities laws.
15.12 Dilution. The Company specifically acknowledges that
its obligation to issue the shares of Common Stock upon conversion of the Note
and exercise of the Warrant and the Option is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
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4.26 Patriot Act. The Company certifies that, to the best of
Company's knowledge, neither the Company nor any of its Subsidiaries has been
designated, and is not owned or controlled, by a "suspected terrorist" as
defined in Executive Order 13224. The Company hereby acknowledges that the
Purchasers seek to comply with all applicable laws concerning money laundering
and related activities. In furtherance of those efforts, the Company hereby
represents, warrants and agrees that: (i) none of the cash or property that the
Company or any of its Subsidiaries will pay or will contribute to the Purchasers
has been or shall be derived from, or related to, any activity that is deemed
criminal under United States law; and (ii) no contribution or payment by the
Company or any of its Subsidiaries to the Purchasers, to the extent that they
are within the Company's and/or its Subsidiaries' control shall cause the
Purchasers to be in violation of the United States Bank Secrecy Act, the United
States International Money Laundering Control Act of 1986 or the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001. The Company shall promptly notify the Purchasers if any of these
representations ceases to be true and accurate regarding the Company or any of
its Subsidiaries. The Company agrees to provide the Purchasers any additional
information regarding the Company or any of its Subsidiaries that the Purchasers
deems necessary or convenient to ensure compliance with all applicable laws
concerning money laundering and similar activities. The Company understands and
agrees that if at any time it is discovered that any of the foregoing
representations are incorrect, or if otherwise required by applicable law or
regulation related to money laundering similar activities, the Purchasers may
undertake appropriate actions to ensure compliance with applicable law or
regulation, including but not limited to segregation and/or redemption of the
Purchaser's investment in the Company. The Company further understands that the
Purchasers may release confidential information about the Company and its
Subsidiaries and, if applicable, any underlying beneficial owners, to proper
authorities if the Purchasers, in its sole discretion, determines that it is in
the best interests of the Purchasers in light of relevant rules and regulations
under the laws set forth in subsection (ii) above.
16. Representations and Warranties of the Purchasers. The Purchasers
hereby represents and warrants to the Company as follows (such representations
and warranties do not lessen or obviate the representations and warranties of
the Company set forth in this Agreement):
16.1 No Shorting. The Purchasers or any of its affiliates and
investment partners has not, will not and will not cause any person or entity,
directly or indirectly, to engage in "short sales" of the Company's Common Stock
as long as the Note shall be outstanding.
16.2 Requisite Power and Authority. The Purchasers has all
necessary power and authority under all applicable provisions of law to execute
and deliver this Agreement and the Related Agreements and to carry out their
provisions. All corporate action on Purchaser's part required for the lawful
execution and delivery of this Agreement and the Related Agreements have been or
will be effectively taken prior to the Closing. Upon their execution and
delivery, this Agreement and the Related Agreements will be valid and binding
obligations of Purchasers, enforceable in accordance with their terms, except:
(a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; and
14
(b) as limited by general principles of equity that restrict
the availability of equitable and legal remedies.
15.21 Investment Representations. Purchasers understand that
the Securities are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon Purchaser's
representations contained in the Agreement, including, without limitation, that
the Purchasers are "accredited investors" within the meaning of Regulation D
under the Securities Act of 1933, as amended (the "Securities Act"). The
Purchasers confirm that it has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment
decision with respect to the Note, the Warrant and the Option to be purchased by
it under this Agreement and the Note Shares, the Warrant Shares and the Option
Shares acquired by it upon the conversion of the Note and the exercise of the
Warrant and the Option, respectively. The Purchasers further confirm that they
have had an opportunity to ask questions and receive answers from the Company
regarding the Company's and its Subsidiaries' business, management and financial
affairs and the terms and conditions of the Offering, the Note, the Option, the
Warrant and the Securities and to obtain additional information (to the extent
the Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to the
Purchasers or to which the Purchasers had access.
15.22 Purchasers Bears Economic Risk. The Purchasers have
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests. The Purchasers must bear the
economic risk of this investment until the Securities are sold pursuant to: (i)
an effective registration statement under the Securities Act; or (ii) an
exemption from registration is available with respect to such sale.
15.23 Acquisition for Own Account. The Purchasers are
acquiring the Note, the Option and the Note Shares and the Option Shares for the
Purchaser's own accounts for investment only, and not as a nominee or agent and
not with a view towards or for resale in connection with their distribution.
15.24 Purchasers Can Protect Its Interest. The Purchasers
represent that by reason of their, or of their management's, business and
financial experience, the Purchasers have the capacity to evaluate the merits
and risks of their investment in the Note, the Option, and the Securities and to
protect their own interests in connection with the transactions contemplated in
this Agreement and the Related Agreements. Further, Purchasers are aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement or the Related Agreements.
15.25 Accredited Investor. Purchasers represents that they are
accredited investors within the meaning of Section 501(a)(3) of Regulation D
under the Securities Act.
15.26 Legends.
(a) The Note shall bear substantially the following
legend:
15
"THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS.
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX
CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) The Note Shares, the Warrant Shares and the Option Shares,
if not issued by DWAC system (as hereinafter defined), shall bear a
legend which shall be in substantially the following form until such
shares are covered by an effective registration statement filed with
the SEC:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX
CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT
REQUIRED."
(c) The Option shall bear substantially the following
legend:
16
"THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS OPTION OR THE UNDERLYING SHARES OF COMMON
STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(d) The Warrant shall bear substantially the following
legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF
COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
16. Covenants of the Company. The Company covenants and agrees with
the Purchasers as follows:
16.1 Stop-Orders. The Company will advise the Purchasers,
promptly after it receives notice of issuance by the Securities and Exchange
Commission (the "SEC"), any state securities commission or any other regulatory
authority of any stop order or of any order preventing or suspending any
offering of any securities of the Company, or of the suspension of the
qualification of the Common Stock of the Company for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purpose.
16.2 Listing. (a) EPXR shall promptly secure the listing of
the shares of EPXR Common Stock issuable upon conversion of the Note on the
Principal Market (as defined below) (subject to official notice of issuance) and
shall maintain such listing so long as any other shares of EPXR Common Stock
shall be so listed. EPXR will maintain the listing of EPXR Common Stock on the
Principal Market, and will comply in all material respects with EPXR's
reporting, filing and other obligations under the bylaws or rules of the
National Association of Securities Dealers ("NASD") and such exchanges, as
applicable.
(b) Concurrently with the consummation of an initial public
offering of the VOXX Common Stock, VOXX shall promptly secure the listing of the
shares of VOXX Common Stock issuable upon conversion of the Note and upon the
exercise of the Option and the Warrant on the Principal Market (subject to
official notice of issuance) and shall maintain such listing so long as any
other shares of EPXR Common Stock shall be so listed. EPXR will maintain the
listing of EPXR Common Stock on the Principal Market, and will comply in all
material respects with EPXR's reporting, filing and other obligations under the
bylaws or rules of the National Association of Securities Dealers ("NASD") and
such exchanges, as applicable.
(c) For purposes hereof, the term "Principal Market" means the
NASD Over The Counter Bulletin Board, NASDAQ SmallCap Market, NASDAQ National
Markets System, American Stock Exchange or New York Stock Exchange (whichever of
the foregoing is at the time the principal trading exchange or market for the
respective Common Stock).
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16.3 Market Regulations. The Company shall notify the SEC,
NASD and applicable state authorities, in accordance with their requirements, of
the transactions contemplated by this Agreement, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities to
the Purchasers and promptly provide copies thereof to the Purchasers.
16.9 Reporting Requirements. The Company will timely file
with the SEC all reports required to be filed pursuant to the Exchange Act and
refrain from terminating its status as an issuer required by the Exchange Act to
file reports thereunder even if the Exchange Act or the rules or regulations
thereunder would permit such termination.
16.10 Use of Funds. The Company agrees that it will use the
proceeds of the sale of the Note, the Warrant and the Option (x) for general
working capital purposes and (y) for the development and acquisition of certain
contact centers in the Phillipines.
16.11 Access to Facilities. Each of the Company and each of
its Subsidiaries will permit any representatives designated by the Purchasers
(or any successor of the Purchasers), upon reasonable notice and during normal
business hours, at such person's expense and accompanied by a representative of
the Company, to:
(a) visit and inspect any of the properties of the Company or
any of its Subsidiaries;
(b) examine the corporate and financial records of the Company
or any of its Subsidiaries (unless such examination is not permitted by
federal, state or local law or by contract) and make copies thereof or
extracts therefrom; and
(c) discuss the affairs, finances and accounts of the Company
or any of its Subsidiaries with the directors, officers and independent
accountants of the Company or any of its Subsidiaries.
Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries
will provide any material, non-public information to the Purchasers unless the
Purchasers sign a confidentiality agreement and otherwise comply with Regulation
FD, under the federal securities laws.
16.12 Taxes. Each of the Company and each of its Subsidiaries
will promptly pay and discharge, or cause to be paid and discharged, when due
and payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company and its
Subsidiaries; provided, however, that any such tax, assessment, charge or levy
need not be paid if the validity thereof shall currently be contested in good
faith by appropriate proceedings and if the Company and/or such Subsidiary shall
have set aside on its books adequate reserves with respect thereto, and
provided, further, that the Company and its Subsidiaries will pay all such
taxes, assessments, charges or levies forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security therefor.
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16.13 Insurance. Each of the Company and its Subsidiaries will
keep its assets which are of an insurable character insured by financially sound
and reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in similar business similarly situated
as the Company and its Subsidiaries; and the Company and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the
manner which the Company reasonably believes is customary for companies in
similar business similarly situated as the Company and its Subsidiaries and to
the extent available on commercially reasonable terms. The Company, and each of
its Subsidiaries will jointly and severally bear the full risk of loss from any
loss of any nature whatsoever with respect to the assets pledged to the
Purchasers as security for its obligations hereunder and under the Related
Agreements. At the Company's and each of its Subsidiaries' joint and several
cost and expense in amounts and with carriers reasonably acceptable to
Purchasers, the Company and each of its Subsidiaries shall (i) keep all its
insurable properties and properties in which it has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of companies engaged in businesses similar to the Company's or the
respective Subsidiary's including business interruption insurance; (ii) maintain
a bond in such amounts as is customary in the case of companies engaged in
businesses similar to the Company's or the respective Subsidiary's insuring
against larceny, embezzlement or other criminal misappropriation of insured's
officers and employees who may either singly or jointly with others at any time
have access to the assets or funds of the Company or any of its Subsidiaries
either directly or through governmental authority to draw upon such funds or to
direct generally the disposition of such assets; (iii) maintain public and
product liability insurance against claims for personal injury, death or
property damage suffered by others; (iv) maintain all such worker's compensation
or similar insurance as may be required under the laws of any state or
jurisdiction in which the Company or the respective Subsidiary is engaged in
business; and (v) furnish Purchasers with (x) copies of all policies and
evidence of the maintenance of such policies at least thirty (30) days before
any expiration date.
17.15 Intellectual Property. Each of the Company and each of
its Subsidiaries shall maintain in full force and effect its existence, rights
and franchises and all licenses and other rights to use Intellectual Property
owned or possessed by it and reasonably deemed to be necessary to the conduct of
its business.
17.16 Properties. Each of the Company and each of its
Subsidiaries will keep its properties in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all
needful and proper repairs, renewals, replacements, additions and improvements
thereto; and each of the Company and each of its Subsidiaries will at all times
comply with each provision of all leases to which it is a party or under which
it occupies property if the breach of such provision could, either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
17.17 Confidentiality. The Company agrees that it will not
disclose, and will not include in any public announcement, the name of the
Purchasers, unless expressly agreed to by the Purchasers or unless and until
such disclosure is required by law or applicable regulation, and then only to
the extent of such requirement. Notwithstanding the foregoing, the Company may
disclose Purchaser's identity and the terms of this Agreement to its current and
prospective debt and equity financing sources.
19
17.18 Required Approvals. For so long as twenty-five percent
(25%) of the principal amount of the Note is outstanding, Voxx, without the
prior written consent of the Purchasers, shall not, and shall not permit any of
its Subsidiaries to:
(a) (i) directly or indirectly declare or pay any dividends,
other than dividends paid to EPXR or any of its Subsidiaries, (ii)
issue any preferred stock that is manditorily redeemable prior to the
six month anniversary of the Maturity Date (as defined in the Note),
(iii) redeem any of its preferred stock or other equity interests, or
(iv) issue any equity interests of Voxx, or agree to issue any equity
interests of Voxx prior to the consummation of, or in connection with,
an initial public offering of the Voxx Common Stock (other than the
issuances to the Laurus Creditors (as defined in the Intercreditor
Agreement) that are contemplated by the Laurus Documents (as defined in
the Intercreditor Agreement) and/or issuances to the Sands Creditors
(as defined in the Intercreditor Agreement) that are contemplated by
the Sands Documents (as defined in the Intercreditor Agreement) or
(iii) issuances to the investors in respect of the Bridge Loan
Indebtedness (as defined below) in accordance with the terms set forth
in Section 6.12(e)(i)(v) below);
(b) liquidate, dissolve or effect a material reorganization,
other than the liquidation or dissolution of Immaterial Subsidiaries
(it being understood that in no event shall (i) EPXR or Voxx merge or
(ii) either EPXR or Voxx dissolve, liquidate or merge with any other
person or entity (unless EPXR or Voxx, as the case may be, is the
surviving entity));
(c) become subject to (including, without limitation, by way
of amendment to or modification of) any agreement or instrument which
by its terms would (under any circumstances) restrict EPXR's or any of
its Subsidiaries' right to perform the provisions of this Agreement,
any Related Agreement or any of the agreements contemplated hereby or
thereby;
(d) materially alter or change the scope of the business of
EPXR and its Subsidiaries taken as a whole;
20
(e) (i) create, incur, assume or suffer to exist any
indebtedness (exclusive of trade debt and debt incurred to finance the
purchase of equipment (not in excess of five percent (5%) per annum of
the fair market value of Voxx's assets) whether secured or unsecured
other than (v) indebtedness consisting of unsecured bridge loans in an
aggregate principal amount not to exceed $5,000,000 at any time
outstanding ("Bridge Loan Indebtedness"), which bridge loans shall by
their terms (I) require either (a) the repayment thereof from the
proceeds of an initial public offering of the VOXX Common Stock or (b)
the conversion thereof into VOXX Common Stock in connection with (but
not prior to the VOXX IPO Date (as defined in the Note)) an initial
public offering of the VOXX Common Stock at a conversion price no less
than 70% of the price of the VOXX Common Stock in connection with the
such initial public offering thereof and (II) may provide for the
issuance of warrants to the investors with respect to such Bridge Loan
Indebtedness and issuance of warrants to the selling agent with respect
to such Bridge Loan Indebtedness, in each case so long as such warrants
are not exercisable prior to the VOXX IPO Date (as defined in the Note)
and are not exercisable at a price per share of Voxx Common Stock less
than or equal to $2.23 (as adjusted proportionately for any stock
splits, combinations or similar events), (w) lease obligations
(capitalized or otherwise) incurred by the Company or any of its
Subsidiaries in the ordinary course of business, (x) the Sands
Obligations (as defined in the Intercreditor Agreement) and the Laurus
Obligations (as defined in the Intercreditor Agreement), (y)
indebtedness set forth on Schedule 6.12(e) attached hereto and made a
part hereof and any refinancings or replacements thereof on terms no
less favorable to the Purchaser than the indebtedness being refinanced
or replaced, and (z) any debt incurred in connection with the purchase
of assets in the ordinary course of business, or any refinancings or
replacements thereof on terms no less favorable to the Purchaser than
the indebtedness being refinanced or replaced; (ii) cancel any debt
owing to it in excess of $50,000 in the aggregate during any 12 month
period; (iii) assume, guarantee, endorse or otherwise become directly
or contingently liable in connection with any obligations of any other
Person, except the endorsement of negotiable instruments by EPXR for
deposit or collection or similar transactions in the ordinary course of
business or guarantees of indebtedness otherwise permitted to be
outstanding pursuant to this clause (e);
(f) create or acquire any Subsidiary after the date hereof
unless (i) such Subsidiary is a wholly-owned Subsidiary of Voxx and
(ii) such Subsidiary becomes party to the Master Security Agreement,
the Stock Pledge Agreement, the Subsidiary Guaranty (in each case,
either by executing a counterpart thereof or an assumption or joinder
agreement in respect thereof) and/or, if requested by the Purchasers
with respect to entities located outside of the United States, the
foreign equivalent of any such agreement or guaranty (it being
understood that the terms and conditions of any such foreign equivalent
shall be satisfactory to the Purchasers), and, to the extent required
by the Purchasers, satisfies each condition of this Agreement and the
Related Agreements as if such Subsidiary were a Subsidiary of Voxx on
the Closing Date; and
(g) make, or permit any of its Subsidiaries which are Credit
Parties to make, any loans or advances to, any person or entity, other
than (x) to EPXR or any of its Subsidiaries or (y) so long as no Event
of Default (as defined in the Note) has occurred and is continuing,
immaterial investments, loans and/or advances made in the ordinary
course of business.
For the purposes of this Agreement, "Credit Party" shall mean (x) Voxx
and each Subsidiary of Voxx organized in the United States of America that is
party to the Master Security Agreement, the Stock Pledge Agreement and the
Subsidiary Guaranty and (y) Epixtar Phillippines IT-Enabled Services
Corporation, a corporation organized under the laws of the Phillippines
("Epixtar Phillippines") and each other wholly-owned Subsidiary of the Voxx that
is organized outside of the United States of America that has executed the
Foreign Documentation referred to in Section 6.16 (it being understood and
agreed that an Immaterial Subsidiary shall be deemed a Credit Party for purposes
of this definition following the execution by such Immaterial Subsidiary of an
assumption or joinder agreement with respect to the Master Security Agreement,
the Subsidiary Guaranty and the Stock Pledge Agreement).
21
22.2 Reissuance of Securities. The Company agrees to reissue
certificates representing the Securities without the legends set forth in
Section 5.7 above at such time as:
(a) the holder thereof is permitted to dispose of such
Securities pursuant to Rule 144(k) under the Securities Act; or
(b) upon resale subject to an effective registration statement
after such Securities are registered under the Securities Act.
The Company agrees to cooperate with the Purchasers and Warrant Holders in
connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide
legal opinions necessary to allow such resales provided the Company and its
counsel receive reasonably requested representations from the selling
Purchasers, Warrant Holders and broker, if any.
22.3 Opinion. On the Closing Date, the Company will deliver
to the Purchasers and Warrant Holders an opinion acceptable to the Purchasers
from the Company's external legal counsel. The Company will provide, at the
Company's expense, such other legal opinions in the future as are deemed
reasonably necessary, as the case may be, by the Purchasers and Warrant Holders
(and acceptable to the Purchasers and Warrant Holders) in connection with the
conversion of the Note and exercise of the Option and the Warrant.
6.15 Margin Stock. The Company will not permit any of
the proceeds of the Note, the Warrant or the Option to be used directly or
indirectly to "purchase" or "carry" "margin stock" or to repay indebtedness
incurred to "purchase" or "carry" "margin stock" within the respective meanings
of each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
6.16 Foreign Security. No later than 20 days
following the Closing Date hereunder, the Company shall cause Epixtar
Phillipines, each other applicable Subsidiary of the Company and any other third
party requested by the Purchasers to enter into such security and guaranty
documentation governed by laws of the Phillippines as is requested by the
Purchasers, with such documentation to be in form and substance satisfactory to
the Purchasers. No later than 60 days following a request by the Purchasers, the
Company shall cause each Subsidiary organized in a jurisdiction outside of the
United States (collectively, the "Foreign Subsidiaries"), other than an
Immaterial Subsidiary, to execute such guaranty and security documentation
governed by the jurisdiction of organization of such Subsidiary (the "Foreign
Documentation") as the Purchasers deem necessary or desirable. All such Foreign
Documentation shall be in form and substance satisfactory to the Purchasers, and
the Company agrees to cause the respective Foreign Subsidiary to deliver all
such other documentation as is requested by the Purchasers in connection with
the execution and delivery of such Foreign Documentation (including, without
limitation, an opinion of counsel satisfactory to the Purchasers). Furthermore,
it is hereby agreed that the Company shall not permit any equity interests of
any Foreign Subsidiary (or any parent thereof) to be transferred to any person
or other entity that is not a Credit Party until such time as the Foreign
Subsidiaries have become party to the Foreign Documentation required to be
entered into pursuant to this Section 6.16. The Company shall reimburse the
Purchasers for any and all legal fees and other expenses incurred by the
Purchasers in connection with the preparation, execution, negotiation and
delivery of the Foreign Documentation.
22
6.17 Financing Right of First Refusal.
(a) The Company hereby agrees that the Purchasers shall have
the right to participate in any provision of Bridge Loan Indebtedness by Laurus
pursuant to Section 6.17 of the Laurus Securities Purchase Agreement on a pro
rata basis based on the principal amount of the Laurus investment made on the
date hereof and the principal amount of the investment made by the Purchasers on
the date hereof.
(b) The Company will not, and will not permit its Subsidiaries
to, agree, directly or indirectly, to any restriction with any person or entity
which limits the ability of the Purchasers to consummate a Bridge Loan
Indebtedness transaction or any other additional financing with the Company or
any of its Subsidiaries.
6.18 Issuance of Voxx Common Stock. Notwithstanding anything to the
contrary contained in this Agreement, EPXR and Voxx hereby agree that it shall
not (or shall not permit, as the case may be) issue any shares of Voxx Common
Stock (or any securities convertible or exercisable into shares of Voxx Common
Stock) to be issued, or agree to issue any share of Voxx Common Stock (or any
securities convertible or exercisable into shares of Voxx Common Stock), in any
case, at a price less than or equal to $2.23 per share.
23. Covenants of the Purchasers. The Purchasers covenants and agrees
with the Company as follows:
23.1 Confidentiality. The Purchasers agrees that it will not
disclose, and will not include in any public announcement, the name of the
Company, unless expressly agreed to by the Company or unless and until such
disclosure is required by law or applicable regulation, and then only to the
extent of such requirement.
23.2 Non-Public Information. The Purchasers agree not to
effect any sales in the shares of the Company's Common Stock while in possession
of material, non-public information regarding the Company if such sales would
violate applicable securities law.
24. Covenants of the Company and Purchasers Regarding Indemnification.
24.1 Company Indemnification. The Company agrees to
indemnify, hold harmless, reimburse and defend the Purchasers, each of the
Purchasers's officers, directors, agents, affiliates, control persons, and
principal shareholders, against any claim, cost, expense, liability, obligation,
loss or damage (including reasonable legal fees) of any nature, incurred by or
imposed upon the Purchasers which results, arises out of or is based upon: (i)
any misrepresentation by the Company or any of its Subsidiaries or breach of any
warranty by the Company or any of its Subsidiaries in this Agreement, any
Related Agreement or in any exhibits or schedules attached hereto or thereto; or
(ii) any breach or default in performance by Company or any of its Subsidiaries
of any covenant or undertaking to be performed by Company or any of its
Subsidiaries hereunder, under any other Related Agreement or any other agreement
entered into by the Company and/or any of its Subsidiaries and Purchasers
relating hereto or thereto.
23
24.2 Purchasers's Indemnification. Purchasers agree to
indemnify, hold harmless, reimburse and defend the Company and each of the
Company's officers, directors, agents, affiliates, control persons and principal
shareholders, at all times against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Company which results, arises out of or is based
upon: (i) any misrepresentation by Purchasers or breach of any warranty by
Purchasers in this Agreement or in any exhibits or schedules attached hereto or
any Related Agreement; or (ii) any breach or default in performance by
Purchasers of any covenant or undertaking to be performed by Purchasers
hereunder, or any other agreement entered into by the Company and Purchasers
relating hereto.
25. Conversion of Convertible Note.
25.1 Mechanics of Conversion.
(a) Provided the Purchasers have notified the Company of the
Purchaser's intention to sell the Note Shares and the Note Shares are
included in an effective registration statement or are otherwise exempt
from registration when sold: (i) upon the conversion of the Note or
part thereof, the Company shall, at its own cost and expense, take all
necessary action (including the issuance of an opinion of counsel
reasonably acceptable to the Purchasers following a request by the
Purchasers) to assure that the Company's transfer agent shall issue
shares of the Company's Common Stock in the name of the Purchasers (or
its nominee) or such other persons as designated by the Purchasers in
accordance with Section 9.1(b) hereof and in such denominations to be
specified representing the number of Note Shares issuable upon such
conversion; and (ii) the Company warrants that no instructions other
than these instructions have been or will be given to the transfer
agent of the Company's Common Stock and that after the Effectiveness
Date (as defined in the respective Registration Rights Agreement) the
Note Shares issued will be freely transferable subject to the
prospectus delivery requirements of the Securities Act and the
provisions of this Agreement, and will not contain a legend restricting
the resale or transferability of the Note Shares.
(b) Purchasers will give notice of its decision to exercise
its right to convert the Note or part thereof by telecopying or
otherwise delivering an executed and completed notice of the number of
shares to be converted to the Company (the "Notice of Conversion"). The
Purchasers will not be required to surrender the Note until the
Purchasers have received good delivery of the securities representing
the Note Shares or until the Note has been fully satisfied. Each date
on which a Notice of Conversion is telecopied or delivered to the
Company in accordance with the provisions hereof shall be deemed a
"Conversion Date." Pursuant to the terms of the Notice of Conversion,
the Company will issue instructions to the transfer agent accompanied
by an opinion of counsel within one (1) business day of the date of the
delivery to the Company of the Notice of Conversion and shall cause the
transfer agent to transmit the certificates representing the Conversion
Shares to the Purchasers by crediting the account of the Purchaser's
brokerage account (which account the Purchasers will supply to the
Company on or before delivery of the first Notice of Conversion) within
three (3) business days after receipt by the Company of the Notice of
Conversion (the "Delivery Date").
24
(c) The Company understands that a delay in the delivery of
the Note Shares in the form required pursuant to Section 9 hereof
beyond the Delivery Date could result in economic loss to the
Purchasers. In the event that the Company fails to direct its transfer
agent to deliver the Note Shares to the Purchasers within the time
frame set forth in Section 9.1(b) above and the Note Shares are not
delivered to the Purchasers by the Delivery Date, as compensation to
the Purchasers for such loss, the Company agrees to pay late payments
to the Purchasers for late issuance of the Note Shares in the form
required pursuant to Section 9 hereof upon conversion of the Note in
the amount equal to the greater of: (i) $500 per business day after the
Delivery Date; or (ii) the Purchaser's actual damages from such delayed
delivery. Notwithstanding the foregoing, the Company will not owe the
Purchasers any late payments if the delay in the delivery of the Note
Shares beyond the Delivery Date is solely out of the control of the
Company and the Company is actively trying to cure the cause of the
delay. The Company shall pay any payments incurred under this Section
in immediately available funds upon demand and, in the case of actual
damages, accompanied by reasonable documentation of the amount of such
damages. Such documentation shall show the number of shares of Common
Stock the Purchasers is forced to purchase (in an open market
transaction) which the Purchasers anticipated receiving upon such
conversion, and shall be calculated as the amount by which (A) the
Purchaser's total purchase price (including customary brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (B) the aggregate principal and/or interest amount of the Note,
for which such Conversion Notice was not timely honored.
Nothing contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required to
be paid or other charges hereunder exceed the maximum amount permitted by such
law, any payments in excess of such maximum shall be credited against amounts
owed by the Company to the Purchasers and thus refunded to the Company.
26. Registration Rights.
26.1 Registration Rights Granted. The Company hereby grants
registration rights to the Purchasers and the Warrant Holders pursuant to a
Registration Rights Agreement dated as of even date herewith between the
Company, the Purchasers and the Warrant Holders.
25
26.2 Offering Restrictions. Except as previously disclosed in
the SEC Reports or in the Exchange Act Filings, or stock or stock options
granted to employees or directors of the Company (these exceptions hereinafter
referred to as the "Excepted Issuances"), neither the Company nor any of its
Subsidiaries will issue any securities with a continuously variable/floating
conversion feature which are or could be (by conversion or registration)
free-trading securities (i.e. common stock subject to a registration statement)
prior to the full repayment or conversion of the Note (together with all accrued
and unpaid interest and fees related thereto) (the "Exclusion Period"), provided
that securities with a variable/floating rate conversion feature that is not nor
can never be less than the Fixed Conversion Price (as defined in the Note) shall
be permitted.
27. Miscellaneous.
27.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EXCEPT AS SET FORTH
BELOW IN THIS SECTION 11.1, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT
THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY ASSERT AGAINST THE PURCHASERS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED AGREEMENT SHALL BE
DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION")
IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE
PURCHASERS AND THE COMPANY (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH
AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. THE COMPANY (ON ITS BEHALF AND ON BEHALF OF ITS
SUBSIDIARIES) HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY
OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD
SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO
RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS'
FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT
CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS
AGREEMENT OR OF ANY RELATED AGREEMENT NOR SHALL THEY HAVE THE POWER TO RENDER
ANY AWARD AGAINST THE PURCHASERS THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION
AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT
MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF
ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION
OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER
AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11.8 HEREOF. NOTWITHSTANDING THE
FOREGOING, THE PROVISIONS OF THIS SECTION 11.1 NOR ANY OTHER PROVISION CONTAINED
IN THIS AGREEMENT OR IN ANY RELATED AGREEMENT SHALL LIMIT IN ANY MANNER
WHATSOEVER THE PURCHASERS'S RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION
WITH THE COMPANY, ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTIES IN ANY
COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN
CONNECTION WITH OR ARISING OUT OF THE PURCHASERS'S RIGHTS AND REMEDIES UNDER
THIS AGREEMENT AND/OR ANY RELATED AGREEMENT OR OTHERWISE (ANY SUCH ACTION, A
"COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE PURCHASERS IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION AND THE COMPANY (ON ITS BEHALF AND ON
BEHALF OF ITS SUBSIDIARIES) IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH
STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF
INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF
REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR
OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN
CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS
MAY BE GIVEN UNDER SECTION 11.8. IN ADDITION, THE PURCHASERS MAY SERVE PROCESS
IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. IN THE EVENT THAT ANY
PROVISION OF THIS AGREEMENT OR ANY RELATED AGREEMENT DELIVERED IN CONNECTION
HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF
LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY
CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM WITH SUCH STATUTE OR
RULE OF LAW. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER
ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION
OF THIS AGREEMENT OR ANY RELATED AGREEMENT.
26
27.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Purchasers
and the Warrant Holders and the closing of the transactions contemplated hereby
to the extent provided therein. All statements as to factual matters contained
in any certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.
27.3 Successors. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Securities from time to time, other than the holders of Common
Stock which has been sold by the Purchasers or the Warrant Holders pursuant to
Rule 144 or an effective registration statement. Purchasers and the Warrant
Holders may not assign their rights hereunder to a competitor of the Company.
27.4 Entire Agreement. This Agreement, the Related
Agreements, the exhibits and schedules hereto and thereto and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and no
party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
27
27.5 Severability. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
27.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and, as the case may be, the Purchasers
or the Warrant Holders.
(b) The obligations of the Company and the rights of the
Purchasers and warrant Holders under this Agreement may be waived only
with the written consent of the Purchasers and the Warrant Holders.
(c) The obligations of the Purchasers and the Warrant Holders
and the rights of the Company under this Agreement may be waived only
with the written consent of the Company.
27.7 Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement or the
Related Agreements, shall impair any such right, power or remedy, nor shall it
be construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. All remedies, either under this Agreement or the Related
Agreements, by law or otherwise afforded to any party, shall be cumulative and
not alternative.
27.8 Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified;
(b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day;
(c) three (3) business days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; or
(d) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written
verification of receipt.
All communications shall be sent as follows:
If to the Company, to: Epixtar Corp.
Voxx Corporation
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: 000-000-0000
28
with a copy to:
Xxxxxxx XxXxxxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
If to the Purchasers, to: Sands Brothers Venture Capital
c/o Laidlaw & Company (UK) Ltd.
Attn: Xxxx Xxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX (10016)
If to the Warrant Holders Xxxxxxx & Company (UK) Ltd.
Attn: Xxxx Xxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX (10016)
In each case with a copy to:
Xxxxxxx & Company (UK) Ltd.
Attn: Xxxx XxXxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX (10016)
or at such other address as the Company or the Purchasers and Warrant Holders
may designate by written notice to the other parties hereto given in accordance
herewith.
27.9 Attorneys' Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including, without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
27.10 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
27.11 Facsimile Signatures; Counterparts. This Agreement may
be executed by facsimile signatures and in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
29
27.12 Broker's Fees. Except as provided in Section 2(c) and
2(d) and set forth on Schedule 11.12 hereof, each party hereto represents and
warrants that no agent, broker, investment banker, person or firm acting on
behalf of or under the authority of such party hereto is or will be entitled to
any broker's or finder's fee or any other commission directly or indirectly in
connection with the transactions contemplated herein. Each party hereto further
agrees to indemnify each other party for any claims, losses or expenses incurred
by such other party as a result of the representation in this Section 11.12
being untrue.
27.13 Construction. Each party acknowledges that its legal
counsel participated in the preparation of this Agreement and the Related
Agreements and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Agreement to favor any party against the other.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
30
IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY: PURCHASERS:
EPIXTAR CORP. SANDS BROTHERS VENTURE CAPITAL LLC
Sands Brothers Venture Capital II LLC
Sands Brothers Venture Capital III LLC
Sands Brothers Venture Capital IV LLC
By: /s/ Xxxxx Xxxxxxxx By: /s/ Authorized Officer
------------------------- --------------------------
Name: Xxxxx Xxxxxxxx Name:
------------------------- --------------------------
Title: CEO Title:
------------------------- --------------------------
------------------------- --------------------------
VOXX CORPORATION
By: /s/ Xxxxx Xxxxxxxx
-------------------------
Name: Xxxxx Xxxxxxxx
-------------------------
Title: CEO
-------------------------
WARRANTHOLDERS:
Xxxxxxx & Company (UK) Ltd.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX (10016)
BY: /s/ Xxxxxx Xxxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxxx
Title: President
31
EXHIBIT A
THE PURCHASERS
Sands Brothers Venture Capital LLC
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 $100,000
Fax: 000 000 0000
Tax Id: 13 4102660
Sands Brothers Venture Capital II LLC
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 $50,000
Fax: 000 000 0000
Tax Id: 13 4110488
Sands Brothers Venture Capital III LLC
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 $1,200,000
Fax: 000 000 0000
Tax Id: 13 4137586
Sands Brothers Venture Capital IV LLC
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 $150,000
Fax: 000 000 0000
Tax Id: 13 4157861
A-1
EXHIBIT B
THE WARRANT HOLDERS
XXXXXXX & COMPANY (UK) LTD.
2
EXHIBIT C
FORM OF CONVERTIBLE NOTE
3
EXHIBIT D-1
FORM OF OPTION
B-1
EXHIBIT D-2
FORM OF WARRANT
2
EXHIBIT E
FORM OF OPINION
3
EXHIBIT E
FORM OF ESCROW AGREEMENT
