Exhibit 10.8
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STOCK PURCHASE AGREEMENT
Dated as of October 26, 2001
Between
RHM Teleservices, Inc.
And the Investors Listed on Exhibit A Hereto
TABLE OF CONTENTS
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PAGE
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1. Subscription for Shares and Warrants................................................................. 3
1.1 Subscription for Shares..................................................................... 3
1.2 Subscription for Warrants................................................................... 4
1.3 Placement Fee............................................................................... 4
1.4 Closing..................................................................................... 4
2. Representations and Warranties of the Company........................................................ 5
2.1 Organization and Standing................................................................... 5
2.2 Corporate Power............................................................................. 5
2.3 Capitalization.............................................................................. 5
2.4 Authorization............................................................................... 6
2.5 Valid Issuance.............................................................................. 6
2.6 SEC Documents; Financial Statements......................................................... 6
2.7 No Conflicts................................................................................ 7
2.8 Contracts................................................................................... 7
2.9 Litigation.................................................................................. 7
2.10 Tax Returns................................................................................. 8
2.11 Governmental Consents....................................................................... 8
2.12 Employment Matters; ERISA Matters........................................................... 8
2.13 Intellectual Property Rights................................................................ 9
2.14 Environmental Laws.......................................................................... 9
2.15 Regulatory Permits; Compliance.............................................................. 10
2.16 Investment Company Status................................................................... 10
2.17 Accuracy of Information..................................................................... 11
2.18 Labor Disturbances.......................................................................... 11
2.19 Internal Accounting Controls................................................................ 11
2.20 S-3 Registration............................................................................ 11
2.21 Use of Proceeds............................................................................. 11
2.22 No Material Adverse Changes................................................................. 11
2.23 Listing and Maintenance Requirements Compliance............................................. 11
2.24 Title....................................................................................... 12
2.25 Insurance................................................................................... 12
2.26 Registration Rights; Rights of Participation................................................ 12
3. Representations and Warranties of Investor........................................................... 12
3.1 Organization and Standing; Power............................................................ 12
3.2 Authorization............................................................................... 13
3.3 Experience.................................................................................. 13
3.4 Investment Purpose.......................................................................... 13
3.5 Access to Data.............................................................................. 13
3.6 Residency................................................................................... 14
3.7 Accredited Investor......................................................................... 14
3.8 Restrictive Legends......................................................................... 14
3.9 Transactions in Common Stock................................................................ 15
3.10 No General Solicitation..................................................................... 15
4. Registration Rights and Termination Events........................................................... 15
4.1 Registration Rights......................................................................... 15
4.2 Termination Events.......................................................................... 15
5. Closing Conditions................................................................................... 15
5.1 Conditions to the Company's Obligation to Sell.............................................. 15
5.2 Conditions to Each Investor's Obligation to Purchase........................................ 16
6. Right of First Refusal............................................................................... 17
6.1 Right of First Refusal...................................................................... 17
6.2 Definition of New Securities................................................................ 17
6.3 Notice of Right............................................................................. 18
6.4 Exercise of Right........................................................................... 18
6.5 Lapse and Reinstatement of Right............................................................ 18
7. Miscellaneous........................................................................................ 18
7.1 Governing Law............................................................................... 18
7.2 Expenses.................................................................................... 18
7.3 Survival.................................................................................... 18
7.4 Successors and Assigns...................................................................... 19
7.5 Entire Agreement............................................................................ 19
7.6 Assignment and Transfer..................................................................... 19
7.7 Amendment and Waiver........................................................................ 19
7.8 Notices..................................................................................... 19
7.9 Counterparts................................................................................ 20
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (including the Exhibits hereto, the
"Agreement"), dated as of October 26, 2001, is entered into by and among the
investors listed on Exhibit A hereto, LLC (each an "Investor" or jointly, the
"Investors") and RMH Teleservices, Inc., a Pennsylvania corporation (the
"Company").
WHEREAS, pursuant to a Special Meeting of the Board of Directors of the
Company held on September 25, 2001 and a Special Meeting of the Board of
Directors of the Company held on September 28, 2001, the Company was authorized
to issue up to 3,000,000 shares of its Common Stock, no par value per share (the
"Common Stock"), and warrants to purchase up to an additional 3,000,000 shares
of Common Stock (the "Offering"), to a group of investors, including certain of
the Company's existing investors;
WHEREAS, the Company previously issued a portion of these shares of
Common Stock and warrants pursuant to the terms of the Stock Purchase Agreement
dated as of September 28, 2001 by and among the Company and the investors listed
on Schedule A attached thereto;
WHEREAS, pursuant to the authority of the Board of Directors of the
Company, the Company desires to issue additional shares of Common Stock and
warrants in completion of the Offering, such Shares and Warrants (as such terms
are defined below) to be issued to the Investors pursuant to the terms and
conditions set forth in this Agreement;
WHEREAS, the Company will at the Closing (as defined below) sell up to
217,804 shares of its Common Stock, to the Investors and the Investors will
purchase the Shares of Common Stock from the Company on the terms and conditions
set forth herein;
WHEREAS, the Company will at the Closing sell up to 72,601 Warrants to
the Investors and the Investors will purchase the Warrants from the Company on
the terms and conditions set forth herein and therein;
WHEREAS, in consideration for the Investors entering into this
transaction, the Company will pay to the Investors, in cash, an aggregate of
$100,000 to be allocated among the Investors as set forth on Exhibit A and issue
to the Investors an additional 10,890 Warrants from the Company on the terms and
conditions set forth herein and therein in the respective amounts set forth on
Exhibit A; and
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained in this Agreement, the parties agree as
follows:
1. Subscription for Shares and Warrants.
1.1 Subscription for Shares.
(a) Authorization of Shares. The Company will authorize the sale and
issuance of up to 217,804 shares of its Common Stock (the "Shares"), having the
rights, privileges and
preferences as set forth in the Company's Articles of Incorporation, as amended
to date (the "Articles of Incorporation").
(b) Sale of Common Stock. Subject to the terms and conditions hereof,
each Investor agrees, severally and not jointly, to purchase at the Closing (as
defined below) and the Company agrees to issue and sell to each Investor, that
number of shares of the Company's Common Stock set forth opposite each Investors
name on Exhibit A, at a price of $9.60 per share (the "Share Purchase Price").
1.2 Subscription for Warrants.
(a) Authorization of Warrants. The Company will authorize the sale and
issuance of up to 228,694 of its Warrants (each a "Warrant" and collectively,
the "Warrants") to purchase one (1) share of its Common Stock (collectively, the
"Warrant Shares") at an exercise price of $12.00, having the rights, privileges
and preferences as set forth in the form of Warrant attached hereto as Exhibit
B.
(b) Sale of Warrants. Subject to the terms and conditions hereof, each
Investor agrees, severally and not jointly, to purchase at the Closing and the
Company agrees to issue and sell to each Investor, that number of Warrants set
forth opposite each Investor's name on Exhibit A, at a price of $0.1251 per
Warrant (the "Warrant Purchase Price"). The sum of the Warrant Purchase Price
and the Share Purchase Price is referred to herein as the "Purchase Price."
1.3 Placement Fee. In consideration of the Investors agreeing to
purchase the Shares described in Section 1.1 and the Warrants described in
Section 1.2, Company will authorize the issuance and issue to the Investors an
aggregate of an additional 10,890 Warrants (the "Placement Warrants"), in the
respective amount set forth in Exhibit A, and pay to the Investors an aggregate
amount of $100,000 (the "Cash Placement Fee"), to be allocated among the
Investors in their sole discretion, in the respective amounts set forth in
Exhibit A; provided, that the Placement Warrants issued pursuant to this Section
1.3 shall not be subject to Section 4 herein, including, but not limited to, the
provisions relating to the declaration of a Termination Event (as defined
below). The Cash Placement Fee will be not be paid, but will be credited against
the Purchase Price of the Shares and Warrants to be purchased by the Investors
at Closing.
1.4 Closing. The closing (the "Closing") of the purchase and sale of the
Shares shall take place at the offices of Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m., on October 26,
2001, or at such other time and place as the Company and the Investors mutually
agree upon orally or in writing (the "Closing Date"). At the Closing, the
Company shall deliver to each Investor certificates representing the shares of
Common Stock and the Warrants which such Investor is purchasing and the
Placement Warrants (as set forth in Exhibit A) against delivery to the Company
by such Investors of a wire transfer in immediately available funds in the
aggregate amount of $2,100,000, the Purchase Price therefor, minus the
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Cash Placement Fee.
2. Representations and Warranties of the Company.
As a material inducement to the Investors to enter into this Agreement and
purchase the Shares and the Warrants issued to such Investor hereunder, the
Company hereby represents and warrants to each Investor as follows:
2.1 Organization and Standing. The Company and its subsidiaries are
corporations duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which they are incorporated and have all requisite
corporate power and authority and all material qualifications, licenses, permits
and authorizations necessary to own and operate their properties, to carry on
their businesses as now conducted and as proposed to be conducted by them for
the foreseeable future, and to carry out the transactions contemplated by this
Agreement, the Joinder Agreement and Waiver dated as of October 26, 2001 by and
among the Company, the Investors and the other parties thereto (the "Joinder
Agreement") attached as Exhibit C hereto, and the Warrants. Each of the Company
and its subsidiaries is duly qualified to do business as a foreign corporation
in all jurisdictions in which the failure to be so qualified would have a
material adverse effect on the Company's or its subsidiaries' properties or
business as now conducted or as proposed to be conducted. The Company has
furnished to each of the Investors true and correct copies of the Company's
Articles of Incorporation and Bylaws, as amended, and as in effect on the date
hereof, and true, complete and accurate copies of all documents evidencing all
classes of securities convertible into or exchangeable for Common Stock (other
than documents relating to stock option plans and other similar arrangements
that the Company has entered into with its employees, officers and directors in
the ordinary course of business) and all other material rights holders thereof
and in respect to.
2.2 Corporate Power. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, the Joinder Agreement and the
Warrants and the other agreements contemplated hereby, to issue and sell the
Common Stock hereunder and under the Warrants, and to carry out and perform its
obligations under the terms of this Agreement, the Joinder Agreement and the
Warrants.
2.3 Capitalization. The authorized capital stock of the Company, the
designations of classes of capital stock and the rights and preferences of
capital stock are set forth in the Articles of Incorporation. As of October 26,
2001, 12,772,480 shares of the Common Stock are issued and outstanding,
excluding the Shares and the Warrant Shares, and no shares of preferred stock
are issued and outstanding. All issued and outstanding shares of the Company's
Common Stock as of the date hereof have been duly authorized and validly issued,
are fully paid and nonassessable, and were issued in compliance with applicable
federal and state securities laws. Except as set forth on
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Schedule 2.3, as of the date hereof, there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries. No shareholder of the Company has any rights
or preferences not afforded all shareholders of the Company, except pursuant to
this Agreement. Except as set forth on Schedule 2.3, no shareholder of the
Company has any options or warrants to purchase Common Stock, except pursuant to
options issued under the Company's stock option plan, stock incentive plan or
any other equity-based compensation plans. Except as set forth on Schedule 2.3,
no shareholder has any pre-emptive or approval right or authority pertaining to
the sale and purchase of the Shares of Common Stock pursuant to this Agreement
or the Warrant Shares pursuant to the Warrants, whether by statute, Nasdaq
National Market Rules, contractual obligation or otherwise, except pursuant to
Section 6 of this Agreement.
2.4 Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this Agreement, the Joinder
Agreement, and the Warrants and each of the other agreements contemplated hereby
to which the Company is a party; the authorization, issuance, sale and delivery
of the Shares, the Warrants and the Warrant Shares; and the performance of all
of the Company's obligations hereunder and thereunder has been taken. This
Agreement, the Joinder Agreement and the Warrants, and each of the other
agreements contemplated hereby to which the Company is a party, have been duly
authorized and when executed and delivered by the Company and each Investor,
shall constitute a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency or creditors' rights and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
2.5 Valid Issuance. The Shares, the Warrants and the Warrant Shares
issuable upon exercise of the Warrants, when issued, sold and delivered in
accordance with this Agreement and, in the case of the Warrant Shares, the
Warrants, will be duly authorized and validly issued, fully paid and
nonassessable, and will be free and clear of any liens or encumbrances, except
for restrictions imposed under applicable state and federal securities laws.
2.6 SEC Documents; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed
prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the "SEC Documents"). The Company (i) has
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delivered or made available to each Investor or its
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representative true and complete copies of the SEC Documents to the extent that
each Investor or its representative has requested any such SEC Documents from
the Company and (ii) agrees to deliver or make available to each Investor or its
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representative true and complete copies of any additional SEC Documents, upon
request. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles, consistently applied during the periods involved (except in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to each Investor which is
not included in the SEC Documents, including, without limitation, information
referred to in Section 3.5 of this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are or
were made, not misleading.
2.7 No Conflicts. The Company is not in violation of any term of (i) the
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Articles of Incorporation or its Bylaws, (ii) any contract, agreement, mortgage,
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indebtedness, indenture, instrument, judgment, decree, order to which the
Company is subject or (iii) any statute, rule or regulation applicable to the
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Company, except in the case of clause (ii) above, for any such violations that,
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individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the Company's business, properties, financial
condition, results of operations or prospects, taken as a whole ("Material
Adverse Effect"). The execution and delivery by the Company of this Agreement,
the Joinder Agreement and the Warrants and each of the other agreements
contemplated hereby to which the Company is a party, the offering, sale and
issuance of the Shares, the Warrants and the Warrant Shares and the fulfillment
of and compliance with the respective terms hereof and thereof and the
consummation of the transactions contemplated hereby and thereby, do not and
shall not (i) conflict with or result in a breach (which conflict or breach has
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not been waived) of the terms, conditions or provisions of, (ii) constitute a
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default under, (iii) result in the creation of any lien, security interest,
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charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
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obligation under, (v) result in a violation (which violation has not been
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waived) of, or (vi) require any authorization, consent, approval, exemption or
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other action by or notice to any court or administrative or governmental body
pursuant to, (a) the Articles of Incorporation or Bylaws of the Company, or any
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law, statute, rule or regulation to which the
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Company is subject, or (b) any agreement, instrument, order, judgment or decree
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to which the Company is subject, except, in the case of clause (b), with respect
to any of the foregoing which could not reasonably be expected to have a
Material Adverse Effect. The Company is not in violation of the listing
requirements of The Nasdaq National Market and is unaware of any facts or
circumstances that reasonably might cause the Common Stock to be delisted by The
Nasdaq National Market in the foreseeable future.
2.8 Contracts. All descriptions in the Compendium of Public Filing
Documents, dated September 27, 2001, (the "Compendium") or incorporated by
reference therein, of contracts and other documents to which the Company or its
subsidiaries are a party are accurate in all material respects; none of the
Company's contracts, including, but not limited to, those described in the
Compendium, have been terminated, nor is the Company aware that any client has
the intention of terminating any contract in the near future.
2.9 Litigation. Except as disclosed in the SEC Documents, there are no
actions, suits, proceedings, orders, investigations or claims pending or, to the
best of the Company's knowledge, threatened against or affecting the Company (or
to the best of the Company's knowledge, pending or threatened against or
affecting any of the officers, directors or employees of the Company with
respect to the Company's business or proposed business activities) at law or in
equity, or before or by any governmental department, commission, board, bureau,
agency or instrumentality (including, without limitation, any actions, suit,
proceedings or investigations with respect to the transactions contemplated by
this Agreement) which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect; and the Company is not a party to
any arbitration proceedings under collective bargaining agreements or otherwise
or, to the best of the Company's knowledge, any governmental investigations or
inquiries (including inquiries as to the qualification to hold or receive any
license or permit). The Company is not subject to any judgment, order or decree
of any court or other governmental agency.
2.10 Tax Returns. The Company has filed all tax returns which it is
required to file under applicable foreign, federal, state and local laws and
regulations; all such returns are complete and correct in all material respects;
and the Company has paid all taxes which have become due and payable. The
Company has not been advised that any of its returns, federal, state or other,
have been or are being audited as of the date thereof. The Company has not
waived any statute of limitations with respect to taxes or agreed to any
extension of time with respect to a tax assessment or deficiency, and there are
no agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency. There are no actions,
suits, proceedings or claims now pending against the Company in respect of any
tax or assessment. There is no pending or, to the Company's knowledge,
threatened investigation of the Company by any federal, state, foreign or local
authority relating to any taxes or assessments,
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or any claims for additional taxes or assessments asserted by any such
authority.
2.11 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
governmental authority on the part of the Company is required in connection with
the valid execution and delivery of this Agreement, the Joinder Agreement and
the Warrants, the offer, sale or issuance of the Shares, the Warrants or the
Warrant Shares, or the consummation of any other transaction contemplated hereby
or thereby, except under applicable state securities laws, which filings and
qualifications, if required, will be accomplished within the required statutory
period, for the filing pursuant to Regulation D promulgated under the Securities
Act of 1933, as amended (the "1933 Act"), which filing will be made within 15
days of the execution hereof, and for the filing of the NASDAQ National Market
Additional Listing Application, which filing shall be made as soon as
practicable.
2.12 Employment Matters; ERISA Matters. The Company and its subsidiaries
are in compliance with all federal, state, local and foreign laws and
regulations respecting employment and employment practices, terms and conditions
of employment and wages and hours, except where failure to be in compliance
could not have a Material Adverse Effect. To the best of the Company's
knowledge, there are no pending investigations involving the Company or any of
its subsidiaries by the U.S. Department of Labor or any other governmental
agency responsible for the enforcement of such federal, state, local or foreign
laws and regulations. There is no unfair labor practice charge or complaint
against the Company or any of its subsidiaries pending before the National Labor
Relations Board or any strike, picketing, boycott, dispute, slowdown or stoppage
pending or threatened against or involving the Company or any of its
subsidiaries. No representation question exists respecting the employees of the
Company or any of its subsidiaries, and no collective bargaining agreement or
modification thereof is currently being negotiated by the Company or any of its
subsidiaries. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company or any of
its subsidiaries. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent.
Except for such failures that could not result in a Material Adverse Effect,
every employee benefit plan (whether or not subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) maintained or contributed to
by the Company has been maintained and administered in accordance with their
terms, ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), and
other applicable laws. None of the plans is subject to Title IV of ERISA and no
plan is a multi-employer plan (within the meaning of Section 3(37) of ERISA).
Each plan intended to qualify under Section 401(a) or 501(c)(9) of the Code has
received a favorable determination or approval letter from the Internal Revenue
Service regarding its qualification under such section and to the best of the
Company's knowledge no event has occurred which could reasonably be expected to
cause any such plan to lose its qualification.
2.13 Intellectual Property Rights.
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The Company and its subsidiaries own or possess the requisite rights or licenses
to use all trademarks, trade names, service marks, service ▇▇▇▇ registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights (collectively
"Intellectual Property Rights") necessary to conduct their respective businesses
as now conducted and as proposed to be conducted through the foreseeable future.
None of the Intellectual Property Rights or other intellectual property rights
have expired or terminated, or are expected to expire or terminate on or before
September 30, 2006 other than expirations or terminations which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Company and its subsidiaries do not have any knowledge of any event,
fact or circumstance relating to (i) any infringement by the Company or its
subsidiaries of any trademarks, trade names, service marks, service ▇▇▇▇
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets or other similar
rights of others, or (ii) any person or entity now infringing any Intellectual
Property Rights or other similar rights, or (iii) any person or entity now
infringing any Intellectual Property Rights or other similar rights, except for
such infringements that could not reasonably be expected to result in a Material
Adverse Effect. There is no claim, action or proceeding being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its subsidiaries regarding any trademarks, trade names, service marks, service
▇▇▇▇ registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets or
other similar rights of others. The Company and its subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.
2.14 Environmental Laws.
(a) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and its subsidiaries (1) are in compliance
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with any and all Environmental Laws, (2) have received all permits, licenses or
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other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, and (3) are in compliance with all terms and
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conditions of any such permit, license or approval, except in each case where
the failure could not reasonably be expected to have a Material Adverse Effect.
To the knowledge of the Company, with respect to the Company (A) there are no
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past or present releases of any Hazardous Materials into the environment,
actions, activities, circumstances, conditions, events, incidents, or
contractual obligations which may give rise to any common law environmental
liability or any liability under any Environmental Law in any material respect
and (B) the Company has not received any notice with respect to the foregoing,
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nor is any action pending or to the Company's knowledge, threatened in
connection with the foregoing, except in each case where the condition or
obligation could not reasonably be expected to have a Material Adverse Effect.
The term "Environmental Laws" means all federal, state, local or foreign laws
regulations, codes, orders, decrees, judgments or injunctions issued promulgated
or approved or entered thereunder relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or
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wastes (collectively, "Hazardous Materials") into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
(b) Other than those that are or were stored, used or disposed of in
compliance with applicable law, to the knowledge of the Company, no Hazardous
Materials are contained on or about any real property currently owned, leased or
used by the Company, and no Hazardous Materials were released on or about any
real property previously owned, leased or used by the Company during the period
the property was owned, leased or used by the Company.
(c) To the knowledge of the Company, there are no underground storage
tanks on or under any real property owned, leased or used by the Company or any
of its subsidiaries that are not in compliance with applicable law.
2.15 Regulatory Permits; Compliance. The Company possesses all
franchises, grants, authorizations, licenses permits, easements, consents,
certificates, approvals and orders necessary to own, lease and operate its
properties and to conduct its business as currently being conducted
(collectively, the "Company Permits"), except where the failure to obtain a
Company Permit could not reasonably be expected to have a Material Adverse
Effect. There is no action pending, or to the knowledge of the Company,
threatened regarding the suspension or cancellation of any of the Company
Permits. The Company is not in conflict with, or in default or violation of, any
of the Company Permits except where such violation could not reasonably be
expected to have a Material Adverse Effect. The Company has not received any
notification with respect to possible conflicts, defaults, or violations of
applicable laws.
2.16 Investment Company Status. The Company is not and upon consummation
of the sale of the Common Stock will not be an "investment company," a company
controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
2.17 Accuracy of Information. The information that has been furnished to
the Investors is true and correct and accurate in all material respects as of
the date hereof except for financial data that is accurate as of the date shown
therein, and the Company has not omitted to state any material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or
its business, properties, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the
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Company but which has not been so publicly disclosed or announced.
2.18 Labor Disturbances. No labor disturbance by the employees of the
Company exists, or to the knowledge of the Company, is imminent which could
reasonably be expected to have a Material Adverse Effect.
2.19 Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are recorded as necessary to permit preparation of financial
-
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets; (ii) transactions are
--
executed in accordance with management's general or specific authorization;
(iii) access to assets is available only if permitted in accordance with
---
management's general or specific authorization; and (iv) the recorded
--
accountability for amounts is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
2.20 S-3 Registration. The Company is currently eligible to register
secondary offerings of securities, including the resale of the Shares, on a
registration statement on Form S-3 under the 1933 Act.
2.21 Use of Proceeds. The proceeds received from the sale of the Shares
shall be used for repayment of indebtedness, working capital and general
corporate purposes.
2.22 No Material Adverse Changes. Since the respective dates of which
information was given in the investment materials, except as otherwise
specifically stated therein, there has been no (i) material adverse change in
the business, results of operations, assets, prospects, or financial condition
of the Company, taken as a whole, whether or not arising in the ordinary course
of business, or (ii) dividend or distribution of any kind declared, paid or made
by the Company on its capital stock.
2.23 Listing and Maintenance Requirements Compliance. The principal
market on which the Common Stock is currently traded is Nasdaq. The Company has
not in the three (3) years preceding the date hereof received notice (written or
oral) from Nasdaq (or any stock exchange, market or trading facility on which
the Common Stock is or has been traded or listed (or on which it has been
quoted)) to the effect that the Company is not in compliance with the listing or
maintenance requirements of any such market, exchange or trading facility. The
Company is not aware of any facts that would reasonably lead to delisting or
suspension of the Common Stock by Nasdaq. After giving effect to the
transactions
-10-
contemplated by this Agreement and the Registration Rights Agreement (as defined
below), the Company is and will be in compliance with all such maintenance
requirements.
2.24 Title. Except as disclosed on Schedule 2.24, the Company has good
and valid title to all real property and personal property owned by it which is
material to the business of the Company, in each case free and clear of all
liens and encumbrances, except for liens that do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company. Any real property and facilities held under
lease by the Company are held by it under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and facilities by the Company.
2.25 Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the business
in which the Company is engaged. The Company has no reason to believe that it
will not be able to renew its existing insurance coverages as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business, at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company, taken as a whole.
2.26 Registration Rights; Rights of Participation. Except as set forth in
Section 2.1(b) of the Registration Rights Agreement dated as of September 28,
2001 between the Company and the other parties thereto (the "Registration Rights
Agreement") or on Schedule 2.26, the Company has not granted or agreed to grant
any Person any rights (including "piggy-back" registration rights) to have any
securities of the Company registered with the Commission or any other
governmental authority which have not been satisfied. Additionally, no person,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or the Registration Rights
Agreement.
3. Representations and Warranties of Investor.
Each Investor hereby represents and warrants to the Company as follows:
3.1 Organization and Standing; Power.
(a) The Investor is an entity duly organized, validly existing, and in
good standing under the laws of the jurisdiction in which it is formed and has
all requisite power and authority and all material qualifications, licenses,
permits and authorizations necessary to own and operate its properties, to carry
on its business as now conducted and as proposed to be conducted through
-11-
the current fiscal year and to carry out the transactions contemplated by this
Agreement. Such Investor has all requisite power to execute and deliver this
Agreement, the Joinder Agreement and the other agreements contemplated hereby to
which it is a party, and to carry out and perform its obligations under the
terms of this Agreement.
3.2 Authorization. This Agreement, the Joinder Agreement and each of the
other agreements contemplated hereby to which an Investor is a party, when
executed and delivered by the Investor and the Company, will constitute valid
and legally binding obligations of the Investor, enforceable against the
Investor in accordance with their terms, subject to laws of general application
relating to bankruptcy, insolvency or creditors' rights and rules of law
governing specific performance, injunctive relief or other equitable remedies.
3.3 Experience. The Investor has such knowledge and experience in
financial and business matters 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 Investor acknowledges that investment in the Shares, the Warrants
and the Warrant Shares is a speculative risk. The Investor is able to fend for
itself in the transactions contemplated by this Agreement, can bear the economic
risk of its investment in the Shares, the Warrants and the Warrant Shares
(including possible complete loss of such investment) for an indefinite period
of time and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment in the
Shares, the Warrants and the Warrant Shares. The Investor understands that
nothing in this Agreement, the Joinder Agreement or the Warrants or any other
materials presented to the Investor in connection with the purchase and sale of
the Shares, the Warrants and the Warrant Shares constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as such Investor, in its sole discretion, has deemed necessary or
appropriate.
3.4 Investment Purpose. The Investor is acquiring the Shares, the
Warrants and the Warrant Shares for investment for its own account, and not with
a view to, or for resale in connection with, any distribution thereof. The
Investor understands that the Shares, the Warrants and the Warrant Shares have
not been registered under the Securities Act of 1933, as amended (the "1933
Act"), by reason of a specific exemption from the registration provisions of the
1933 Act, the availability of which depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of such Investor's
representations as expressed herein. The Investor understands that the Shares,
the Warrants and the Warrant Shares are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving any public offering and that under such
laws and applicable regulations, the Shares may be resold without registration
under the 1933 Act only in certain limited circumstances. The Investor shall
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares, the Warrants or the Warrant Shares except in compliance
-12-
with the 1933 Act, applicable state securities laws and the respective rules and
regulations thereunder.
3.5 Access to Data. The Investor and its representatives have been
afforded access to corporate books, financial statements, records, contracts,
documents and other information concerning the Company (to the extent such
exists), and to its offices and facilities, have been afforded an opportunity to
ask such questions of the Company's officers, employees, agents, accountants and
representatives concerning the Company's existing and proposed business,
operations, financial condition, assets, liabilities and other relevant matters
as they have deemed necessary or desirable, and have been given all such
information as has been requested, in order to evaluate the merits and risks of
the prospective investments contemplated herein. The Investor further represents
and acknowledges that it has been solely responsible for its own "due diligence"
investigation of the Company and its management and business, for its own
analysis of the merits and risks of this investment, and for its own analysis of
the fairness and desirability of the terms of the investment. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 hereof.
3.6 Residency. For purposes of the application of state securities laws,
the Investor represents and warrants to the Company that it is a bona fide
resident of, or a duly formed entity domiciled in, the state of Texas.
3.7 Accredited Investor. The Investor is an accredited investor within
the meaning of Rule 501(a) of Regulation D of the Securities and Exchange
Commission and has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company so that
the Investor is capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests.
3.8 Restrictive Legends. The Investors agree that, so long as the
Shares, the Warrants and the Warrant Shares remain restricted securities, the
Company shall place a restrictive legend on the certificate(s) representing them
in substantially the following forms:
(a) Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION
UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
-13-
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) Warrants:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
SUCH LAWS."
(c) Warrant Shares:
"THE TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED PURSUANT TO THE TERMS OF A
COMMON STOCK PURCHASE WARRANT DATED OCTOBER 26, 2001,
ISSUED BY RMH TELESERVICES, INC., A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF RMH
TELESERVICES, INC. TRANSFER MAY NOT BE MADE EXCEPT IN
ACCORDANCE WITH THE TERMS OF THE COMMON STOCK PURCHASE
WARRANT. IN ADDITION, NO SALE, OFFER TO SELL OR TRANSFER
OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE
MADE UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), WITH RESPECT TO
SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT IS THEN IN FACT
APPLICABLE TO SUCH SHARES."
3.9 Transactions in Common Stock. Investor has not, during the 30
trading days immediately preceding the Closing Date, sold or established a short
position in any shares of the Common Stock or other capital stock of the
Company.
3.10 No General Solicitation. Investor did not learn of the investment in
the Common Stock as a result of any public
-14-
advertising or general solicitation.
4. Registration Rights and Termination Events.
4.1 Registration Rights. The Shares and the Warrant Shares shall have
the registration rights set forth in the Registration Rights Agreement..
4.2 Termination Events. Upon the declaration of a Termination Event (as
defined the Registration Rights Agreement), each Investor will receive from the
Company warrants to purchase shares of Common Stock of the Company in an amount
such that the number of Warrants that each Investor purchased at Closing plus
the warrants received by such Investor pursuant to this Section 4.2 shall, in
the aggregate, be equal to the number of Shares of Common Stock purchased by
such Investor at the Closing (the "Additional Warrants"). The Additional
Warrants will be exercisable at a price equal to 125% of the Stock Price and
will have a five (5) year life from the date of issuance and will be
substantially similar in form and substance to the Warrants. For purposes of
this Section 4.2, Stock Price means $9.60 per share.
5. Closing Conditions.
5.1 Conditions to the Company's Obligation to Sell. The Company's
obligation to sell and deliver the Shares and the Warrants to the Investors
shall, unless waived by the Company, be subject to the satisfaction, with
respect to each Investor, prior to or on the Closing Date, of each of the
following conditions:
(a) Each Investor shall have executed this Agreement and the
Joinder Agreement and delivered the same to the Company.
(b) Each Investor shall have delivered to the Company the
purchase price for the Shares and the Warrants being purchased by the
Investor at the Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.
(c) The representations, covenants and warranties contained in
Section 3 hereof shall be true and correct in all material respects at and
as of the Closing as though then made, except to the extent of changes
caused by the transactions expressly contemplated herein, and each Investor
shall have performed, satisfied and complied in all material respects with
the covenants, agreements and conditions required by this Agreement and the
Registration Rights Agreement to be performed, satisfied and complied with
by such Investor at or prior to the Closing.
5.2 Conditions to Each Investor's Obligation to Purchase.
-15-
Each Investor's obligation hereunder to purchase the Shares and the Warrants at
the Closing shall, unless waived by such Investor, be subject to the
satisfaction, prior to or on the Closing Date, of each of the following
conditions:
(a) The Company and each other Investor shall have executed this
Agreement and the Joinder Agreement and any other transaction document (to
the extent a party thereto), including, in the case of the Company, the
Warrants, and delivered the same to such Investor.
(b) The representations, covenants and warranties contained in
Section 2 hereof shall be true and correct in all material respects at and
as of the Closing as though then made, except to the extent of changes
caused by the transactions expressly contemplated herein, and the Company
shall have performed, satisfied and complied with the covenants, agreements
and conditions required by this Agreement, the Registration Rights
Agreement and the Warrants to be performed, satisfied and complied with by
the Company at or prior to the Closing.
(c) Each Investor shall have received from Wolf, Block, ▇▇▇▇▇▇
and ▇▇▇▇▇-▇▇▇▇▇ LLP, counsel for the Company, an opinion substantially as
set forth in Exhibit D attached hereto, which shall be addressed to the
Investors and dated as of the Closing Date.
(d) The Company shall have delivered to the Investors all of the
following documents, which shall be satisfactory in form and substance to
the Investors:
(1) An Officer's Certificate, executed by the Company's Chief Executive
Officer and Chief Financial Officer and dated the Closing Date,
stating that the conditions specified in Section 5.2(b) have been
fully satisfied;
(2) Certified copies of the resolutions duly adopted by the Company's
Board of Directors (or a duly authorized committee thereof)
authorizing the execution, delivery and performance of this
Agreement, the Joinder Agreement and the Warrants and each of the
other agreements contemplated hereby, the issuance and sale of the
Shares, the Warrants and the Warrant Shares, and all other
transactions contemplated by this Agreement, the Joinder Agreement
and the Warrants;
(3) Copies of all third party and governmental consents, approvals and
filings required in connection with the consummation of the
transactions hereunder (including, without limitation, all blue sky
law filings required to be made prior to the Closing (provided, that
the Company agrees to deliver copies of all other required blue sky
filings within 10 days of the Closing) and waivers of all preemptive
rights and rights of first refusal, if any);
(4) The legal opinion referred to in Section 5.2(c) hereof;
(5) Certificates representing the Shares and the Warrants as described
in Section 1
-16-
hereof; and
(6) Such other documents relating to the transactions contemplated by
this Agreement as the Investors may reasonably request before the
Closing.
Any condition specified in this Section 5.2 may be waived with respect to
the Investors only if consented to in writing by the Investors granting such
waiver. In furtherance of the foregoing, if the Company does not satisfy all of
the conditions set forth in this Section 5.2, the Investors will nevertheless
have the option to purchase the Shares and the Warrants at the Closing.
6. Right of First Refusal.
6.1 Right of First Refusal. Subject to the terms and conditions
contained in this Section 6, the Company hereby grants to each Investor the
right of first refusal, for 180 days after September 28, 2001, to purchase such
Investor's Pro Rata Portion of any New Securities (as defined below) which the
Company may, from time to time, propose to sell and issue. An Investor's "Pro
Rata Portion" for purposes of this Section 6.1 is equal to the fraction obtained
by dividing (a) the number of Shares held by such Investor by (b) the aggregate
- -
number of shares of Common Stock then outstanding, assuming in each case the
conversion, exercise or exchange of all securities by their terms convertible
into or exercisable for Common Stock and the exercise of all options to purchase
or rights to subscribe for Common Stock or such convertible or exchangeable
securities, whether or not the terms of such securities or rights then permit
such conversion, exercise or exchange.
6.2 Definition of New Securities. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, and rights,
options or warrants to purchase said shares of capital stock, and securities of
any type whatsoever that are, or may become, convertible into said shares of
capital stock. Notwithstanding the foregoing, "New Securities" does not include
(i) securities offered in an underwritten public offering pursuant to a
-
registration statement under the 1933 Act, (ii) all shares of Common Stock,
--
warrants or options to purchase Common Stock or other securities issued upon the
approval of the Board of Directors to employees, officers, directors and
consultants of the Company (x) who have provided or will provide bona fide
-
services to the Company not in connection with the offer or sale of securities
in a capital raising transaction and (y) who do not, directly or indirectly,
-
promote or maintain a market for the Company's securities, pursuant to any plan
or arrangement approved by the Board of Directors or the shareholders of the
Company, (iii) all securities issued to lending or leasing institutions upon the
---
approval of the Board of Directors in connection with loans from or leasing
transactions with such institutions, (iv) stock issued pursuant to any private
--
placement completed on substantially similar terms or within 45 days of
September 28, 2001, or (v) stock issued in connection with any merger or
-
acquisition by the Company.
-17-
6.3 Notice of Right. In the event the Company proposes to undertake an
issuance of New Securities, it shall give each Investor written notice of its
intention, describing the type of New Securities and the price and terms upon
which the Company proposes to issue the same. Each Investor shall have 15 days
from the date of receipt of any such notice to agree to purchase shares of such
New Securities (up to the amount referred to in Section 6.1), for the price and
upon the terms specified in the notice, which price and terms shall be the same
as are applicable to the investors purchasing the New Securities, by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.
6.4 Exercise of Right. If any Investor exercises its right of first
refusal hereunder, the closing of the purchase of the New Securities by such
Investor with respect to which such right has been exercised shall take place on
the date set by the Company for the sale of New Securities; provided that such
closing shall not occur prior to the date 20 days following the date of the
written notice provided to the Investors, and provided, further, that the date
of such closing shall be extended in order to comply with applicable laws and
regulations.
6.5 Lapse and Reinstatement of Right. In the event an Investor fails to
exercise the right of first refusal provided in Section 6.1 within said 15 day
period, the Company shall have 60 days thereafter to sell the New Securities not
elected to be purchased by such Investor at the price and upon the terms no more
favorable to the purchasers of such securities than specified in the Company's
notice. In the event the Company has not sold the New Securities or entered into
an agreement to sell the New Securities within said 60 day period, the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Investors in the manner provided above.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law provision or rule (whether of the Commonwealth
of Pennsylvania or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Pennsylvania.
7.2 Expenses. The Company and each of the Investors shall bear its own
expenses in connection with the transactions contemplated by this Agreement.
7.3 Survival.
-18-
The representations, warranties, covenants, and agreements made herein by the
Company and each Investor shall survive any investigation made by the Company or
any Investor and shall survive the Closing. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company or each Investor pursuant hereto shall be deemed to be
representations and warranties by the Company or such Investor, as appropriate,
hereunder as of the date of such certificate or instrument.
7.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto.
7.5 Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, and the Joinder Agreement constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
7.6 Assignment and Transfer. The Investors may transfer such Shares,
Warrants and Warrant Shares in whole or in part, to another person or entity and
may, in connection with such transfer, assign its rights in whole or in part
under this Agreement in accordance with the provisions of this Section 7.6. The
Company agrees to execute and deliver such instruments, documents and
certificates as the Investors, holders or any such transferees may reasonably
request in order to document the transfer in whole or in part of rights
hereunder, which instruments, documents and certificates shall be satisfactory
in form and substance to counsel for the Investors, or holders or such
transferees. Any such transfer shall be subject to compliance with applicable
federal and state securities laws.
7.7 Amendment and Waiver. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and Investors holding two thirds of the
Shares then held by the Investors.
7.8 Notices. All notices or other communications to a party required or
permitted hereunder shall be
-19-
in writing and shall be delivered personally or by telecopy (receipt confirmed)
to such party (or, in the case of an entity, to an executive officer of such
party) or shall be sent by a reputable express delivery service or by certified
mail, postage prepaid with return receipt requested, addressed as follows:
If to an Investor:
To the address set forth on Exhibit A or such other address as may be
designated in writing hereafter, in the same manner, by such Investor.
and with a copy to:
__________________________
__________________________
__________________________
__________________________
__________________________
if to the Company:
RMH Teleservices, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Any party may change the above-specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).
7.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. A facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
IN WITNESS WHEREOF, the Company and the Investors have executed this
Agreement as of the date first written above.
RMH TELESERVICES, INC.
-20-
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
----------------------
Title: CFO
--------------------
-21-
INVESTOR EXECUTION PAGE
INVESTOR SIGNATURE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Member
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
-------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
Address
Dollar Amount of Investment: $ 1,144,296
------------
Number of Shares Subscribed: 118,682
------------
State of Residence/Domicile: Texas
------------
TIN/SSN: 74-3017734
---------------------------------
Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):
____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.
____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.
____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.
____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.
____ (v) A private business development company.
____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.
____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.
____ (viii) A trust with assets in excess of $5,000,000.
____ (ix) A director or an executive officer of the Company.
X (x) An entity in which all of the equity owners are accredited
----
investors.
____ (xi) A self-directed ▇▇▇, ▇▇▇▇▇, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.
-22-
INVESTOR EXECUTION PAGE
INVESTOR SIGNATURE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: Texas Margins, LLC
-------------------------------------
Title: Member
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
-------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
Address
Dollar Amount of Investment: $ 732,769
------------
Number of Shares Subscribed: 76,000
------------
State of Residence/Domicile: Texas
------------
TIN/SSN: 74-3017730
---------------------------------
Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):
____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.
____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.
____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.
____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.
____ (v) A private business development company.
____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.
____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.
____ (viii) A trust with assets in excess of $5,000,000.
____ (ix) A director or an executive officer of the Company.
X (x) An entity in which all of the equity owners are accredited
----
investors.
____ (xi) A self-directed ▇▇▇, ▇▇▇▇▇, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.
-23-
INVESTOR EXECUTION PAGE
INVESTOR SIGNATURE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: Gladeshare I, LLC
-------------------------------------
Title: Member
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
-------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
Address
Dollar Amount of Investment: $ 222,935
------------
Number of Shares Subscribed: 23,122
------------
State of Residence/Domicile: Texas
------------
TIN/SSN: 74-3017727
---------------------------------
Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):
____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.
____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.
____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.
____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.
____ (v) A private business development company.
____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.
____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.
____ (viii) A trust with assets in excess of $5,000,000.
____ (ix) A director or an executive officer of the Company.
X (x) An entity in which all of the equity owners are accredited
----
investors.
____ (xi) A self-directed ▇▇▇, ▇▇▇▇▇, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.
-24-
Exhibits
--------
Exhibit A List of Investors
Exhibit B Form of Warrant
Exhibit C Form of Joinder Agreement
Exhibit D Form of Opinion of Company Counsel
Disclosure Schedules
--------------------
2.3 Capitalization
2.26 Registration Rights; Rights of Participation
EXHIBIT A
LIST OF INVESTORS
State of
Investor Name Sale Placement Placement Domicile
and Address Closing ($) Shares (#) Warrants (#) Warrants (#) Fee ($)
Gladshare 1, LLC $ 222,935 23,122 6,514 977 $ 10,616 Texas
Texas Margins, LLC $ 732,769 76,000 66,087 9,913 $ 34,894 Texas
JFO 1, LLC $1,144,296 118,682 0 0 $ 54,490 Texas
Total $2,100,000 217,804 72,601 10,890 $100,000
2
EXHIBIT D
FORM OF OPINION OF
WOLF, BLOCK, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP
October __, 2001
Based on the foregoing and subject to the qualifications and
limitations set forth below, we are of the opinion that:
1. The Company has been duly incorporated and is subsisting as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Compendium of Public Filing Documents delivered to each of the Investors (the
"Compendium") and to enter into and perform its obligations under the
Transaction Documents.
3. The shares of Common Stock (including shares of Common Stock to
be purchased upon the exercise of any Warrants) and the Warrants to be purchased
by the Investor from the Company have been duly authorized for issuance and sale
to the Investor pursuant to the Purchase Agreement and the Warrants, and, when
issued and delivered by the Company pursuant to the Purchase Agreement and the
Warrants, against payment of the consideration set forth in the Purchase
Agreement and the Warrants, will be validly issued and fully paid and non-
assessable.
4. No securityholder of the Company has, pursuant to the terms of
the Articles of Incorporation or bylaws of the Company, any statute, or any
rules of The NASDAQ National Market, any preemptive, approval or similar rights
or authority pertaining to the issuance, sale and purchase of (i) the shares of
Common Stock to be purchased pursuant to the Purchase Agreement or the shares of
Common Stock issuable upon exercise of the Warrants, or (ii) the Warrants.
5. Each subsidiary of the Company has been duly incorporated and is
validly existing or subsisting as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as presently
being conducted; except where the failure so to be in good standing could not
reasonably be expected to result in a Material Adverse Effect; except as
otherwise disclosed in the Compendium, all of the issued and outstanding capital
stock of each subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to our knowledge, is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity other than the pledge of the equity
interests in such subsidiaries in favor of PNC Bank, N.A., securing obligations
of the Company and its subsidiaries thereto; none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such subsidiary set forth in the
Articles of Incorporation (or comparable governing document)
3
or bylaws of the subsidiary.
6. Each of the Transaction Documents has been duly authorized,
executed and delivered by the Company, and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and, in the case of the Registration Rights
Agreement, except to the extent that the indemnification provisions thereof may
be unenforceable; and all corporate action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby has been
duly and validly taken.
7. Each of the Transaction Documents conforms in all material
respects to the description thereof contained in the Compendium and the shares
of Common Stock and Warrants conform in all material respects to the description
thereof contained in the Compendium.
8. Based in part on the representations of the Investor in the Stock
Purchase Agreement, except for (a) the listing of the Shares and the Warrant
Shares on The NASDAQ National Market, (b) post-closing filings with the
Commission and (c) post-closing filings as may be necessary to comply with the
"blue sky" laws of various states, no filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
in connection with the due authorization, execution and delivery of the
Transaction Documents or for the offering, issuance, sale or delivery of the
shares of Common Stock and the Warrants pursuant to the terms of the Transaction
Documents.
9. The execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated therein
(including the issuance and sale of the Common Stock and the Warrants, and the
use of the proceeds from the sale of the Common Stock and the Warrants as
described in the Compendium) and compliance by the Company with its obligations
under the Transaction Documents do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject and which is listed as an exhibit to the Company's Form
10-K for the year ended September 30, 2000 or listed as an exhibit to any
documents filed with the Commission after the Company's Form 10-K for the year
ended June 30, 2000 (except for such
4
conflicts, breaches or defaults or liens, charges or encumbrances that could not
reasonably be expected to have a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.
10. Neither the Company nor any of its subsidiaries is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
11. Based in part on the representations of the Investor in the Stock
Purchase Agreement, no registration of the Securities under the Securities Act
is required in connection with the issuance and sale of the shares of Common
Stock and the Warrants by the Company in the manner contemplated by the
Transaction Documents.
5
Schedules to Stock Purchase Agreement
Schedule 2.3
------------
As of September 26, 2001, there were 1,079,935 outstanding options to
purchase shares of common stock at a weighted average exercise price of $4.00
per share.
As of September 26, 2001, there were 199,735 options to purchase shares
of common stock available for future issuance under the RMH Teleservices, Inc.
1996 stock incentive plan.
As of September 28, 2001 there were 930,340 outstanding warrants to
purchase shares of common stock at an exercise price of $12.00 per share.
As of September 28, 2001, the Company may have to issue up to 1,617,991
warrants to purchase shares of common stock at an exercise price of $12.00 if
the Company defaults on certain provisions under the stock purchase agreement
dated September 28, 2001 by and among the Company and the investors listed on
Exhibit A thereto.
6
Schedule 2.26
-------------
Certain rights to have securities of the Company registered with the
Commission which have not been satisfied were granted under a Registration
Rights Agreement dated as of September 28, 2001 by and among the Company,
ThinkEquity Partners LLC and the investors listed on Schedule I thereto.
Certain rights to participate in the transactions contemplated by this
Agreement were granted under a Stock Purchase Agreement dated as of September
28, 2001 by and among the Company and the investors listed on Exhibit A thereto.
7