SECURITIES PURCHASE AGREEMENT by and among TWISTBOX ENTERTAINMENT, INC., THE SUBSIDIARY GUARANTORS, AND VALUEACT SMALLCAP MASTER FUND, L.P, dated as of July 30, 2007
by
and
among
TWISTBOX
ENTERTAINMENT, INC.,
THE
SUBSIDIARY GUARANTORS,
AND
VALUEACT
SMALLCAP MASTER FUND, L.P,
dated
as
of
July
30,
2007
|
TABLE
OF CONTENTS
|
||||
|
Page
|
||||
|
ARTICLE
I
DEFINITIONS
|
||||
|
1.1
|
Definitions
|
1
|
||
|
ARTICLE
II
PURCHASE
AND SALE
|
||||
|
2.1
|
Closing
|
4
|
||
|
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
|
||||
|
3.1
|
Representations
and Warranties of the Company
|
5
|
||
|
3.2
|
Representations
and Warranties of the Investors
|
16
|
||
|
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
|
||||
|
4.1
|
Transfer
Restrictions
|
18
|
||
|
4.2
|
Use
of Proceeds
|
20
|
||
|
ARTICLE
V
REGISTRATION
RIGHTS
|
||||
|
5.1
|
Warrant
Shares
|
20
|
||
|
ARTICLE
VI
OBSERVER
RIGHTS
|
||||
|
6.1
|
Observer
|
20
|
||
|
6.2
|
Confidentiality
|
21
|
||
|
6.3
|
Termination
of Certain Rights
|
22
|
||
|
ARTICLE
VII
COVENANTS
|
||||
|
7.1
|
Integration
|
22
|
||
|
7.2
|
Reservation
of Securities
|
22
|
||
|
ARTICLE
VIII
CONDITIONS
|
||||
|
8.1
|
Conditions
Precedent to the Investor’s Obligation to Purchase
|
22
|
||
|
8.2
|
Conditions
Precedent to the Obligations of the Company
|
24
|
-i-
|
ARTICLE
IX
MISCELLANEOUS
|
||
|
9.1
|
Termination
|
25
|
|
9.2
|
Fees
and Expenses
|
25
|
|
9.3
|
Entire
Agreement
|
25
|
|
9.4
|
Notices
|
25
|
|
9.5
|
Amendments;
Waivers
|
26
|
|
9.6
|
Construction
|
26
|
|
9.7
|
Successors
and Assigns
|
26
|
|
9.8
|
Governing
Law; Venue; Waiver of Jury Trial
|
26
|
|
9.9
|
Survival
|
27
|
|
9.10
|
Execution
|
27
|
|
9.11
|
Severability
|
27
|
|
9.12
|
Rescission
and Withdrawal Right
|
27
|
|
9.13
|
Replacement
of Securities
|
27
|
|
9.14
|
No
Promotion
|
27
|
Exhibits
Exhibit
A Schedule
of Investors
Exhibit
B Form
of
Senior Secured Note
Exhibit
C Form
of
Warrant
Exhibit
D Form
of
Guarantee and Security Agreement
Exhibit
E List
of
Material Agreements
Exhibit
F Schedule
of Exceptions
Exhibit
G Form
of
Opinion of Company Counsel
Exhibit
H Form
of
Amended and Restated Investors’ Rights Agreement
Exhibit
I Form
of
Shareholders Agreement Amendment
-ii-
This
SECURITIES
PURCHASE AGREEMENT
(the
“Agreement”),
is
dated as of July 30, 2007, by and among Twistbox Entertainment, Inc., a Delaware
corporation (the “Company”),
each
of the Subsidiary Guarantors (as defined below) and ValueAct SmallCap Master
Fund, L.P. (the “Investor”).
WHEREAS:
A.
The
Company and the Investor are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2)
of the
Securities Act of 1933, as amended (the “Securities
Act”),
and
Rule 506 of Regulation D (“Regulation
D”)
as
promulgated by the United States Securities and Exchange Commission (the
“SEC”)
under
the Securities Act.
B.
The
Investor wishes to purchase, and the Company wishes to sell, upon the terms
and
conditions stated in this Agreement: (i) that aggregate principal amount
of
notes (the “Senior
Secured Notes”)
in
substantially the form attached hereto as Exhibit
B
set
forth opposite such Investor’s name in column two (2) on the Schedule of
Investors attached hereto as Exhibit
A,
and (ii)
that aggregate number of Warrants (the “Warrants”)
in
substantially the form attached hereto as Exhibit
C
set
forth opposite such Investor’s name in column four (4) on the Schedule of
Investors which will be exercisable to purchase shares of Common Stock, par
value $0.001 per share (the “Common
Stock”),
of the
Company (as exercised, collectively, the “Warrant
Shares”).
C.
Each
of the Subsidiary Guarantors (as defined below) will guarantee (the “Guarantee”)
the
Company’s obligations under the Senior Secured Notes on the terms and subject to
the conditions of the Guarantee and Security Agreement (as defined
below).
D.
The
Senior Secured Notes, Warrants and Warrant Shares are collectively referred
to
herein as the “Securities.”
E.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of
which
are hereby acknowledged, the Company and the Investors agree as
follows:
ARTICLE
I
DEFINITIONS
1.1
Definitions.
In
addition to the terms defined elsewhere in this Agreement, the following
terms
have the meanings indicated:
“Action”
has the
meaning set forth in Section 3.1(m).
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as
such
terms are used in and construed under Rule 144.
-1-
“Amended
and Restated Investors’ Rights Agreement”
means
the Amended and Restated Investors’ Rights Agreement in substantially the form
set forth as Exhibit H hereto.
“Board”
means
the Board of Directors of the Company.
“Business
Day”
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York are required by law to remain closed.
“Closing”
means
the closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing
Date”
means
the date and time of the Closing and shall be 12:00 p.m., eastern standard
time,
on July 30, 2007 (or such other date and time as is mutually agreed to by
the
Company and each Investor).
“Collateral”
has the
meaning assigned to such term in the Guarantee and Security
Agreement.
“Collateral
Agent”
has the
meaning assigned to such term in the Guarantee and Security
Agreement.
“Company
Counsel”
means
Proskauer Rose LLP, special counsel to the Company.
“Common
Stock”
has the
meaning set forth in the Preamble.
“Environmental
Laws”
has the
meaning set forth in Section 3.1(n).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Financial
Statements”
has the
meaning set forth in Section 3.1(h).
“Foreign
Securities Law”
means
the laws and regulations governing the sale of securities of a jurisdiction
outside the United States of America where the capital stock of the Company
may
be listed or traded.
“Fundamental
Transaction”
shall be
(i) a merger or consolidation of the Company with or into another corporation
in
which the Company is not the surviving entity unless the holders of the capital
stock of the Company immediately prior to such transaction are entitled to
exercise, directly or indirectly, 50% (fifty percent) or more of the voting
power of all shares of capital stock entitled to vote generally in the election
of directors of the continuing or surviving corporation, (ii) a reverse
triangular merger in which the Company is the surviving entity but the shares
of
the Company’s capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form
of
securities, cash or otherwise, or (iii) a sale of transfer of all or
substantially all of the Company’s properties and assets to another
person.
-2-
“Guarantee
and Security Agreement”
by and
among the Company, the Investor and Subsidiary Guarantors party thereto in
substantially in the form set forth as Exhibit
D
hereto.
“Grantor”
has the
meaning assigned to such term in the Guarantee and Security
Agreement.
“Information”
has the
meaning set forth in Section 6.1(b).
“Lien”
means
any lien, charge, claim, encumbrance, right of first refusal or other security
interest.
“Major
Content Provider”
means
each of the top five (5) content providers to the Company ranked by dollar
volume during the fiscal year ended March 31, 2007.
“Major
Mobile Telephone Carrier”
means
each of the top five (5) mobile telephone carriers of the Company’s content
ranked by revenue during the fiscal year ended March 31, 2007.
“Material
Adverse Effect”
has the
meaning set forth in Section 3.1(a).
“Material
Agreements”
has the
meaning set forth in Section 3.1(r).
“Material
Permits”
has the
meaning set forth in Section 3.1(ff).
“Measuring
Date”
has the
meaning set forth in Section 3.1(i).
“Observer”
has the
meaning set forth in Section 6.1(a).
“Person”
means
any individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, or
joint
stock company.
“Plan”
has the
meaning set forth in Section 3.1(f)(iii).
“Preferred
Stock”
means
the Company’s preferred stock designated as “Series A Preferred Stock” and
“Series B Preferred Stock”.
“Proceeding”
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened in writing.
“Proprietary
Assets”
has the
meaning set forth in Section 3.1(k)(i).
“Purchase
Price”
has the
meaning set forth in Section 2.1(b).
“Rule
144”
means
Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule
may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same effect as such
Rule.
“SEC”
has the
meaning set forth in the Preamble.
-3-
“Securities”
has
the
meaning set forth in the Preamble.
“Senior
Secured Notes” has
the
meaning set forth in the Preamble.
“Shareholders
Agreement” means
the
Second Amended and Restated Shareholders Agreement, dated as of May 15, 2006,
as
amended, or otherwise modified from time to time (including by the Shareholders
Agreement Amendment).
“Shareholders
Agreement Amendment” means
the
Amendment to the Shareholders Agreement in substantially the form set forth
as
Exhibit I hereto.
“Shares”
means
shares of the Company’s Common Stock.
“Subsidiary”
means
any
Person in which the Company, directly or indirectly, owns capital stock or
holds
an equity or similar interest.
“Subsidiary
Guarantor” means
each Subsidiary of the Company that has guaranteed the Senior Secured Notes
pursuant to the Guarantee and Security Agreement.
“Trading
Market” means
any
foreign or United States securities exchange, market or trading or quotation
facility on which the Common Stock is then listed or quoted.
“Transactions”
means
the
transactions contemplated by the Transaction Documents.
“Transaction
Documents” means
this Agreement, the schedules and exhibits attached hereto, the Senior Secured
Notes, the Warrants, the Amended and Restated Investors’ Rights Agreement, the
Shareholders’ Agreement Amendment and the Guarantee and Security
Agreement.
“Transfer”
means
any
sale, transfer, assignment or other disposition, directly or indirectly,
and
“Transferred” shall have the correlative meaning.
“VAC”
has
the
meaning set forth in Section 6.2(a).
“VAC
Entity” or
“VAC
Entities” has
the
meaning set forth in Section 6.2(a).
“Violation”
has
the
meaning set forth in Section 5.8(a).
“Warrant”
has
the
meaning set forth in the Preamble.
“Warrant
Shares” has
the
meaning set forth in the Preamble.
-4-
ARTICLE
II
PURCHASE
AND SALE
2.1
Closing.
(a)
Subject to the terms and conditions set forth in Sections 8.1 and 8.2 herein,
at
the Closing the Company shall issue and sell to the Investor, and the Investor
shall purchase from the Company, such principal amount of Senior Secured
Notes
and number of Warrants set forth opposite the Investor’s name on Exhibit
A
hereto
under the headings “Senior Secured Notes” and “Warrants”. The Closing shall take
place on the Closing Date at the offices of Company Counsel.
(b)
At
the Closing, the Investor shall deliver or cause to be delivered to the Company
the purchase price set forth opposite such Investor’s name on Exhibit
A
hereto
under the heading “Total Purchase Price” in United States dollars and in
immediately available funds (the “Purchase
Price”), by
wire
transfer to an account designated in writing to such Investor by the Company
for
such purpose; provided, however,
that an
amount of the Purchase Price equal to the principal amount together with
accrued
interest on the promissory note dated July 16, 2007 between the Company and
the
Investor in the principal amount of $250,000 (the “Promissory
Note”)
may be
paid by the Investor by delivering to the Company the Promissory Note for
cancellation by the Company.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1
Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Investor that, except as set
forth
in the Schedule of Exceptions attached as Exhibit
F
to this
Agreement, which exceptions shall be deemed to be part of the representations
and warranties made hereunder, the following representations are true and
complete as of the date hereof. The Schedule of Exceptions shall be arranged
in
sections corresponding to the numbered and lettered sections and subsections
contained in this Section 3, and the disclosures in any section or subsection
of
the Schedule of Exceptions shall qualify other sections and subsections in
this
Section 3 if it is reasonably apparent from a reading of the disclosure that
such disclosure is applicable to such other sections and
subsections:
(a)
Organization,
Good Standing, Corporate Power and Qualification.
Each of
the Company and the Subsidiary Guarantors has been duly incorporated and
organized, and is validly existing in good standing, under the laws of its
state
of incorporation and qualified to do business in any state or other jurisdiction
in which the nature of the business conducted or property owned by it makes
such
qualification necessary except where the failure to be so qualified or in
good
standing, as the case may be, would not reasonably be expected to individually
or in the aggregate, (i) materially and adversely affect the legality, validity
or enforceability of any Transaction Document, (ii) have or result in a material
adverse effect on the results of operations, assets, business, prospects
or
financial condition of the Company and the Subsidiaries, taken as a whole
on a
consolidated basis or (iii) materially and adversely impair the Company’s
ability to perform its obligations under any of the Transaction Documents
(any
of (i), (ii) or (iii), a “Material
Adverse Effect”). Each
of
the Company and the Subsidiary Guarantors has the requisite corporate power
and
authority to enter into, deliver, and perform the Transaction Documents,
to sell
and issue the Securities (including the underlying Warrant Shares) hereunder,
and to own and operate their properties and assets and to carry on their
business as currently conducted and as presently proposed to be conducted.
The
Company has made available to the Investor copies of its Articles of
Incorporation, Bylaws and its minute books. Said copies are true, correct
and
complete and reflect all amendments now in effect, and with respect to the
minute books, contain minutes of all meetings and/or actions by written consent
of directors and stockholders since the time of incorporation.
-5-
(b)
Subsidiaries.
The
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, partnership, trust, joint venture, association,
or
other entity other than the Subsidiaries scheduled on Section 3.1(b) of the
Schedule of Exceptions. The Company owns, directly or indirectly, all of
the
capital stock or comparable equity interests of each Subsidiary free and
clear
of any Lien and all the issued and outstanding shares of capital stock or
comparable equity interest of each Subsidiary are, to the extent applicable,
validly issued and are fully paid, non-assessable and free of preemptive
and
similar rights.
(c)
Authorization;
Enforcement.
All
corporate action on the part of the Company’s and each of the Subsidiary
Guarantor’s directors and stockholders necessary, as applicable, for: (i) the
authorization, execution, delivery of, and the performance of all obligations
of
the Company and each Subsidiary Guarantor under this Agreement and the other
Transaction Documents to which it is a party; (ii) the authorization, issuance,
reservation for issuance, sale and delivery of all of the Securities being
sold
under this Agreement and of the Warrant Shares; and (iii) amending the Company’s
bylaws, has been taken. This Agreement, along with the other Transaction
Documents, when executed and delivered, will constitute valid and legally
binding obligations of the Company and each Subsidiary Guarantor, to the
extent
party thereto, enforceable against the Company and each Subsidiary Guarantor,
to
the extent party thereto, in accordance with their respective terms, except
as
may be limited by (i) applicable bankruptcy, insolvency, reorganization or
others laws of general application relating to or affecting the enforcement
of
creditors’ rights generally, (ii) applicable federal or state securities laws
limits on indemnification; and (iii) the effect of rules of law governing
the
availability of equitable remedies.
(d)
No
Conflicts.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party, and the consummation of the Transactions
contemplated hereby or thereby will not result in any violation or default,
or
result in a violation or breach of, with or without the passage of time or
the
giving of notice or both, the Company’s or any Subsidiary Guarantor’s
certificate or articles of incorporation, bylaws or other organizational
or
charter documents, any judgment, order or decree of any court or arbitrator
to
which the Company or any Subsidiary Guarantor is a party or is subject, any
agreement or contract of the Company or any Subsidiary Guarantor, or, to
the
Company’s knowledge, a violation of any statute, law, regulation or order, or an
event which results in the creation of any Lien upon any asset of the Company
or
any Subsidiary Guarantor (other than the Lien granted to the Investor pursuant
to the Transaction Documents).
(e)
Valid
Issuance of Securities.
(i)
The
Senior Secured Notes have been duly and validly authorized by the Company
for
issuance and sale to the Investor pursuant to this Agreement and, when paid
for
and then issued, as provided in this Agreement, will have been validly executed,
issued and delivered by the Company in accordance with the terms of this
Agreement and the Senior Secured Note.
-6-
(ii)
The
Guarantee and Security Agreement has been duly and validly authorized by
each
Subsidiary Guarantor and, on the Closing Date, will have been validly executed
and delivered by each such Subsidiary Guarantor in accordance with the terms
of
the Guarantee and Security Agreement.
(iii)
The
Warrants have been duly and validly authorized by the Company and, when paid
for
and then issued, as provided in this Agreement, will have been validly executed
and delivered by the Company. The Warrant Shares have been duly and validly
authorized and reserved for issuance upon exercise of the Warrants and when
issued upon such exercise in accordance with the Warrant, will be duly and
validly issued and outstanding, fully paid and nonassessable.
(iv)
Assuming the truth and accuracy of the representations made by the Investor
in
Section 3.2 hereof, the offer and sale of the Securities solely to the Investor
in accordance with this Agreement and (assuming no change in currently
applicable law, no Transfer of Securities by any holder thereof and no
commission or other remuneration is paid or given, directly or indirectly,
for
soliciting the issuance of Warrant Shares upon exercise of the Warrants)
the
issuance of the Warrant Shares are exempt from the registration and prospectus
delivery requirements of the Securities Act and the securities registration
and
qualification requirements of the currently effective provisions of the
securities laws of the State of California and the states in which the Investor
is a resident based upon its address set forth on the Schedule of Investors
attached hereto as Exhibit
A.
(f)
Capitalization.
The-capitalization
of the Company immediately prior to the Closing consists of the
following:
(i)
Preferred Stock. A total of 5,204,255 authorized shares of preferred
stock, $0.01 par value per share, consisting of 2,500,000 shares designated
as
“Series A Preferred Stock,” of which 825,075 shares will be issued and
outstanding and 2,704,255 shares designated as “Series B Preferred Stock,” of
which 2,704,254 will be issued and outstanding.
(ii)
Common Stock. A total of 20,000,000 authorized shares of Common Stock, of
which 7,785,716 shares will be issued and outstanding.
(iii)
Options, Warrants, Reserved Shares. Except for (i) any conversion
privileges of the Preferred Stock, (ii) the 3,700,000 shares of Common Stock
reserved for issuance under the Company’s 2006 Stock Incentive Plan (the
“Plan”) under which (y) options to purchase 2,223,689 shares
will be outstanding, and (z) 1,476,311 shares remain available for future
issuance under the
Plan,
there are no outstanding options, warrants, rights (including conversion
or
preemptive rights) or agreement for the purchase or acquisition from the
Company
of any shares of its capital stock or any securities convertible into or
ultimately exchangeable or exercisable for any shares of the Company’s capital
stock. Apart from the exceptions noted herein or in the Schedule of Exceptions,
no shares of the Company’s outstanding capital stock, or stock issuable upon
exercise or exchange of any outstanding options, warrants or rights, or other
stock issuable by the Company, are subject to any preemptive rights, rights
of
first refusal or other rights to purchase such stock (whether in favor of
the
Company or any other person), pursuant to any agreement or commitment of
the
Company. The Company has not made any representations regarding equity
incentives to any officer, employee, director or consultant that are
inconsistent with the share amounts and terms set forth in the Board minutes
and/or actions by written consent of the Board.
-7-
(iv)
The
outstanding shares of the capital stock of the Company (i) are duly authorized
and validly issued, fully paid and nonassessable, and have been approved
by all
requisite stockholder action, and (ii) assuming the accuracy of the
representations and warranties and the compliance with the covenants made
by the
original purchasers of such shares, were issued in compliance with all
applicable state and federal laws concerning the issuance of
securities.
(v)
All
options granted vest as follows: twenty-five percent (25%) of the shares
vest
one (1) year following the vesting commencement date, with the remaining
seventy-five percent (75%) vesting in equal quarterly installments over the
next
three (3) years. No stock plan, stock purchase, stock option or other agreement
or understanding between the Company and any holder of any equity securities
or
rights to purchase equity securities provides for acceleration or other changes
in the vesting provisions or other terms of such agreement or understanding
as
the result of (i) termination of employment or consulting services (whether
actual or constructive); (ii) any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company; or (iii) the
occurrence of any other event or combination of events.
(g)
Consents.
No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, (i) any federal, state or local
governmental authority having jurisdiction over the Company or any Subsidiary
Guarantor, or (ii) any other Person, is required on the part of the Company
or
any Subsidiary Guarantor in order to enable the Company or the Subsidiary
Guarantors to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party except (A) where
the
failure to obtain the same would not have a material and adverse impact on
the
Company’s business, (B) for such qualifications or filings under applicable
securities laws as may be required in connection with the Transactions
contemplated by this Agreement and (C) for such board of director and
stockholder consents that have been obtained prior to Closing. All such
qualifications and filings will, in the case of qualifications, be effective
on
the Closing and will, in the case of filings, be made within the time prescribed
by law.
-8-
(h)
Financial
Statements.
The
Company has delivered to each Investor its unaudited balance sheet and
statements of operations and cash flows as of and for the period ended March
31,
2007 (collectively the “Financial
Statements”). The
Financial Statements are complete and correct in all material respects and
have
been prepared substantially in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated,
except as set forth in Section 3.1(h) of the Schedule of Exceptions. The
Financial Statements accurately set out and describe the financial condition
and
operating results of the Company as of the dates, and for the periods, indicated
therein.
(i)
Certain
Actions.
Since
March 31, 2007 (the “Measuring
Date”), the
Company has not: (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 individually in excess
of Ten
Thousand Dollars ($10,000) or in excess of Twenty Five Thousand Dollars
($25,000) in the aggregate; (iii) made any loans or advances to any person,
other than advances (e.g.,
travel
expenses) made in the ordinary course of business in excess of Ten Thousand
Dollars ($10,000) in the aggregate; (iv) sold, exchanged or otherwise disposed
of any material assets or rights other than the sale of inventory in the
ordinary course of its business; or (v) entered into any material transactions
with any of its officers, directors or employees or any entity controlled
by any
of such individuals.
(j)
Activities
Since Measuring Date.
Since
the Measuring Date, there has not been:
(i)
any
damage, destruction or loss, whether or not covered by insurance, materially
and
adversely affecting the assets, properties, financial condition, operating
results, prospects or business of the Company (as presently conducted and
as
presently proposed to be conducted), taken as a whole;
(ii)
any
waiver by the Company or any Subsidiary Guarantor of any material right or
of a
material debt owed to it;
(iii)
any
change or amendment to a material contract or arrangement by which the Company,
any Subsidiary Guarantor or any of their assets or properties is bound or
subject, except for changes or amendments which are expressly provided for
or
disclosed in this Agreement;
(iv)
any
satisfaction or discharge of any lien, claim or encumbrance or payment of
any
obligation by the Company or any Subsidiary Guarantor, except in the ordinary
course of business and that is not material to the assets, properties, financial
condition, operating results or business of the Company (as such business
is
presently conducted and as it is proposed to be conducted);
(v)
any
material change in any compensation arrangement or agreement with any
employee;
-9-
(vi)
any
sale, assignment or Transfer of any material patents, trademarks, copyrights,
trade secrets or other material intangible assets;
(vii)
any
resignation or termination of employment of any key officer of the Company;
and
the chief executive officer of the Company, to his knowledge, does not know
of
the impending resignation or termination of employment of any such
officer;
(viii)
any receipt of notice that there has been a loss of, or material order
cancellation by, any Major Mobile Telephone Carrier or Major Content Provider
of
the Company;
(ix)
any
mortgage, pledge, Transfer of a security interest in, or lien, created by
the
Company or any Subsidiary Guarantor, with respect to any of its material
intellectual property rights or any other material properties or assets,
except
liens for taxes not yet due or payable;
(x)
any
loans or guarantees made by the Company to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other
than
travel advances and other advances made in the ordinary course of its
business;
(xi)
any
declaration, setting aside or payment or other distribution in respect of
any of
the Company’s capital stock, or any direct; or indirect redemption, purchase or
other acquisition of any of such stock by the Company; or
(xii)
any
agreement or commitment by the Company or any Subsidiary Guarantor to do
any of
the things described in this Section 3.1(j).
(k)
Status
of Proprietary Assets.
(i)
Status.
The
Company and the Subsidiary Guarantors have full title and ownership of, or
are
duly licensed under or otherwise authorized to use, all inventions, patents,
patent applications, trademarks, service marks, trade names, trade secrets,
information, proprietary rights, processes and copyrights (all of the foregoing
collectively hereinafter referred to as the “Proprietary
Assets”)
necessary to enable it to carry on its business as now conducted and as
presently proposed to be conducted without any conflict with or, to its
knowledge, infringement upon the rights of others. Neither the Company nor
the
Subsidiary Guarantors has received any written communications alleging that
the
Company or the Subsidiary Guarantor has violated or, by conducting its business
as currently conducted, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade proprietary rights of any other person
or entity, nor is the Company or any Subsidiary Guarantor aware of any basis
therefore.
-10-
(ii)
Licenses;
Other Agreements.
Neither
the Company nor any Subsidiary Guarantor has granted any options, licenses
or
agreements of any kind relating to any Proprietary Asset of the Company or
any
Subsidiary Guarantor, nor is the Company or any Subsidiary Guarantor bound
by or
a party to any option, license or agreement of any kind with respect to any
of
its respective Proprietary Assets. Neither the Company nor the Subsidiary
Guarantor is obligated to pay any royalties or other payments to third parties
with respect to the marketing, sale, distribution, manufacture, license or
use
of any Proprietary Asset or any other property or rights.
(iii)
Employee
Obligations.
The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Company or that would
conflict with the Company’s business as presently proposed to the
conducted.
(iv)
Assignment
of Inventions.
Each
current or former partner, director, officer, employee or consultant of the
Company who has, in each case, been involved in the development or modification
of any Proprietary Assets owned or purported to be owned by the Company,
has
executed a written agreement expressly assigning to the Company all right,
title
and interest in any inventions and works of authorship and all intellectual
property rights therein.
(1)
Tax
Matters.
The
Company and each Subsidiary (i) has timely prepared and filed all material
foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has
paid
all material taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports
and
declarations, except those being contested in good faith, with respect to
which
adequate reserves have been set aside on the books of the Company and (iii)
has
set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports
or
declarations apply. To the Company’s knowledge, there are no unpaid taxes in any
material amount claimed to be past due by the taxing authority of any
jurisdiction, and the Company knows of no basis for such claim. The Company
has
not waived or extended any statute of limitations at the request of any taxing
authority. There are no outstanding tax sharing agreements or other such
arrangements between the Company and any other corporation or entity and
the
Company is not presently undergoing any audit by a taxing
authority.
(m)
Absence
of Litigation.
There
is no action, suit, proceeding, claim, arbitration or investigation
(“Action”)
pending
(or, to the Company’s knowledge, currently threatened) against the Company or
any Subsidiary Guarantor, its respective activities or its respective properties
before any court or governmental agency. There is no action, suit, proceeding
or
investigation by the Company or any Subsidiary Guarantor currently pending
or
which the Company or any Subsidiary Guarantor intends to initiate.
-11-
(n)
Environmental
Matters.
The
Company and each Subsidiary (i) is not in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous
or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”),
(ii)
does not own or operate any real property contaminated with any substance
in
violation of any Environmental Laws, (iii) is not liable for any off-site
disposal or contamination pursuant to any Environmental Laws and (iv) is
not
subject to any claim relating to any Environmental Laws; which violation,
contamination, liability or claim has affected or would reasonably be expected
to affect, individually or in the aggregate, materially and adversely the
assets, properties, financial condition, operating results or business of
the
Company; and there is no pending or, to the Company’s knowledge, threatened
investigation that might lead to such a claim.
(o)
Compliance.
None of
the Company or any Subsidiary Guarantor is in violation of (i) any term of
its
certificate or articles of incorporation, bylaws or other organizational
or
charter documents, (ii) any material term or provision of any indebtedness,
instrument, judgment or decree or Material Agreement and (iii) to its knowledge,
is not in violation of any order, statute, rule or regulation applicable
to the
Company where such violation would have a Material Adverse Effect.
(p)
Title
to Assets.
The
Company and the Subsidiary Guarantors own and have good and marketable title
to
its respective tangible properties and assets, free and clear of all mortgages,
deeds of trust, liens, encumbrances and security interests except for statutory
liens for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company.
All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by the Company or the Subsidiary Guarantors are in
good
operating condition and repair, ordinary wear and tear excepted.
(q)
Real
Property.
No
condemnation, eminent domain, or similar proceeding exists, is pending or,
to
the knowledge of the Company, is threatened with respect to or that could
affect
any real property leased by the Company or any of the Subsidiary Guarantors,
which proceedings has affected or would reasonably be expected to affect,
individually or in the aggregate, materially and adversely the assets,
properties, financial condition, operating results or business of the Company.
No real property leased by the Company or any of the Subsidiary Guarantors
is
subject to any sales contract, option, right of first refusal or similar
agreement or arrangement with any third party. The Company owns no real
property.
(r)
Material
Agreements and Obligations.
All of
the indentures, contracts and agreements, with expected receipts or expenditures
in excess of $25,000 or involving a license or grant of material rights to
or
from the Company involving, patents, copyrights, trademarks, or other
proprietary information applicable to the current business of the Company
or
relating to compensation plans or arrangements with employees (other than
with
respect to such employees’ salaries or grants of options pursuant to the
Company’s Plan), to which the Company is a party and which are in effect as of
the Closing are listed on Exhibit
E
(the
“Material
Agreements”). The
Material Agreements are valid, binding, and in full force and effect in all
material respects, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and
the
Company has not received any written notice of termination with respect to
any
such contract or agreement by any of the parties to any such contract or
agreement.
-12-
(s)
Material
Liabilities.
The
Company has no material liabilities or obligations, absolute or contingent
(individually or in the aggregate), except (i) the liabilities and obligations
set forth in the Financial Statements, (ii) liabilities and obligations which
have been incurred subsequent to March 31, 2007 in the ordinary course of
business which have not been, in the aggregate, materially adverse to the
assets, properties, financial condition, operating results or business of
the
Company, (iii) liabilities and obligations under leases for its principal
offices and for equipment, and (iv) liabilities and obligations under sales,
procurement and other contracts and arrangements entered into in the normal
course of business.
(t)
No
General Solicitation; Brokers or Finders.
Neither
the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale
of the
Securities. Other than as set forth on Section 3.1(t) of the Schedule of
Exceptions, neither the Company nor the Investor, as a result of any action
taken by the Company, have incurred or will incur, directly or indirectly,
any
liability for brokerage of finders’ fees or agents’ commissions or any similar
charges in connection with this Agreement or the Transactions contemplated
hereby.
(u)
Private
Placement.
None of
the Company, its Subsidiaries, any of their Affiliates, or any Person acting
on
their behalf has, directly or indirectly, at any time within the past six
(6)
months, made any offer or sale of any security or solicitation of any offer
to
buy any security under circumstances that would (i) eliminate the availability
of the exemption from registration under Regulation D under the Securities
Act
in connection with the offer and sale by the Company of the Securities as
contemplated hereby or (ii) cause the offering of the Securities pursuant
to the
Transaction Documents to be integrated with prior offerings by the Company
for
purposes of any applicable law, regulation or stockholder approval provisions,
including, without limitation, under the rules and regulations of any Trading
Market.
(v)
Real
Property Holding Corporation.
The
Company is not a real property holding corporation within the meaning of
Code
Section 897(c)(2) and any regulations promulgated thereunder.
(w)
Off-Balance
Sheet Arrangements.
Neither
the Company nor any of its Subsidiaries is a party to, or has any commitment
to
become a party to, any “off-balance sheet arrangements” (as defined in Item
303(a) of Regulation S-K of the SEC).
(x)
Registration
Rights.
Except
as contemplated by the Transaction Documents and the Registration Rights
Agreement, dated May 16, 2006 by and among the Company and certain holders
of
the Company’s Series A Preferred Stock, the Company is not under any obligation
to register under the Securities Act or Foreign Securities Law any of its
currently outstanding securities or any securities issuable upon exercise
or
conversion of its currently outstanding securities nor is the Company obligated
to register or qualify any such securities under any state securities or
blue
sky laws.
-13-
(y)
Disclosure.
This
Agreement, the Exhibits hereto, the other Transaction Documents and any
certificate expressly delivered by the Company or any Subsidiary Guarantor
to
the Investor or their attorneys or agents in connection herewith or therewith
or
with the Transactions contemplated hereby or thereby, taken as a whole, neither
contain any untrue statement of a material fact nor, to the Company’s knowledge,
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading except that, with respect to the
Company’s business plan or investment presentations and any financial
projections submitted to the Investor in connection with this Agreement and
the
Transactions contemplated hereby, the Company represents and warrants only
that
such business plan, investment presentations and financial projections were
prepared in good faith based on reasonable assumptions and are not materially
inconsistent with any internal Company plans, budgets or forecasts.
(z)
Insurance.
The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses and location in which the Company and the
Subsidiaries are engaged, including directors’ and officers’ liability
insurance. Neither the Company nor any Subsidiary has any knowledge that
it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.
(aa)
ERISA.
The
Company does not have any Employee Pension Benefit Plan as defined in Section
3
of the Employee Retirement Income Security Act of 1974, as amended.
(bb)
Labor
Agreements and Actions; Employee Compensation.
The
Company is not bound by or subject to any contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the best of
the
Company’s knowledge, has sought to represent any of the employees of the
Company. There is no strike or other labor dispute involving the Company
pending, or to the best of the Company’s knowledge, threatened, that could have
a Material Adverse Effect, nor is the Company aware of any labor organization
activity involving its employees. Other than the Company’s Plan and any grants
of options thereunder, the Company is not a party to any employment contract,
deferred compensation agreement, bonus plan, incentive plan, profit sharing
plan, retirement agreement, or other employee compensation
agreement.
(cc)
Employees.
To the
Company’s knowledge, no employee of the Company nor any consultant with whom the
Company has contracted, is in violation of any material term of any employment
contract, proprietary information agreement, non-disclosure agreement or
any
other similar contract or agreement relating to the relationship of such
employee or consultant with the Company, any former employer or any other
party;
and to the Company’s knowledge the continued employment by the Company of its
present employees, and the performance of the Company’s contracts with its
independent contractors, will not result in any such violation. The Company
has
not received any written notice alleging that any such violation
has occurred. The Company does not have any collective bargaining agreement
covering any of its employees. The Company does not believe it is or will
be
necessary to utilize any inventions of any of its employees made prior to
or
outside the scope of their employment by the Company. No employee of the
Company
has been granted the right to continued employment by the Company or to any
material compensation following termination of employment with the Company.
The
chief executive officer of 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, nor does the Company have a present intention to terminate
the
employment of any officer, key employee or group of
employees.
-14-
(dd)
Transactions
With Affiliates and Employees.
There
are no obligations of the Company to officers, directors, stockholders, or
employees of the Company other than (a) for payment of salary for services
rendered, (b) reimbursement for reasonable expenses incurred on behalf of
the
Company and (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). No officer, director, key employee or
stockholder of the Company is indebted to the Company (excluding advances
to
employees made in the ordinary course of business not exceeding $10,000 in
the
aggregate). To the Company’s knowledge, none of the officers, directors, key
employees or stockholders of the Company or any members of their immediate
families, has 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 that competes with the
Company, other than (i) passive investments in publicly traded companies
(representing less than 1 % of
such
company) which may compete with the Company and (ii) investments by venture
capital funds or similar institutional investors with which directors of
the
Company may be affiliated and serve as a board member of a company in connection
therewith due to a person’s affiliation with a venture capital fund or similar
institutional investor in such company. No officer, director or stockholder,
or
any member of their immediate families, is, directly or indirectly, personally
interested in any material contract with the Company (other than such contracts
as relate to any such person’s (i) ownership of capital stock or other
securities of the Company, (ii) indemnification by the Company or (iii) salary
and other employment benefits provided by the Company to such
person).
(ee)
Questionable
Payments.
Neither
the Company nor any Subsidiary, nor, to the Company’s knowledge, directors,
officers, employees, agents or other Persons acting on behalf of the Company
or
any Subsidiary has, in the course of its actions for, or on behalf of, the
Company: (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to foreign or domestic
political activity; (ii) made any direct or indirect unlawful payments to
any
foreign or domestic governmental officials or employees from corporate funds;
(iii) violated in any respect any provision of the Foreign Corrupt Practices
Act
of 1977, as amended or (iv) made any other unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee which, in the aggregate of clauses (i) through
(iv) would materially and adversely affect the assets, properties, financial
condition, operating results or business of the Company.
(ff)
Regulatory
Permits.
The
Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory
authorities necessary to conduct their respective businesses, except where
the
failure to possess such permits does not, individually or in the aggregate,
materially and adversely affect the assets, properties, financial condition,
operating results, prospects or business of the Company (“Material
Permits”),
and
neither the Company nor any Subsidiary has received any written notice of
proceedings relating to the revocation or modification of any Material
Permit.
-15-
(gg)
Internal
Accounting Controls.
The
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements substantially in conformity with generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to
any differences.
(hh)
Investment
Company.
Neither
the Company nor any of its Subsidiaries is (i) an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of
1940
or (ii) a “holding company” as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
(ii)
Margin
Stock.
Neither
the Company nor any of the Subsidiaries is engaged principally, or as one
of
their important activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock (as such term is defined in Regulation
U).
Immediately before and after giving effect to the sale of the Senior Secured
Note, Margin Stock will constitute less than 25% of the Company’s assets as
determined in accordance with Regulation U. No part of the proceeds of the
Senior Secured Note will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase, acquire or carry any
Margin Stock or for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the regulations of the Board of Governors
of the Federal Reserve System of the United States of America, including
Regulation T, U or X.
(jj)
Application
of Takeover Protections.
There is
no control share acquisition, business combination, poison pill (including
any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company’s charter documents or the laws of its state of incorporation
that is or would become applicable to any of the Investors as a result of
the
Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including, without limitation, as
a
result of the Company’s issuance of the Securities and the Investors’ ownership
of the Securities.
3.2
Representations
and Warranties of the Investors.
The
Investor hereby represents and warrants to the Company as follows:
(a)
Authorization.
This
Agreement constitutes the Investor’s valid and legally binding obligation,
enforceable against the Investor in accordance with its terms except as may
be
limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws
of general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect
of
rules of law governing the availability of equitable remedies. The Investor
represents that it has full power and authority to enter into the Transaction
Documents to which it is a party.
-16-
(b)
Purchase
for Own Account.
The
Securities to be purchased by the Investor hereunder will be acquired for
investment for the Investor’s own account, not as a nominee or agent, and not
with a view to the public resale or distribution thereof with the meaning
of the
Securities Act, and the Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same. If not an individual,
the Investor also represents that the Investor has not been formed for the
specific purpose of acquiring Securities.
(c)
Disclosure
of Information.
At no
time was the Investor presented with or solicited by any publicly issued
or
circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the offer, sale and purchase
of
the Securities. To the knowledge of such Investor, such Investor has received
or
has had full access to all the information it requested in connection with
its
investment decision with respect to the Securities to be purchased by such
Investor under this Agreement. Such Investor further has had an opportunity
to
discuss the Company’s business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review
the
Company’s operations and facilities. Investor has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(d)
Investment
Experience.
The
Investor understands that the purchase of the Securities involves substantial
risk. The Investor: (i) has experience as an investor in securities of companies
in the development stage and acknowledges that the Investor is able to fend
for
itself, can bear the economic risk of the Investor’s investment in the
Securities and has such knowledge and experience in financial or business
matters that the Investor is capable of evaluating the merits and risks of
this
investment in the Securities and protecting its own interests in connection
with
this investment and/or (ii) has a preexisting personal or business relationship
with the Company and certain of its officers, directors or controlling persons
of a nature and duration that enables such Investor to be aware of the
character, business acumen and financial circumstances of such persons. The
Investor represents that the office in which its investment decision was
made is
located at the address on the Schedule of Investors attached hereto as
Exhibit
A.
(e)
Accredited
Investor Status.
The
Investor is an “accredited investor” within the meaning of Regulation D
promulgated under the Securities Act.
(f)
Restricted
Securities.
Such
Investor understands that the Securities are characterized as “restricted
securities” under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under
the
Securities Act and applicable regulations thereunder such securities may
be
resold without registration under the Securities Act only in certain limited
circumstances as set forth in Article IV. In this connection, such Investor
represents that the Investor is familiar with Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the Securities
Act. The Investor understands that the Company is under no obligation to
register any of the Securities sold hereunder except as provided herein.
The
Investor understands that no public market
now exists for any of the Securities and that it is uncertain whether a public
market will ever exist for the Securities.
-17-
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer
Restrictions.
(a)
The
Investor covenants that the Securities will only be Transferred pursuant
to an
effective registration statement under, and in compliance with the requirements
of, the Securities Act or Foreign Securities Law or, if so requested by the
Company, upon delivery to the Company of an opinion of counsel reasonably
satisfactory to the Company that such Transfer is being made pursuant to
an
available exemption from the registration requirements of the Securities
Act or
Foreign Securities Law, and in compliance with any applicable state securities
laws. The Investor may not Transfer any Securities to any person that the
Board,
in its reasonable judgment, deems to be a direct competitor of the Company
or an
affiliate thereof. In connection with any Transfer of Securities other than
pursuant to an effective registration statement or to the Company, the Company
may require the transferor to provide to the Company an opinion of counsel
selected by the transferor, the form and substance of which opinion shall
be
reasonably satisfactory to the Company, to the effect that such Transfer
does
not require registration under the Securities Act or Foreign Securities Law.
Notwithstanding anything contained herein to the contrary, any transferee
of any
Securities shall, as a condition precedent to such Transfer, agree in writing
to
be subject to the terms of the Transaction Documents to the same extent as
if
the transferee were an original Investor hereunder.
(b)
Such
Investor understands that the instruments representing the Senior Secured
Notes
and the Warrants and, when issued, the stock certificates representing the
Warrant Shares, until such time as the resale of the Secrities have been
registered and sold under the Securities Act and Foreign Securities Law,
shall
bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
[NEITHER
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE EXERCISABLE HAVE BEEN] [THIS NOTE HAS NOT BEEN] REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
AND
BLUE SKY LAWS. [THESE SECURITIES] [THIS NOTE] MAY NOT BE OFFERED FOR SALE,
SOLD,
TRANSFERRED OR ASSIGNED (1) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE
“SECURITIES ACT”) OR FOREIGN SECURITIES LAWS, OR (B) IF REASONABLY REQUESTED BY
THE COMPANY, AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION
IS NOT
REQUIRED UNDER SAID ACT OR FOREIGN SECURITIES LAWS AND (2) IF SUCH SALE,
TRANSFER OR ASSIGNMENT VIOLATES APPLICABLE STATE SECURITIES AND BLUE SKY
LAWS.
[THESE SECURITIES] ARE SUBJECT TO THE PROVISIONS OF A CERTAIN SECURITIES
PURCHASE AGREEMENT, DATED AS OF JULY 30, 2007, INCLUDING CERTAIN RESTRICTIONS
ON
TRANSFER SET FORTH THEREIN, AND AN AMENDED
AND RESTATED INVESTORS’ RIGHTS AGREEMENT, DATED AS OF JULY 30, 2007. COMPLETE
AND CORRECT COPIES OF SUCH AGREEMENTS ARE AVAILABLE FOR INSPECTION AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED TO ANY HOLDER OF [THESE
SECURITIES] UPON WRITTEN REQUEST WITHOUT CHARGE.
-18-
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which
it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities have been registered and sold pursuant to an effective registration
statement under the Securities Act or Foreign Securities Law or (ii) in
connection with a sale, assignment or other Transfer, the Company reasonably
requests that such holder provide the Company with opinion of counsel reasonably
acceptable to the Company that the legend may be removed without registration
under the applicable requirements of the Securities Act or Foreign Securities
Law.
(c)
Drag-Along.
In the
event that the Board and holders of a majority of the outstanding shares
of
Common Stock issued or issuable upon conversion of the shares of Series A
Preferred Stock and Series B Preferred Stock approve (i) a sale of all or
substantially all of the assets of the Company to an unrelated third party,
(ii)
a sale of more than 50% of the outstanding capital stock of the Company (on
an
as-converted basis) to one or more unrelated third parties or (iii) a merger
or
consolidation of the Company with an unrelated third party as a result of
which
either (x) the Company does not survive or (y) such unrelated third parties
(or
equity owners thereof) hold, directly or indirectly, at least a majority
of the
Common Stock (on an as-converted basis), (such events, a “Sale
of the Company”),
then
each holder of Warrant Shares hereby agrees with respect to all shares of
capital stock of the Company (including Common Stock) that he, she or it
holds
and any other Company securities over which he, she or it otherwise exercises
dispositive power:
(i)
in
the event such transaction requires the approval of stockholders, (a) if
the
matter is to be brought to a vote at a stockholder meeting, after receiving
proper notice of any meeting of stockholders of the Company to vote on the
approval of a Sale of the Company, to be present, in person or by proxy,
as a
holder of the Company’s capital stock, at all such meetings and be counted for
the purposes of determining the presence of a quorum at such meetings; and
(b)
to vote (in person, by proxy or by action by written consent, as applicable)
all
shares of the Company’s capital stock in favor of such Sale of the Company and
in opposition of any and all other proposals that could reasonably be expected
to delay or impair the ability of the Company to consummate such Sale of
the
Company;
(ii)
in
the event that the Sale of the Company is to be effected by the sale of shares
of the Company’s capital stock held by the holders of the Company’s Series B
Preferred Stock (the “Selling
Stockholders”)
without the need for stockholder approval, each holder of Warrant Shares
agrees
to sell all shares of capital stock of the Company beneficially held thereby
(or
in the event that the Selling Stockholders are selling fewer than all of
their
shares of Company’s capital stock, shares in the same proportion as the Selling
Stockholders
are selling) to the person to whom the Selling Stockholders propose to sell
their shares, for the same per-share consideration (on an as-converted basis)
and on the same terms and conditions as the Selling Stockholders, except
that
the holders of Warrant Shares will not be required to sell their shares unless
the liability for indemnification of such holders of Warrant Shares in such
Sale
of the Company is several, not joint, and is pro rata in accordance with
such
holder’s respective relative stock ownership of the Company, and will not exceed
the consideration payable thereto, if any, in such transaction (except in
the
case of potential liability for fraud or willful misconduct
thereby);
-19-
(iii)
to
refrain from exercising any dissenters’ rights or rights of appraisal under
applicable law at any time with respect to such Sale of the Company;
and
(iv)
to
execute and deliver all related documentation and take such other action
in
support of the Sale of the Company as shall reasonably be requested by the
Company.
If
the
drag-along provisions set forth in the Shareholders Agreement are amended
or
modified, or are replaced with a similar provision applicable to the
shareholders of a successor to the Company in connection with a Fundamental
Transaction, then the provisions of Section 4.1(c) above shall be deemed
to have
been similarly amended, modified or replaced, mutatis
mutandis.
4.2
Use
of
Proceeds.
The
Company intends to use the net proceeds from the sale of the Securities for
working capital and general corporate purposes and not for the (i) repayment
of
any of the Senior Secured Notes or (ii) redemption or repurchase of any of
its
equity securities. Pending these uses, the Company intends to invest the
net
proceeds from this offering in short-term, interest-bearing, investment-grade
securities, or as otherwise pursuant to the Company’s customary investment
policies.
ARTICLE
V
REGISTRATION
RIGHTS
5.1
Warrant
Shares.
The
Warrant Shares have certain rights to registration as set forth in the Amended
and Restated Investors’ Rights Agreement, dated as of July 30, 2007 and are
subject to certain restrictions as set forth therein.
ARTICLE
VI
OBSERVER
RIGHTS
6.1
Observer.
(a)
If
ValueAct SmallCap Master Fund, L.P. (“VAC”)
no
longer has the right to elect one director pursuant to the Shareholders
Agreement, then, so long as VAC owns at least $5,500,000 of the principal
amount
of the Senior Secured Notes or at least 800,582 shares of Common Stock issued
or
issuable upon exercise of the Warrants (as adjusted pursuant to the terms
and
conditions set forth therein), then VAC shall be granted the right to appoint,
and the Company will permit, one representative appointed by VAC (the
“Observer”) to
attend
all meetings
of the Board and all committees thereof (whether in person, telephonic or
other)
in a non-voting, observer capacity and shall provide to the Observer,
concurrently with the members of the Board, and in the same manner, notice
of
such meeting and a copy of all materials provided to such members. VAC may
transfer its rights to appoint the Observer to one transferee of the Warrants
or
Warrant Shares in connection with a Transfer permitted by the terms of this
Agreement, provided, however, that such Transfer to such transferee shall
include at least $5,500,000 in principal amount of the Senior Secured Notes
or
800,582 shares of Common Stock (as adjusted pursuant to the terms and conditions
set forth therein) issued or issuable upon exercise of the Warrants.
Notwithstanding anything contained herein to the contrary, the Company may
withhold portions of information from the Observer and exclude the Observer
from
portions of any meeting if, upon advice of the Company’s legal counsel, access
to such information or attendance at a portion of a meeting by the Observer
would adversely affect the attorney-client privilege between the Company
and its
legal counsel. The Observer shall execute a customary confidentiality agreement
reasonably acceptable to the Company.
-20-
(b)
The
Company acknowledges that the Investor will likely have, from time to time,
information that may be of interest to the Company (“Information”) regarding
a wide variety of matters including, by way of example only, (i) current
and
future investments VAC has made, may make, may consider or may become aware
of
with respect to other companies and other technologies, products and services,
including, without limitation, technologies, products and services that may
be
competitive with the Company’s, and (ii) developments with respect to the
technologies, products and services, and plans and strategies relating thereto,
of other companies, including, without limitation, companies that may be
competitive with the Company. The Company recognizes that a portion of such
Information may be of interest to the Company. Such Information may or may
not
be known by the Observer. The Company, as a material part of the consideration
for this Agreement, agrees that VAC and its Observer shall have no duty to
disclose any Information to the Company or permit the Company to participate
in
any projects or investments based on any Information, or to otherwise take
advantage of any opportunity that may be of interest to the Company if it
were
aware of such Information, and hereby waives, to the extent permitted by
law,
any claim based on the corporate opportunity doctrine or otherwise that could
limit VAC’s ability to pursue opportunities based on such Information or that
would require VAC or Observer to disclose any such Information to the Company
or
offer any opportunity relating thereto to the Company.
6.2
Confidentiality.
The
Investor agrees to hold all information received pursuant to this Article
VI, or
otherwise in connection with its rights under the Transaction Documents,
in
confidence, and not to use or disclose any of such information to any third
party, except to the extent such information was made publicly available
by the
Company; provided,
however, that
the
Investor may disclose such information (i) as may be required by law, (ii)
to
its attorneys, accountants, consultants, and other professionals to the extent
necessary to obtain their bona fide services in connection with monitoring
its
investment in the Company, (iii) to any potential purchaser of the Securities
so
long as such purchaser is advised of the confidentiality provisions of this
Section 6.2 and is bound by confidentiality obligations at least as restrictive
as this Section 6.2 and (iv) to any partner or affiliate of the Investor
so long
as such partner or affiliate is advised of the confidentiality provisions
of
this Section 6.2 and is bound by confidentiality obligations at least as
restrictive as this Section 6.2.
-21-
6.3
Termination
of Certain Rights.
The
Company’s obligations under Sections 6.1 above will terminate (a) upon the
closing of the first sale of the Company’s Common Stock to the general public
pursuant to an effective registration statement filed under the Securities
Act
or Foreign Securities Law in which the gross proceeds of the Company (without
reduction for underwriter’s discounts and commissions or expenses of the sale),
equals or exceeds $25,000,000; (b) upon a Fundamental Transaction; or (c)
at
such time as VAC or any permitted transferee of the rights under Section
6.1, as
the case may be, no longer own, beneficially or of record, at least (i)
$5,500,000 in principal amount of the Senior Secured Notes or (ii) 800,582
of
shares of Common Stock issued or issuable upon exercise of the Warrants as
adjusted pursuant to the terms and conditions set forth therein.
ARTICLE
VII
COVENANTS
7.1
Integration.
The
Company shall not, and shall use its best efforts to ensure that no Affiliate
thereof shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in
a
manner that would require the registration under the Securities Act of the
sale
of the Securities to the Investor or that would be integrated with the offer
or
sale of the Securities for purposes of the rules and regulations of any Trading
Market.
7.2
Reservation
of Securities.
The
Company shall maintain a reserve from its duly authorized shares of Common
Stock
for issuance pursuant to the Transaction Documents in such amount as may
be
required to fulfill its obligations in full under the Transaction Documents.
In
the event that at any time the then authorized shares of Common Stock are
insufficient for the Company to satisfy its obligations in full under the
Transaction Documents, the Company shall promptly take such actions as may
be
required to increase the number of authorized shares.
ARTICLE
VIII
CONDITIONS
8.1
Conditions
Precedent to the Investor’s Obligation to Purchase.
The
obligation of the Investor to purchase the Securities at the Closing is subject
to the satisfaction or waiver by the Investor, at or before the Closing,
of each
of the following conditions:
(a)
The
Company shall have duly executed and delivered to each Investor:
(i)
one
or more Senior Secured Notes with an aggregate principal amount as is set
forth
opposite the Investor’s name in column two (2) on the Schedule of
Investors;
(ii)
that
number of Warrants as is set forth opposite the Investor’s name in column three
(3) on the Schedule of Investors;
(iii)
copies of the Amended and Restated Investors’ Rights Agreement and the
Shareholders Agreement Amendment fully executed by all parties thereto (other
than the Investor);
-22-
(iv)
the
Guarantee and Security Agreement signed on behalf of the Company, and each
Subsidiary Guarantor party thereto, together with the following:
(1)
any
certificated securities representing shares of capital stock or other similar
interests owned by or on behalf of any Grantor (as defined in the Guarantee
and
Security Agreement) constituting Collateral (as defined in the Guarantee
and
Security Agreement) as of the Closing Date after giving effect to the
Transactions;
(2)
any
promissory notes and other instruments evidencing all loans, advances and
other
debt owed or owing to any Grantor constituting Collateral as of the Closing
Date
after giving effect to the Transactions;
(3)
stock
powers and instruments of transfer, endorsed in blank, with respect to such
certificated securities, promissory notes and other instruments;
(4)
descriptions of all intellectual property, including all patents, trademarks
and
copyrights, owned by the Company and its Subsidiaries in detail reasonably
satisfactory to the Investor;
(5)
the
Control Agreements executed by the relevant Grantors and the Collateral Agent
and acknowledged and agreed to by the relevant Control Account Bank pursuant
to
the Guarantee and Security Agreement (“Control Agreement”, “Collateral Agent”
and “Control Account Bank” shall have the meanings set forth in the Guarantee
and Security Agreement);
(6)
all
instruments and other documents, including UCC financing statements, required
by
law or reasonably requested by the Collateral Agent to be filed, registered
or
recorded to create or perfect the Liens intended to be created under the
Guarantee and Security Agreement; and
(7)
results of a search of the UCC (or equivalent) filings made and tax and judgment
lien searches with respect to the Grantors in the jurisdictions contemplated
by
the Guarantee and Security Agreement and copies of the financing statements
(or
similar documents) disclosed by such search and evidence reasonably satisfactory
to the Collateral Agent that the Liens indicated by such financing statements
(or similar documents) are acceptable to the Collateral Agent or have been
released.
(b)
Such
Investor shall have received the opinion of Company Counsel, dated as of
the
Closing Date, in substantially the form of Exhibit
G
attached
hereto.
(c)
The
Company shall have delivered a certificate, executed on behalf of the Company
by
its Secretary, dated as of the Closing Date, certifying the resolutions
adopted by
the
Board approving the Transactions contemplated by the Transaction Documents
and
the issuance of the Securities, certifying the current versions of the
Certificate of Incorporation and Bylaws of the Company and certifying as
to the
signatures and authority of persons signing this Agreement and related documents
on behalf of the Company.
-23-
(d)
The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true
and
correct in all respects) as of the date when made and as of the Closing Date
as
though made at that time (except for representations and warranties that
speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Investor shall have
received a certificate, executed on behalf of the Company by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the
Investor.
(e)
The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities, except for
those consents and approvals set forth in Sections 3.1(d) and 3.1(g) to the
Schedule of Exceptions.
(f)
The
Investors shall have received all fees and other amounts due and payable
on or
prior to the Closing Date pursuant to Section 9.2 hereof.
(g)
The
Company shall have delivered to such Investor such other documents relating
to
the Transactions contemplated by this Agreement as such Investor or its counsel
may reasonably request.
8.2
Conditions
Precedent to the Obligations of the Company.
The
Company’s obligation to sell and issue the Securities at the Closing is, at the
option of the Company, subject to the fulfillment or waiver of the following
conditions:
(a)
Receipt
of Payment.
The
Investor shall have delivered payment of the Purchase Price to the Company
for
the Securities.
(b)
Representations
and Warranties.
The
representations and warranties of the Investor shall be true and correct
in all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true
and
correct in all respects) as of the date when made and as of the Closing Date
as
though made at that time (except for representations and warranties that
speak
as of a specific date, which shall be true and correct as of such date) and
the
Investor shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Investor at
or
prior to the Closing Date.
-24-
(c)
Covenants.
All
covenants, agreements and conditions contained in this Agreement to be
performed, satisfied or complied with by the Investor on or prior to the
Closing
Date shall have been performed, satisfied or complied with in all material
respects.
(d)
Transaction
Documents.
The
Company shall have received copies of all Transaction Documents fully executed
by all parties thereto (other than the Company and its
Subsidiaries).
ARTICLE
IX
MISCELLANEOUS
9.1
Termination.
This
Agreement may be terminated by the Company or the Investor, by written notice
to
the other parties, if the Closing has not been consummated by the third Business
Day following the date of this Agreement; provided that no such termination
will
affect the right of any party to ▇▇▇ for any breach by the other party (or
parties).
9.2
Fees
and Expenses.
The
Company shall reimburse the Investor for all of its reasonable costs and
expenses incurred in connection with the Transactions contemplated by this
Agreement, including, but not limited to, fees of outside counsel (in an
amount
not to exceed $150,000) and other out-of-pocket expenses. The Company shall
pay
all transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the initial sale and issuance of the applicable Securities
(other than the Warrant Shares) to the Investor.
9.3
Entire
Agreement.
The
Transaction Documents, together with the Exhibits and Schedules thereto,
contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules. At or after the Closing, and
without further consideration, the Company and the Investor will execute
and
deliver such further documents as may be reasonably requested in order to
give
effect to the intention of the parties under the Transaction
Documents.
9.4
Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
prior to 6:30 p.m. (New York City time) on a Business Day, (b) the next Business
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section on a day
that is
not a Business Day or later than 6:30 p.m. (New York City time) on any Business
Day, (c) the Business Day following the date of deposit with a nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to
whom such notice is required to be given. The addresses and facsimile numbers
for such notices and communications are those set forth on the signature
pages
hereof, or such other address or facsimile number as may be designated in
writing hereafter, in the same manner, by any such Person.
-25-
9.5
Amendments;
Waivers.
Any term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either
retroactively or prospectively), with the written consent of the Company
and the
Investor(s) holding a majority in interest on an as converted basis of the
Warrant Shares. Subject to the preceding sentence, any amendment or waiver
effected in accordance with this Section shall be binding upon all parties
to
this Agreement, including, without limitation, any Investor who may not have
executed such amendment or waiver.
9.6
Construction.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
9.7
Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Investors. Any Investor may assign its rights under this
Agreement to any Person to whom such Investor assigns or Transfers any
Securities, provided such transferee agrees in writing to be bound, with
respect
to the Transferred Securities, by the provisions hereof that apply to the
“Investors.”
9.8
Governing
Law; Venue; Waiver of Jury Trial.
ALL
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL
PRACTICE LAWS AND RULES 327(b). EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR
IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT,
ACTION OR PROCEEDING, ANY
CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT,
THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN
ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED
OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES
THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY
RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES
ALL
RIGHTS TO A TRIAL BY JURY.
-26-
9.9
Survival.
The
representations and warranties, agreements and covenants contained herein
shall
survive the Closing.
9.10
Execution.
This
Agreement may be executed in two or more counterparts, all of which when
taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered
to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) with the
same
force and effect as if such facsimile signature page were an original
thereof.
9.11
Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that
is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
9.12
Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting
any
similar provisions of) the Transaction Documents, whenever the Investor
exercises a right, election, demand or option owed to the Investor by the
Company under a Transaction Document and the Company does not timely perform
its
related obligations within the periods therein provided, then, prior to the
performance by the Company of the Company’s related obligation, such Investor
may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or
in
part without prejudice to its future actions and rights.
9.13
Replacement
of Securities.
If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction
and
the execution by the holder thereof of a customary lost certificate affidavit
of
that fact and an agreement to indemnify and hold harmless the Company for
any
losses in connection therewith. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.
9.14
No
Promotion.
Except
as otherwise required by law and as provided in Section 4.5 herein, the Company
agrees that it will not, without the prior written consent of VAC in each
instance, (i) use in advertising, publicity, press release or otherwise the
name
of any VAC Entity, or any partner or employee of any VAC Entity, nor any
trade
name, trademark, trade device, service ▇▇▇▇, symbol or any abbreviation,
contraction or simulation thereof owned by any VAC Entity or (ii) represent,
directly or indirectly, that any product or any service provided by the Company
has been approved or endorsed by any VAC Entity. This provision shall survive
termination of the Transaction Documents.
-27-
[SIGNATURE
PAGES TO FOLLOW]
-28-
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories
as of
the date first indicated above.
|
TWISTBOX
ENTERTAINMENT, INC.
|
|||
|
By:
|
/s/
▇▇▇
▇▇▇▇▇
|
||
|
Name:
|
▇▇▇
▇▇▇▇▇
|
||
|
Title:
|
PRES./CEO
|
||
|
WAAT
MEDIA CORP.
|
|||
|
By:
|
/s/
▇▇▇
▇▇▇▇▇
|
||
|
Name:
|
▇▇▇
▇▇▇▇▇
|
||
|
Title:
|
PRES./CEO
|
||
|
TWISTBOX
GAMES LTD. & CO. KG
|
|||
|
By:
|
/s/
▇▇▇
▇▇▇▇▇
|
||
|
Name:
|
▇▇▇
▇▇▇▇▇
|
||
|
Title:
|
PRES./CEO
|
||
Investor
Signature Page
By
its
execution and delivery of this signature page, the undersigned Investor hereby
joins in and agrees to be bound by the terms and conditions of the Securities
Purchase Agreement dated as of July 30, 2007 (the “Purchase Agreement”) by and
among Twistbox Entertainment, Inc., the Subsidiary Guarantors (as defined
therein) and the Investor (as defined therein) and authorizes this signature
page to be attached to the Purchase Agreement or counterparts
thereof.
|
VALUEACT
SMALLCAP MASTER FUND, L.P.
|
|||
|
By
its General Partner, VA SmallCap Partners, LLC
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
||
|
Title:
|
MANAGING
MEMBER
|
||