Exhibit 10.15
CBCom Inc.
COMMON STOCK
PURCHASE AGREEMENT
MARCH 19, 2002
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TABLE OF CONTENTS
Page
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SECTION 1. AUTHORIZATION OF SALE OF THE SHARES...........................1
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.....................1
2.1. Sale of Shares................................................1
2.2. Acceptance of Proposed Purchase of Shares.....................1
SECTION 3. CLOSING AND DELIVERY..........................................1
3.1. Closing.......................................................1
3.2. Delivery of the Shares at the Closing.........................2
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY......2
4.1. Organization and Standing.....................................2
4.2. Corporate Power; Authorization................................2
4.3. Issuance and Delivery of the Shares...........................2
4.4. Offering Memorandum; Additional Disclosure Documents;
Financial Statements..........................................3
4.5. Intellectual Property.........................................3
4.6. Capitalization................................................3
4.7. Litigation....................................................4
4.8. No Defaults...................................................4
4.9. Governmental Consents.........................................4
4.10. Taxes.........................................................5
4.11. Insurance.....................................................5
4.12. Investment Company............................................5
4.13. Listing; Maintenance of Listing...............................5
4.14. No Registration...............................................5
4.15. Subsidiaries..................................................5
4.16. Material Adverse Effect.......................................5
4.17. "Adjustment Price"............................................5
4.18. "Adjustment Shares"...........................................5
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER....6
SECTION 6. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING............7
6.1. Representations and Warranties Correct........................7
SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING..........7
7.1. Registration Statement Effective..............................7
7.2. Representations and Warranties Correct........................8
7.3. Legal Opinions................................................8
7.4. Material Adverse Effect.......................................8
SECTION 8. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT...........................................................8
8.1. Registration Procedures and Expenses..........................8
8.2. Transfer of Shares............................................9
8.3. Indemnification..............................................10
8.4. Termination of Conditions and Obligations....................11
8.5. Changes in Purchaser Information.............................11
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SECTION 9. MISCELLANEOUS................................................11
9.1. Waivers and Amendments.......................................11
9.2. Headings.....................................................11
9.3. Broker's Fee.................................................11
9.4. Severability.................................................12
9.5. Notices......................................................12
9.6. Governing Law................................................12
9.7. No Joint Liability...........................................12
9.8. Counterparts.................................................13
9.9. Survival of Representations, Warranties and Agreements,
Definition of "Knowledge"....................................13
9.10. Successors and Assigns.......................................13
9.11. Entire Agreement.............................................13
9.12. Payment of Fees and Expenses.................................14
9.13. Confidentiality..............................................14
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
March 19, 2002, (the "Effective Date"), by and among CBCom Inc., a Delaware
Corporation, with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (the "Company") and the Brighton Opportunity Fund a
California limited partnership with its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Purchaser").
AGREEMENT
In consideration. of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Purchaser hereby agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SHARES. Subject to the terms
and conditions of this Agreement, the Company has, or before the Closing (as
defined below) will have, authorized the sale and issuance of Three Hundred
Ninety Thousand (390,000) shares of its common stock ("Shares") to the
Purchaser.
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.
2.1. At the Closing (as defined in Section 3.1 hereof), the Company
shall sell, and the Purchaser shall purchase the Shares for an aggregate
purchase price of Two Hundred Fifty Thousand Dollars ($250,000). The Shares
shall be delivered in two blocks as follows:
1. Three Hundred Ninety Thousand (390,000) Shares issued by the
Company dated March 19, 2002, legended to restrict transfer pursuant to Rule 144
(The "Shares"), a copy of the certificate for which is attached hereto as
Exhibit A, showing the front and back of the share certificate: subject to an
"Adjustment Price" set forth in Paragraph 4.17, and "Adjustment Shares" set
forth in Paragraph 4.18; and
2. Five Hundred Thousand (500,000) Shares eligible for resale,
with evidence of transfer to the securities account in the name of Purchaser as
specified in Exhibit B hereto prior to Closing ( " The Collateral Shares"). The
Collateral Shares are delivered as collateral for the performance of the
Registration provisions set forth in Paragraphs 8.1 and 8.2 by Ng Keng Sing and
said Collateral Shares shall be returned to Ng Keng Sing upon the completion of
Registration of the 390,000 shares, set forth in Paragraph 8.2.
3. The Restricted Shares and Collateral Shares shall be referred
to hereinafter in the aggregate as the "Shares".
SECTION 3. CLOSING AND DELIVERY.
3.1. Closing. The closing of the purchase and sale of the Shares
pursuant to this Agreement (the "Closing") shall be held as soon as practicable
after the execution of this Agreement at the law offices of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or on such other date and
place as may be agreed to by the Company and the Purchaser. The Company shall
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give at least one (1) business day prior written notice to the Purchaser, in a
manner provided for in Section 9.4 hereof, of the date, time and location of the
Closing. At or prior to the Closing, the Purchaser shall execute any related
agreements or other documents required to be executed hereunder, dated as of the
date of the Closing (the "Closing Date").
3.2. Delivery of the Shares at the Closing. At or prior to the Closing,
the Company shall deliver to the Purchaser the Shares.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
4.1. Organization and Standing. Each of the Company and its
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
full corporate power and authority to own or lease its properties and conduct
its business as presently conducted.
4.2. Corporate Power; Authorization. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, sell and issue the Shares and carry out and perform all
of its obligations under this Agreement. This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium and other laws of general applicability
relating to or affecting creditors' rights, (b) as limited by equitable
principles generally, whether such enforceability is considered in a proceeding
in equity or at law, and (c) as rights to indemnity or contribution hereunder
may be limited by federal or state securities laws or principles of public
policy. Except as would. not individually or in the aggregate have a material
adverse effect on, or result in a material adverse change in, the business,
properties, operations, condition (financial or other) or results of operations
of the Company and its subsidiaries, taken as a whole, or render this Agreement,
or any portion hereof, invalid or unenforceable or impair in any material
respect the ability of the Company to perform fully its obligations hereunder
(any of the foregoing shall be referred to herein as a "Material Adverse
Effect"), the execution and delivery of this Agreement does not, and the
performance of this Agreement and the compliance with the provisions hereof and
the issuance, sale and delivery of the Shares by the Company will not conflict
with, or result in a breach or violation of the terms, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
any lien pursuant to the terms of (i) the Certificate of Incorporation or Bylaws
of the Company, (ii) any statute, law, rule or regulation applicable to the
Company, (iii) any state or federal order, judgment or decree applicable to the
Company, or (iv) any indenture, mortgage, lease or other agreement or instrument
to which the Company or any of its properties is subject.
4.3. Issuance and Delivery of the Shares. The Shares have been duly
authorized and, when issued and paid for in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable. The
issuance and delivery of the Shares is not subject to preemptive, co-sale, right
of first refusal or any other similar rights of the shareholders of the Company
or its subsidiaries or any liens or encumbrances. No holder of any of the
Company's securities has been granted any registration rights other than the
registration rights set forth herein.
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4.4. Disclosure Documents; Financial Statements.
(a) Each statement or report included as part of the periodic
reports filed by the Company with the Securities and Exchange Commission ("SEC")
pursuant to Sections 13, 14(a) and (d) of the Securities Exchange Act of 1934
(the "Exchange Act") is true and complete in all respects. The Company has filed
in a timely manner all documents ("Disclosure Documents") that the Company was
required to file with the SEC under Sections 13, 14(a) and 15(d) of the Exchange
Act during the twelve (12) months preceding the date of this Agreement. The
Company satisfies the requirements for the use of Form S-3 under the Securities
Act of 1933, as amended (the "Securities Act") with respect to any registration
of the Shares for resale by the holders thereof.
(b) As of their respective filing dates (or, if amended, when
amended), the Disclosure Documents complied in all material respects with the
requirements of the Exchange Act and the information contained therein as of the
date thereof did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, except to the extent that information contained in any such document
has been revised or superseded by a later filed SEC document. The Disclosure
Documents, did not contain any untrue statement of fact or omit to state facts
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
(c) The financial statements of the Company and its subsidiaries
included or incorporated by reference in the Disclosure Documents comply in all
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP") and fairly present the financial position of the
Company and its subsidiaries at the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
the unaudited statements having been prepared in accordance with GAAP for
interim financial information including normal recurring adjustments). Since the
date of the Financial Statements, there has been no material commitment of the
Company or any of its subsidiaries which is not reflected in the Financial
Statements except commitments made in the ordinary course of business.
4.5. Intellectual Property. Each of the Company and its subsidiaries
owns or, to the Company's knowledge, possesses adequate rights to use all
material patents, patent rights, inventions, trade secrets and know-how
described or referred to in the Offering Memorandum as owned or used by it or
that are necessary for the conduct of its lousiness as presently conducted and
as described in the Disclosure Documents. Each of the Company and its
subsidiaries has not received any notice of, nor has any knowledge of, any
infringement of or conflict with asserted rights of others with respect to any
patent, patent right, invention, trade secret or know how that, individually or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
4.6. Capitalization. As of March 19, 2002 (the "Share Date"), the
Company had authorized 80,000,000 shares of $ .01 per share par value common
stock (the "Common Stock") of which 21,995,792. There have been no changes in
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the outstanding capital stock of the Company since the Share Date except for,
grants of options pursuant to option plans described in the Disclosure Documents
and to the extent that certain outstanding options, convertible securities and
warrants may have been exercised. The certificates evidencing the Shares are in
due and proper legal form in and have been duly authorized for issuance by the
Company. All of the issued and outstanding securities of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with Federal, state and other applicable laws and were
issued without violation of any preemptive, co-sale or other right. Except as
otherwise disclosed in the Disclosure Documents, there are no outstanding
options, warrant, agreement or other right calling for the issuance or
redemption of, and there is no commitment, plan or arrangement to issue or
redeem, any securities of the Company. The Company owns, beneficially and of
record, all of the securities of each of its subsidiaries. Neither the Company
nor any of its subsidiaries has any binding agreement with respect to the
acquisition or purchase of the securities of or owned by any person or entity or
the acquisition of the business, assets or liabilities of any person or entity,
and neither the Company nor any of its subsidiaries has any agreement or
understanding with respect to the disposition or sale of their business, assets
or property other than in the ordinary course of their bushiness.
4.7. Litigation. Except as disclosed in the Disclosure Documents, there
is no pending or, to the Company's knowledge, threatened action, suit or other
proceeding to which the Company or its subsidiaries is a party or to which its
property or assets are subject which would have a Material Adverse Effect; and
no labor disturbance by the employees of the Company or any subsidiary exists or
is imminent which would have a Material Adverse Effect.
4.8. No Defaults. Neither the Company nor any of its subsidiaries is in
violation or default of any provision of its certificate of incorporation or
bylaws, or any organizational documents, or is in breach with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its properties are bound which violation,
default or breach would have a Material Adverse Effect; and there does not exist
any state of facts which constitutes ail event of default on the part of the
Company or any such subsidiary as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default.
4.9. Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement ("Consents") except for (a) such Consents which
are not material, (b) compliance with the securities and blue sky laws in the
states and other jurisdictions in which Shares are offered and/or sold, which
compliance will be effected in accordance with such laws, and (c) the filing and
effectiveness of a Registration Statement and any amendments thereto with the
SEC as contemplated by Section 8.1 hereof. The Company and its subsidiaries are
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including
but not limited to, all applicable local, state and federal environmental laws
and regulations, except where the failure to so comply would not have a Material
Adverse Effect.
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4.10. Taxes. Each of the Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns and have
paid or accrued all taxes shown as due thereon except for such taxes as are
being contested in good faith, and the Company has no knowledge of any tax
deficiency winch has been or might be asserted or threatened against the Company
or its subsidiaries which would have a Material Adverse Effect.
4.11. Insurance. The Company and its subsidiaries maintain property,
general liability, directors and officers and errors and omissions insurance
policies of the types and in the amounts generally deemed adequate for its
business covering all risks customarily insured against, all of which insurance
is in full force and effect.
4.12. Investment Company. The Company is not an "investment company"
within the meaning of the investment Company Act of 1940, as amended.
4.13. Listing; Maintenance of Listing. The Common Stock is traded on
The Nasdaq Over the Counter Bulletin Board (the "Bulletin Board"). For so long
as the Company is obligated to keep in effect the Registration Statement
provided under Section 8 hereof, the Company shall use commercially reasonable
efforts to maintain its authorization to trade on the Bulletin Board or a
national securities exchange, as defined in the Exchange Act.
4.14. No Registration. Assuming the accuracy of the representations
and warranties made by, and compliance with the covenants of, the Purchaser in
Section 5 hereof, no registration of the shares under the Securities Act is
required in connection with the sale of the shares to the Purchaser as
contemplated by this Agreement.
4.15. Subsidiaries. All of the issued and outstanding securities of
each of the Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with Federal,
state and other applicable laws and were issued without violation of any
preemptive, co-sale or other right.
4.16. Material Adverse Effect. There has not been, since the date of
the latest Disclosure Document any change or any development involving or which
may reasonably be expected to involve a change in the condition (financial or
other), business, operations, properties, or results of operations of the
Company or its subsidiaries that could reasonably be expected to have a Material
Adverse Effect.
4.17. "Adjustment Price" shall mean if the share price is two and one
half percent (2.5%) or below the average share price paid from the Closing date,
at the time on which the SEC has declared effective a Registration Statement
registering resale of Registrable Securities as set forth in Section 7.2(a) and
(ii) the date on which such Registrable Securities first become eligible for
resale pursuant to Rule 144 of the Securities Act..
4.18. "Adjustment Shares" If the Adjustment Price shall fall more than
two and one half percent (2.5%) below the Purchase Price in respect of shares
purchased by Investor on the Closing Date, then the Investor shall be issued
Adjustment Shares equal to the difference between the number of shares purchased
on the Closing Date and the amount that would have been purchased if the
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Purchase Price had been the Adjustment Price. The Adjustment Shares shall be
issued to Investor within 12 Trading Days of the Effective Date.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
5.1. The Purchaser represents and warrants to and covenants with the
Company that:
(a) Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares presenting an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company. Purchaser
has had the opportunity to meet with representatives of the Company in order to
ask questions regarding the Company and the terms of this Agreement, and
Purchaser has requested, received, reviewed and considered all information
Purchaser deems relevant in making an informed decision to purchase the Shares.
(b) Purchaser is purchasing the Shares in the ordinary course of
its business for its own account and with no present intention of distributing
the Shares or any arrangement or understanding with any other persons regarding
the distribution of the Shares.
(c) Purchaser 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 securities purchased
hereunder except in compliance with the Securities Act, applicable blue sky
laws, and the rules and regulations promulgated thereunder.
(d) Purchaser has, in connection with its decision to purchase the
Shares, relied with respect to the Company and its affairs solely upon the
Disclosure Documents and the representations and warranties of the Company
contained herein.
(e) Purchaser is an "accredited investor" within the meaning of
Rule 501 (a) (1), (2) or (3) of Regulation D promulgated under the Securities
Act.
(f) Purchaser has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated hereby
and has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this Agreement
by Purchaser, this Agreement shall constitute a valid and binding obligation of
Purchaser, enforceable in accordance with its terms.
5.2. Purchaser is able to bear the economic risk of holding the Shares
for an indefinite period, including the loss of Purchaser's entire investment.
The Shares were not offered ,or sold to Purchaser by any form of general
solicitation or advertising, provided that the Purchaser and the Company are
aware that the Purchaser may elect to sell any or all of the Shares as soon as
possible after the Closing.
5.3. Purchaser understands that each of the representations and
warranties of Purchaser may be relied upon by the Company in connection with the
preparation and filing of the Registration Statement (as defined in Section 8.1
below).
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5.4. Purchaser understands that: the Restricted Shares: shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom or in the absence of compliance with any term of this
Agreement; the Company shall provide stop transfer instructions to its transfer
agent with respect to the Restricted Shares in order to enforce the restrictions
contained in this Section 5.4 and to confirm that Purchaser has complied with
its obligations contained in Section 8.2 hereof, and (c) to the extent not
covered by an effective registration statement under the Securities Act, each
certificate representing Restricted Shares shall be in the name of Purchaser and
shall bear substantially the following legend (in addition to any legend
required under applicable securities laws):
"THE SECURITIES REPRESENTED BY THIS, CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR QUALIFIED UNDER THE CALIFORNIA CORPORATE
SECURITIES LAW OF 1968, AS AMENDED, OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY ONLY
BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSE) OF BY AN
INVESTOR IF SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES
LAWS, UNLESS THE COMPANY DETERMINES THAT EXEMPTIONS FROM SUCH
REGISTRATION AND QUALIFICATION REQUIREMENTS ARE AVAILABLE."
SECTION 6. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The
Company's obligations to complete the sale and issuance of the Shares and to
deliver Shares to the Purchaser shall be subject to the following Conditions (to
the extent not waived by the Company)
6.1. Representations and Warranties Correct. The representations and
Warranties made by the Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date and the obligations
of the Purchaser which are to be performed or complied with on or prior to the
Closing Date, have been so performed or complied with
This Agreement may be terminated by the Company if the Closing has not
transpired by the third day after the Effective Date for reasons other than a
breach of this Agreement by the Company.
SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. The
Purchaser's obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions (to the extent not waived by
the Purchaser):
7.1. Representations and Warranties Correct. The representations and
warranties made, by the Company in Section 4 hereof shall be true and correct
when made and as of the Closing Date and the obligations of the Company which
are to be performed or complied with on or prior to the Closing Date have been
so performed or complied with, and the Purchaser shall have received a
certificate signed by the chief executive officer and chief financial officer of
the Company, or such other officers of the Company, as agreed upon by the
parties hereto, that each of such representations and warranties, as
appropriate, is true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date, and that the Company has
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performed and complied with all of its obligations under this Agreement which
are to be performed or complied with on or prior to the Closing Date.
7.2. Legal Opinions. The Purchaser shall have received an opinion
letter from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., counsel to the Company, without
qualification, stating that the Restricted Shares have been duly and validly
issued by the Company to the Purchaser; (ii) the Agreement constitutes a valid
binding and enforceable agreement against Purchaser in accordance with its terms
(iii) the Company is eligible to file a registration statement for registration
of the Restricted Shares in the manner provided in Paragraph 8 hereof and there
are no SEC restrictions or policies, to the best of the knowledge of the
attorney, with respect to the Company's ability to effectuate the registration
statement and achieve SEC registration as soon as practicable; (iv) that the
Freely Tradeable Shares, upon transfer to the account of Purchaser are freely
saleable by the Purchaser in open market transactions without restriction and
that the attorney covenants to issue appropriate instructions to the transfer
agent, if necessary, to authorize transfer of the Restricted Shares or the
Freely Tradeable Shares immediately upon the written request of the Purchaser.
7.3. Material Adverse Effect. There shall not have been, since the date
of this Agreement, a change in the business, properties, operations, condition
(financial or other) or results of operations of the Company or its
subsidiaries, that could reasonably be expected to have a Material Adverse
Effect.
This Agreement may be terminated by the Purchaser if the Closing has
not transpired by the third day after the Effective Date for reasons other than
a breach of this Agreement by the Purchaser.
SECTION 8. REGISTRATION OF THE RESTRICTED SHARES; COMPLIANCE WITH THE
SECURITIES ACT.
8.1. Registration Procedures and Expenses. The Company is obligated to
do the following:
(a) As soon as practicable following the Effective Date and in any
event no later than thirty (30) business days following the Effective Date, the
Company shall prepare and file with the SEC one or more registration statements
in order to register with the SEC the continuous resale by the Purchaser, from
time to time, of the Shares through the Bulletin Board or the facilities of any
national securities exchange on which Common Stock is then traded, or in
privately-negotiated transactions (a "Registration Statement"). The Company
shall use its reasonable best efforts to cause such Registration Statement to be
declared effective as soon thereafter as reasonably possible.
(b) The Company shall prepare and file with the SEC (i) such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith, and (ii) such other filings required by the SEC, in
each case as may be necessary to keep the Registration Statement continuously
effective and not misleading until the earlier of (A) the second anniversary
date of the Closing, or (B) such date as all of the Restricted Shares have been
resold.
(c) In order to facilitate the public sale or other disposition of
all or any of the Restricted Shares by the Purchaser, the Company shall furnish
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to the Purchaser with respect to the Shares registered under the Registration
Statement such number of copies of prospectuses, prospectus supplements and
preliminary prospectuses as such Purchaser reasonably requests in conformity
with the requirements of the Securities Act.
(d) The Company shall file any documents reasonably required of
the Company for normal blue sky clearance in states specified in writing by the
Purchaser; provided, however, that the Company shall not be required to qualify
to do business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented.
(e) The Company shall bear all expenses in connection with the
procedures in paragraphs (a) through (d) of this Section 8. 1.
(f) With a view to making available to the Purchaser the benefits
of Rule 144 promulgated under the Securities Act ("Rule 144") and any other rule
or regulation of the SEC that may at any time permit the Purchaser to sell
Restricted Shares to the public without registration or pursuant to
registration, the Company covenants and agrees to: (i) make and keep public
information available, and those terms arc understood and defined in Rule 144,
until the earlier of (A) the second anniversary of the Closing Date or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the
Purchaser owns any Restricted Shares, (A) a written statement by the Company
that it has complied with the reporting requirements of the Exchange Act, and
(B) such other information as may be reasonably requested in order to avail the
Purchaser of any rule or regulation of the SEC that permits the selling of any
such Shares without registration under the Securities Act.
(g) The Purchaser acknowledges that there may occasionally be
times when the Company determiners the use of the prospectus forming a part of
the Registration Statement (the "Prospectus") should be suspended until such
time as an amendment or supplement to the Registration statement or the
Prospectus has been filed by the Company and any such amendment to the
Registration Statement is declared effective by the SEC, or until such time as
the Company has filed an appropriate report with the SEC pursuant to the
Exchange Act. The Purchaser hereby covenants that it will not sell any Shares
pursuant to the Prospectus during the period commencing at the time at which the
Company gives the Purchaser written notice of the suspension of the use or the
Prospectus and ending at the time the Company gives the Purchaser written notice
that the Purchaser may thereafter effect sales pursuant to the Prospectus. The
Company may, upon written notice to the Purchaser, suspend the use of the
Prospectus for two 30-day periods in any 365-day period based on the reasonable
determination of the Company's Board of Directors that there is a significant
business purpose for such determination, such as pending corporate developments,
public filings with the SEC or similar events. The Company shall in no event be
required to disclose the business purpose for which it has suspended the use of
the Prospectus if the Company determines in its good faith judgment that the
business purpose should remain confidential. The Company shall use its
reasonable best efforts to minimize the length of the suspension period.
8.2. Return of Shares. In the event that the Registration Statement is
declared effective by the SEC on or before sixty days (60) from the Closing Date
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in a manner which enables the Purchaser to immediately resale all of the Shares,
Purchaser will transfer to the Company, a share certificate for Three Hundred
Ninety Thousand (390,000).
(a) In the event that the Registration Statement is declared
effective by the SEC after sixty (60) days, from the Closing Date in a manner
which enables the Purchaser to immediately resale all of the Shares, The
Collateral Shares shall be kept in there entirety by Purchaser, fully paid, with
no additional consideration required.
8.3. Indemnification. As used in this Section 8.3 the following terms
shall have the following respective meanings:
(a) "Registration Statement" shall mean the Registration Statement
referred to in Section 8.1 hereof, including any exhibit and amendment thereto,
and any preliminary or final prospectus, and any supplement thereto;and
(b) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless the Purchaser, in
respect of the Shares purchased pursuant to this Agreement, from and against any
losses, claims, damages or liabilities to which such Purchaser may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon any Untrue Statement, or arise out of any failure by the
Company to fulfill any undertaking included in the Registration Statement and
the Company shall reimburse as incurred such Purchaser for any reasonable legal
or other expenses reasonably incurred in investigating, defending or preparing
to defend any such action, proceeding or claim; provided, however, that the
Company shall not be liable to such Purchaser in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to, the Company by or on behalf of
such Purchaser specifically for use in preparation of the Registration
Statement.
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement contained in the Registration Statement if such Untrue Statement was
made in reliance upon and in conformity with written information furnished by or
on behalf of such Purchaser specifically for use in preparation of the
Registration Statement, and such Purchaser shall reimburse as incurred the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim; provided, however,
LADOCS\2721409 1
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that in no event shall any indemnity by a Purchaser under this Section 8.3
exceed the gross proceeds received by such Purchaser from the sale of Shares
covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 8.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate theorem, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for ally
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists or shall exist
a conflict of interest that would make it inappropriate, in the opinion of
counsel to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses or more than one separate
counsel for each indemnified party, it being understood that the Company shall
not be responsible for the fees and expenses of more than one counsel for the
Purchaser and the Other Purchasers as a group, unless the Purchaser and any
Other Purchasers can not be represented by the same counsel because of a
conflict of interest.
8.4. Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5.4 hereof or this Section 8 upon the
transferability of the Shares shall cease and or terminate as to any particular
number of the Shares when such Shares shall have been otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement covering such Shares or at such time as an opinion of counsel
satisfactory to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
8.5 Changes in Purchaser Information.
SECTION 9. MISCELLANEOUS.
9.1. Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and Purchaser.
9.2. Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
9.3. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
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9.4. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by confirmed facsimile or mailed by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, and shall be deemed given when sent in the
case of facsimile transmission, or when so received in the case of mail or
courier, and addressed as follows:
(a) if to the Purchaser, to:
Brighton Opportunity Fund
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy so mailed to:
Jeffer, Mangels, ▇▇▇▇▇▇ & Marmaro LLP
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to the Company, at the address as set forth in the
Disclosure Document.
9.5. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
9.6. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
9.7. Survival of Representations, Warranties and Agreements, Definition
of "Knowledge". Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser herein and in the certificates for the securities
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares and the payment therefor; provided,
however, all representations and warranties of the Company shall survive for a
period of two years after the Closing Date. Any claim of a breach of
representation or warranty made prior to the end of the applicable survival
period which has not been finally resolved before the expiration of such period
shall survive and remain a basis for such claim until finally resolved.
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9.8. 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. Neither the terms "successors" nor "assigns" as used herein shall
include any entity or person who purchases Shares from the Purchaser after the
Closing Date.
9.9. Entire Agreement. This Agreement and other documents delivered
pursuant hereto, including the exhibits and appendices, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
9.10. Payment of Fees and Expenses. Each of the Company and the
Purchaser shall bear its own expenses with legal fees incurred on its behalf
with respect to this Agreement and the transactions contemplated hereby
provided, however, that the Company shall bear the costs described in Section 8.
If any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
9.11. Confidentiality. Purchaser acknowledges and agrees that any
information or data it has acquired from the Company, not otherwise properly in
the public domain, was received in confidence. Purchaser agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement, or use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any confidential information
of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly Authorized representatives as of the day and year first
above written.
the "Company"
CBCom Inc.
By: ________________________________________
CEO
"PURCHASER"
Brighton Opportunity Fund, L.P., a California
limited partnership
By: Brighton Advisors, a California limited
liability company, its General Partner
By:____________________________________
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9.12. Payment of Fees and Expenses
9.13. Confidentiality.
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