Form of Series A Convertible Preferred Stock Purchase Agreement
THIS
SERIES
A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
(this
“Agreement”)
is
made and entered into as of January 24, 2007 between MPLC, Inc., a corporation
organized and existing under the laws of the State of Delaware (the
“Company”),
and
the purchaser listed on Schedule 1
hereto
(the “Purchaser”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to the Purchaser and the Purchaser desires to acquire
from the Company one (1) share of the Company’s Series A Convertible
Preferred Stock, $0.10 par value per share (the “Series
A Preferred Stock”),
with
a Stated Value of Three Million Five Hundred Thousand dollars
($3,500,000) per
share, for an aggregate purchase price of Three Million Five Hundred
Thousand dollars
($3,500,000).
IN
CONSIDERATION of the mutual covenants contained in this Agreement, the Company
and each Purchaser agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
1.1 Certain
Definitions.
As used
in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:
“Affiliate”
means,
with respect to any Person, any Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person. For the purposes
of this definition, “control”
(including, with correlative meanings, the terms “controlled
by”
and
“under
common control with”)
shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
“Agreement”
shall
have the meaning set forth in the introductory paragraph of this
Agreement.
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a legal holiday
or a
day on which banking institutions in the State of New York are authorized or
required by law or other government actions to close.
“Certificate
of Designation”
means
the Certificate of Designation, Preferences and Rights of Series A
Convertible Preferred Stock of the Company annexed as Exhibit
A
hereto.
“Closing”
shall
have the meaning set forth in Section
2.2(a).
“Closing
Date”
shall
have the meaning set forth in Section
2.2(a).
1
“Company”
shall
have the meaning set forth in the introductory paragraph.
“Company
SEC Reports”
shall
have the meaning set forth in Section
3.1(f)
hereof.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Execution
Date”
means
the date of this Agreement first written above.
“Per
Share Consideration”
shall
have the meaning set forth in Section
2.1(b)
hereof.
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Preferred
Stock”
means
shares now or hereafter authorized of the class of preferred stock, $0.10 par
value per share, of the Company.
“Purchase
Price”
shall
have the meaning set forth in Section
2.1(b).
“Purchaser”
shall
have the meaning set forth in the introductory paragraph.
“SEC”
means
the Securities
and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Series
A Preferred Stock”
shall
have the meaning set forth in the recital.
“Shares”
shall
have the meaning set forth in Section
2.1(a).
“Transaction
Documents”
means
this Agreement and all exhibits and schedules hereto and all other documents,
instruments and writings required pursuant to this Agreement.
ARTICLE
II
PURCHASE
AND SALE OF CONVERTIBLE
PREFERRED
SHARES
2.1 Purchase
and Sale;
Purchase Price.
(a) Subject
to the terms and conditions set forth herein, the Company shall issue and sell
and the Purchaser shall purchase one (1) share of the Company’s Series A
Preferred Stock (the “Shares”).
The
Series A Preferred Stock shall have the respective rights, preferences and
privileges as set forth in the Certificate of Designation to be filed by the
Company with the Secretary of State of the State of Delaware on or before the
Execution Date.
2
(b) The
purchase price for each Share shall be Three Million Five Hundred
Thousand dollars
($3,500,000) (the “Per
Share Consideration”).
The
Per Share Consideration multiplied by the number of Shares to be purchased
by
the Purchaser is referred to as the “Purchase
Price.”
2.2 The
Closing.
(a) The
Closing of the purchase and sale of the Shares (the “Closing”)
shall
take place simultaneously with the execution and delivery of this Agreement
(the
“Closing
Date”).
On
the Closing Date, the Purchaser shall deliver to the Company the Purchase Price
by delivering a
wire
transfer with immediately available U.S. funds for the full amount of the
Purchase
Price plus
all wire
transfer fees to:
Mellon
Bank
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Credit
account number: ▇▇▇▇▇▇▇ name of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Further
credit to account number: 855-07785
Account
name of: MPLC, Inc.
(b) At
any time and from time
to time after the Closing, the Parties shall duly execute, acknowledge and
deliver all such further assignments, conveyances, instruments and documents,
and shall take such other action consistent with the terms of this Agreement
to
carry out the transactions contemplated by this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations,
Warranties and Agreements of the Company.
The
Company hereby makes the following representations and warranties to the
Purchaser, all of which shall survive the Closing:
(a) Organization
and
Qualification.
The
Company is a corporation, duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with the requisite corporate
power and authority to own and use its properties and assets and to carry on
its
business as currently conducted. The Company has no subsidiaries. The Company
is
duly qualified to do business and is in good standing in each 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, individually or in the aggregate,
have
a material adverse effect on the results of operations, assets, prospects,
or
financial condition of the Company, taken as a whole.
3
(b) Authorization,
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated hereby and by each other Transaction
Document and to otherwise carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby has been duly authorized by all necessary action
on the part of the Company. Each of this Agreement and each of the other
Transaction Documents has been or will be duly executed by the Company and
when
delivered in accordance with the terms hereof or thereof will constitute the
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.
(c) Issuance
of
Securities.
The
Shares have been duly and validly authorized for issuance, offer and sale
pursuant to this Agreement and, when issued and delivered as provided hereunder
against payment in accordance with the terms hereof, shall be valid and binding
obligations of the Company enforceable in accordance with their respective
terms. When issued in accordance with the terms hereof, the Shares will be
duly
authorized, validly issued, fully paid and non-assessable. The Company has
no
equity or equity equivalent security outstanding that is substantially similar
to the Shares, including any security having a redeemable feature substantially
similar to the Shares.
(d) No
Conflicts.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, to the best knowledge of the Company, do not
and will not (i) conflict with or violate any provision of its Certificate
of Incorporation or bylaws (each as amended through the date hereof) or
(ii) be subject to obtaining any consents, conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to
which
the Company is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including,
but
not limited to, those of other countries and the federal and state securities
laws and regulations), or by which any property or asset of the Company is
bound
or affected. The business of the Company is not being conducted in violation
of
any law, ordinance or regulation of any governmental authority.
(e) Consents
and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of this Agreement and each
of
the other Transaction Documents, except for the filing of the Certificate
of Designation with respect to the Series A Preferred Stock with the Secretary
of State of the State of Delaware, which filing shall be effected on or before
the Execution Date.
4
(f) SEC
Compliance; Financial Statements.
(1) Since
January 1, 2006, the Company has filed all required forms, reports and documents
with the SEC required to be filed by it pursuant to the federal securities
laws
and the SEC rules and regulations thereunder (the “Company
SEC Reports”),
all
of which have complied as of their respective filing dates in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act, and the rules and regulations promulgated thereunder. None of such forms,
reports or documents, at the time filed (and, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing
and
as so amended or superseded), contained any untrue statement of a material
fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Except to the extent set forth in this
Section 3.1(f), the Company makes no representation or warranty whatsoever
concerning the Company SEC Reports as of any other time other than the time
they
were filed.
(2) Each
set
of financial statements (including, in each case, any related notes thereto)
contained in Company SEC Reports complied or will comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, was or will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited statements, do not contain footnotes as permitted by Form 10-Q of
the
Exchange Act) and each fairly presents or will fairly present in all material
respects the financial position of the Company at the respective dates thereof
and the results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were, are or will be
subject to normal adjustments which were not or are not expected to have a
material adverse effect on the Company taken as a whole.
3.2 Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows:
(a) Authority.
The
Purchaser has the requisite power and authority to enter into and to consummate
the transactions contemplated hereby and by the other Transaction Documents
and
otherwise to carry out its obligations hereunder and thereunder. The acquisition
of the Shares to be purchased by the Purchaser hereunder has been duly
authorized by all necessary action on the part of the Purchaser. This Agreement
has been duly executed and delivered by the Purchaser and constitutes the valid
and legally binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to, or affecting generally the enforcement of, creditors rights and
remedies or by other general principles of equity.
5
(b) Investment
Intent.
The
Purchaser is acquiring the Shares to be purchased by it hereunder, and will
acquire the Shares for its own account for investment purposes only and not
with
a view to or for distributing or reselling such Shares, or any part thereof
or
interest therein, without prejudice, however, to such Purchaser’s right, subject
to the provisions of this Agreement, at all times to sell or otherwise dispose
of all or any part of such Shares in compliance with applicable federal and
state securities laws.
(c) Experience
of Purchaser.
The
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of an investment in the Shares
to be acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
(d) Ability
of Purchaser to Bear Risk of Investment.
The
Purchaser is able to bear the economic risk of an investment in the Shares
to be
acquired by it hereunder and, at the pre-sent time, is able to afford a complete
loss of such investment.
(e) Access
to
Information.
The
Purchaser acknowledges that it has been afforded (i) the opportunity to ask
such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the Shares
offered hereunder and the merits and risks of investing in such securities;
(ii)
access to information about the Company and the Company’s financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment in the Shares; and (iii) the opportunity
to obtain such additional information which the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment and to verify the accuracy
and completeness of the information that it has received about the
Company.
(f) Reliance.
The
Purchaser understands and acknowledges that (i) the Shares that are being
offered and sold to it hereunder are being offered and sold without registration
under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act under Section 4(2) of the
Securities Act and (ii) the availability of such exemption depends in part
on,
and that the Company will rely upon the accuracy and truthfulness of, the
foregoing representations and such Purchaser hereby consents to such
reliance.
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1 Manner
of
Offering.
The
Shares are being issued pursuant to Section 4(2) of the Securities
Act.
4.2 Blue
Sky
Laws.
The
Company shall cooperate with the Purchaser in connection with the exemption
from
registration of the Shares under the securities or Blue Sky laws of such
jurisdictions as the Purchaser may request; provided,
however,
that
the Company shall not be required in connection therewith to qualify as a
foreign corporation where they are not now so qualified. The Company agrees
that
it will execute all necessary documents and pay all necessary state filing
or
notice fees to enable the Company to sell the Shares to the
Purchaser.
4.3 Integration.
The
Company shall not and shall use its best efforts to ensure that no Affiliate
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 Shares in a manner that would
require the registration under the Securities Act of the sale of the Shares
to
the Purchaser.
6
ARTICLE
V
MISCELLANEOUS
5.1 Fees
and Expenses.
Except
as set forth in this Agreement, each party shall pay the fees and expenses
of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay
all
stamp and other taxes and duties levied in connection with the issuance of
the
Shares pursuant hereto. The Purchaser shall be responsible for any taxes payable
by the Purchaser that may arise as a result of the investment hereunder or
the
transactions contemplated by this Agreement or any other Transaction Document.
The Company shall pay all costs, expenses, fees and all taxes incident to and
in
connection with: (a) the issuance and delivery of the Shares, (b) the
exemption from registration of the Shares for offer and sale to the Purchaser
under the securities or Blue Sky laws of the applicable jurisdictions,
(c) the preparation of certificates for the Securities (including, without
limitation, printing and engraving thereof), and (d) all fees and expenses
of counsel and accountants of the Company.
5.2 Entire
Agreement.
This
Agreement, together with all of the Exhibits and Schedules annexed hereto,
and
any other Transaction Document 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. This Agreement
shall be deemed to have been drafted and negotiated by both parties hereto
and
no presumptions as to interpretation, construction or enforceability shall
be
made by or against either party in such regard.
5.3 Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given upon delivery, when
delivered personally or by overnight courier or sent by facsimile transmission
(with written transmission confirmation report) at the number designated below
(if delivered on a Business Day during normal business hours where such notice
is to be received), or the first Business Day following such delivery (if
delivered other than on a Business Day during normal business hours where such
notice is to be received) whichever shall first occur or 48 hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified as such party’s address as set
forth below. The addresses for such communications shall be:
| If to the Company: | MPLC, Inc. | ||
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ | |||
| ▇▇▇▇▇ ▇▇▇▇ | |||
| ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Attn: ▇▇▇ ▇▇▇▇ | |||
| Tel: ▇▇▇-▇▇▇-▇▇▇▇ | |||
| Fax: ▇▇▇-▇▇▇-▇▇▇▇ |
7
| With copies to: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq. | ||
|
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
|
|||
|
If
to the Purchaser:
|
See
Schedule
1
attached hereto
|
or
such
other address as may be designated hereafter by notice given pursuant to the
terms of this Section 5.3.
5.4 Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by both the Company and the
Purchaser, or, in the case of a waiver, by the party against whom enforce-ment
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or require-ment of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any other provision, condition
or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
5.5 Headings.
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.
5.6 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. The assignment by a party
of
this Agreement or any rights hereunder shall not affect the obligations of
such
party under this Agreement.
5.7 No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
5.8 Governing
Law; Venue;
Service of Process.
The
parties hereto acknowledge that the transactions contemplated by this Agreement
and the exhibits hereto bear a reasonable relation to the State of New York.
The
parties hereto agree that the internal laws of the State of New York shall
govern this Agreement and the exhibits hereto, including, but not limited to,
all issues related to usury. Any action to enforce the terms of this Agreement
or any of its exhibits, or any other Transaction Document shall be brought
exclusively in the state and/or federal courts situated in the County and State
of New York. Service of process in any action by the Purchaser to enforce the
terms of this Agreement may be made by serving a copy of the summons and
complaint, in addition to any other relevant documents, by commercial overnight
courier to the Company at its principal address set forth in this
Agreement.
5.9 Survival.
The
representa-tions and warranties of the Company and the Purchaser contained
in
Article III and the agreements and covenants of the parties contained in
Article IV and this Article V shall survive the Closing.
5.10 Counterpart
Signatures.
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) the same
with
the same force and effect as if such facsimile signature page were an original
thereof.
8
5.11 Severability.
In case
any one or more of the provisions of this Agreement shall 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 which shall be a reasonable substitute therefore, and
upon
so agreeing, shall incorporate such substitute provision in this
Agreement.
5.12 Limitation
of Remedies.
With
respect to claims by the Company or any person acting by or through the Company,
or by the Purchaser or any person acting through the Purchaser, for remedies
at
law or at equity relating to or arising out of a breach of this Agreement,
liability, if any, shall, in no event, include loss of profits or incidental,
indirect, exemplary, punitive, special or consequential damages of any
kind.
[SIGNATURE
PAGE FOLLOWS. ]
9
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first indicated above.
| COMPANY: | ||
| MPLC, INC. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| PURCHASER: | ||
| ▇▇▇▇▇▇ CAPITAL MASTER FUND, LTD. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
10
EXHIBIT A
Certificate
of Designations
(see
attached)
11
Schedule
1
Purchaser(s)
|
NAME
AND ADDRESS
OF
PURCHASER
|
PURCHASE
PRICE
|
NO.
OF
SHARES
|
|
▇▇▇▇▇▇
Capital Master Fund, Ltd.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇ ▇▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
|
$3,500,000
|
1
|
12