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EXHIBIT 3.4
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
WORLD COMMERCE ONLINE, INC.
AND
INTERPRISE TECHNOLOGY PARTNERS, L.P.
MARCH 30, 1999
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CONTENTS
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PAGE
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Section 1. Authorization and Initial Closing..........................................................1
1A. Authorization of the Stock.................................................................1
1B. Purchase and Sale of the Stock.............................................................1
Section 2. Conditions of the Purchasers' Obligations..................................................2
2A. Conditions to Initial Closing..............................................................2
Section 3. Covenants..................................................................................4
3A. Financial Statements and Other Information.................................................4
3B. Inspection of Property.....................................................................5
3C. Restrictions...............................................................................6
3D. Affirmative Covenants......................................................................7
3E. Current Public Information.................................................................8
3F. Limited Preemptive Rights..................................................................8
3G. Public Disclosures.........................................................................9
3H. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance...............................................................9
Section 4. Transfer of Restricted Securities..........................................................10
Section 5. Representations and Warranties of the Company..............................................10
5A. Organization and Corporate Power...........................................................10
5B. Capital Stock and Related Matters..........................................................10
5C. Authorization; No Breach...................................................................11
5D. Subsidiaries; Investments..................................................................11
5E. Conduct of Business; Liabilities...........................................................11
5F. Tax Matters................................................................................12
5G. Litigation, etc............................................................................12
5H. ▇▇▇▇▇▇▇▇▇..................................................................................▇▇
▇▇. Governmental Consent, etc..................................................................12
5J. ERISA......................................................................................13
5K. Compliance with Laws.......................................................................13
5L. Disclosure.................................................................................13
5M. Closing Date...............................................................................13
Section 6. Definitions................................................................................13
Section 7. Miscellaneous..............................................................................17
7A. Expenses...................................................................................17
7B. Remedies...................................................................................17
7C. Purchasers'Investment Representations......................................................18
7D. Consent to Amendments......................................................................18
7E. Survival of Representations and ▇▇▇▇▇▇▇▇▇▇.................................................▇▇
▇▇. Successors and Assigns.....................................................................19
7G. Generally Accepted Accounting Principles...................................................19
7H. Severability...............................................................................19
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7I. Counterparts...............................................................................19
7J. Descriptive Headings; Interpretation.......................................................19
7K. Governing Law..............................................................................20
7L. Notices....................................................................................20
7M. Rights.....................................................................................21
7N. Amendments.................................................................................21
7O. Several Obligations........................................................................21
LIST OF EXHIBITS AND SCHEDULES
Purchase Schedule
Schedule of Exceptions
Exhibit A-1 -- Certificate of Designation
Exhibit A-2 -- Articles of Incorporation
Exhibit A-3 -- Bylaws
Exhibit B -- Registration Agreement
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
March 30, 1999, by and among WORLD COMMERCE ONLINE, INC., a Nevada corporation
(the "COMPANY"), INTERPRISE TECHNOLOGY PARTNERS, L.P., a Delaware limited
partnership ("INTERPRISE"), and the other Persons identified on the signature
pages attached hereto (together with Interprise, the "PURCHASERS"). Except as
otherwise indicated herein, capitalized terms used herein are defined in Section
6 hereof.
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
SECTION 1. AUTHORIZATION AND INITIAL CLOSING.
1A. AUTHORIZATION OF THE STOCK. The Company shall authorize
the issuance and sale to the Purchasers of up to 4,000,000 shares of its Class A
Convertible Preferred Stock, par value $.001 per share (the "PREFERRED STOCK"),
having the rights and preferences set forth on the form of certificate of
designation attached hereto as Exhibit A-1 (the "CERTIFICATE OF DESIGNATION").
1B. PURCHASE AND SALE OF THE STOCK.
(i) At the Initial Closing (as defined below), the Company
shall sell to the Purchasers and, subject to the terms and conditions set forth
herein, the Purchasers shall purchase from the Company, 250,000 shares of
Preferred Stock at a price of $2.00 per share. The initial closing of the
purchase and sale of the Preferred Stock pursuant hereto (the "INITIAL CLOSING")
shall take place at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇ at 10:00 a.m. on the date of the
Initial Closing. At the Initial Closing, after the purchase and sale of the
Preferred Stock pursuant hereto, the Company shall deliver to each Purchaser
stock certificates evidencing the Preferred Stock to be purchased by such
Purchaser, registered in such Purchaser's name, upon payment of the purchase
price thereof by check, cancellation of indebtedness or wire transfer of
immediately available funds to such account as is designated by the Company. In
the event that payment by a Purchaser is made, in whole or in part, by
cancellation of indebtedness, then such Purchaser shall surrender to the Company
for cancellation at the Initial Closing any evidence of such indebtedness or
shall execute an instrument of cancellation in form and substance acceptable to
the Company. In addition, the Company shall deliver to any Purchaser choosing to
pay any part of the purchase price of the Preferred Stock by cancellation of
indebtedness, a check in the amount of any interest accrued on such indebtedness
through the Initial Closing.
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(ii) From time to time after the Initial Closing, the Company
shall sell to the Purchasers and, subject to the terms and conditions set forth
herein, the Purchasers shall purchase from the Company, up to 3,750,000 shares
of Preferred Stock at a price of $2.00 per share (as adjusted from time to time
as a result of stock dividends, stock splits, recapitalizations, and similar
events). Such additional purchases of the Preferred Stock shall be made by each
Purchaser at such times and in such amounts as are set forth on the Purchase
Schedule attached hereto. The Purchasers' obligation to purchase any additional
Preferred Stock will be conditioned on a breach or default not having occurred
under this Agreement, or any of the Company's financing or other material
agreements, as determined in Interprise's sole discretion. In addition, at the
time of any such purchase, each Purchaser shall be entitled to receive, and the
Company shall be obligated to deliver, satisfactory representations and
warranties and all other information and documentation as Interprise may
reasonably request.
(iii) In addition to the Preferred Stock which may be sold by
the Company and purchased by the Purchasers pursuant to Sections 1B(i) and (ii),
the Company hereby grants to Interprise the option to purchase from the Company,
at Interprise's election, up to 250,000 shares of Preferred Stock at a price of
$2.00 per share, which option may be exercised in whole or in part at any time
or times during the five (5) year period following the date of this Agreement.
At the time of Interprise's (or its assignee's) exercise of such option to
purchase such shares of Preferred Stock, Interprise shall be entitled to
receive, and the Company shall be obligated to deliver, satisfactory
representations and warranties and all other information and documentation as
Interprise may reasonably request. Notwithstanding anything to the contrary
contained in this Section 1B(iii), this option may only be exercised by
Interprise if the Board unanimously determines that immediately after exercise,
Interprise will transfer the shares underlying such option to a party mutually
agreeable to the Board and to Interprise.
(iv) Notwithstanding anything contained herein to the
contrary, after the Purchasers have purchased a total of $3,000,000 in Preferred
Stock, Interprise may terminate the Purchasers' commitment to make any further
purchases of Preferred Stock, provided that in the event Interprise elects to
terminate its commitment hereunder, notice of such election shall be made by
Interprise in writing and delivered to the Company within fifteen (15) days
after Interprise has purchased a total of $1,500,000 of the Company's Preferred
Stock, whether pursuant to this Agreement or otherwise. Notwithstanding the
foregoing, the option granted to Interprise pursuant to Section 1B(iii) shall
remain in full force and effect.
SECTION 2. CONDITIONS OF THE PURCHASERS' OBLIGATIONS.
2A. CONDITIONS TO INITIAL CLOSING. The obligation of the
Purchasers to purchase and pay for the Preferred Stock at the Initial Closing is
subject to the satisfaction as of the Initial Closing of the following
conditions:
(i) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties contained in Section 5 hereof shall be true and
correct at and as of the Initial Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated herein, and
the Company shall have performed all of the covenants required to be performed
by it hereunder prior to the Initial Closing.
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(ii) Articles OF INCORPORATION; BYLAWS. The Company's articles
of incorporation, together will all amendments thereto, the Certificate of
Designation, and any other certificates of designation or other similar
documents or instruments filed with the Secretary of State of Nevada
(collectively, the "ARTICLES OF INCORPORATION") shall be in form and substance
set forth in Exhibit A-2 hereto, shall be in full force and effect under the
laws of Nevada as of the Initial Closing and shall not have been amended or
modified. The Company's bylaws (the "BYLAWS") shall be in form and substance set
forth in Exhibit A-3 hereto, shall be in full force and effect under the laws of
Nevada as of the Initial Closing, and shall not have been amended or modified.
(iii) REGISTRATION AGREEMENT. The Company and the Purchasers
shall have entered into a registration rights agreement in form and substance
set forth in Exhibit B attached hereto (the "REGISTRATION AGREEMENT"), the
Registration Agreement shall not have been amended or modified, and shall be in
full force and effect as of the Initial Closing.
(iv) CONSENTS AND APPROVALS. The Company shall have received
or obtained all third-party and governmental and regulatory consents and
approvals necessary for the consummation of the transactions contemplated
hereby.
(v) COMPLIANCE WITH APPLICABLE LAWS. The sale of Preferred
Stock to the Purchasers hereunder shall not be prohibited by any applicable law
or governmental regulation, and shall be permitted by laws and regulations of
the jurisdictions to which the Company is subject.
(vi) FEES AND EXPENSES. The Company shall have reimbursed
Interprise for its fees and expenses as provided in Section 7A hereof.
(vii) INITIAL CLOSING DOCUMENTS. The Company shall have
delivered to Interprise all of the following documents:
(a) an Officer's Certificate, dated the date
of the Initial Closing, stating that the conditions specified
in Sections 2A(ii) through 2A(vi), inclusive, have been fully
satisfied;
(b) certified copies of the resolutions duly
adopted by the Company's board of directors (its "BOARD")
authorizing the execution, delivery, and performance of this
Agreement, the Registration Agreement, and each of the other
agreements contemplated hereby, the filing of the Certificate
of Designation referred to in Section 1A, the issuance and
sale of the Preferred Stock and the consummation of all other
transactions contemplated by this Agreement;
(c) certified copies of (1) the Certificate
of Designation; (2) the Articles of Incorporation; and (3) the
Company's Bylaws, each as in effect at the Initial Closing;
and
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(d) such other documents relating to the
transactions contemplated hereby as Interprise or its counsel
may reasonably request.
Any condition specified in this Section 2 may be waived only if such waiver is
set forth in a writing executed by Interprise.
SECTION 3. COVENANTS. As an inducement to enter into the
transactions contemplated by this Agreement, the Company hereby covenants to
undertake the obligations set forth in this Section 3. The covenants set forth
in Sections 3A through 3D below, shall, however, terminate upon the consummation
of a Qualified Public Offering.
3A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
shall deliver to Interprise, each holder of at least fifteen percent (15%) of
the Purchaser Preferred and each holder of at least fifteen percent (15%) of the
Purchaser Common:
(i) as soon as available but in any event within (a) sixty
(60) days after the end of the Company's quarterly accounting periods ended
March 31, 1998 and June 30, 1999, and (b) thereafter, forty-five (45) days after
the end of each quarterly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and for the period from
the beginning of the fiscal year to the end of such quarter, and consolidating
and consolidated balance sheets of the Company and its Subsidiaries as of the
end of such quarterly period, all prepared in accordance with generally accepted
accounting principles, consistently applied, subject to the absence of footnote
disclosures and to normal year-end adjustments;
(ii) accompanying the financial statements referred to in
Section 3A(i), an Officer's Certificate stating that neither the Company nor any
of its Subsidiaries is in default under any of its other material agreements or,
if any such default exists, specifying the nature and period of existence
thereof and what actions the Company and its Subsidiaries have taken and propose
to take with respect thereto;
(iii) within ninety (90) days after the end of each fiscal
year, consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such fiscal year, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such fiscal year, setting forth in each case comparisons to the annual budget
and to the preceding fiscal year, all prepared in accordance with generally
accepted accounting principles, consistently applied, and accompanied by: (a)
with respect to the consolidated portions of such statements (except with
respect to budget data), an opinion containing no exceptions or qualifications
(except for qualifications regarding specified contingent liabilities) of an
independent accounting firm of recognized standing reasonably acceptable to
Interprise; and (b) a copy of such firm's annual management letter to the Board;
(iv) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials provided
hereunder);
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(v) at least thirty (30) days before the beginning of each
fiscal year, an annual budget prepared on a monthly basis for the Company and
its Subsidiaries for such fiscal year (displaying anticipated statements of
income and cash flows), and promptly upon preparation thereof any other
significant budgets prepared by the Company and any revisions of such annual or
other budgets, and within thirty (30) days after any monthly period in which
there is a material adverse deviation from the annual budget, an Officer's
Certificate explaining the deviation and what actions the Company has taken and
proposes to take with respect thereto;
(vi) promptly (but in any event within five (5) business days)
after the discovery or receipt of notice of any default under any material
agreement to which the Company or any of its Subsidiaries is a party or any
other event or circumstance affecting the Company or any of its Subsidiaries
which is reasonably likely to have a material adverse effect on the financial
condition, operating results, assets, operations, or business prospects of the
Company or any of its Subsidiaries (including the filing of any material
litigation against the Company or any of its Subsidiaries or the existence of
any material dispute with any Person which involves a reasonable likelihood of
such litigation being commenced), an Officer's Certificate specifying the nature
and period of existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect thereto; and
(vii) with reasonable promptness, such other information and
financial data concerning the Company and its Subsidiaries as any Person
entitled to receive information under this Section 3A may reasonably request.
Each of the financial statements referred to in Sections 3A(i) and (iii) shall
be consistent with the books and records of the Company (which in turn shall be
accurate and complete in all respects) and in accordance with GAAP applied on a
consistent basis shall present fairly the financial condition and results of
operation of the Company and its Subsidiaries as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit adjustments (none of
which would, alone or in the aggregate, be materially adverse to the financial
condition, operating results, assets, operations or business prospects of the
Company and its Subsidiaries taken as a whole).
3B. INSPECTION OF PROPERTY. The Company shall permit
Interprise, each holder of at least fifteen percent (15%) of the Purchaser
Common, and each holder of at least fifteen percent (15%) of the Purchaser
Preferred, or the representatives of any such Person, upon reasonable notice and
during normal business hours and such other times as any such holder may
reasonably request, to: (i) visit and inspect any of the properties of the
Company and its Subsidiaries; (ii) examine the corporate and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom; and (iii) discuss the affairs, finances, and accounts of any such
corporations with the directors, officers, key employees, and independent
accountants of the Company and its Subsidiaries; provided that the Company shall
have the right to have its chief financial officer present at any meetings with
the Company's independent accountants.
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3C. RESTRICTIONS. Without the prior written consent of
Interprise, the Company shall not and shall not commit to:
(i) directly or indirectly declare or pay any dividends or
make any distributions upon any of its equity securities, other than payments of
dividends on, or redemption payments in respect of, the Preferred Stock pursuant
to the Articles of Incorporation;
(ii) except pursuant to this Agreement, directly or indirectly
redeem, purchase, or otherwise acquire, or permit any of its Subsidiaries to
redeem, purchase, or otherwise acquire, any of the Company's or any Subsidiary's
equity securities (including, without limitation, warrants, options, and other
rights to acquire equity securities);
(iii) except as expressly contemplated by this Agreement,
authorize, issue, sell, or enter into any agreement providing for the issuance
(contingent or otherwise), or permit any of its Subsidiaries to authorize,
issue, sell, or enter into any agreement providing for the issuance (contingent
or otherwise) of any equity securities or debt securities with equity features
or securities exercisable or convertible into equity securities or debt
securities with equity features;
(iv) merge or consolidate with any Person or permit any of its
Subsidiaries to merge or consolidate with any Person (other than a wholly owned
Subsidiary);
(v) sell, lease, or otherwise dispose of, or permit any of its
Subsidiaries to sell, lease, or otherwise dispose of, more than ten percent
(10%) of the consolidated assets of the Company and its Subsidiaries (computed
on the basis of book value, determined in accordance with generally accepted
accounting principles consistently applied, or fair market value, determined by
the Board in its reasonable good faith judgment) in any transaction or series of
related transactions (other than sales of inventory in the ordinary course of
business);
(vi) liquidate, dissolve, or effect, or permit any of its
Subsidiaries to liquidate, dissolve, or effect, a recapitalization or
reorganization in any form of transaction (including, without limitation, any
reorganization into partnership form);
(vii) acquire, or permit any of its Subsidiaries to acquire,
any interest in any business (whether by a purchase of assets, purchase of
stock, merger, or otherwise), or enter into any joint venture, in excess of
$100,000;
(viii) enter into, or permit any of its Subsidiaries to enter
into, the ownership, active management, or operation of any business that is
materially different from the businesses in which the Company and its
Subsidiaries were engaged on the date of this Agreement;
(ix) enter into, amend, modify, or supplement or permit any of
its Subsidiaries to enter into, amend, modify, or supplement any agreement,
transaction, commitment, or arrangement with any of its or any of its
Subsidiaries' officers, directors, or senior executive employees;
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(x) create, incur, assume, or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume, or suffer to exist, Indebtedness
or other non-ordinary course liabilities exceeding the amounts approved therefor
by the Board in the annual budget;
(xi) make, or permit any of its Subsidiaries to make, any
loans or advances to, guarantees for the benefit of, or Investments in, any
Person (other than a wholly-owned Subsidiary), except for: (a) reasonable
advances to employees in the ordinary course of business; and (b) Investments
having a stated maturity no greater than one year from the date the Company
makes such Investment in (1) obligations of the United States government or any
agency thereof or obligations guaranteed by the United States government, (2)
certificates of deposit of commercial banks having combined capital and surplus
of at least $50 million or (3) commercial paper with a rating of at least
"Prime-1" by ▇▇▇▇▇'▇ Investors Service, Inc.;
(xii) except as expressly contemplated by this Agreement, make
any amendment to the Articles of Incorporation or the Company's bylaws, or file
any resolution of the Board or certificate of designation with the Secretary of
State of Nevada;
(xiii) make any capital expenditures (including, without
limitation, payments with respect to capitalized leases, as determined in
accordance with generally accepted accounting principles consistently applied)
exceeding $100,000, except as permitted by any budget approved by the Board;
(xiv) hire, terminate, suspend, promote or demote any senior
executive employee of the Company or any of its Subsidiaries;
(XV) enter into, or cause any Subsidiary to enter into, any
agreement which would (under any circumstances) restrict the Company's or any of
its Subsidiaries' right or ability to perform the provisions of this Agreement
or any of the other agreements or instruments contemplated hereby or to conduct
its business as currently conducted or as proposed to be conducted at any time;
or
(xvi) approve any business plan or annual budget of the
Company or any of its Subsidiaries for any fiscal year.
3D. AFFIRMATIVE COVENANTS. Unless the Company obtains the
prior written consent of Interprise, the Company shall, and shall cause each
Subsidiary to:
(i) comply with all applicable laws, rules, and regulations of
all governmental authorities, the violation of which would reasonably be
expected to have a material adverse effect upon the financial condition,
operating results, assets, operations, or business prospects of the Company and
its Subsidiaries taken as a whole, and pay and discharge when payable all Taxes,
assessments, and governmental charges (except to the extent the same are being
contested in good faith and adequate reserves therefor have been established);
(ii) enter into and maintain appropriate non-disclosure,
noncompete, and non-solicitation agreements with its key employees; and
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(iii) cause any agreement entered into by the Company or any
Subsidiary after the date hereof which provides for the sale of capital stock of
the Company (or the capital stock of any Subsidiary of the Company) to, or
employment of, a senior management to be in form and substance substantially
similar to the draft of such agreement reviewed and approved by Interprise.
3E. CURRENT PUBLIC INFORMATION. At all times after the Company
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
shall take such further action as any holder or holders of Restricted Securities
may reasonably request, all to the extent required to enable: (i) such holders
to sell Restricted Securities pursuant to Rule 144 adopted by the Securities and
Exchange Commission under the Securities Act (as such rule may be amended from
time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission; or (ii) the Company to be eligible to
register its securities pursuant to a registration statement on Form S-2 or S-3
or any similar registration form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company shall deliver to any holder of
Restricted Securities a written statement as to whether it has complied with
such requirements. Until such time as the Company has filed a registration
statement with the Securities and Exchange Commission pursuant to the
requirements of either the Securities Act or the Securities Exchange Act, the
Company shall file all reports required to be filed by it by the National
Association of Securities Dealers, Inc., or any affiliate thereof (the "NASD"),
and shall comply with all rules and requirements of the NASD which are
applicable to the Company, and shall Comply with all rules and regulations
adopted by the Securities and Exchange Commission which apply to the Company's
current status as a "publicly traded company" on the NASD "bulletin board"
system.
3F. LIMITED PREEMPTIVE RIGHTS.
(i) Except for the issuance of Stock or any securities
containing options or rights to acquire any shares of Stock: (a) to employees,
consultants, officers, or directors of the Company or an Affiliate thereof
pursuant to arrangements approved by the Board; (b) in connection with
acquisitions approved by the Board; (c) in connection with financing
transactions approved by the Board; or (d) pursuant to a public offering
registered under the Securities Act, if the Company at any time after the
Initial Closing and prior to the consummation of the earlier of a Sale of the
Company or Qualified Public Offering authorizes the issuance or sale of any
shares of any class of capital stock or any securities containing options or
rights to acquire any shares of any class of capital stock ("OPTIONS") (other
than as a dividend or distribution on outstanding shares of capital stock), then
the Company shall first offer to sell to each holder of Purchaser Stock a
portion of such capital stock or Options equal to the quotient determined by
dividing (1) the number of shares of Purchaser Common assuming the Preferred
Stock held by such holder were converted by (2) the total number of shares of
Common Stock outstanding immediately before such issuance assuming all shares of
Preferred Stock were converted. Each holder of Purchaser Stock shall be entitled
to purchase all or any
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portion of such capital stock or Options at the most favorable price and on the
most favorable terms as such capital stock or Options are to be offered to any
other Persons.
(ii) In order to exercise its purchase rights hereunder, a
holder of Purchaser Stock must within fifteen (15) days after receipt of written
notice from the Company describing in reasonable detail the stock or securities
being offered, the purchase price thereof, the payment terms, and such holder's
percentage allotment deliver a written notice to the Company describing its
election hereunder. If all of the capital stock and Options offered to the
holders of Purchaser Stock is not fully subscribed by such holders, then the
remaining stock and securities shall be reoffered by the Company to the holders
purchasing their full allotment upon the terms set forth in this paragraph,
except that such holders must exercise their purchase rights within five (5)
days after receipt of such reoffer.
(iii) Upon the expiration of the offering periods described
above, the Company shall be entitled to sell such stock or securities which the
holders of Purchaser Stock have not elected to purchase during the ninety (90)
days following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to such holders. Any stock or securities
offered or sold by the Company after such ninety (90) day period must be
reoffered to the holders of Purchaser Stock pursuant to the terms of this
paragraph.
(iv) Nothing contained in this paragraph 3F shall be deemed to
amend, modify, or limit in any way the restrictions on the issuance of shares of
stock set forth in paragraph 3C hereof or elsewhere in this Agreement, in the
Articles of Incorporation, or in any other agreement to which the Company is
bound.
3G. PUBLIC DISCLOSURES. The Company shall not, nor shall it
permit any of its Subsidiaries or other Affiliates to, disclose Interprise's (or
its Affiliates') name or identity as an investor in the Company in any press
release or other public announcement or in any document or material filed with
any governmental entity, without the prior written consent of Interprise, unless
such disclosure is required by applicable law or governmental regulations or by
order of a court of competent jurisdiction, in which case, before making such
disclosure the Company shall give written notice to Interprise describing in
reasonable detail the proposed content of such disclosure and shall permit
Interprise to review and comment upon the form and substance of such disclosure.
3H. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ COMPLIANCE. In connection with any
transaction in which the Company, or any Subsidiary is involved which is
required to be reported under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended from time to time (the "HSR ACT"), the Company, or any such
Subsidiary, shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice which may be required to
comply with the HSR Act, and shall promptly furnish all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings, in connection with the transactions contemplated thereby. The Company,
or any such Subsidiary, shall take all reasonable actions and shall file and use
reasonable best efforts to have declared effective or approved all documents and
notifications with any governmental or regulatory bodies, as may be
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necessary or may reasonably be requested under federal antitrust laws for the
consummation of the subject transaction.
SECTION 4. TRANSFER OF RESTRICTED SECURITIES. Each Purchaser
acknowledges that the Restricted Securities are transferable only pursuant to:
(a) public offerings registered under the Securities Act; (b) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule or rules are available; and (c) any other legally
available means of transfer. In connection with the transfer of any Restricted
Securities (other than a transfer described in clauses (a) or (b) above), the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer. In addition, upon the
request of Interprise, the Company shall promptly supply to Interprise or its
prospective transferees all information regarding the Company required to be
delivered in connection with a transfer pursuant to Rule 144A of the Securities
and Exchange Commission.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Stock, the Company hereby represents and warrants to the Purchasers that,
except as expressly set forth on the Schedule of Exceptions attached hereto:
5A. ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of Nevada and is qualified to do business in every jurisdiction in which
the failure to so qualify might reasonably be expected to have a material
adverse effect on the financial condition, operating results, assets,
operations, or business prospects of the Company and its Subsidiaries taken as a
whole. The Company has all requisite corporate power and authority and all
material licenses, permits, and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted, and to carry out the transactions contemplated by this
Agreement. The copies of the Company's Articles of Incorporation and Bylaws, and
the copies of the articles of incorporation and bylaws (or other similar
organizational documents) of each Subsidiary of the Company, which have been
furnished to Interprise's counsel, reflect all amendments made thereto at any
time before the Applicable Date and are correct and complete.
5B. CAPITAL STOCK AND RELATED MATTERS.
(i) The authorized capital stock of the Company consists of
100,000,000 shares of capital stock, of which 10,000,000 shares are designated
as Class A Convertible Preferred Stock, par value $.001 per share and of which
90,000,000 shares are designated as Common Stock par value $.001 per share.
Immediately prior to the Initial Closing, the Company had 15,185,000 shares of
Common Stock issued and outstanding. Except for such issued and outstanding
shares, the Company does not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or containing
any profit participation features, nor does it have outstanding any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or any stock
appreciation rights or phantom stock plans other than pursuant to, and as
contemplated by, this Agreement. The Company is not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock or any warrants, options,
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or other rights to acquire its capital stock, except pursuant to this Agreement.
All of the outstanding shares of the Company's capital stock are and shall be
validly issued, fully paid, and nonassessable.
(ii) There are no statutory or contractual stockholders
preemptive rights or rights of refusal with respect to the issuance of any of
the Stock hereunder, except as expressly provided herein. Based in part on the
investment representations of the Purchasers in Section 7C hereof, the Company
has not violated any applicable federal or state securities laws in connection
with the offer, sale, or issuance of any of its capital stock, and the offer,
sale, and issuance of the Stock hereunder does not and will not require
registration under the Securities Act or any applicable state securities laws.
There are no agreements between the Company's stockholders with respect to the
voting or transfer of the Company's capital stock or with respect to any other
aspect of the Company's affairs.
5C. AUTHORIZATION; NO BREACH. The execution, delivery, and
performance of this Agreement, the Registration Agreement, and all other
agreements contemplated hereby to which the Company is from time to time a party
and the filing of the Articles of Incorporation and the filing of the
Certificate of Designation have been duly authorized by the Company. This
Agreement, the Registration Agreement, the Certificate of Designation, the
Articles of Incorporation, and all other agreements contemplated hereby from
time to time to which the Company or any Subsidiary is a party each constitutes
a valid and binding obligation of such Person, enforceable in accordance with
its terms. The execution and delivery by the Company of this Agreement, the
Registration Agreement, and all other agreements contemplated hereby to which
the Company is a party, the offering, sale, and issuance of the Stock hereunder,
the Certificate of Designation, the Articles of Incorporation and the
fulfillment of and compliance with the respective terms hereof and thereof by
the Company do not and will not: (i) conflict with or result in a breach of the
terms, conditions, or provisions of; (ii) constitute a default under; (iii)
result in the creation of any Lien, security interest, charge, or encumbrance
upon the Company's capital stock or assets pursuant to; (iv) give any third
party the right to modify, terminate, or accelerate any obligation under; (v)
result in a violation of; or (vi) require any authorization, consent, approval,
exemption, or other action by or notice to any court or administrative or
governmental body pursuant to, the Articles of Incorporation or Bylaws of the
Company, or any law, statute, rule, or regulation to which the Company is
subject, or any agreement, instrument, order, judgment, or decree to which the
Company or any of its Affiliates, or employees is a party or by which it or any
of the foregoing Persons is bound.
5D. SUBSIDIARIES; INVESTMENTS. The Company does not own or
hold any shares of stock or any other security or interest in any other Person
or any rights to acquire any such security or interest, and the Company has
never had any Subsidiary.
5E. CONDUCT OF BUSINESS; LIABILITIES. Other than the
negotiation, execution and delivery of this Agreement, the Registration
Agreement and the other agreements contemplated hereby and thereby, and except
as has been disclosed or made available to Interprise, prior to the Closing, the
Company has not: (i) conducted any business; (ii) incurred any material
expenses, obligations or liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise, whether or not known to the Company and whether due
or to become
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due and regardless of when asserted); (iii) owned any material assets; (iv)
entered into any material contracts or agreements; or (v) violated any laws or
governmental rules or regulations.
5F. TAX MATTERS. The Company has filed all tax returns (if
any) which it is required to file under applicable laws and regulations; all
such returns are complete and correct in all material respects; the Company has
paid all taxes due and owing by it and has withheld and paid over all taxes
which it is obligated to withhold from amounts paid or owing to any employee,
stockholder, creditor or other third party; the Company has not waived any
statute of limitations with respect to taxes or agreed to any extension of time
with respect to a tax assessment or deficiency; the assessment of any additional
taxes for periods for which returns have been filed is not expected; no foreign,
federal, state or local tax audits are pending or being conducted with respect
to the Company, no information related to tax matters has been requested by any
foreign, federal, state or local taxing authority and no notice indicating an
intent to open an audit or other review has been received by the Company from
any foreign, federal, state or local taxing authority; and there are no
unresolved questions or claims concerning the Company's tax liability. The
Company has not made an election under ss.341(f) of the IRC.
5G. LITIGATION, ETC. There are no actions, suits, proceedings,
orders, investigations or claims pending or, to the best of the Company's
knowledge, threatened against or affecting the Company (or to the best of the
Company's knowledge, pending or threatened against or affecting any of the
officers, directors or employees of the Company with respect to their business
or proposed business activities) at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality
(including, without limitations, any actions, suits, proceedings or
investigations with respect to the transactions contemplated by this Agreement)
which could have a material adverse effect on the financial condition, operating
results, assets, operations or business prospects of the Company taken as a
whole; the Company is not subject to any arbitration proceedings under
collective bargaining agreements or otherwise or, to the best of the Company's
knowledge, any governmental investigations or inquiries; and, to the best of the
Company's knowledge, there is no basis for any of the foregoing. The Company is
not subject to any judgment, order or decree of any court or other governmental
agency. The Company has not received any opinion or memorandum or legal advice
from legal counsel to the effect that it is exposed, from a legal standpoint, to
any liability or disadvantage which may be material to its business.
5H. BROKERAGE. There are no claims for brokerage commissions,
finders, fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon the Company. The Company shall pay, and hold each Purchaser harmless
against, any liability, loss or expense (including, without limitation,
attorneys fees and out-of-pocket expenses) arising in connection with any such
claim.
5I. GOVERNMENTAL CONSENT, ETC. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby.
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5J. ERISA. The Company does not maintain or have any
obligation to contribute to or any other liability with respect to or under
(including but not limited to current or potential withdrawal, liability), nor
has it ever maintained or had any obligation to contribute to or any other
liability with respect to or under: (i) any plan or arrangement whether or not
terminated, which provides medical, health, life insurance or other welfare
types benefits for current or future retired or terminated employees (except for
limited continued medical benefit coverage required to be provided under Section
4980B of the IRC or as required under applicable state law); (ii) any
"mutliemployer plan" (as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); (iii) any employee plan which
is a tax-qualified "defined benefit plan" (as defined in Section 3(35) of
ERISA), whether or not terminated; (iv) any employee plan which is tax-qualified
"defined contribution plan" (as defined in Section 3(34) of ERISA), whether or
not terminated; or (v) any other plan or arrangement providing benefits to
current or former employees, including any bonus plan, plan for deferred
compensation, employee health or other welfare benefit plan or other
arrangement, whether or not terminated. For purposes of this Section 5J, the
term "Company" includes all organizations under common control with the Company
pursuant to Section 414(b) or (c) of the IRC.
5K. COMPLIANCE WITH LAWS. The Company has not violated any law
or any governmental regulation or requirement which violation would reasonably
be expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of the Company, and
the Company has not received notice of any such violation. The Company is not
subject to any clean up liability, and the Company has no reason to believe it
may become subject to any clean up liability, under any federal, state or local
environmental law, rule or regulation.
5L. DISCLOSURE. Neither this Agreement nor any of the
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to the Purchasers by or on behalf of the Company with
respect to the transactions contemplated hereby contain any untrue statement of
a material fact or omit a material fact necessary to make each statement
contained herein or therein not misleading. There is no fact which the Company
has not disclosed to the Purchasers in writing and of which any of its officers,
directors or executive employees is aware and which has had or might reasonably
be anticipated to have a material adverse effect upon the existing or expected
financial condition, operating results, assets, customer or supplier relations,
employee relations or business prospects of the Company.
5M. CLOSING DATE. The representations and warranties of the
Company contained in this Section 5 and elsewhere in this Agreement and all
information contained in any exhibit, schedule or attachment hereto or in any
writing delivered by, or on behalf of, the Company to the Purchasers shall be
true and correct in all respects on the date of the Closing as though then made,
except as affected by the transactions expressly contemplated by this Agreement.
SECTION 6. DEFINITIONS. For the purposes of this Agreement,
the following terms have the meanings set forth below:
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"AFFILIATE" of any particular person or entity means any other
person or entity controlling, controlled by, or under common control with such
particular person or entity.
"AFFILIATED GROUP" means an affiliated group as defined in
Section 1504 of the IRC (or any analogous combined, consolidated, or unitary
group defined under state, local, or foreign income Tax law).
"COMMON STOCK" means the Company's common stock, par value
$0.001 per share.
"INDEBTEDNESS" means all indebtedness for borrowed money
(including purchase money obligations), all indebtedness under revolving credit
arrangements, all capitalized lease obligations, and all guarantees of any of
the foregoing, involving any amount or amounts in excess of $100,000.
"INVESTMENT" as applied to any Person means: (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities, or ownership interest (including partnership
interests and joint venture interests of any other Person, and; (ii) any capital
contribution by such Person to any other Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien, or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company, any of its
Subsidiaries or any of its Affiliates, any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect owner-ship by a third party of property leased to
the Company or any of its Subsidiaries under a lease which is not in the nature
of a conditional sale or title retention agreement, or any subordination
arrangement in favor of another Person (other than any subordination arising in
the ordinary course of business).
"OFFICER'S CERTIFICATE" means a certificate signed by the
Company's President or its Chief Financial Officer, stating that: (i) the
officer signing such certificate has made or has caused to be made such
investigations as are necessary in order to permit him to verify the accuracy of
the information set forth in such certificate; and (ii) such certificate does
not misstate any material fact and does not omit to state any fact necessary to
make the certificate not misleading.
"PERSON" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, and a governmental
entity or any department, agency, or political subdivision thereof.
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"PREFERRED STOCK" means the Company's Class A Convertible
Preferred Stock, par value $0.001 per share.
"PURCHASER COMMON" means: (i) the Common Stock issued to
Purchasers upon the conversion of the Preferred Stock; and (ii) any capital
stock issued or issuable with respect to the Common Stock referred to in clause
(i) above by way of stock dividends or stock splits or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization. As to any particular shares of Purchaser Common, such shares
shall cease to be Purchaser Common when they have been: (a) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them; or (b) distributed to the public through a
broker, dealer, or market maker pursuant to Rule 144 under the Securities Act
(or any similar rule then in force).
"PURCHASER PREFERRED" means (i) the Preferred Stock issued to
Purchasers hereunder; and (ii) any capital stock issued or issuable with respect
to the Preferred Stock referred to in clause (i) above by way of stock dividends
or stock splits or in connection with a combination of shares, recapitalization,
merger, consolidation, or other reorganization. As to any particular shares of
Purchaser Preferred, such shares shall cease to be Purchaser Preferred when they
have been: (a) converted into Common Stock; (b) redeemed by the Company; (c)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them; or (d) distributed to the public
through a broker, dealer, or market maker pursuant to Rule 144 under the
Securities Act (or any similar rule then in force).
"PURCHASER STOCK" means the Purchaser Preferred and the
Purchaser Common.
"QUALIFIED PUBLIC OFFERING" means an underwritten public
offering of shares of Common Stock registered under the Securities Act in which
the aggregate price paid by the public for such shares is at least $15 million.
For purposes of this Agreement, a Qualified Public Offering shall be deemed to
have occurred upon the effectiveness of the registration statement filed with
respect to such offering, subject to any consequences under this Agreement of
such Qualified Public Offering having been deemed to have occurred being
reversed and nullified if the closing of the sale of such shares pursuant to
such offering does not occur within ten business days after such effectiveness.
"RESTRICTED SECURITIES" means: (i) the Stock issued hereunder;
and (ii) any securities issued with respect to the securities referred to in
clause (i) above by way of a stock dividend or stock split or in connection with
the conversion of stock, or in connection with combination of shares,
recapitalization, merger, consolidation, or other reorganization. As to any
particular Restricted Securities, such securities shall cease to be Restricted
Securities when they have: (a) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them;
(b) become eligible for sale pursuant to Rule 144(k) (or any similar provision
then in force) under the Securities Act; or (c) been otherwise transferred and
new certificates for them not bearing the Securities Act legend set forth in
Section 7C have been delivered by the Company in accordance with Section 7C.
Whenever any particular securities cease to be Restricted Securities, the holder
thereof shall be entitled to receive from the
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Company, without expense, new securities of like tenor not bearing a Securities
Act legend of the character set forth in Section 7C.
"SALE OF THE COMPANY" means: (i) any sale, transfer, or
issuance or series of sales, transfers, and/or issuances of capital stock of the
Company by the Company or any holders thereof which results in any Person or
group of Persons (as the term "group" is used under the Securities Exchange
Act), other than the holders of Common Stock and Preferred Stock as of the
Initial Closing, owning capital stock of the Company possessing the voting power
(under ordinary circumstances) to elect a majority of the Board; and (ii) any
sale or transfer of all or substantially all of the assets of the Company and
its Subsidiaries in any transaction or series of transactions (other than sales
in the ordinary course of business).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.
"STOCK" means the Company's Preferred Stock and Common Stock.
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which: (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof;
or (ii) if a limited liability company, partnership, association, or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association, or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association, or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association, or other business
entity. References to a "SUBSIDIARY" of the Company shall be given effect only
at such times as the Company has one or more Subsidiaries.
"TAX" OR "TAXES" means any: (i) federal, state, local, or
foreign income, gross receipts, franchise, estimated, alternative minimum,
add-on minimum, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property, capital stock,
social security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties, or additions to tax or
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additional amounts in respect of the foregoing; (ii) liability of the Company
for the payment of any amounts of the type described in clause (i) arising as a
result of being (or ceasing to be) a member of any Affiliated Group (or being
included (or required to be included) in any Tax Return relating thereto); and
(iii) liability of the Company for the payment of any amounts of the type
described in clause (i) as a result of any express or implied obligation to
indemnify or otherwise assume or succeed to the liability of any other person
(including, but not limited to, as a successor or transferee).
"TAX RETURNS" means returns, declarations, reports, claims for
refund, information returns, or other documents (including any related or
supporting schedules, statements, or information) filed or required to be filed
in connection with the determination, assessment, or collection of Taxes of any
party or the administration of any laws, regulations, or administrative
requirements relating to any Taxes.
SECTION 7. MISCELLANEOUS.
7A. EXPENSES. As a further inducement for the Purchasers to
consummate the transactions contemplated hereby, the Company agrees to pay to
Interprise a closing fee, payable as follows: (a) $15,000 at the Initial
Closing; and (b) $65,000 payable at such time as the Purchasers have purchased a
total of at least $1,500,000 in Preferred Stock. In addition, the Company shall
reimburse Interprise for its reasonable fees and expenses (including its
reasonable fees and expenses of its counsel and other advisors) which Interprise
has incurred in connection with the Initial Closing. In addition, the Company
agrees to pay, and hold each of Interprise and the other holders of Purchaser
Stock harmless against liability for the payment of: (i) its reasonable fees and
expenses (including its reasonable fees and expenses of its counsel and other
advisors) arising in connection with the interpretation and enforcement of its
rights under, this Agreement, the Registration Agreement, the other agreements
contemplated hereby and thereby, the Articles of Incorporation and the Company's
Bylaws, and the consummation of the transactions contemplated hereby and thereby
(including, but not limited to, reasonable fees and expenses arising with
respect to any subsequent purchase of Stock pursuant to Section 1B hereof and
any subsequent or proposed acquisitions, sales, mergers, or recapitalizations by
the Company and its Subsidiaries); (ii) the reasonable fees and expenses
incurred with respect to any amendments or waivers (whether or not the same
become effective) under or in respect of this Agreement, the Registration
Agreement, the other agreements contemplated hereby, and thereby and the
Articles of Incorporation and the Company's Bylaws; (iii) reasonable travel
expenses and other reasonable out-of-pocket fees and expenses as have been or
may be incurred by Interprise, its directors, officers and employees in
connection with the transactions contemplated hereby (including, but not limited
to, reasonable fees and expenses incurred in attending Company-related
meetings); and (iv) stamp and other Taxes which may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery, or
acquisition of any shares of Stock purchased hereunder or in accordance with
Section 1B hereof.
7B. REMEDIES. Each holder of Stock issued hereunder shall have
all rights and remedies set forth in this Agreement and the Articles of
Incorporation and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any Person having any rights under any
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provision of this Agreement shall be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law.
7C. PURCHASERS' INVESTMENT REPRESENTATIONS. Each Purchaser
hereby represents that such Purchaser is acquiring the Restricted Securities
purchased hereunder or acquired pursuant hereto for its own account with the
present intention of holding such securities for purposes of investment, and
that it has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws; provided that nothing contained herein shall prevent such Purchaser and
subsequent holders of Restricted Securities from transferring such securities in
compliance with the provisions of Section 4 hereof.
Each certificate for Restricted Securities shall be imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON MARCH __, 1999, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE STOCK PURCHASE
AGREEMENT, DATED AS OF MARCH___, 1999, BETWEEN THE ISSUER (THE
"COMPANY") AND CERTAIN INVESTORS, AND THE COMPANY RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH
CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER.
A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO
THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE."
If the holder of the Restricted Securities delivers to the Company an
opinion of qualified securities counsel reasonably acceptable to the Company
that no subsequent transfer of such Restricted Securities shall require
registration under the Securities Act, however, the Company shall promptly upon
such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in this Section
7C.
7D. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if and when the Company has obtained the written
consent of Interprise, unless or until Interprise no longer has any rights under
this Agreement, at which time the Company need only obtain the written consent
of a successor to the rights and obligations of Interprise. No other course of
dealing between the Company and the holder of any Stock or any delay in
exercising any rights hereunder or under the Articles of Incorporation shall
operate as a waiver of any rights of any
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such holders. For purposes of this Agreement, shares of Stock held by the
Company or any Subsidiaries shall not be deemed to be outstanding.
7E. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement, regardless of any investigation made by any Purchaser or on its
behalf.
7F. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not; provided that this Agreement may not be assigned by the Company without
the consent of Interprise. In addition, and whether or not any express
assignment has been made, the provisions of this Agreement which are for a
Purchaser's benefit as a purchaser or holder of Stock are also for the benefit
of, and enforceable by, any subsequent holder of such Stock. The rights and
obligations of Interprise under this Agreement and the agreements contemplated
hereby may be assigned by Interprise at any time, in whole or in part, to any
investment fund managed by ▇▇▇▇▇▇ Technology Management, L.P. or its Affiliates,
or any successor thereto.
7G. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Where any
accounting determination or calculation is required to be made under this
Agreement or the exhibits hereto, such determination or calculation (unless
otherwise provided) shall be made in accordance with generally accepted
accounting principles, consistently applied, except that, if because of a change
in generally accepted accounting principles the Company would have to alter a
previously utilized accounting method or policy in order to remain in compliance
with generally accepted accounting principles, then such determination or
calculation shall continue to be made in accordance with the Company's previous
accounting methods and policies. All numbers set forth herein which refer to
share prices or numbers or amount will be appropriately adjusted to reflect
stock splits, stock dividends, combinations of shares, and other
recapitalizations affecting the subject class of stock.
7H. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but, if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, then such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
7I. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
7J. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall
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include the corresponding masculine, feminine, or neuter forms, and the
singular form of nouns, pronouns, and verbs shall include the plural and vice
versa. The use of the word "INCLUDING" in this Agreement shall be by way of
example rather than by limitation. Reference to any agreement, document, or
instrument means such agreement, document, or instrument as amended or otherwise
modified from time to time in accordance with the terms thereof, and if
applicable hereof. Without limiting the generality of the immediately preceding
sentence, no amendment or other modification to any agreement, document, or
instrument that requires the consent of any Person pursuant to the terms of this
Agreement or any other agreement will be given effect hereunder unless such
Person has consented in writing to such amendment or modification.
7K. GOVERNING LAW. The corporate law of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity, and interpretation of
this Agreement and the exhibits and schedules hereto shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
7L. NOTICES. All notices, demands, or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, upon machine-generated acknowledgment of receipt
after transmittal by facsimile, sent to the recipient by reputable express
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested, and postage prepaid. Such notices,
demands, and other communications shall be sent to the Purchasers and to the
Company at the address indicated below:
If to the Company:
World Commerce Online, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to any Purchaser:
c/▇ ▇▇▇▇▇▇ Capital Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
7M. RIGHTS. This Agreement shall not confer any rights or
remedies upon any Person, other than the parties hereto and their respective
heirs, successors, and permitted assigns.
7N. AMENDMENTS. Any reference contained herein to any
agreement, instrument, or other document shall include any amendments or
modifications made to such agreement, instrument, or other document made from
time to time in accordance with the terms thereof, and if applicable, hereof.
7O. SEVERAL OBLIGATIONS. The obligations of the Purchasers
hereunder shall be several obligations, and not joint and several obligations.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Stock Purchase Agreement on the date first written above.
WORLD COMMERCE ONLINE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Chairman and Chief Executive Officer
INTERPRISE TECHNOLOGY PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Principal
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================================================================================
PURCHASE SCHEDULE
================================================================================
This Purchase Schedule relates to that certain Stock Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of March 30, 1999, by and between Interprise
Technology Partners, L.P. ("INTERPRISE") and World Commerce Online, Inc. (the
"COMPANY"), and sets forth the times at which Interprise will purchase certain
amounts of the Company's Class A Convertible Preferred Stock, par value $0.001
per share (the "PREFERRED STOCK"). Purchases of the Preferred Stock shall be
made subject to the terms and conditions set forth in the Purchase Agreement.
Numbers set forth in this Purchase Schedule shall be equitably adjusted for
subsequent stock splits, stock combinations, stock dividends and
recapitalizations.
NUMBER OF SHARES OF
PREFERRED STOCK TO BE PURCHASED
DATE BY INTERPRISE
------------------------ --------------------------------
April 1, 1999 200,000
May 3, 1999 225,000
June 1, 1999 250,000
July 1, 1999 250,000
August 2, 1999 250,000
September 1, 1999 250,000
October 1, 1999 through October 1, 2,325,000 shares of Preferred Stock, to be purchased
2000 at such times in such amounts as are mutually
agreeable to Interprise and the Company. The
schedule for such purchases shall be determined by
June 1, 1999, and this Purchase Schedule shall be
revised accordingly at such time and appended
to the Purchase Agreement.
27
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SCHEDULE OF EXCEPTIONS
================================================================================
5D: SUBSIDIARY; INVESTMENTS.
World Commerce Online - Floraplex, Inc., a Florida corporation, is a
wholly-owned subsidiary of the Company.
5G: LITIGATION, ETC.
The following lawsuits and/or judgments remain outstanding against
World Commerce Online - Floraplex, Inc., f/k/a World Commerce Online, Inc., and
f/k/a The Floral Foundation, Inc.
1. VISBEEN FLORAL BV, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim for $20,993.93 through October
17, 1996 plus interest. Suit filed but no adjudication.
2. BLOOMX, INC., vs. THE FLORAL FOUNDATION, INC., (Dade County) -
Trade credit claim reduced to a judgment on February 10, 1997
in the amount of $42,000.00 plus interest. This claim has
already been substantially repaid.
3. AABLO BV AALSMEER, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim reduced to a judgment on March
14, 1997 in the amount of $10,728.62 plus interest.
4. HOLEX FLOWER BV, vs. THE FLORAL FOUNDATION, INC., (Orange
County) - Trade credit claim for $47,595.52 through December
31, 1997. Suit filed but no adjudication.
5. ARMELLINI EXPRESS LINES, INC., vs. WORLD COMMERCE ONLINE,
INC., f/k/a THE FLORAL FOUNDATION, INC., and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, (Dade County) - Trade credit claim reduced to a
judgement on August 24, 1998 in the amount of $1,837.89 plus
interest.
5J: ERISA.
Employee health insurance with United Healthcare of Florida, Inc., ▇.▇.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Account No. 156485, Plan 200C-PPO.
Currently the Company is paying the insurance premium for each of the employee's
and deducting from payroll for their spouses and children.