SERIES A PREFERRED STOCK PURCHASE AGREEMENT
Dated February 8, 2007
by and between
▇▇▇▇▇ OPPORTUNITY FUND, LP
and
SEARCHHELP, INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
1.1 Definitions..........................................................1
1.2 Knowledge............................................................3
1.3 Interpretation.......................................................3
ARTICLE II CLOSING; PURCHASE AND SALE.........................................4
2.1 The Closing..........................................................4
2.2 Issuance and Delivery of the Purchase Shares.........................4
2.3 The Purchase Price...................................................4
2.4 Delivery of Purchase Price...........................................4
2.5 Use of Proceeds......................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................4
3.1 Organization; Good Standing..........................................4
3.2 Subsidiaries.........................................................5
3.3 Authority; Execution and Delivery; Enforceability....................5
3.4 Non-Contravention....................................................5
3.5 Corporate Documents..................................................6
3.6 Capitalization; Options..............................................6
3.7 Consents and Approvals...............................................7
3.8 SEC Reports and Financial Statements.................................7
3.9 Litigation and Claims................................................8
3.10 No Finder............................................................Error!
Bookmark not defined.
3.11 Exempt Offering......................................................8
3.12 Agreements; Action...................................................8
3.13 Related-Party Transactions...........................................Error!
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3.14 Title to Property and Assets.........................................Error!
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3.15 Employee Benefit Plans...............................................Error!
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3.16 Tax Returns, Payments and Elections..................................Error!
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3.17 Insurance............................................................Error!
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3.18 Disclosure...........................................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER........................8
4.1 Organization and Good Standing.......................................8
4.2 Corporate Authority; Execution and Delivery; Enforceability..........8
4.3 Non-Contravention....................................................9
4.4 Consents and Approvals...............................................9
4.5 Litigation and Claims................................................9
4.6 No Finder............................................................9
4.7 Investment Representations...........................................9
4.8 Accredited Investor..................................................10
4.9 Access to Information................................................10
ARTICLE V COVENANTS...........................................................10
5.1 Restrictive Legends..................................................10
5.2 Change in Condition..................................................10
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES.................10
6.1 Conditions to obligations of the Buyer...............................11
6.2 Conditions to obligations of the Company.............................11
ARTICLE VII MISCELLANEOUS.....................................................12
7.1 Survival; Certain Other Matters......................................12
7.2 Further Assurances...................................................12
7.3 Expenses of the Transaction..........................................13
7.4 Notices..............................................................13
7.5 No Modification Except in Writing....................................14
7.6 Entire Agreement.....................................................14
7.7 Severability.........................................................14
7.8 Assignment...........................................................14
7.9 Governing Law; Jurisdiction..........................................14
7.10 Captions.............................................................15
7.11 Counterparts.........................................................15
7.12 Delays or Omissions..................................................15
Exhibit A Certificate of Designations
ii
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
SERIES A PREFERRED STOCK PURCHASE AGREEMENT ("Agreement"), made and
entered into this 8th day of February, 2007, by and between ▇▇▇▇▇ OPPORTUNITY
FUND, LP ("Buyer"), and SEARCHHELP, INC., a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Buyer desires to purchase and acquire from the Company, and
the Company desires to issue and deliver to the Buyer, an aggregate of 160,306
shares of the Company's Series A Convertible Series A Preferred Stock, par value
$0.0001 ("Series A Preferred Stock"), free and clear of all claims, liens,
options, charges and encumbrances of any kind other than restrictions on
transfer as provided under applicable securities laws ("Liens") and a Warrant to
purchase from Company 400,765 fully paid and non-assessable shares of Common
Stock, $.0001 par value, at the Exercise Price of $0.26 per share (the "Purchase
Shares"), on the terms and subject to the conditions hereinafter set forth; and
WHEREAS, unless the context otherwise requires, capitalized terms used in
this Agreement shall have the meanings ascribed to such terms in Article I of
this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants hereinafter contained, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the
respective meanings ascribed to them below:
"Action" has the meaning ascribed to such term in Section 3.9.
"Affiliate" means, with respect to any specified Person, (i) any other
Person 50% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with the power to vote by such specified
Person or (ii) any other Person directly or indirectly controlling, controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, the term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person by virtue of ownership of voting securities, by contract
or otherwise.
"Agreement" has the meaning ascribed to such term in the Preamble.
"Business Day" means any day (other than Saturday or Sunday) on which
banking institutions in the State of New York are not authorized or obligated by
law to close.
"Buyer" has the meaning ascribed to such term in the Preamble.
"Certificate of Designations" shall mean the Certificate of Designations
of the Series A Preferred Stock, attached hereto as Exhibit A.
"Closing" has the meaning ascribed to such term in Section 2.1.
"Closing Date" has the meaning ascribed to such term in Section 2.1.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute thereto.
"Common Stock" has the meaning ascribed to such term in Section 3.6.
"Company" has the meaning ascribed to such term in the Preamble.
"Company Material Adverse Effect" shall mean any event, condition or
contingency that has had, or is reasonably likely to have, a material adverse
effect on the business, assets, liabilities, results of operations, prospects or
financial condition of the Company and its Subsidiaries, taken as a whole,
provided, however, that a Company Material Adverse Effect shall not include any
such effect resulting from or arising in connection with (a) changes or
conditions generally affecting the industries or segments in which the Company
operates or (b) changes in general economic, market or political conditions.
"Conversion Shares" has the meaning ascribed to such term in Section
3.6(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and all regulations promulgated thereunder.
"Financial Statements" has the meaning ascribed to such term in Section
3.8.
"GAAP" shall mean United States generally accepted accounting principles,
consistently applied.
"Governmental Authority" shall mean any federal, state, municipal or other
governmental authority, department, commission, board, agency or other
instrumentality.
"Governmental Rules" shall mean all laws, statutes, rules, regulations,
codes, ordinances, writs, orders or decrees of any Governmental Authority.
"Lien" has the meaning ascribed to such term in the Preamble.
"Person" shall mean any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, estate, trust,
cooperative, foundation, union, syndicate, league, consortium, coalition,
committee, society, firm, company or other enterprise, association, organization
or other entity or Governmental Authority.
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"Purchase Price" has the meaning ascribed to such term in Section 2.3.
"Purchase Shares" has the meaning ascribed to such term in the Recitals.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" has the meaning ascribed to such term in Section 3.8.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and all regulations promulgated thereunder.
"Series A Preferred Stock" has the meaning ascribed to such term in the
Recitals.
"Subsidiary" shall mean, when used with respect to any Person, any other
Person, whether incorporated or unincorporated, of which (i) more than fifty
percent of the securities or other ownership interests or (ii) securities or
other interests having by their terms ordinary voting power to elect more than
fifty percent of the board of directors or others performing similar functions
with respect to such corporation or other organization, is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries.
"Survival Period" has the meaning ascribed to such term in Section 8.1.
"Transaction Documents" shall mean the Certificate of Designations and
those other agreements, certificates and documents entered into or delivered
between the Buyer and the Company related to, ancillary to, or in connection
with this Agreement or the Certificate of Designations.
"Warrant" shall mean a five-year warrant entitling the holder to purchase
400,765 shares of common stock, par value $0.0001 per share, of the Company (the
"Common Stock") at the Exercise Price of $0.26 per share.
1.2 Knowledge. As used in the Agreement, "to the Company's knowledge" or
"to the knowledge of the Company" or words of similar import shall mean the
actual knowledge of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Chief Executive Officer of the
Company.
1.3 Interpretation. When a reference is made in this Agreement to a
section, article, paragraph, clause, annex or exhibit, such reference shall be
to a reference to this Agreement unless otherwise clearly indicated to the
contrary. The descriptive article and section headings herein are intended for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement. The meaning assigned to each term used in this
Agreement shall be equally applicable to both the singular and the plural forms
of such term, and words denoting either gender shall include both genders. Where
a word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.
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The parties have participated jointly in the negotiation and drafting of
this Agreement and the Transaction Documents. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement and
each of the Transaction Documents shall be construed as if drafted jointly by
the parties thereto, and no presumption or burden of proof shall arise favoring
or disfavoring either party by virtue of the authorship of any provision of this
Agreement or of any of the Transaction Documents.
ARTICLE II
CLOSING; PURCHASE AND SALE
2.1 The Closing. Subject to the terms and conditions of this Agreement,
the closing (the "Closing") of the transaction set forth in this Article II
shall take place on or before February 8, 2007, or at such other time or such
other date as Buyer and the Company may agree, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇
Rosenman LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (such date upon which the
Closing occurs is referred to as the "Closing Date").
2.2 Issuance and Delivery of the Purchase Shares. At the Closing, the
Company shall issue and deliver to the Buyer certificates for the purchase
Shares and the Buyer shall purchase the Purchase Shares from the Company.
2.3 The Purchase Price. At the Closing, the Buyer shall purchase the
Purchase Shares for a purchase price equal to $2.62 per Purchase Share (the
"Purchase Price"), which shall be paid to the Company by the Buyer.
2.4 Delivery of Purchase Price. At the Closing, the aggregate Purchase
Price shall be paid by the Buyer to the Company by wire transfer of immediately
available funds to an account designated in writing by the Company at least one
Business Day prior to the Closing.
2.5 Use of Proceeds. The Company shall use the net proceeds from the
issuance of the Purchase Shares for general working capital purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer as of the date hereof and
as of the Closing Date as follows:
3.1 Organization; Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has the corporate power and authority to conduct its
business as now being conducted and is duly licensed or qualified to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of the business conducted by it, and/or the character of the assets
owned or leased by it, makes such qualification or licensure necessary, except
for those jurisdictions in which the failure to be so qualified or licensed or
to be in good standing would not, individually or in the aggregate, limit the
Company's ability to consummate the transactions hereby contemplated or have a
Company Material Adverse Effect.
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3.2 Subsidiaries. All of the outstanding shares of the capital stock of
each Subsidiary of the Company are owned by the Company free and clear of all
Liens. Each of the Company's Subsidiaries is set forth on Schedule 3.2 and is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of the
Company's Subsidiaries has the power and authority to conduct its business as
now being conducted and is duly licensed or qualified to do business and is in
good standing as a foreign corporation or other legal entity in all
jurisdictions in which the nature of the business conducted by it, and/or the
character of the assets owned or leased by it, makes such qualification or
licensure necessary, except for those jurisdictions in which the failure to be
so qualified or licensed or to be in good standing would not, individually or in
the aggregate, limit the Company's ability to consummate the transactions hereby
contemplated or have a Company Material Adverse Effect.
3.3 Authority; Execution and Delivery; Enforceability. The Company has the
corporate power and authority to execute and deliver this Agreement and the
Transaction Documents and to consummate the transactions hereby and thereby
contemplated. The execution and delivery by the Company of this Agreement and
the Transaction Documents and the consummation by the Company of the
transactions hereby and thereby contemplated have been authorized by all
necessary corporate action of the Company. The Company has duly executed and
delivered this Agreement and the Transaction Documents, and, assuming the due
execution and delivery of this Agreement and the Transaction Documents by each
party thereto (other than the Company), this Agreement and the Transaction
Documents constitute valid and binding obligations of the Company and are
enforceable against the Company in accordance with its and their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or general equitable principles
(whether considered in a proceeding at equity or in law).
3.4 Non-Contravention. Neither the execution and delivery of this
Agreement and the Transaction Documents by the Company, nor the consummation of
the transactions hereby and thereby contemplated by the Company, will:
(i) constitute any violation or breach of the certificate of
incorporation or the by-laws (or comparable organizational documents in
the case of Subsidiaries) of the Company or any of its Subsidiaries;
(ii) constitute a default under or a violation or breach of, or
result in the acceleration of any obligation under, any provision of any
Contract to which the Company or any of its Subsidiaries is a party or by
which any of the assets of the Company or any of its Subsidiaries or the
Purchase Shares may be affected;
5
(iii) assuming the consents and approvals described in Section 3.7
have been received, violate any Governmental Rules affecting the Company
or any of its Subsidiaries; or
(iv) result in the creation of any Lien on any of the assets of the
Company or any of its Subsidiaries;
other than, in the case of foregoing clauses (ii), (iii), and (iv), those
defaults, violations, breaches, accelerations and Liens which, individually or
in the aggregate, would not have a Company Material Adverse Effect.
3.5 Corporate Documents. The Company has filed as exhibits to its SEC
Reports true and complete copies of the Certificate of Incorporation, as
amended, and By-Laws of the Company.
3.6 Capitalization; Options. (a) The Company is authorized to issue
250,000,000 shares of Common Stock, par value $0.00001 per share, 38,197,596 of
which are issued and outstanding as of the date hereof, ("Common Stock") and
25,000,000 shares of Series A Preferred Stock, none of which are issued and
outstanding as of the date hereof (prior to giving effect to the transactions
contemplated by this Agreement).
(b) All of the Purchase Shares when issued to the Buyer in accordance with
the terms of this Agreement shall be legally and validly issued, fully paid and
non-assessable, free and clear of all Liens. The shares of Common Stock issuable
upon conversion of the Purchase Shares or the exercise of the Warrant (the
"Conversion Shares") have been duly and validly reserved on the books and
records of the Company and, when issued upon conversion of the Purchase Shares
in accordance with the terms of the Certificate of Designations and the Warrant
and applicable Governmental Rules, shall be legally and validly issued, fully
paid and nonassessable, free and clear of all Liens.
(c) Other than the Common Stock and the Series A Preferred Stock, there
are no other series or classes of capital stock of the Company authorized or
issued and outstanding. Except as set forth in the SEC Filings, there are no
outstanding warrants, options, contracts, rights (preemptive or otherwise),
calls, commitments or other instruments convertible into or exchangeable for
shares of capital stock of the Company or any of the Company's Subsidiaries, in
each such case, to which the Company or any of Company's Subsidiaries is a party
and which relates to the sale or issuance of shares of capital stock of the
Company or of any of Company's Subsidiaries (collectively, the "Company
Instruments"). Except as set forth in the SEC Filings or as contemplated by this
Agreement and the Transaction Documents, (i) the Company has not agreed to
register any shares of its capital stock under the Securities Act or granted
registration rights with respect to shares of its capital stock to any Person
and (ii) there are no voting trusts, stockholders agreements, proxies or other
agreements or understandings in effect to which the Company is a party with
respect to the voting or transfer of any shares of Common Stock. Except as
disclosed in the SEC Reports or any exhibit thereto, to the extent any such
Company Instruments are outstanding as of the date hereof, neither the issuance
and sale of the Purchase Shares nor the issuance of the Conversion Shares in
accordance with its terms will result in an adjustment of the exercise or
conversion price of, or number of shares issuable upon the exercise or
conversion of any such, Company Instruments.
6
(d) The outstanding shares of Common Stock are all duly and validly
authorized and issued, fully paid and nonassessable. All outstanding Common
Stock, options and other securities of the Company were issued in accordance
with the registration or qualification provisions of the Securities Act and any
relevant state securities laws (including, without limitation, anti-fraud
provisions) or, subject in part to the truth and accuracy of each purchaser's
representations to the Company at the time of the purchase thereof, pursuant to
valid exemptions therefrom.
3.7 Consents and Approvals. Except for filings required under applicable
securities laws and designation in Delaware, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Authority or any other Person is required on behalf of the Company or any of its
Subsidiaries in connection with the execution, delivery or performance of this
Agreement and the Transaction Documents or the consummation of the transactions
contemplated hereby and thereby, other than such consents, approvals and
authorizations of, and declarations, filings and registrations the failure of
which to obtain, make or otherwise effect which would not, individually or in
the aggregate, result in a Company Material Adverse Effect.
3.8 SEC Reports and Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed by it with the SEC since July 23, 2003 (collectively, the "SEC Reports").
The SEC Reports (i) were prepared in all material respects in accordance with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and (ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. None of the Company's
Subsidiaries is required to file any form, report or other document with the
SEC.
(b) Each of the financial statements (including, in each case, any notes
thereto) contained in the SEC Reports (the "Financial Statements") (i) was
prepared from the books of account and other financial records of the Company,
(ii) was prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto) and (iii) presented fairly in all material respects the financial
position of the Company as at the respective dates thereof and the results of
its operations and its cash flows for the respective periods indicated therein
except as otherwise noted therein (subject, in the case of unaudited statements,
to the omission of footnotes and normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to have a
Company Material Adverse Effect).
(c) Except for liabilities and obligations reflected on the September 30,
2006 balance sheet of the Company included in the SEC Reports (including the
notes thereto), liabilities and obligations disclosed in the SEC Reports
(including exhibits thereto) filed prior to the date of this Agreement and other
liabilities and obligations incurred in the ordinary course of business since
September 30, 2006, neither the Company nor any of the Company's Subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
prepared in accordance with GAAP which, individually or in the aggregate, would
cause a Company Material Adverse Effect.
7
3.9 Litigation and Claims. There is no action, suit, claim, proceeding,
arbitration or investigation (each, an "Action") pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries or, to the best of the Company's knowledge, against any officer,
director or employee of the Company in connection with such officer's,
director's or employee's relationship with, or actions taken on behalf of, the
Company or that questions the validity of this Agreement, or the right of the
Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby. Neither the Company nor any of its Subsidiaries
is subject to or in default under any judgment, order, writ, agreement,
injunction or decree of any court or Governmental Authority.
3.10 Exempt Offering. Subject in part to the truth and accuracy of the
Buyer's representations set forth in Article IV of this Agreement, the offer,
sale and issuance of the Purchase Shares and the Conversion Shares, as
contemplated by and in conformity with this Agreement are exempt from the
registration requirements of Section 5 of the Securities Act by virtue of
Regulation D thereunder, and from the registration or qualification requirements
of any other applicable federal or state securities laws, and the issuance of
the Conversion Shares in accordance with the Company's Certificate of
Incorporation and the Certificate of Designations will be exempt from such
registration and qualification requirements, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
3.11 Agreements; Action. Other than as attached as an exhibit to the
Company's Annual Report on Form 10-KSB for year ended December 31, 2005 (as
amended), or any subsequent report on Form 10-QSB or 8-K filed with the SEC, the
Company is not a party to, and none of its properties, rights or assets are
bound by, any material contract, agreement, lease, power of attorney, guaranty,
surety arrangement, or other commitment, whether written or oral.
3.12 Disclosure. None of this Agreement or any other statements or
certificates made or delivered in connection herewith or therewith contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated therein or necessary to make the
statements herein or therein, in light of the circumstances in which they are
made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company as of the date hereof and
the Closing Date as follows:
4.1 Organization and Good Standing. The Buyer is duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
4.2 Corporate Authority; Execution and Delivery; Enforceability. The Buyer
has the requisite power and authority to execute and deliver this Agreement and
the Transaction Documents to which it is a party and to consummate the
transactions hereby and thereby contemplated. The execution and delivery by the
Buyer of this Agreement and the Transaction
8
Documents to which it is a party and the consummation by the Buyer of the
transactions hereby and thereby contemplated have been authorized by all
necessary action (corporate or otherwise). The Buyer has duly executed and
delivered this Agreement and the Transaction Documents to which it is a party,
and, assuming the due execution and delivery of this Agreement and the
Transaction Documents by each party thereto (other than the Buyer), this
Agreement and the Transaction Documents to which it is a party constitute valid
and binding obligations of the Buyer and are enforceable against the Buyer in
accordance with its and their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or general equitable principles (whether considered in a proceeding at
equity or in law).
4.3 Non-Contravention. Neither the execution and delivery of this
Agreement or the Transaction Documents to which it is a party by the Buyer, nor
the consummation of the transactions hereby or thereby contemplated by the
Buyer, will:
(i) constitute any violation or breach of the organizational
documents of the Buyer; or
(ii) violate any Government Rule affecting the Buyer, other than any
such violations which, individually or in the aggregate, would not prevent
the Buyer from consummating the transactions contemplated by this
Agreement and the Transaction Documents.
4.4 Consents and Approvals. No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or third
party is required on behalf of the Buyer in connection with the execution,
delivery or performance of this Agreement or the Transaction Documents to which
it is a party and all documents contemplated hereby or thereby or the
transactions contemplated hereby and thereby, other than such consents,
approvals and authorizations of, and declarations, filings and registrations
with, third parties the failure of which to obtain, make or otherwise effect
which would not, individually or in the aggregate, prevent the Buyer from
consummating the transactions contemplated by this Agreement and the Transaction
Documents.
4.5 Litigation and Claims. There is no action, suit, claim, proceeding,
arbitration or investigation pending or, to the knowledge of the Buyer,
threatened against or affecting the Buyer with respect to the propriety or
validity of the transactions contemplated hereby.
4.6 No Finder. Neither the Buyer nor any party acting on the Buyer's
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated
hereby.
4.7 Investment Representations. The Buyer hereby acknowledges and agrees
that the Purchase Shares, and, if and when issued, the Conversion Shares, will
not be registered under the Securities Act or any state securities laws and may
not be offered or sold except pursuant to registration or an exemption from the
registration requirements of the Securities Act and all applicable state
securities laws. In this connection, the Buyer understands Rule 144 promulgated
under the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
9
4.8 Accredited Investor. The Buyer represents that: (i) the Buyer is an
"accredited investor" (as such term is defined in Regulation D under the
Securities Act) and is acquiring the Purchase Shares for its own account, for
investment purposes only, and not with a view to the resale or offer for sale
thereof or with any present intention of distributing or selling or offering for
sale any of such securities; and (ii) the Buyer is capable of bearing the
economic risk of such investment, including a complete loss of the investment in
the Purchase Shares.
4.9 Access to Information. Such Purchaser or his representative during the
course of this transaction, and prior to the purchase of any Series APreferred
Stock, has had the opportunity to ask questions of and receive answers from
management of the Company concerning the terms and conditions of the offering of
the Series A Preferred Stock and the additional information, documents, records
and books relative to its business, assets, financial condition, results of
operations and liabilities (contingent or otherwise) of the Company.
ARTICLE V
COVENANTS
5.1 Restrictive Legends. None of the Purchase Shares or the Conversion
Shares may be transferred without registration under the Securities Act and
applicable state securities laws unless counsel to the Buyer shall advise the
Company in writing that such transfer may be effected without such registration.
Each certificate representing any of the foregoing shall bear legends in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT (I)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES UNDER THE ACT, OR (II) UPON RECEIPT BY ISSUER OF AN OPINION
OF LEGAL COUNSEL REASONABLY SATISFACTORY TO ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Company shall remove or cause its registrar and transfer agent to
remove such legend at the time such Purchase Shares or Conversion Shares are
transferred pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 under the Securities Act.
5.2 Change in Condition. Prior to the Closing, the Company shall promptly
advise the Buyer in writing of any material change in the condition (financial
or otherwise), operations or properties or businesses of the Company.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
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The obligation of the parties to consummate the transactions contemplated
under this Agreement are subject to the fulfillment of each of the following
conditions, any or all of which may be waived in whole or in part by the party
whose obligation is subject to such conditions, in their sole discretion.
6.1 Conditions to obligations of the Buyer.
(a) There shall not be in effect any injunction or restraining order
issued by a court of competent jurisdiction in an Action against the
consummation of the transactions contemplated hereby or by any Transaction
Document.
(b) The Company shall have filed the Certificate of Designations with the
Secretary of State of the State of Delaware.
(c) The representations and warranties of the Company contained in Article
III that are qualified as to materiality shall be true and correct and those not
so qualified shall be true and correct in all material respects on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
(d) The Company shall have performed and complied in all material respects
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
(e) All authorizations, approvals or permits, if any, of any governmental
authority or regulatory body of the United States or of any state that are
required in connection with the lawful issuance and sale of the Securities
pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
6.2 Conditions to obligations of the Company.
(a) There shall not be in effect any injunction or restraining order
issued by a court of competent jurisdiction in an Action against the
consummation of the transactions contemplated hereby or by any Transaction
Document.
ARTICLE VII
REGISTRATION RIGHTS
If at any time the Company shall determine to register for its own account
or the account of others under the Securities Act (including pursuant a demand
for registration of any stockholder of the Company) any of its equity
securities, other than on Form S-4 or Form S-8 or their then equivalents
relating to shares of Common Stock to be issued solely in connection with any
acquisition of any entity or business or shares of Common Stock issuable in
connection with stock option or other employee benefit plans, it shall send to
the Buyer written notice of such determination and, if within fifteen (15) days
after receipt of such notice, the Buyer shall so request in writing to the
Company, the Company shall use its best efforts to include in such registration
statement all or any part of the Conversion Shares requested to be registered.
11
ARTICLE VIII
MISCELLANEOUS
8.1 Survival; Certain Other Matters.
(a) The representations and warranties of the parties contained in this
Agreement shall survive the Closing and shall continue in full force and effect
until the second anniversary of the date hereof, after which time such
representations and warranties shall terminate and have no further force or
effect; provided, however, that the representations and warranties contained in
Sections 3.6, 4.6, 4.7, 4.8 and 4.9 hereof shall survive the Closing and remain
in full force and effect until the expiration of the applicable statute of
limitations, after which time such representations and warranties shall
terminate and have no further force or effect. The period during which any such
representation or warranty survives is the "Survival Period" for such
representation or warranty. Notwithstanding the foregoing, any representation or
warranty that would otherwise terminate shall survive with respect to, and only
with respect to, any matter of which notice is given to Company or the Buyer, as
the case may be, in writing pursuant to this Agreement prior to the end of the
applicable Survival Period until such matter is resolved, after which time such
representation and warranty shall terminate and have no further force or effect.
The representations, warranties and covenants of the Company contained in or
made pursuant to this Agreement shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of the Buyer or the Company.
(b) The covenants and agreements of the parties contained in this
Agreement shall survive the Closing as to the Buyer until the Buyer no longer
owns any Purchase Shares or Conversion Shares.
(c) Each party hereto may assert a claim or cause of action under this
Agreement with respect to (i) any breach of one or more of the representations
and warranties contained in Articles III and IV hereof, as the case may be,
provided that such claim or cause of action is asserted within the applicable
time period specified in Section 8.1(a) hereof and (ii) subject to Section
8.1(b) hereof, a breach of any one or more of the covenants or agreements
contained in this Agreement. Except as provided for in the immediately preceding
sentence, the parties to this Agreement agree that no claims or causes of action
on any basis (including in contract or tort, under federal or state securities
laws or otherwise), other than for fraud, may be brought against the Company or
the Buyer or any of their respective directors, officers, employees, Affiliates,
shareholders, successors, permitted assigns, agents, or representatives based
upon, directly or indirectly, any of the representations or warranties contained
in Articles III and IV of this Agreement or any misstatement or failure to state
any fact made by Company in connection with the Buyer's purchase of the Purchase
Shares or the Conversion Shares.
8.2 Further Assurances. From and after the Closing Date, each party shall,
at any time and from time to time, make, execute and deliver, or cause to be
made, executed and delivered, such instruments and agreements, and take or cause
to be taken all such actions as counsel for the other party may reasonably
request for the effectual consummation of this Agreement and the transactions
hereby contemplated.
12
8.3 Expenses of the Transaction. The Company and the Buyer shall each pay
its own fees and expenses in connection with this Agreement and the transactions
hereby contemplated.
8.4 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered (i) when
delivered personally or by private courier, (ii) when actually delivered by
registered or certified United States mail, return receipt requested, or (iii)
when sent by telecopy (provided that it is confirmed by a means specified in
clause (i) or (ii)), addressed as follows:
If to the Buyer:
▇▇▇▇▇ Opportunity Fund, LP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy:
--------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Name:
------------------------------
Address:
---------------------------
Attention:
-----------------------
Telecopy:
--------------------------
Telephone:
------------------------
If to the Company to:
SearchHelp, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: CFO
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as such party may indicate by a notice delivered to the
other parties hereto.
13
8.5 No Modification Except in Writing. This Agreement shall not be
changed, modified, or amended except by a writing signed by the party to be
affected by such change, modification or amendment, and this Agreement may not
be discharged except by performance in accordance with its terms or by a writing
signed by the party to which performance is to be rendered.
8.6 Entire Agreement. This Agreement, together with any Schedules and
Exhibits hereto, sets forth the entire agreement and understanding among the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of every kind and nature among them.
8.7 Severability. If any provision of this Agreement or the application of
any provision hereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision to other
persons or circumstances shall not be affected unless the provision held invalid
shall substantially impair the benefits of the remaining portions of this
Agreement.
8.8 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. This Agreement may not be
assigned by the Company or the Buyer without the prior written consent of the
other party; provided, however, that, prior to Closing, the Buyer may assign its
rights under this Agreement to any Affiliate of the Buyer that agrees in favor
of the Company in writing to the assumption of the assigning the Buyer's
obligations under this Agreement. No such assignment and assumption shall
relieve the Buyer of its obligations under this Agreement.
8.9 Governing Law; Jurisdiction.
(a) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts made and to be
performed wholly within said State, without giving effect to the conflict of
laws principles thereof.
(b) Each of the parties hereto irrevocably and unconditionally submits to
the exclusive jurisdiction of the United States District Court for the Southern
District of New York or, if such court will not accept jurisdiction, the Supreme
Court of the State of New York, New York County or any court of competent civil
jurisdiction sitting in New York County, New York. In any action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above courts, that such action
or suit is brought in an inconvenient forum or that the venue of such action,
suit or other proceeding is improper. Each of the parties hereto also agrees
that any final and unappealable judgment against a party hereto in connection
with any action, suit or other proceeding shall be conclusive and binding on
such party and that such award or judgment may be enforced in any court of
competent jurisdiction, either within or outside of the United States. A
certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment.
14
(c) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE
ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT.
8.10 Captions. The captions appearing in this Agreement are inserted only
as a matter of convenience and for reference and in no way define, limit or
describe the scope and intent of this Agreement or any of the provisions hereof.
8.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single agreement.
8.12 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to the Company or to the Buyer, upon any breach or
default of any party hereto under this Agreement, shall impair any such right,
power or remedy of the Company or any Buyer nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach of default thereafter occurring; nor shall any waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of the Company or the
Buyer of any breach of default under this Agreement, or any waiver on the part
of the Company or any Buyer of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement, or by law or
otherwise afforded to the Company or the Buyer, shall be cumulative and not
alternative.
[Signature page follows]
15
IN WITNESS WHEREOF, each of the parties hereto has executed this Series A
Preferred Stock Purchase Agreement on the day and year first above written.
SEARCHHELP, INC.
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
▇▇▇▇▇ OPPORTUNITY FUND, LP
By:
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
SEARCHHELP, INC.
PAYMENT INFORMATION
PAYMENT BY WIRE
Your bank should wire transfer only U.S. dollars via Fed wire to:
HSBC BANK USA
SearchHelp, Inc., IPO Account
ABA # - ▇▇▇▇▇▇▇▇▇
Account # 945705107
(i)
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IMPORTANT:
1) Please have your bank identify on the wire transfer the name of the
intended investor.
2) We recommend that your bank charge its wiring fees separately so that an
even amount may be invested.
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