I-STORM, INC.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of January 12, 2000, by and between I-STORM, INC., a Nevada
corporation (the "Company") and Computer Associates International, Inc.
(hereinafter referred to as "CA").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of up to
500,000 shares of its Series D Cumulative Convertible Preferred Stock (the
"Shares" or "Series D Preferred Stock");
WHEREAS, CA desires to purchase a portion of the Shares on the terms
and conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to CA on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to each Closing (as defined
below), the Company shall have authorized (i) the sale and issuance to CA of the
Shares and (ii) the issuance of such shares of Common Stock to be issued upon
conversion of the Shares (the "Conversion Shares"). The Shares and the
Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Certificate of Designations of the Company in the
form attached hereto as EXHIBIT A (the "Certificate of Designations").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at each Closing the Company hereby agrees to issue and sell to CA and CA agrees
to purchase from the Company 40,817 Shares, at a purchase price of twelve
dollars and twenty-five cents ($12.25) per share for an aggregate purchase price
of $500,000, subject to adjustment as set forth herein. The total number of
shares to be purchased is 163,268 and the aggregate purchase price for all
Shares to be purchased under this Agreement is $2,000,000.
1.3 CA PURCHASES DEPENDENT UPON EXECUTION OF E-COMMERCE PARTNERSHIP
AGREEMENTS. Upon the execution of this agreement, CA agrees to purchase 40,817
Shares (the "Initial Closing"). After the Initial Closing, within five business
days of the execution and delivery by the Company of each of three qualifying
E-Commerce and Sales Marketing Agreements with a third party involved in
e-commerce (a "Qualifying Partnership Agreement"), CA agrees to purchase an
additional 40,817 Shares (each a "Subsequent Closing"). In order to qualify as a
Qualifying Partnership Agreement, not less than 10 days prior to the execution
of a proposed Qualifying Partnership Agreement, the Company shall provide CA
with the terms of the proposed Qualifying Partnership Agreement and CA shall,
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exercising reasonable business judgment, have the option to deem the agreement a
Qualifying Partnership Agreement no later than five days after the Company has
provided to CA the terms of such proposed Qualifying Partnership Agreement. Upon
the purchase of Shares after the third Qualifying Partnership Agreement at the
third Subsequent Closing, CA's obligation to purchase any more Shares and the
Company's obligation to sell any more Shares will cease.
1.4 PURCHASE PRICE PER SHARE; ADJUSTMENTS FOR CHANGE IN CAPITAL
STOCK. The purchase price for the Shares shall initially be $12.25 per Share
(the "Purchase Price"), PROVIDED; that if the Company (i) subdivides the Series
D Preferred Stock into a greater number of shares or (ii) combines its
outstanding shares of Series D Preferred Stock into a smaller number of shares,
then with respect to any Closing that has not yet taken place: (i) the Purchase
Price and (ii) the number of Shares to be purchased at such Closing (and each
Subsequent Closing after such Closing) shall be proportionately adjusted so that
CA will receive the aggregate number of Shares which it would have owned
immediately following such action if the Closing had taken place immediately
prior to such action. Such adjustment shall be made successively whenever any
event listed above shall occur and shall be independent and not in lieu of any
adjustment to the conversion rate described in the Certificate of Designations.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. Each closing of the sale and purchase of the Shares
under this Agreement shall take place either at the Initial Closing or a
Subsequent Closing (each a "Closing") at the time specified in Section 1.3
above, or at such other time, and at such place, as the Company and CA may
mutually agree (each such date is hereinafter referred to as a "Closing Date").
2.2 DELIVERY. At each Closing, subject to the terms and conditions
hereof, the Company will deliver to CA certificates representing the number of
Shares to be purchased at the Closing by CA pursuant to the terms of this
Agreement, against payment of the purchase price therefor in immediately
available funds by check or wire transfer made payable to the order of the
Company, cancellation of indebtedness which the parties agree is owing to CA by
the Company, or any combination of the foregoing; provided, however that,
anything to the contrary herein notwithstanding, in the event that any Closing
shall occur hereunder after the date on which all of the Company's outstanding
Series D Preferred Stock has been converted into Common Stock in accordance with
the Certificate of Designations, then the "Shares" to be issued and delivered at
such Closing shall be that number of shares of Common Stock into which the
number of shares of Series D Preferred Stock otherwise deliverable at such
Closing would have been converted if they had been outstanding on such
conversion date.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to CA as of the date of
this Agreement as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in corporate and tax good
standing under the laws of the State of Nevada. The Company has all requisite
corporate power and authority to own, operate and lease its properties and
assets, to execute and deliver this Agreement and the Registration Rights
Agreement in the form attached hereto as EXHIBIT B (the "Registration Rights
Agreement") ((i) the Registration Rights Agreement, (ii) this Agreement, (iii)
the Certificate of Designations, (iv) the License Agreement and the Professional
Services Agreement dated the date hereof between the Company and CA, together
with all Order Forms and Addendum thereto (collectively the "Products and
Services Agreements") and (v) all exhibits, schedules and other agreements
entered into in connection with all of the foregoing are collectively the
"Transaction Documents"), to issue and sell the Shares and to carry out the
provisions of the Transaction Documents and to carry on its business as
presently conducted and as presently proposed to be conducted. The Company is
duly qualified and is authorized to do business and is in corporate and tax good
standing as a foreign corporation in all jurisdictions in which the nature of
its activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on the business, liabilities,
properties, assets, prospects, operations, results of operations and/or
condition (financial or otherwise) of the Company and its subsidiaries taken as
a whole (a "Material Adverse Effect").
3.2 SUBSIDIARIES. The Company owns all outstanding shares in the
following wholly-owned subsidiaries (collectively the "Subsidiaries"): LVL
Communications Corporation, a California corporation. Other than the
Subsidiaries, the Company owns no equity securities of any other corporation,
limited partnership or similar entity, and is not a participant in any joint
venture, partnership or similar arrangement except those arrangements made
pursuant to e-commerce and sales and marketing agreements (whether or not such
agreements are deemed Qualifying Partnership Agreements).
3.3 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of
the Company, immediately prior to the first Closing, will consist of 25,000,000
shares of Common Stock, (par value $0.01) per share and 3,525,000 shares of
Preferred Stock, (par value $0.01), of which 600,000 are designated Series A
Cumulative Convertible Preferred Stock ("Series A Preferred Stock") ; 1,700,000
are designated Series B Cumulative Convertible Preferred Stock ("Series B
Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible
Preferred Stock ("Series C Preferred Stock"). Immediately prior to the effective
date of this Agreement, 5,460,449 shares of Common Stock, 0 shares Series A
Preferred Stock (subscribed for 600,000 shares), 407,900 shares of Series B
Preferred Stock, 371,438 shares of Series C Preferred Stock and no shares of
Series D Preferred Stock will be issued and outstanding. Of the authorized
shares of Common Stock, (i) 1.4 million shares are reserved for issuance to
employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option
Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to
employees pursuant to the Company's 1998-B Incentive Stock Option and
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Non-Statutory Plan (the "1998-B Plan"), (ii) 600,000 shares are reserved for
issuance upon the exercise of certain warrants, (iii) 600,000 shares are
reserved for issuance upon the conversion of the Series A Preferred Stock, (iv)
1,785,000 shares are reserved for issuance upon the conversion of the Series B
Preferred Stock, and (v) 1,650,000 shares are reserved for issuance upon
conversion of the Series C Preferred Stock. The Company intends to reserve
714,300 shares of its Common Stock for issuance upon conversion of the Series D
Preferred Stock. All issued and outstanding shares of the Company's Common Stock
(a) have been duly authorized and validly issued, (b) are fully paid and
nonassessable, and (c) were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The rights, preferences,
privileges and restrictions of the Shares are as stated in the Certificate of
Designations. Each series of Preferred Stock is convertible into Common Stock on
the basis described in the Reports (as defined below), subject to adjustment as
provided in the respective certificate of designations. The Conversion Shares
have been duly and validly reserved for issuance. Other than as set forth in
this Section 3.3 or as disclosed in Schedule 3.3 hereto, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or shareholder agreements, or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities. When issued in compliance with the provisions of this Agreement and
the Certificate of Designations, and upon payment of the Purchase Price the
Shares and the Conversion Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; PROVIDED, HOWEVER,
that the Shares and the Conversion Shares may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or in
the Registration Rights Agreement or as otherwise required by such laws at the
time a transfer is proposed.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization of the Transaction Documents, the performance of all obligations
of the Company hereunder and thereunder and the authorization, sale, issuance
and delivery of the Shares pursuant hereto and pursuant to the Certificate of
Designations has been taken or will be taken prior to each Closing. The
Transaction Documents, when executed and delivered, will be legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
except as may be limited by: (i) applicable principles limiting the availability
of specific performance, injunctive relief, and other equitable remedies; (ii)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors' rights,
provided, that the Bankruptcy (as defined below) shall not effect the
enforceability of the Transaction Documents and (iii) limitations on the
enforceability of the indemnification provisions of the Registration Rights
Agreement under federal and New York law. The sale of the Shares and the
subsequent conversion of the Shares into Conversion Shares are not and will not
be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.
3.5 SEC AND OTHER DOCUMENTS; UNDISCLOSED LIABILITIES. (a) The
Company has filed, and has provided to CA, (i) all required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents (including exhibits and all other information incorporated therein)
with the Securities and Exchange Commission (the "SEC") since July 17, 1998 and
(ii) all offering documents relating to the issuance of any securities of the
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Company since December 11, 1998, together with all supplements and exhibits and
schedules thereto (collectively, the "Reports"). As of their respective dates,
the Reports complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be (if
applicable), and the rules and regulations of the SEC promulgated thereunder
applicable to such Reports, except with respect to the late filing of certain
Reports as described in Schedule 3.5 hereto, and none of the Reports when filed
or distributed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
Reports comply as to form, as of their respective dates of filing with the SEC,
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited statements,
as permitted by Form 10-Q) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto), are complete and
correct and fairly present in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, (i) in the case of unaudited statements, to normal
year-end audit adjustments and (ii) to any comments of the SEC which have been
previously furnished to CA).
(b) The Company has no liabilities other than (i) liabilities
disclosed in the Reports and (ii) current liabilities incurred in the ordinary
course of business which would not have, either in any individual case or in the
aggregate, a Material Adverse Effect.
3.6 AGREEMENTS; ACTION.
(a) Except as set forth in Schedule 3.6 hereto, there are no
agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or by which
it is bound which may involve (i) obligations (contingent or otherwise) of, or
payments to, the Company in excess of $25,000, or (ii) the license of any
patent, copyright, trade secret or other proprietary right to or from the
Company (other than licenses arising from the purchase of "off the shelf" or
other standard products), or (iii) indemnification by the Company with respect
to infringements of proprietary rights.
(b) The Company has not (i) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (ii) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the
sale of its inventory in the ordinary course of business.
3.7 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salaries or directors or consultants fees, which are
described in Schedule 3.7, (b) reimbursement for reasonable expenses incurred on
behalf of the Company and (c) for other standard employee benefits made
generally available to all employees. The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.
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3.8 CHANGES. Except as set forth on Schedule 3.8 or as disclosed in
the Company's Form 10-KSB/A for the fiscal year ended December 31, 1998, as
filed on December 16, 1999, there has not been since December 31, 1998:
(a) a Material Adverse Effect or any event relating to the
operation of the Company which could reasonably be expected to have a Material
Adverse Effect;
(b) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(c) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(d) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(e) Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than employee
advances made in the ordinary course of business;
(f) Any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(g) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(h) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(i) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets or any sale, assignment or
transfer of any other assets except in the ordinary course of business;
(j) Any change in any material agreement to which the Company is
a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company;
(k) Any change in any accounting method used by the Company
other than as disclosed in the Reports.
3.9 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good
and marketable title to its properties and assets, including the properties and
assets reflected in the most recent balance sheet included in the Reports, and
good title to its leasehold estates, in each case subject to no mortgage,
pledge, lien, lease, encumbrance or charge, other than (a) those resulting from
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taxes which have not yet become delinquent, (b) minor liens and encumbrances
which do not materially detract from the value of the property subject thereto
or materially impair the operations of the Company, and (c) those that have
otherwise arisen in the ordinary course of business, none of which are material
in amount. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company are in good operating condition
and repair and are reasonably fit and usable for the purposes for which they are
being used. The Company is in compliance with all material terms of each lease
to which it is a party or is otherwise bound.
3.10 PATENTS AND TRADEMARKS. The Company owns or possesses
sufficient legal rights to all trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes and, to the best of its knowledge, all patents necessary for its
business as now conducted and as presently proposed to be conducted, without any
known infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, nor is the Company
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
of any other person or entity other than such licenses or agreements arising
from the purchase of "off the shelf" or standard products. No person has made
or, to the knowledge of the Company, threatened to make any claim alleging that
the Company has violated or, by conducting its business as presently proposed,
would violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity. The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company or
that would conflict with the Company's business as presently proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as presently proposed, will, to the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any employee is now obligated. The Company does not
believe it is or will be necessary to utilize any inventions, trade secrets or
proprietary information of any of its employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been assigned to the Company.
3.11 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any term of its Certificate of Incorporation or Bylaws,
or of any provision of any mortgage, indenture, contract, agreement, instrument
or contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or, any statute, rule or regulation applicable to the
Company which would have a Material Adverse Effect. The execution, delivery, and
performance of and compliance with this Agreement, and the other Transaction
Documents and the issuance and sale of the Shares pursuant hereto and of the
Conversion Shares pursuant to the Certificate of Designations, will not, with or
without the passage of time or giving of notice, result in any such violation,
or be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit license, authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties.
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3.12 LITIGATION. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened against
the Company that questions the validity of this Agreement, or the other
Transaction Documents or the right of the Company to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby, or
which might result, either individually or in the aggregate, in a Material
Adverse Effect, or any change in the current equity ownership of the Company,
nor is the Company aware that there is any basis for the foregoing. Each action,
suit, proceeding or investigation that is pending or, to the Company's
knowledge, threatened against the Company is set forth on Schedule 3.12 hereto,
together with a description thereof. The foregoing includes, without limitation,
actions pending or threatened (or any basis therefor known to the Company)
involving the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company intends to initiate.
3.13 TAX RETURNS AND PAYMENTS. The Company has filed all tax returns
(federal, state and local) required to be filed by it. All taxes shown to be due
and payable on such returns, any assessments imposed, and all other taxes due
and payable by the Company on or before each Closing as it occurs have been paid
or will be paid prior to the time they become delinquent. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.
3.14 EMPLOYEES. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement with the
Company; and to the Company's knowledge the continued employment by the Company
of its present employees, and the performance of the Company's contracts with
its independent contractors, will not result in any such violation. The Company
has not received any notice alleging that any such violation has occurred.
Except as set forth in Schedule 3.14, no employee of the Company has been
granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company. The Company
is not aware that any officer or key employee, or that any group of key
employees, intends to terminate their employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer, key
employee or group of key employees.
3.15 REGISTRATION RIGHTS. Except as required pursuant to the
Registration Rights Agreement or as listed in Schedule 3.15, the Company is
presently not under any obligation, and has not granted any rights, to register
(as defined in the Registration Rights Agreement) any of the Company's presently
outstanding securities or any of its securities that may hereafter be issued.
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3.16 COMPLIANCE WITH LAWS; PERMITS. The Company is not in violation
of any applicable statute, rule, regulation, order or restriction of any
domestic or, to the knowledge of the Company, any foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its properties which violation would have a Material Adverse
Effect. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement and the issuance of the Shares or the Conversion Shares, except such
as has been duly and validly obtained or filed, or with respect to any filings
that must be made after each Closing, as will be filed in a timely manner. The
Company has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business as now being conducted by it, the lack
of which could have a Material Adverse Effect and believes it can obtain,
without undue burden or expense, any similar authority for the conduct of its
business as planned to be conducted.
3.17 OFFERING VALID. Assuming the accuracy of the representations
and warranties of CA contained in Section 4.2 hereof, the offer, sale and
issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws. Neither the Company nor
any agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Shares and
Conversion Shares to any person or persons so as to bring the sale of such
Shares or Conversion Shares by the Company within the registration provisions of
the Securities Act or any state securities laws.
3.18 INSURANCE. The Company has in effect the insurance policies
listed on Schedule 3.18.
3.19 CONTRACTS.
(a) Except as set forth in the Schedule 3.19 hereto, as of the
Initial Closing Date, the Company is not a party to any written or oral: (i)
pension, profit sharing, stock option, employee stock purchase or other plan
providing for deferred or other compensation to employees or any other employee
benefit plan or any contract with any labor union; (ii) contract relating to the
borrowing of money or the mortgaging, pledging or otherwise placing a lien on
any asset of the Company, (iii) contract pursuant to which the Company is lessor
of or permits any third party to hold or operate any property, real or personal,
owned or controlled by the Company; (iv) warranty contract (other than its
standard form of warranty contract or otherwise delivered to counsel to CA) with
respect to its services rendered or its products sold or leased; (v) contract or
non-competition provision in any contract prohibiting it from freely engaging in
any business or competing anywhere in the world; (vi) employment, consulting,
sales, commissions, advertising or marketing contracts (other than its standard
form of such agreements or otherwise delivered to counsel to CA); (vii)
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contracts providing for "take or pay" or similar unconditional purchase or
payment obligations; or (viii) contract that requires the consent of any party
in connection with the execution, delivery or performance of the Transaction
Documents.
(b) The Company's subsidiary, LVL Communications Corporation,
reorganized pursuant to Chapter Eleven of the Bankruptcy Code following the
approval of a Plan of Reorganization, without creditor objection, on April 16,
1998, by the United States Bankruptcy Court for the Northern District of
California (such reorganization, together with all proceedings in connection
therewith, the "Bankruptcy"). Since July 17, 1998, the date upon which LVL
became a wholly owned subsidiary of the Company, the Company has not been, and
currently is not in default in any respect under or in breach of nor in receipt
of any claim of default or breach under any material contract to which the
Company is subject (including without limitation all performance bonds, warranty
obligations or otherwise); no event has occurred which with the passage of time
or the giving of notice or both would result in a default, breach or event of
non-compliance under any material contract to which the Company is subject
(including without limitation all performance bonds, warranty obligations or
otherwise); the Company does not have any present expectation or intention of
not fully performing all such obligations; the Company does not have any
knowledge of any breach or anticipated breach by the other parties to any such
contract to which it is a party.
3.20 YEAR 2000 COMPLIANCE. To the Company's knowledge, as of the
Closing Date, all Date-Sensitive Systems are Year 2000 Compliant except as such
noncompliance would not have a Material Adverse Effect. "Date Data" means any
data of any type that includes date information or which is otherwise derived
from, dependent on or related to date information. "Date-Sensitive System" means
any software that processes any Date Data and that the Company has itself
developed for its internal use, or that the Company sells, leases, licenses,
assigns or otherwise provides, or the provision or operation of which the
Company provides the benefit, to its customers. "Year 2000 Compliant" means that
each such system accurately processes all Date Data, including for the twentieth
and twenty-first centuries, without loss or any functionality or performance,
including but not limited to calculating, comparing, sequencing storing and
displaying such Date Data (including all leap year considerations), when used as
a stand-alone system or in combination with other software or hardware.
3.21 SOFTWARE. The current software applications used by the Company
in the operation of its business, as set forth and described on Schedule 3.22
hereto (the "Software"), to the extent it has been designed or developed by the
Company's management information or development staff or by consultants on the
Company's behalf, is original and capable of copyright protection in the United
States, and the Company has complete rights to and ownership of such software.
To the Company's knowledge, no part of any such software is an imitation or copy
of, or infringes upon, the software of any other Person or violates or infringes
upon any common law or statutory rights of any other person, including, without
limitation, rights relating to defamation, contractual rights, copyrights, trade
secrets, and rights of privacy or publicity. The Company has not sold, assigned,
licensed, distributed, or in any other way disposed of or encumbered the
Software. The Software, to the extent it is licensed from any third party
licensor or constitutes "off-the-shelf" software, is held by the Company
legitimately. All of the Company's computer hardware has legitimately-licensed
software installed therein. To the Company's knowledge, the Software is free
from any software defect or programming or documentation error which might have
a materially adverse effect on the Company.
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3.22 CUSTOMER WARRANTIES. There are no pending, nor to the knowledge
of the Company, threatened, claims under or pursuant to any warranty, whether
expressed or implied, on products or services sold prior to the Closing Date by
the Company that are not disclosed or referred to in the financial statements to
the Reports and that are not fully reserved against. There is no reason to
expect an increase in warranty claims in the future.
3.23 DEALINGS WITH AFFILIATES. Schedule 3.23 sets forth a complete
and accurate list, including the parties, of all oral or written contracts to
which the Company is, will be or has been a party, at any time since July 17,
1998 to the Closing Date, and to which any one or more affiliates of the Company
(including any employee, officer, director or shareholder holding in excess of
5% of any class of equity security of the Company on a fully-diluted basis) is
also a party. Since July 17, 1998, the Company has not made any payments, loaned
any funds or property or made any credit arrangement with any affiliate
(including any employee, officer, director or shareholder holding in excess of
5% of any class equity security of the Company on a fully-diluted basis) except
for the payment of employee salaries and director compensation in the ordinary
course of business.
3.24 DISCLOSURE. Neither this Agreement nor any of the Exhibits and
Schedules hereto, nor any written materials supplied to CA by the Company, nor
the Reports as of the date they were filed with the SEC, or if not filed with
the SEC, as of the date of such Report, contains any untrue statement of a
material fact or omits a material fact known to the Company necessary to make
each statement contained herein or therein not misleading. The reports have not
been updated except as required under the Exchange Act to the extent applicable
to the Reports. There is no fact which the Company has not disclosed to CA
herein and of which the Company, or any of its officers, directors or executive
employees is aware and which could reasonably be anticipated to have a Material
Adverse Effect.
3.25 NO BROKERS. No agent, broker, person or firm acting on behalf
of the Company is or will be entitled, as a result of any action or agreement by
the Company, to any commission or broker's or finder's fees from CA in
connection with any of the transactions contemplated herein.
4. REPRESENTATIONS AND WARRANTIES OF CA.
CA hereby represents and warrants to the Company as follows (such
representations and warranties do not lessen or obviate the representations and
warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. CA has all necessary power and
authority under all applicable provisions of law to execute and deliver this
Agreement and the Registration Rights Agreement and to perform the obligations
of CA hereunder and thereunder. All action on CA's part required for the lawful
execution and delivery of this Agreement and the Registration Rights Agreement
have been or will be effectively taken prior to each Closing. Upon their
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execution and delivery, this Agreement and the Registration Rights Agreement
will be valid and binding obligations of CA, enforceable in accordance with
their terms, except as may be limited by: (i) applicable principles limiting the
availability of specific performance, injunctive relief, and other equitable
remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect generally relating to or affecting
creditors' rights, and (iii) limitations on the enforceability of the
indemnification provisions of the Registration Rights Agreement under federal
and New York law
4.2 INVESTMENT REPRESENTATIONS. CA understands that none of the
Shares and the Conversion Shares has been registered under the Securities Act.
CA also understands that the Shares are being offered and sold pursuant to an
exemption from registration contained in the Securities Act and the Rules and
Regulations thereunder based in part upon CA's representations contained in this
Agreement and the Registration Rights Agreement. CA hereby represents and
warrants as follows:
(a) CA BEARS ECONOMIC RISK. CA has experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests. CA
must bear the economic risk of this investment indefinitely unless the Shares
(or the Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available. CA understands that the Company has no
present intention of registering the Shares or any shares of its Common Stock
(except as contemplated by the Registration Rights Agreement). CA also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow CA to transfer all or any portion of the Shares or the
Conversion Shares under the circumstances, in the amounts or at the times CA
might propose.
(b) ACQUISITION FOR OWN ACCOUNT. CA is acquiring the Securities
for CA's own account for investment only, and not with a view towards their
resale or distribution.
(c) CA CAN PROTECT ITS INTEREST. CA represents that by reason of
its, or of its management's, business or financial experience, CA has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement and the Registration Rights Agreement. Further,
CA is aware of no publication of any advertisement in connection with the
transactions contemplated in the Agreement.
(d) ACCREDITED INVESTOR. CA represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.
(e) COMPANY INFORMATION. CA has adequately and to its own
satisfaction conducted its independent due diligence and investigation of the
Company. CA has received and read the Reports and has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. CA has also had the opportunity to ask
questions of and receive answers from, the Company and its management regarding
12
the terms and conditions of this investment and to obtain any additional
information which the Company possesses or can acquire without unreasonable
effort and expense necessary to verify the accuracy of any information furnished
by the Company. CA has received satisfactory answers to any questions asked and
all information that it has requested.
(f) RULE 144. CA acknowledges and agrees that the Shares and the
Conversion Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. CA has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act as in effect from time to time, which
permits limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144, the sale being
effected through a "broker's transaction" or in a transaction directly with a
"market maker" (as provided by Rule 144(f)) and the number of shares being sold
during any three-month period not exceeding specified limitations.
(g) RESIDENCE. The office or offices of CA in which its
investment decision was made is located at Islandia, New York.
4.3 TRANSFER RESTRICTIONS. CA acknowledges and agrees that the
Shares and, if issued upon conversion of the Shares, the Conversion Shares, are
subject to restrictions on transfer under applicable securities laws and as set
forth in the Registration Rights Agreement and herein. CA understands and agrees
that the Share and Conversion Share certificates may bear a legend or legends
setting forth applicable restrictions on transferability under applicable
securities law and this Agreement and the registration Rights Agreement and that
it will not transfer any Shares in violation of any such restrictions.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO CA'S OBLIGATIONS AT EACH CLOSING. CA's obligations
to purchase the Shares at each Closing are subject to the satisfaction, at or
prior to each such Closing Date, of the following conditions (any of which may
be waived by CA):
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties of the Company contained in
Article 3 which are qualified as to materiality or Material Adverse Effect shall
be true and correct, subject to such qualification, at and as of each Closing
Date as if made at and as of such date, all other representations and warranties
of the Company shall be true and correct as of each Closing Date as if made at
and as of such date except where the failure of such representation or warranty
to be true and correct would not have a Material Adverse Effect. The Company
shall have performed and complied with all material agreements and conditions
herein required to be performed or complied with by it on or before such
Closing.
(b) LEGAL INVESTMENT. On such Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which CA and the Company are
subject.
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(c) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Transaction Documents.
(d) CORPORATE DOCUMENTS. The Company shall have delivered to CA
or its counsel, copies of all corporate documents of the Company as CA shall
reasonably request.
(e) RESERVATION OF CONVERSION SHARES. The Conversion Shares
shall have been duly authorized and reserved for issuance upon such conversion
or exercise.
(f) COMPLIANCE CERTIFICATE. The Company shall have delivered to
CA a Compliance Certificate, executed by the President of the Company, dated
such Closing Date, to the effect that the conditions specified in subsections
(a), (c) and (e) of this Section 5.1 have been satisfied.
(g) TRANSACTION DOCUMENTS. The Company shall have executed this
Agreement and the Registration Rights Agreement, and shall have filed the
Certificate of Designations with the Nevada Secretary of State, or other
appropriate authority.
(h) LEGAL OPINION. CA shall have received from DeMartino,
Finkelstein, ▇▇▇▇▇ & ▇▇▇▇▇ an opinion addressed to it, dated as of such Closing
Date, in substantially the form attached hereto as EXHIBIT C.
(i) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the CA and its counsel, and CA
and its counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.
(j) COMPLIANCE WITH SECURITIES LAWS; CONTINUED LISTING. The
Company shall have complied with applicable securities laws and its common stock
shall be quoted on the NASD OTC Electronic Bulletin Board ("OTCBB").
(k) QUALIFYING PARTNERSHIP AGREEMENTS. The Company shall have
entered into a Qualifying Partnership Agreement relating to such Closing and
such Qualifying Partnership Agreement shall be in full force and effect and the
Company shall not be in breach thereof. CA agrees that the Company has executed
and delivered a Qualifying Partnership Agreement acceptable to CA relating to
the Initial Closing.
(l) PRODUCTS AND SERVICES AGREEMENTS. The Products and Services
Agreements between the Company and CA, dated as of the date hereof, together
with any Order Forms and Addendum thereto, shall be executed simultaneously with
the Initial Closing and at each Subsequent Closing such documents shall be in
full force and effect and neither the Company nor CA shall be in breach thereof.
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5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at each Closing is subject to the
satisfaction, on or prior to such Closing, of the following conditions (any of
which may be waived by the Company):
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of CA contained in Article 5 which are qualified as to materiality or
Material Adverse Effect shall be true and correct at and as of each Closing Date
as if made at and as of such date, all other representations and warranties of
CA shall be shall be true and correct as of each Closing Date as if made at and
as of such date except where the failure of such representation or warranty to
be true and correct would not have a Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS. CA shall have performed and
complied with all material agreements and conditions herein required to be
performed or complied with by CA on or before such Closing.
(c) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement shall have been executed and delivered by CA.
(d) LEGAL INVESTMENT. On such Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which CA and the Company are
subject.
6. COVENANTS.
6.1 COMPLIANCE WITH TRANSACTION DOCUMENTS. Each of the parties shall
observe or comply with each of its respective covenants set forth in each of the
Transaction Documents.
6.2 FURTHER ASSURANCES. Each of the parties hereto agrees to use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, to consummate and make effective the
transactions contemplated by this Agreement and the Transaction Documents as
expeditiously as practicable and to ensure that the conditions set forth in
Articles 4 and 5 are satisfied. In case at any time after any Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement or any of the other Transaction Documents, each of the parties to this
Agreement shall take or cause to be taken all such necessary action, including
the execution and delivery of such further instruments and documents, including
but not limited to the issuance of securities to CA, as may be reasonably
requested by either party for such purposes or otherwise to complete or perfect
the contemplated transactions.
6.3 ACCESS AND INFORMATION. During the term of this Agreement, the
Company shall permit CA and its representatives and agents to have access to the
Company's and its Subsidiaries' offices and the Company's officers, counsel,
auditors, books and records, and the opportunity to investigate the Company's
and its Subsidiaries' title to property and the condition and nature of its
assets, business and liabilities, in each case upon reasonable notice and during
normal business hours; subject to agreement by CA to treat as confidential all
proprietary, confidential and trade secret information of the Company.
15
6.4 BOARD MEMBERS. The Company agrees that immediately after the
Initial Closing Date, it will use its best efforts to cause at least one
individual designated by CA to be elected to the Company's Board of Directors as
soon as possible thereafter (the "CA Designee"). Thereafter the Company shall
use its best efforts to cause the CA Designee to be reelected to the Board of
Directors. Neither the right to enforce the Company's obligation nor the right
to designate a member of the Board is assignable, whether on a sale or transfer
of the Shares or Conversion Shares or otherwise.
6.5 SERIES A PREFERRED STOCK. The Company shall use its best efforts
to obtain the consent of the requisite number of holders and shares of Series A
Cumulative Convertible Preferred Stock to (i) the issuance of the Series D
Preferred Stock upon the terms described in the Certificate of Designations (ii)
the payment of all dividends in connection therewith and (iii) such other
matters as CA may reasonably request (the "Series A Consent"). The Company shall
provide CA with a draft of any form proposed to be used in connection with such
consent and to incorporate any comments CA may reasonably have to such form.
7. TERMINATION.
TERMINATION. This Agreement may be terminated at any time (a) by mutual consent
of the Company and CA, (b) by the Company (i) upon the failure of CA to perform
or comply in all material respects with any of its covenants or agreements
contained herein or in the Transaction Documents (ii) if any representation or
warranty of CA shall not have been true and correct in any material respect as
of the time at which it was made, (c) by CA (i) upon the failure of the Company
to perform or comply in all material respects with any of its covenants or
agreements contained herein or in the Transaction Documents, (ii) if any
representation or warranty of the Company shall not have been true and correct
in any material respect as of the time at which it was made, (iii) if the
Company shall commence (by petition, application, or otherwise) a voluntary case
or other proceeding under the laws of any jurisdiction or an involuntary case or
other proceeding shall be commenced under the laws of any jurisdiction against
the Company seeking liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect, or seeking the appointment of a trustee,
self-trusteeship, receiver, custodian, or other similar official of it or any
substantial part of its property, or shall consent (by answer or failure to
answer or otherwise) to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make an assignment for the benefit of creditors,
or shall generally not pay its debts as they become due, or shall take any
action to authorize any of the foregoing, (iv) if the third Subsequent Closing
does not occur prior to December 31, 2000 or (v) if the Series A Consent is not
obtained before March 1, 2000; PROVIDED, however, that no party may terminate
this Agreement if such party has failed to comply with its material obligations
under this Agreement; PROVIDED, FURTHER, that this Agreement shall automatically
terminate without any further action on the part of CA if any of the events in
Section 7.1(c)(iii) occur.
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Termination by any party shall not be deemed to be a waiver of any claim such
party may have against the other party hereunder or under the other Transaction
Documents. If this Agreement is terminated pursuant to Section 7.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations under sections 6.3, 6.5, 8.1, 8.2, 8.3, 8.8, 8.9 and 8.10 will
survive the termination of this Agreement. Nothing in this Section shall relieve
any party of any liability for a breach of this Agreement prior to its
termination.
8. MISCELLANEOUS.
8.1 GOVERNING LAW; CONSENT TO JURISDICTION. (a) This Agreement shall
be governed in all respects by the laws of the State of New York without regards
to conflicts of laws; provided that, with respect to matters of corporate law,
the laws of the state in which the Company is incorporated shall govern.
(b) The Company hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or the other Transaction Documents, and the
Company hereby waives to the fullest extent permitted by law any objection which
it may have to the laying of venue of any such proceeding and any claim that any
such proceeding has been brought in an inconvenient forum.
8.2 SURVIVAL; INDEMNIFICATION. (a) The representations, warranties,
covenants and agreements made herein, unless otherwise indicated by their terms
shall survive any investigation made by CA and the closing of the transactions
contemplated hereby for a period of three (3) years from the date hereof;
PROVIDED, that Sections 3.4, 3.5, 3.17 and 4.1 shall survive indefinitely;
PROVIDED, FURTHER that any claims made for indemnification made prior to the
expiration of such period shall survive and not be extinguished by the
expiration of such period. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby or by
the other Transaction Documents shall be deemed to be representations and
warranties by the Company hereunder.
(b) The Company shall indemnify and hold CA and its directors,
officers, shareholders, employees, agents and each other person which controls
(within the meaning of the Securities Act) CA, harmless against all liability,
loss or damage, together with all reasonable costs and expenses related thereto
(including legal and accounting fees and expenses) (collectively "Damages"),
arising from any breach of or any inaccuracy in, any representations,
warranties, covenants or agreements contained herein or in any of the
Transaction Documents or in any schedule, certificate or exhibit to any of the
Transaction Documents, PROVIDED, that such indemnification shall not include any
consequential damages; PROVIDED, FURTHER, that notwithstanding anything to the
contrary in this Agreement or any Schedule hereto or CA's knowledge with respect
thereto, the Company's liability shall include but not be limited to
consequential damages with respect to any failure to obtain the Series A Consent
or any damages incurred by CA in connection with any action by the holders of
Series A Cumulative Convertible Preferred Stock with respect to the Series D
Preferred Stock.
17
(c) CA shall indemnify and hold the Company and its directors,
officers, shareholders, employees, agents and each other person which controls
(within the meaning of the Securities Act) the Company harmless against all
Damages, arising from any breach of or any inaccuracy in, any representations,
warranties, covenants or agreements contained herein or in any of the
Transaction Documents or in any schedule, certificate or exhibit to any of the
Transaction Documents; PROVIDED, that such indemnification shall not include any
consequential damages.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares or the Conversion Shares from time to
time.
8.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Registration Rights Agreement and the other Transaction Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof and no party shall be liable or
bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.
8.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
to the extent permitted by applicable law.
8.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of at least a majority of the
outstanding Shares (treated as if converted and including any Conversion Shares
issued upon conversion of the Shares that have not been sold to the public).
(b) The obligations of the Company and the rights of the holders
of the Shares and the Conversion Shares under the Agreement may be waived only
with the written consent of the holders of at least a majority of the
outstanding Shares (treated as if converted and including any Conversion Shares
issued upon conversion of the Shares that have not been sold to the public).
8.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under the Transaction Documents, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or in
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
18
any CA's part of any breach, default or noncompliance under the Transaction
Documents or any waiver on such party's part of any provisions or conditions of
the Transaction Documents, or the Certificate of Designations must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under the Transaction Documents, the Certificate
of Designations, by law, or otherwise afforded to any party, shall be cumulative
and not alternative.
8.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) the first business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the Company or CA at its respective address set forth as follows or at such
other address as the Company or CA respectively may designate by written notice
to the other party hereto:
If to the Company to:
I-Storm Inc.
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇. #▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimilie: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsilimie: (▇▇▇) ▇▇▇-▇▇▇▇
If to CA to:
Computer Associates International, Inc
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimilie: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
8.9 EXPENSES; ATTORNEYS' FEES. Each party shall pay all costs and
expenses incurred by it in connection with the negotiation, execution and
delivery of the Transaction Documents. In the event that any dispute between the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
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8.10 PUBLIC ANNOUNCEMENT. Until the termination of this Agreement
and the Transaction Documents, neither the Company nor CA shall issue or cause
the publication of any press release or other public announcement with respect
to the transactions contemplated by the Transaction Documents without the
consent of the other party which consent shall not be unreasonably withheld,
provided that each party shall give the other parties a reasonable opportunity
to review and comment thereon.
8.11 TITLES AND SUBTITLES. The titles of the articles sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.13 PRONOUNS. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
20
IN WITNESS WHEREOF, the parties hereto have executed this SERIES D PREFERRED
STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
I-STORM, INC. COMPUTER ASSOCIATES INTERNATIONAL, INC.
By:___________________________________ By:____________________________________
Name:_________________________________ Name:__________________________________
Title:________________________________ Title:_________________________________
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