Exhibit 10.13
LIGHTSPACE CORPORATION
UNIT SUBSCRIPTION AGREEMENT
COMMON STOCK
AND WARRANTS
UNIT SUBSCRIPTION AGREEMENT dated as of March 30, 2007 (this "Agreement"), among
Lightspace Corporation, a Delaware corporation (the "Company"), and the persons
who execute this agreement as investors (each an "Investor" and collectively the
"Investors").
Background: The Company desires to sell to the Investors, and the Investors
desire to purchase, up to four hundred thousand (400,000) Units, as defined
below. The proceeds of the sale of Units will be used in the development and
continuance of the business of the Company and each of its Subsidiaries and to
acquire related businesses and technologies, which may include business and
technologies currently owned by former officers and employees of the Company.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties agree as follows:
Certain Definitions:
"Action" has the meaning set forth in Section 2.10.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with such Person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
"Amendment to Warrant Agreement" means Amendment 1 to the Warrant Agreement
in substantially the form attached hereto as Exhibit 1A, providing for issuance
of the Purchased Warrants.
"Blue Sky Laws" has the meaning set forth in Section 2.7(b).
"Business Day" means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.
"Certificate of Incorporation" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 1.2.
"Closing" has the meaning set forth in Section 1.2.
"Common Stock" means the Company's Common Stock, $.0001 par value per
share, authorized as of the date hereof, and any stock of any class or classes
(however designated) hereafter authorized upon reclassification thereof, which,
if the Board of Directors declares a dividend or distribution, has the right to
participate in the distribution of earnings and assets of the Company after the
payment of dividends or other distributions on any shares of capital stock of
the Company entitled to a preference and in the voting for the election of
directors of the Company.
"Company" has the meaning set forth at the head of this Agreement and any
corporation or other entity which shall succeed to or assume, directly or
indirectly, the obligations of the Company hereunder. The term "corporation"
shall include an association, joint stock company, business trust, limited
liability company or other similar organization.
"Company IP" has the meaning set forth in Section 2.12(a).
"Convertible Security" means any (i) option to purchase or right to
subscribe for Common Stock, (ii) security by its terms convertible into or
exchangeable for Common Stock or (iii) option to purchase or right to subscribe
for such convertible or exchangeable securities.
"Contemplated Transactions" has the meaning set forth in Section 2.1(b).
"Exchange Act" has the meaning set forth in Section 2.7(b).
"Financial Statements" has the meaning set forth in Section 2.9(c).
"Governmental Body" has the meaning set forth in Section 2.7(b).
"Indemnified Party" has the meaning set forth in Section 5.2(b).
"Indemnifying Party" has the meaning set forth in Section 5.2(c).
"Investor" shall mean each Investor who purchases Units hereunder.
"Knowledge" shall mean, with respect to a particular fact or other matter,
the knowledge, after reasonable investigation, of the Chief Executive Officer or
Chief Financial Officer of the Company.
"Legal Requirement" has the meaning set forth in Section 2.8.
"Losses" has the meaning set forth in Section 5.2(b).
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"Material Adverse Effect" has the meaning set forth in Section 2.1(a).
"Material Agreement" has the meaning set forth in Section 2.7.
"Notice" has the meaning set forth in Section 6.6.
"Other Securities" has the meaning set forth in the Purchased Warrants.
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability company, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity, any
university or similar institution, or any government or any agency or
instrumentality or political subdivision thereof.
"Purchased Shares" has the meaning set forth in Section 1.1(a).
"Purchased Warrants" has the meaning set forth in Section 1.1(a).
"Registration Rights Agreement" has the meaning set forth in Section
1.3(a).
"Risk Factors" means the risk factors in the form attached hereto as
Exhibit 3.
"Rule 144" means Rule 144 promulgated under the Securities Act or any
successor or substitute rule, law or provision.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 2.9(a).
"Securities" has the meaning set forth in Section 1.1(a).
"Securities Act" has the meaning set forth in Section 2.5.
"Subsidiary" means any significant subsidiary (as defined under Rule
1.02(w) of Regulation S-X promulgated by the SEC) of the Company.
"Transaction Documents" has the meaning set forth in Section 1.3(a).
"Underlying Securities" means the shares of Common Stock or Other
Securities issued or from time to time issuable upon exercise of the Warrants.
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"Unit" means a unit consisting of (i) eight shares of Common Stock, (ii)
eight Warrants to purchase one share of Common Stock at $1.00 per share, (iii)
two Warrants to purchase one share of Common Stock at $1.25 per share and (iv)
two Warrants to purchase one share of Common Stock at $1.63 per share.
"Warrant Agreement" means the Warrant Agreement between the Company and
Continental Stock Transfer & Trust Company, dated May 5, 2006 as amended from
time to time including without limitation by the Amendment to Warrant Agreement,
in the form attached hereto as Exhibit 1B.
"Warrants" means Warrants as defined in, and issued pursuant to, the
Warrant Agreement.
1. Purchase and Sale of Units.
1.1. Sale and Issuance of Securities.
(a) The Company shall sell to the Investors and the Investors shall
purchase from the Company, up to 400,000 Units, at a price per Unit equal to
$6.40. The Shares sold as part of the Units are referred to as the "Purchased
Shares" and the Unit Warrants sold as part of the Units are referred to as the
"Purchased Warrants" and collectively with the Purchased Shares, the
"Securities".
(b) The number of Purchased Shares and Purchased Warrants to be
purchased by each Investor from the Company is set forth on the signature page
here, subject to acceptance, in whole or in part, by the Company.
1.2. Closings. On and after March 30, 2007, the Company shall accept
subscriptions under this Agreement. The closing (the "Closing") of the purchase
and sale of the Securities hereunder shall take place no later than April 16,
2007 or such other date thereafter, but no later than April 30, 2007, as is
agreed to by the Company and Investors who subscribe for at least 100,000 Units
(the "Closing Date"). The Closing shall take place at the offices of ▇▇▇▇ &
Hessen LLP, counsel for the Company, in New York, New York, or at such other
location as is mutually acceptable to the Investors and the Company, subject to
fulfillment of the conditions to the Closing set forth in the Agreement. At the
Closing:
(a) each Investor purchasing Securities at the Closing shall deliver
to the Company or its designees by wire transfer or such other method of payment
as the Company shall approve, an amount equal to the purchase price of the
Securities purchased by such Investor hereunder, as set forth opposite such
Investor's name on the signature pages hereof; and
(b) the Company shall authorize its transfer agent to arrange
delivery to each Investor of one or more certificates for Units registered in
the name of the Investor, or in such nominee name(s) as designated by the
Investor in writing, representing the number of Units as set forth opposite such
Investor's name on the signature page hereof.
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1.3. Investors' Conditions to Closing. The obligation of the Investors
to complete the purchase of the Securities at the Closing is subject to the
Company delivering Securities as set forth in Section 1.2 and to fulfillment of
the following conditions:
(a) the Company shall execute and deliver to the Investors a
Registration Rights Agreement, dated the Closing Date, in the form attached as
Exhibit 2 with respect to the Purchased Shares and the Underlying Securities
(the "Registration Rights Agreement", and with the Agreement, the Warrant
Agreement and the Purchased Warrants, the "Transaction Documents");
(b) the representations and warranties of the Company set forth in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties speak as
of an earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date), and the
Company shall have performed in all material respects all covenants and other
obligations required to be performed by it under this Agreement at or prior to
the applicable Closing Date;
(c) the Company and Continental Stock Transfer & Trust Company shall
have entered into the Amendment to Warrant Agreement; and
(d) the Company shall have executed and delivered all other
documents reasonably requested by the Investors.
1.4. Company's Conditions to Closing. The obligation of the Company to
complete the sale of the Securities at the Closing is subject to fulfillment of
the following conditions:
(i) Investors shall execute and deliver to the Company the
Registration Rights Agreement; and
(ii) the representations and warranties of such Investors set
forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of
the Closing Date (except to the extent such representations and
warranties speak as of an earlier date), in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date, and such Investors shall
have performed in all material respects all covenants and other
obligations required to be performed by them under this Agreement, if
any, at or prior to the Closing Date.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Investors as follows:
2.1. Corporate Organization; Authority; Due Authorization.
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(a) The Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority to own or lease its
properties as and in the places where its business is now conducted and to carry
on its business as now conducted, and (iii) is duly qualified as a foreign
corporation authorized to do business in every jurisdiction where the failure to
so qualify, individually or in the aggregate, would have a material adverse
effect on the operations, assets, liabilities, financial condition or business
of the Company and its Subsidiaries taken as a whole (a "Material Adverse
Effect"). Each Subsidiary is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is qualified to
do business as a foreign corporation in each jurisdiction in which qualification
is required, except where failure to so qualify would not have, individually or
in the aggregate, a Material Adverse Effect.
(b) The Company (i) has the requisite corporate power and authority
to execute, deliver and perform this Agreement and the other Transaction
Documents to which it is a party and to incur the obligations herein and therein
and (ii) has been authorized by all necessary corporate action to execute,
deliver and perform this Agreement and the other Transaction Documents to which
it is a party and to consummate the transactions contemplated hereby and thereby
(the "Contemplated Transactions"). This Agreement is and each of the other
Transaction Documents will be on each Closing Date a valid and binding
obligation of the Company enforceable in accordance with its terms except as
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights and the availability
of equitable remedies (regardless of whether such enforceability is considered
in a proceeding at law or equity).
2.2. Capitalization. Except as contemplated by this Agreement or as
set forth in the SEC Documents, there are (A) no outstanding subscriptions,
warrants, options, conversion privileges or other rights or agreements
obligating the Company to purchase or otherwise acquire or issue any shares of
capital stock of the Company (or shares reserved for such purpose), (B) no
preemptive rights or rights of first refusal contained in the Company's
Certificate of Incorporation, as amended (the "Certificate of Incorporation"),
the By-laws of the Company or contracts to which the Company is a party with
respect to the issuance of additional shares of capital stock of the Company
(other than as set forth in the Registration Rights Agreement), including
without limitation the Securities and the Underlying Securities, and (C) no
commitments or understandings (oral or written) of the Company to issue any
shares, warrants, options or other rights to acquire any equity securities of
the Company other than with respect to existing antidilution rights of existing
investors. To the Company's Knowledge, except as set forth in the SEC Documents,
none of the shares of Common Stock are subject to any stockholders' agreement,
voting trust agreement or similar arrangement or understanding. Except as set
forth in the SEC Documents, the Company has no outstanding bonds, debentures,
notes or other obligations the holders of which have the right to vote (or which
are convertible into or exercisable for securities having the right to vote)
with the stockholders of the Company on any matter.
2.3. Validity of Securities. The issuance of the Securities has been
duly authorized by all necessary corporate action on the part of the Company
and, when issued to, delivered to, and paid for by the Investors in accordance
with this Agreement, the Purchased Shares will be validly issued, fully paid and
non-assessable.
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2.4. Underlying Securities. The issuance of the Underlying Securities
upon exercise of the Purchased Warrants has been duly authorized, and the
Underlying Securities at all times prior to such exercise will have been duly
reserved for issuance upon such exercise and, when so issued, will be validly
issued, fully paid and non assessable.
2.5. Private Offering. Neither the Company nor anyone authorized to
act on its behalf has within the last 12 months issued, sold or offered any
security of the Company (including, without limitation, any Common Stock or
warrants of similar tenor to the Purchased Warrants) to any Person under
circumstances that would cause the issuance and sale of the Securities, as
contemplated by this Agreement, to the Company's Knowledge, to be subject to the
registration requirements of Section 5 of the Securities Act of 1933, as amended
(the "Securities Act"). The Company agrees that neither the Company nor anyone
authorized to act on its behalf will offer the Securities or any part thereof or
any similar securities for issuance or sale to, or solicit any offer to acquire
any of the same from, anyone so as to make the issuance and sale of the
Securities subject to the registration requirements of Section 5 of the
Securities Act.
2.6. Brokers and Finders. The Company has not retained any broker,
investment banker or finder in connection with the Contemplated Transactions.
2.7. No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement and
the other Transaction Documents by the Company do not, and the consummation by
the Company of the Contemplated Transactions will not, (i) conflict with or
violate the Certificate of Incorporation or the By-laws of the Company or its
Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or its Subsidiaries or by which any
property or asset of the Company or its Subsidiaries is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, result in the
loss of a material benefit under, or give to others any right of purchase or
sale, or any right of termination, amendment, acceleration, increased payments
or cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of the Company or of any of its Subsidiaries pursuant to,
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which the Company or of any
of its Subsidiaries or any property or asset of the Company or of any of its
Subsidiaries is bound or affected (the "Material Agreements"); except, in the
case of clauses (ii) and (iii) above, for any such conflicts, violations,
breaches, defaults or other occurrences that would not prevent or delay
consummation of any of the Contemplated Transactions in any material respect or
otherwise prevent the Company from performing its obligations under this
Agreement or any of the other Transaction Documents in any material respect, and
would not, individually or in the aggregate, have a Material Adverse Effect.
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(b) The execution and delivery of this Agreement and the other
Transaction Documents by the Company do not, and the performance of this
Agreement and the other Transaction Documents and the consummation by the
Company of the Contemplated Transactions will not, require, on the part or in
respect of the Company, any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Body (as hereinafter defined)
except for the filing of a Form D with the SEC and applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
any state securities or "blue sky" laws (collectively, "Blue Sky Laws"), and any
approval required by applicable rules of the markets in which the Company's
securities are traded. For purposes of this Agreement, "Governmental Body" shall
mean any: (i) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature in the United States;
(ii) federal, state, local, municipal, foreign or other government; or (iii)
governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or entity and any court or other tribunal) in
the United States.
2.8. Compliance. Except as set forth in the SEC Documents or in
Section 2.8 of the Company Disclosure Letter, neither the Company nor any
Subsidiary is in conflict with, or in default or violation of (i) any law, rule,
regulation, order, judgment or decree applicable to the Company or such
Subsidiary or by which any property or asset of the Company or such Subsidiary
is bound or affected ("Legal Requirement"), or (ii) any Material Agreement, in
each case except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any Subsidiary has received any written notice or other
communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any Legal Requirement, except any such
violations or failures that would not, individually or in the aggregate, have a
Material Adverse Effect.
2.9. SEC Documents; Financial Statements.
(a) The information contained in the following documents, did not,
as of the date of the applicable document, include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading, as of their respective filing dates or,
if amended, as so amended (the following documents, collectively, the "SEC
Documents"), provided that the representation in this sentence shall not apply
to any misstatement or omission in any SEC Document filed prior to the date of
this Agreement which was superseded by a subsequent SEC Document filed prior to
the date of this Agreement:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 2006;
(ii) the Company's interim filings on Form 8-K or other
appropriate forms filed on any date after December 31, 2006 and on or
before each Closing.
(b) The Company has filed all forms, reports and documents required
to be filed by it with the SEC prior to the date of this Agreement, including
without limitation the SEC Documents. As of their respective dates, the SEC
Documents filed prior to the date hereof complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder.
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(c) The Company's Annual Report on Form 10-K for the year ended
December 31, 2006, includes consolidated balance sheets as of December 31, 2005
and 2006 and consolidated statements of income for the one year periods then
ended (collectively, the "Financial Statements").
(d) The Financial Statements (including the related notes and
schedules thereto) fairly present in all material respects the consolidated
financial position, the results of operations, retained earnings or cash flows,
as the case may be, of the Company for the periods set forth therein (subject,
in the case of unaudited statements, to normal year-end audit adjustments that
would not be material in amount or effect), in each case in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except as may be noted therein.
2.10. Litigation. Except as set forth in the SEC Documents, there are
no claims, actions, suits, investigations, inquiries or proceedings (each, an
"Action") pending against the Company or any of its Subsidiaries or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries, at law or in equity, or before or by any court, tribunal,
arbitrator, mediator or any federal or state commission, board, bureau, agency
or instrumentality, that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect. Except as set forth in the SEC
Documents, neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
2.11. Absence of Certain Changes. Except as specifically contemplated
by this Agreement or as set forth in the SEC Documents, since December 31, 2006,
there has not been (a) any material adverse change in the business, prospects or
financial condition of the Company; (b) any dividends or other distribution of
assets to stockholders of the Company; (c) any acquisition (by merger,
consolidation, acquisition of stock and/or assets or otherwise) of any Person by
the Company; or (d) any transactions, other than in the ordinary course of
business, consistent in all material respects with past practices, with any of
its officers, directors or principal stockholders or any of their respective
Affiliates.
2.12. Intellectual Property.
(a) To the Knowledge of the Company it owns, or has the right to
use, sell or license all intellectual property reasonably required for the
conduct of its business as presently conducted (collectively, the "Company IP")
except for any failure to own or have the right to use, sell or license the
Company IP that would not have a Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not constitute a
breach of any instrument or agreement governing any Company IP, will not cause
the forfeiture or termination or give rise to a right of forfeiture or
termination of any Company IP or impair the right of Company and its
Subsidiaries to use, sell or license any Company IP, except for the occurrence
of any such breach, forfeiture, termination or impairment that would not,
individually or in the aggregate, result in a Material Adverse Effect.
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(c) (i) None of the manufacture, marketing, license, sale and use of
any product currently licensed or sold by the Company or any of its Subsidiaries
violates any license or agreement between the Company or any of its Subsidiaries
and any third party or, to the Knowledge of the Company, infringes any
intellectual property right of any other party; and (ii) there is no pending or,
to the Knowledge of the Company, threatened claim or litigation contesting the
validity, ownership or right to use, sell, license or dispose of any Company IP;
except, with respect to clauses (i) and (ii), for any violations, infringements,
claims or litigations that would not, individually or in the aggregate, have a
Material Adverse Effect.
2.13. No Adverse Actions. Except as set forth in the SEC Documents,
there is no existing, pending or, to the Knowledge of the Company, threatened
termination, cancellation, limitation, modification or change in the business
relationship of the Company or any of its Subsidiaries, with any supplier,
customer or other Person except such as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
2.14. Registration Rights. Except as set forth in the Registration
Rights Agreement or in the SEC Documents, the Company is not under any
obligation to register under the Securities Act any of its currently outstanding
securities or any securities issuable upon exercise or conversion of its
currently outstanding securities nor is the Company obligated to register or
qualify any such securities under any Blue Sky Laws.
2.15. Disclosure. On or before 9:00 a.m., New York City Time, on the
fourth Business Day after the Closing, the Company shall file with the SEC a
Current Report on Form 8-K describing the material terms of the Contemplated
Transactions, and attaching as exhibits to such Form 8-K copies of this
Agreement and the other Transaction Documents, as required by the SEC. Except
for information that may be provided to the Investors pursuant to this
Agreement, the Company shall not, and shall use commercially reasonable efforts
to cause each of its officers, directors, employees and agents not to, provide
any Investor with any material nonpublic information regarding the Company from
and after the filing of such Form 8-K without the express written consent of
such Investor.
2.16. Use of Proceeds. The net proceeds received by the Company from
the sale of the Securities shall be used by the Company for working capital and
general corporate purposes, including without limitation a possible acquisition
of additional assets and technologies relating to its business from a former
officer.
3. Representations and Warranties of the Investors. Each Investor
represents and warrants to the Company as follows:
3.1. Authorization. If an entity, such Investor (i) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and (ii) has the power and authority to own and hold the Units.
Such Investor (i) has full power and authority to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party and to
incur the obligations herein and therein and (ii) if applicable has been
authorized by all necessary corporate or equivalent action to execute, deliver
and perform this Agreement and the other Transaction Documents and to consummate
the Contemplated Transactions. This Agreement is and each of the other
Transaction Documents will be upon the execution and delivery by Investor, a
valid and binding obligation of such Investor enforceable in accordance with its
terms, except as limited by applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights and
the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding at law or equity).
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3.2. Brokers and Finders. Except for ▇▇▇▇▇▇▇ Securities, Inc., which
shall receive (i) a cash commission of 5% of the aggregate Purchase Price of the
Securities and (ii) a five year warrant exercisable to purchase at the Purchase
Price a number of Units equal to 10% of the number of Units sold hereunder,
Investor has either not retained an investment banker, broker or finder, or has
provided the name and information concerning such entity to the Company on or
prior to the applicable Closing Date.
3.3. No Governmental Review. Such Investor understands that no United
States Federal or state agency or any other Governmental Body has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor has any agency or other
Governmental Body passed upon or endorsed the merits of the offering of the
Securities.
3.4. No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement and
the other Transaction Documents by each Investor do not, and the consummation by
such Investor of the Contemplated Transactions will not, (i) if such Investor is
an entity, conflict with or violate the Certificate of Incorporation or the
By-laws (or equivalent or comparable documents) of such Investor, (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to such Investor or by which any property or asset of such Investor is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, result
in the loss of a material benefit under, or give to others any right of purchase
or sale, or any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of such Investor pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which such Investor is a party or
by which such Investor or any property or asset of such Investor is bound or
affected; except, for any such conflicts, violations, breaches, defaults or
other occurrences that would not prevent or delay consummation of any of the
Contemplated Transactions in any material respect or otherwise prevent such
Investor from performing its obligations under this Agreement or any of the
other Transaction Documents in any material respect.
(b) The execution and delivery of this Agreement and the other
Transaction Documents by each Investor do not, and the performance of this
Agreement and the other Transaction Documents and the consummation by such
Investor of the Contemplated Transactions will not, require, on the part or in
respect of such Investor, any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Body.
4. Securities Laws.
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4.1. Securities Laws Representations and Covenants of Investors.
(a) Each Investor represents and warrants to the Company that: this
Agreement is made by the Company with such Investor in reliance upon such
Investor's representation to the Company, which by such Investor's execution of
this Agreement such Investor hereby confirms, that the Securities to be received
by such Investor will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof such that such Investors would constitute an
"underwriter" under the Securities Act; provided that this representation and
warranty shall not limit (i) the Investor's right to sell the Underlying
Securities pursuant to the Registration Rights Agreement or in compliance with
an exemption from registration under the Securities Act and in compliance with
all applicable Federal Securities laws and Blue Sky Laws or (ii) the Investor's
right to indemnification under this Agreement, if any, or the Registration
Rights Agreement, if any.
(b) Each Investor understands and acknowledges that (i) the offering
of the Securities pursuant to this Agreement will not be registered under the
Securities Act or qualified under any Blue Sky Laws on the grounds that the
offering and sale of the Securities are exempt from registration and
qualification, respectively, under the Securities Act and the Blue Sky Laws,
(ii) nothing in this Agreement or any of the other Transaction Documents or in
any other materials presented by or on behalf of the Company to such Investor in
connection with the purchase of Securities constitutes legal, tax or investment
advice, (iii) such Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Securities, (iv) except as provided in the
Registration Rights Agreement, the Company has not undertaken to register the
Securities pursuant to the Securities Act and will have no obligation to effect
on behalf of any Investor any registration or qualification under the Securities
Act or under any Blue Sky Laws or to assist any Investor in complying with any
exemption from registration or qualification under the Securities Act or under
any Blue Sky Laws and (v) if the Securities have not been registered under the
Securities Act and Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the Person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the SEC thereunder.
(c) Each Investor covenants that, unless the Purchased Shares, the
Purchased Warrants, the Underlying Securities or any other shares of capital
stock of the Company received in respect of the foregoing have been registered
pursuant to the Registration Rights Agreement being entered into among the
Company and the Investors, such Investor will not dispose of such securities
unless and until such Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with an opinion of counsel
reasonably satisfactory in form and substance to the Company to the effect that
(x) such disposition will not require registration under the Securities Act and
(y) appropriate action necessary for compliance with the Securities Act, all
applicable Blue Sky Laws and any other applicable state, local or foreign law
has been taken; provided, however, that an Investor may dispose of such
securities without providing the opinion referred to above if the sale of the
securities is made in reliance on, and in accordance with the terms of Rule 144.
12
(d) Each Investor represents to the Company that: (i) such Investor
is able to fend for itself in the Contemplated Transactions; (ii) such Investor
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of such Investor's prospective
investment in the Securities and has so evaluated the merits and risks of such
investment; (iii) such Investor has the ability to bear the economic risks of
such Investor's prospective investment and can afford the complete loss of such
investment; (iv) such Investor has been furnished with and has reviewed the SEC
Documents; (v) such Investor has been furnished with and has had access to such
information as is in the SEC Documents, together with the opportunity to obtain
such additional information as it requested to verify the accuracy of the
information contained therein or otherwise supplied to such Investor so that
such Investor can make an informed investment decision with respect to an
investment in the Securities; (vi) such Investor has had access to officers of
the Company and an opportunity to ask questions of and receive answers from such
officers and has had all questions that have been asked by such Investor
satisfactorily answered by the Company; (vii) such Investor has reviewed the
Risk Factors attached hereto as Exhibit 3, and (viii) such Investor is not
subscribing to purchase the Securities as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
presented at any seminar or meeting, or any solicitation of a subscription by a
Person not previously known to such Investor in connection with investments in
securities generally.
(e) Each Investor represents to the Company that: (i) such Investor
(A) was qualified at the time such Investor was offered the securities, (B)
qualifies on the date hereof, and (C) will qualify on the applicable Closing
Date, as an "accredited investor" as such term is defined under Rule 501
promulgated under the Securities Act. Any Investor that is a corporation, a
partnership, a limited liability company, a trust or other business entity
further represents to the Company that it has not been organized for the purpose
of purchasing the Securities.
(f) By acceptance hereof, each Investor acknowledges that the
Purchased Shares, the Purchased Warrants, the Underlying Securities and any
shares of capital stock of the Company received in respect of the foregoing held
by it may not be sold by such Investor without registration under the Securities
Act or an exemption therefrom, and therefore such Investor may be required to
hold such securities for an indeterminate period.
(g) In connection with any transfer of Securities made by each
Investor in compliance with the provisions of this Agreement, such Investor will
cause each proposed transferee of such Securities to agree and take hold of such
Securities subject to the provisions of this Agreement.
(h) The Investor will not, directly or indirectly, except (as to
each of clauses (i), (ii) and (iii) below) in compliance with (that is, only to
the extent required to comply with) the Securities Act and such other securities
or Blue Sky laws as may be applicable, (i) offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Securities, (ii) engage in any short
sale which results in a disposition of any of the Securities by Investor, or
(iii) hedge the economic risk of the Investor's investment in the Securities.
13
(i) The representations, warranties and covenants of each Investor
in this Agreement are made severally and not jointly.
4.2. Legends. All certificates for the Purchased Shares, Purchased
Warrants and the Underlying Securities, and each certificate representing any
shares of capital stock of the Company received in respect of the foregoing,
whether by reason of a stock split or share reclassification thereof, a stock
dividend thereon or otherwise, and each certificate for any such securities
issued to subsequent transferees of any such certificate (unless otherwise
permitted herein) shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS."
4.3. Confidentiality. The Investor agrees to use the information
contained in the Transaction Documents for the sole purpose of evaluating a
possible investment in the Securities and the Investor hereby acknowledges that
it is prohibited from reproducing or distributing any of the Transaction
Documents, or any other offering materials or other information provided by the
Company in connection with the Investor's consideration of its investment in the
Company, in whole or in part, or divulging or discussing any of their contents
except to its advisors and representatives for the purpose of evaluating such
investment until the Form 8-K described in Section 2.15 above is filed. The
foregoing agreements shall not apply to any information that is or becomes
publicly available through no fault of the Investor, or that the Investor is
legally required to disclose; provided, however, that if the Investor is
requested or ordered to disclose any such information pursuant to any court or
other government order or any other applicable legal procedure, it shall provide
the Company with prompt notice of any such request or order in time sufficient
to enable the Company to seek an appropriate protective order. Until the Form
8-K described in Section 2.15 above is filed, the Investor will not, directly or
indirectly, except (as to each of (A), (B) and (C) of this sentence) in
compliance with and only to the extent required to comply with the Securities
Act and such other securities or Blue Sky laws as may be reasonably determined
to be applicable after due inquiry, (A) offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Securities, (B) engage in any short sale
which results in a disposition of any of the Securities by Investor, or (C)
hedge the economic risk of the Investor's investment in the Securities.
5. Additional Covenants of the Company.
14
5.1. Reports, Information, Securities. (a) The Company shall cooperate
with each Investor in supplying such information as may be reasonably requested
by such Investor to complete and file any information reporting forms presently
or hereafter required by the SEC as a condition to the availability of the safe
harbor pursuant to Rule 144 for the sale of any of the Purchased Shares, the
Purchased Warrants, the Underlying Securities and shares of capital stock of the
Company received in respect of the foregoing.
5.2. Expenses. The Company agrees to pay on each Closing Date and hold
the Investors harmless against liability for (i) the payment of any stamp or
similar taxes (including interest and penalties, if any) that may be determined
to be payable in respect of the execution and delivery of this Agreement, and
the issue and sale of any Securities and the Underlying Securities, (ii) the
expense of preparing and issuing the certificates for the Securities and the
Underlying Securities, and (iii) the cost of delivering the Securities and the
Underlying Securities of each Investor to such Investor's address, insured in
accordance with customary practice. Each Investor shall be responsible for its
out-of-pocket expenses arising in connection with the Contemplated Transactions.
6. Miscellaneous.
6.1. Entire Agreement; Successors and Assigns. This Agreement and the
other Transaction Documents constitute the entire contract between the parties
relative to the subject matter hereof and thereof, and no party shall be liable
or bound to the other in any manner by any warranties or representations
(express or implied) or agreements or covenants except as specifically set forth
herein or therein. This Agreement and the other Transaction Documents supersede
any previous agreement among the parties with respect to the subject matter
hereof and thereof. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective executors, administrators,
heirs, successors and assigns of the parties. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
6.2. Survival of Representations and Warranties. Notwithstanding any
right of the Investors fully to investigate the affairs of the Company and
notwithstanding any knowledge of facts determined or determinable by any
Investor pursuant to such right of investigation, each Investor has the right to
rely fully upon the representations, warranties, covenants and agreements of the
Company contained in this Agreement or in any documents delivered pursuant to
this Agreement. All such representations and warranties of the Company contained
in this Agreement shall survive the execution and delivery of this Agreement and
each Closing hereunder and shall continue in full force and effect until the
date that is one year after the last Closing. All representations and warranties
of the Investors contained in this Agreement shall survive the execution and
delivery of this Agreement and the applicable Closing hereunder. The covenants
of the Investors and the Company set forth in this Agreement shall survive the
applicable Closing.
6.3. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to principles of conflicts of law. Each party hereby irrevocably
consents and submits to the jurisdiction of any Massachusetts or United States
Federal Court sitting in the Commonwealth of Massachusetts, County of Suffolk,
over any action or proceeding arising out of or relating to this Agreement and
irrevocably consents to the service of any and all process in any such action or
proceeding by registered mail addressed to such party at its address specified
in Section 6.6 (or as otherwise noticed to the other party). Each party further
waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue on the basis of forum non conveniens. Each party also waives any right to
trial by jury.
15
6.4. Counterparts. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5. Headings. The headings of the sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
6.6. Notices. Any notice or other communication required or permitted
to be given hereunder (each a "Notice") shall be given in writing and shall be
made by personal delivery or sent by courier or certified or registered
first-class mail (postage prepaid), addressed to a party at its address shown
below or at such other address as such party may designate by three days advance
Notice to the other parties.
Any Notice to any of the Investors shall be sent to the addresses for such
Investor set forth on the signature pages hereof.
Any Notice to the Company shall be sent to:
Lightspace Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: CEO
with a copy to:
▇▇▇▇ & Hessen LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Each Notice shall be deemed given and effective upon receipt (or refusal of
receipt).
6.7. Rights of Transferees. Any and all rights and obligations of each
of the Investors herein incident to the ownership of Securities or the
Underlying Securities shall pass successively to all subsequent transferees of
such securities until extinguished pursuant to the terms hereof; provided,
however, that no Investor may transfer or assign its rights under this Agreement
(other than to an Affiliate) between the date of this Agreement and the
applicable Closing Date.
16
6.8. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement.
6.9. Fees and Expenses.
(a) Irrespective of whether any Closing is effected, the Company
shall pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement.
(b) Each Investor shall be responsible for all costs and expenses
incurred by such Investor in connection with the negotiation, execution,
delivery and performance of this Agreement.
(c) If any action at law or in equity is necessary to enforce or
interpret any of the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
6.10. Amendments and Waivers. Unless a particular provision or section
of this Agreement requires otherwise explicitly in a particular instance, any
provision of this Agreement may be amended and the observance of any provision
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the holders of a majority of the Purchased Shares (not including for
this purpose any Purchased Shares which have been sold to the public pursuant to
a registration statement under the Securities Act or an exemption therefrom).
Any amendment or waiver effected in accordance with this Section 6.10 shall be
binding upon each Investor, each holder of any Securities at the time
outstanding (including without limitation securities into which any such
Securities are convertible or exercisable), each future holder thereof, and the
Company.
6.11. Conflicts. The Company and each Investor (i) acknowledge that
▇▇▇▇ & Hessen LLP, counsel to the Company in the Contemplated Transactions, has
acted, and from time to time continues to act, as counsel to (A) certain
Investors, or affiliates thereof, including without limitation AIGH Investment
Partners, LLC in connection with investments in the Company, and in unrelated
matters, (ii) consent to the representation of the Company and such other
representation of the Investors, or affiliates thereof, by ▇▇▇▇ & Hessen LLP,
(iii) acknowledge that a partner of ▇▇▇▇ & Hessen LLP beneficially owns
securities of the Company constituting less than 0.05% of outstanding stock of
the Company, and (iv) waive any conflicts of interest claim which may arise from
any or all of the foregoing.
17
6.12. Construction. Words (including capitalized terms defined herein)
in the singular shall be held to include the plural and vice versa as the
context requires. The words "herein," "hereinafter," "hereunder" and words of
similar import used in this Agreement shall, unless otherwise stated, refer to
this Agreement as a whole and not to any particular provision of this Agreement.
All references to "$" in this Agreement and the other agreements contemplated
hereby shall refer to United States dollars (unless otherwise specified
expressly). Any reference to any gender includes the other genders.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
18
SIGNATURE PAGE
TO
LIGHTSPACE CORPORATION
UNIT SUBSCRIPTION AGREEMENT
Dated as of March 30, 2007
IF the INVESTOR is an INDIVIDUAL, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Amount of Subscription:
$
------------------ ----------------------------------
Print Name
Number of Units to be Purchased:
----------------------------------
------------------- Signature of Investor
----------------------------------
Social Security Number
----------------------------------
Address and Fax Number
----------------------------------
E-mail Address
State of Domicile:
----------------
Accepted and Agreed to as of the
date first above written:
LIGHTSPACE CORPORATION
By:____________________________________
Dated:_________________________________
SIGNATURE PAGE
TO
LIGHTSPACE CORPORATION
UNIT SUBSCRIPTION AGREEMENT
Dated as of March 30, 2007
IF the INTERESTS will be held as JOINT TENANTS, as TENANTS IN COMMON, or as
COMMUNITY PROPERTY, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Amount of Subscription:
$
------------------ --------------------------------------
Print Name of Investor
Number of Units to be Purchased:
--------------------------------------
------------------- Signature of Investor
--------------------------------------
Social Security Number
--------------------------------------
Print Name of Spouse or Other Investor
--------------------------------------
Signature of Spouse or Other Investor
--------------------------------------
Social Security Number
--------------------------------------
Address
--------------------------------------
Fax Number
--------------------------------------
E-mail Address
State of Domicile:
--------------------
Accepted and Agreed to as of the
date first above written:
LIGHTSPACE CORPORATION
By: ____________________________________
Dated:__________________________________
SIGNATURE PAGE
TO
LIGHTSPACE CORPORATION
UNIT SUBSCRIPTION AGREEMENT
Dated as of March 30, 2007
IF the INVESTOR is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY,
TRUST or OTHER ENTITY, please complete the following:
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Amount of Subscription:
$
------------------ --------------------------------------
Print Full Legal Name of Partnership,
Company, Limited Liability Company,
Trust or Other Entity
Number of Units to be Purchased: By:
-----------------------------------
------------------- (Authorized Signatory)
Name:
---------------------------------
Title:
--------------------------------
Address and Fax Number:
--------------------------------------
--------------------------------------
Taxpayer Identification Number:
-------
Date and State of Incorporation
or Organization:
----------------------
Date on which Taxable Year Ends:
------
E-mail Address:
-----------------------
Accepted and Agreed to as of the
date first above written:
LIGHTSPACE CORPORATION
By: ____________________________________
Dated:__________________________________
EXHIBITS AND SCHEDULES TO THE UNIT SUBSCRIPTION AGREEMENT
Exhibit 1A: Form of Amendment to Warrant Agreement
Exhibit 1B: Warrant Agreement
Exhibit 2: Form of Registration Rights Agreement
Exhibit 3: Risk Factors