SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of December 24,
1997, by and among Spatialight, Inc., a New York corporation, with headquarters
located at ▇-▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Company"), and the investor listed on the Schedule of Buyers attached hereto
(individually, a "Buyer" or collectively "Buyers").
WHEREAS:
A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration pursuant
to Regulation S ("Regulation S") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"),
B. The Company is offering for sale to the Buyer 3% Convertible
Debentures (the "Debentures") of the Company, due on December 24, 1999, and
offered in denominations of $100,000 and integral multiples of $50,000 in
excess thereof for at least $300,000 in aggregate amount and up to an aggregate
principal amount of $800,000. The terms of the Debentures, including the terms
on which the Debentures may be converted into the common stock of the Company,
$.01 par value, are set forth in the Debenture, in substantially the form
attached as Exhibit "A" hereto.
C. The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, an aggregate principal amount of up to $450,000 of
Debentures in the respective amounts set forth opposite each Buyer's name on
the Schedule of Buyers;
D. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
substantially in the form attached hereto as Exhibit "B" (the "Registration
Rights Agreement") pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws; and
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF DEBENTURES.
a. PURCHASE OF DEBENTURES. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to the Buyers and the Buyers shall purchase from the
Company an aggregate principal amount of $450,000 Debentures, in the
respective amounts set forth opposite each Buyer's name on the Schedule of
Buyers (the "Closing").
b. CLOSING DATE. The date and time of the Closing (the "Closing
Date") shall be 10:00 a.m. Central Standard Time, within five (5) business
days following the date hereof, subject to notification of satisfaction
(or waiver) of the conditions to the Closing set forth in Sections 6 and 7
below (or such later date as is mutually agreed to by the Company and the
Buyer
c. FORM OF PAYMENT. On the Closing Date, (i) each Buyer shall pay
the Purchase Price to the Company for the Debentures to be issued and sold
to such Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the Company's written wire instructions, and (ii)
the Company shall deliver to each Buyer, certificates representing such
Debentures which such Buyer is then purchasing (as indicated opposite such
Buyer's name on the Schedule of Buyers), duly executed on behalf of the
Company and registered in the name of such Buyer or its designee (the
"Certificates").
2. BUYER'S REPRESENTATIONS AND WARRANTEES.
Each Buyer represents and warrants with respect to only itself that:
a. INVESTMENT PURPOSE. Such Buyer is acquiring the Debentures, and
upon conversion of the Debentures will acquire the Conversion Shares then
issuable, for its own account for investment only and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933
Act; provided, however, that by making the representations herein, such
Buyer does not agree to hold any Debentures or Conversion Shares for any
minimum or other specific term other than required by Regulation S and
reserves the right to dispose of Debentures or Conversion Shares at any
time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
b. ACCREDITED INVESTOR STATUS. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D. The
Buyer represents and warrants to the Company that (i) the Buyer is not a
"U.S. person" as that term is defined in Rule 902(o) of Regulation S and
the Buyer was not formed by a "U.S. person" for the purpose of investing
in securities not registered under the Act, unless the Buyer is or was
organized or incorporated by "U.S. persons" who are accredited investors
(as defined in Rule 501(a) under the ▇▇▇▇ ▇▇▇) and who are not natural
persons, estates or trusts, and all owners of interests in such entity who
are not "U.S. persons" are Institutional Investors, and not natural
persons, estates or trusts; (ii) the Debentures were not offered to the
Buyer in the United States and at the time of execution of this Debenture
Agreement and of any offer to the Buyer to purchase the Debentures
hereunder, the Buyer was physically outside the United States; (iii) the
Buyer is purchasing the Debentures for its own account and not on behalf
of or for the benefit of any U.S. person and the sale and resale of the
Debentures have not been prearranged with any buyer in the United States;
(iv)Buyer knows of not public solicitation or advertisement of an offer in
the U.S. in connection with the transactional contemplated herein; and the
Buyer, and to the best
knowledge of the Buyer each distributor, if any, participating in the
offering of the Securities, has agreed and the Buyer hereby agrees that
all offers and sales of the Securities prior to the expiration of a
period commencing on the Closing of all Debentures offered and ending
forty days thereafter (the "Regulation S Restricted Period") shall not
be made to U.S. persons or for the account or benefit of U.S. persons
and shall otherwise be made in compliance with the provisions of
Regulation S whether currently in effect or hereafter amended. The
Buyer has not been engaged as a distributor or dealer with respect to
this transaction.
c. RELIANCE ON EXEMPTIONS. Such Buyer understands that the
Debentures and the Conversion Shares are being offered and sold to it in
reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Buyer's
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order
to determine the availability of such exemptions and the eligibility of
such Buyer to acquire such securities.
d. INFORMATION. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of
the Debentures and the Conversion Shares, which have been requested by
such Buyer. Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor
any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations and warranties
contained in Section 3 below. Such Buyer understands that its investment
in the Debentures and the Conversion Shares involves a high degree of
risk. Such Buyer has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision with
respect to its acquisition of the Debentures and the Conversion Shares.
Buyer understands that the SEC has proposed to revise Regulation S and
that such revisions and recent pronouncements will have a material impact
on the Buyers utilization of Reg S, if applicable, among other things.
e. NO GOVERNMENTAL REVIEW. Such Buyer understands that no United
States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Debentures and the Conversion Shares, or the fairness or suitability of
the investment in the Debentures and the Conversion Shares, nor have such
authorities passed upon or endorsed the merits of the offering of the
Debentures and the Conversion Shares.
f. TRANSFER OR RESALE. Such Buyer understands that except as
provided in the Registration Rights Agreement: (i) the Debentures and the
Conversion Shares have not been and are not being registered under the
1933 Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (a) subsequently registered
thereunder, (b) such Buyer shall have delivered to the Company an opinion
of counsel, in a generally acceptable form, to the effect that such
securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such
registration, or (c) such Buyer provides the Company with reasonable
assurance that such securities can be sold, assigned or transferred
pursuant to Rule 144 (or Regulation S promulgated under the 1933 Act (or
a successor rule thereto); (ii) any sale of such securities made in
reliance on Rule 144 promulgated under the 1933 Act (or a successor rule
thereto) ("Rule 144") may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of such
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 ▇▇▇▇ ▇▇▇) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other person is
under any obligation to register such securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of
any exemption thereunder.
g. LEGENDS. The certificate(s) representing the Debentures shall
bear the legend set forth below. Assuming at the time of conversion
Subscriber is not a "U.S. Person" and has not been a "U.S. Person" since
the date of subscription, the Company shall cause its legal counsel to
issue such opinion as shall be required by the Company's transfer agent in
order for the transfer agent to deliver to Subscriber, upon conversion, a
certificate representing the Shares into which the Debenture is converted
after the restricted period as defined below without restrictive legend of
any kind.
"The Convertible Debentures of Spatialight, Inc. (the "Issuer") represented
by this certificate have been issued pursuant to Regulation S, promulgated
under the Securities Act of 1933, as amended (the "Act"), and have not been
registered under the Act or any applicable state securities laws. These
debentures may not be offered or sold within the United States or to or for
the account of a "U.S. Person" (as that term is defined in Regulation S)
during the period commencing on the sale of these securities and ending on
the forty-fifth (45th) day following completion of the Regulation S offering
of the Issuer pursuant to which these debentures have been issued, which day
is December 24, 1997 (the "Restricted Period"). The principal amount of
debentures represented by this certificate may first be converted into common
stock of the issuer on the forty-fifth (45th) day following completion of the
Regulation S offering of the Issuer pursuant to which these debentures have
been issued, which day is February 7, 1997 (the "Conversion Holding Period").
The Issuer will notify the transfer agent of the date of completion of such
offering and of the expiration of such Restricted Period and Conversion
Holding Period. Following expiration of the Restricted Period, these
debentures may not be offered or sold unless such offer or sale is registered
or exempt from registration under the Act."
h. SUBSCRIBER'S RIGHTS IN THE EVENT SHARES ISSUED WITH A
RESTRICTIVE LEGEND. In the event that the Company issues Conversion
Shares with a restrictive legend upon Conversion by the Subscriber and
Subscriber is not a "U.S. Person" and has not been a "U.S. Person" since
the date of subscription, then Subscriber, at its option, may require the
Company immediately to (i) redeem the Debentures submitted for conversion
at the Conversion Price (as defined in the Debenture) determined under
Section 4(a) of the Debenture, provided, however, that nothing hereunder
shall affect any other Subscriber's rights under the terms of the
Registration Rights Agreement.
i. TRANSFERS. The Company agrees, and shall instruct its agents,
that the Securities may be transferred to any person or entity who is not
an affiliate of the Company if such transfer occurs after the Restricted
Period, without (a) any further restriction on transfer (provided the
transfer is made in compliance with the Act) or (b) the entry of a "stop
transfer" order against such Securities, and the Securities delivered to
the transferee shall not bear a legend. The Company may place a stop
transfer order on any Common Stock issued upon conversion of Debentures
during the Restricted Period for the duration of the Restricted Period.
Upon election by the Subscriber to convert the Debentures into Shares, the
Subscriber shall deliver to the Company a duly completed Notice of
Conversion (a "Notice of Conversion") in the form attached to the
Debenture.
j. AUTHORIZATION, ENFORCEMENT. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Buyer and is
a valid and binding agreement of such Buyer enforceable in accordance with
its terms, subject as enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally,
the enforcement of applicable creditors' rights and remedies.
k. RESIDENCY. Such Buyer is a resident of that state and country
specified in its address on the Schedule of Buyers.
l. NO SCHEME TO EVADE REGISTRATION. Buyer represents and warrants
to the Company that the acquisition of the Debentures and the Conversion
Shares is not a transaction (or any element of a series of transactions)
that is part of a plan or scheme by the Buyer to evade the registration
provisions of the 1933 Act.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
a. ORGANIZATION AND QUALIFICATION. The Company and its
subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. Each of
the Company and its subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
b. AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER INSTRUMENTS.
(i) The Company has the requisite corporate power and authority to enter
into and perform this Agreement, the Registration Rights Agreement and any
related agreements, and to issue the Debentures and the Conversion Shares
in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the
Registration Rights Agreement and any related agreements by the Company
and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation the issuance of the Debentures and
the reservation for issuance and the issuance of the Conversion Shares
issuable upon conversion or exercise thereof, have been duly authorized
by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement and the Registration Rights Agreement
and any related agreements have been duly executed and delivered by the
Company, and (iv) this Agreement, the Registration Rights Agreement and
any related agreements constitute the valid and binding obligations of
the Company enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
c. CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of 20,000,000 shares of Common Stock, of
which as of the date hereof 9,201,111 shares were issued and outstanding,
and no shares of Preferred Stock were issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(c), no shares of Common
Stock or preferred stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company. Except as disclosed in Schedule 3(c), as of the effective date
of this Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of
capital stock of the Company or any of its subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of
its subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and (iii)
there are no agreements or arrangements under which the Company or any of
its subsidiaries is obligated to register the sale of any of their
securities under the 1933 Act (except the Registration Rights Agreement).
There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Debentures or the
Conversion Shares as described in this Agreement. The Company has
furnished to the Buyer true and correct copies of the Company's Articles
of Incorporation, as amended and as in effect on the date hereof (the
"Articles of Incorporation"), and the Company's By-laws, as in effect on
the date hereof (the "By-laws"), and the terms of all securities
convertible into or exercisable for Common Stock and the material rights
of the holders thereof in respect thereto.
d. ISSUANCE OF SECURITIES. The Debentures are duly authorized and,
upon issuance in accordance with the terms hereof, shall be (i) validly
issued, fully paid and nonassessable, are free from all taxes, liens and
charges with respect to the issue thereof and
are entitled to the rights and preferences set forth in the Debentures.
The Conversion Shares issuable upon conversion of the Debentures have
been duly authorized and reserved for issuance. Upon conversion or
exercise in accordance with the Debentures, the Conversion Shares will
be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock.
e. NO CONFLICTS. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby
will not (i) result in a violation of the Articles of Incorporation or By-
laws or (ii) conflict with or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, any material agreement, indenture or instrument to which the Company
or any of its subsidiaries is a party, or result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
principal market or exchange on which the Common Stock is traded or
listed) applicable to the Company or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries is bound
or affected. Except as disclosed in Schedule 3(e), neither the Company
nor its subsidiaries is in violation of any term of or in default under
its Articles of Incorporation or Bylaws or their organizational charter or
by-laws, respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its subsidiaries.
The business of the Company and its subsidiaries is not being conducted,
and shall not be conducted in violation of any law, ordinance, regulation
of any governmental entity. Except as specifically contemplated by this
Agreement and as required under the 1933 Act and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by this Agreement or
the Registration Rights Agreement in accordance with the terms hereof or
thereof Except as disclosed in Schedule 3(e), all consents,
authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained
or effected on or prior to the date hereof. The Company and its
subsidiaries are unaware that any facts or circumstances have occurred or
exist which might reasonably be expected to give rise to any of the
foregoing.
f. SEC DOCUMENTS: FINANCIAL STATEMENTS. Since January 1, 1996, the
Company had filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act") (all of the foregoing filed prior to the date hereof and
all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein and the Company's
Registration Statements on Form S-3 filed on April 29, 1997, as amended,
and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by
reference therein, being hereinafter referred to as the "SEC
Documents"). The Company represents and warrants to the Buyer that the
Company is a "reporting issuer" as defined in Rule 902(1) of Regulation
S and it has a class of securities registered under Section 12(b) or
12(g) of the 1934 Act or is required to file reports pursuant to Section
15(d) of the 1934 Act, and has filed all the materials required to be
filed as reports pursuant to the Exchange Act for a period of at least
twelve months preceding the date hereof (or for such shorter period as
the Company was required by law to file such material). As of their
respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none
of the SEC Documents, at the time they were filed with the SEC,
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. As of their respective dates, the
financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in
the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present
in all material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). No other information provided by or
on behalf of the Company to the Buyer which is not included in the SEC
Documents, including, without limitation information referred to in
Section 2(d) of this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstance under
which they are or were made, not misleading.
g. ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule
3(g) and in the SEC documents, since January 1, 1996, there has been no
material adverse change and no material adverse development in the
business, properties, operations, financial condition, results of
operations or prospects of the Company or its subsidiaries. The Company
has not taken any steps, and does not currently expect to take any steps,
to seek protection pursuant to any bankruptcy law nor does the Company or
its subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.
h. ABSENCE OF LITIGATION. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge
of the Company or any of its subsidiaries, threatened against or affecting
the Company, the Common Stock or any of the Company's subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a
material adverse effect on the transactions contemplated hereby (ii)
adversely affect
the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of the
documents contemplated herein or (iii), except as expressly set forth in
the SEC Documents or in Schedule 3(h), have a material adverse effect on
the business, operations, properties, financial condition or results of
operation of the Company and its subsidiaries taken as a whole.
i. ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF DEBENTURES. The
Company acknowledges and agrees that the Buyer is acting solely in the
capacity of an arm's length purchaser with respect to this Agreement and
the transactions contemplated hereby. The Company further acknowledges
that the Buyer is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer or
any of their respective representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental to
such Buyer's purchase of the Debentures or the Conversion Shares. The
Company further represents to the Buyer that the Company's decision to
enter into this Agreement has been based solely on the independent
evaluation by the Company and its representatives.
j. NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES. No known event, liability, development or circumstance has
occurred or exists, or is contemplated to occur, with respect to the
Company or its subsidiaries or their respective business, properties,
prospects, operations or financial condition, which could be material but
which has not been publicly announced or disclosed in writing to the
Buyer. The Company represents that it has not offered the Debentures or
Conversion Shares to the Buyer in the U.S. or, to the best knowledge of
the Company, to any person in the United States or any U.S. person.
k. NO GENERAL SOLICITATION. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the
meaning of Regulation D under the ▇▇▇▇ ▇▇▇) in connection with the offer
or sale of the Debentures or the Conversion Shares.
l. NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would require
registration of the Debentures or the Conversion Shares under the 1933 Act
or cause this offering of Debentures or the Conversion Shares to be
integrated with prior offerings by the Company for purposes of the 1933
Act or any applicable stockholder approval provisions.
m. EMPLOYEE RELATIONS. Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None
of the Company's or its subsidiaries' employees is a member of a union and
the Company and its subsidiaries believe that their relations with their
employees are good.
n. INTELLECTUAL PROPERTY RIGHTS. To the best of the Company's
knowledge, the Company and its subsidiaries own or possess adequate rights
or licenses to use all trademarks, trade names, service marks, service
▇▇▇▇ registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. Except as set forth on Schedule 3(n), none of the Company's
trademarks, trade names, service marks, service ▇▇▇▇ registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, government authorizations, trade secrets or other intellectual
property rights have expired or terminated, or are expected to expire or
terminate in the near future. The Company and its subsidiaries do not
have any knowledge of any infringement by the Company or its subsidiaries
of trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service ▇▇▇▇
registrations, trade secret or other similar rights of others, and except
as set forth on Schedule 3(n), there is no claim, action or proceeding
being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its subsidiaries regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service
names, service marks, service ▇▇▇▇ registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any
facts or circumstances which might give rise to any of the foregoing. The
Company and its subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their
intellectual properties.
o. ENVIRONMENTAL LAWS. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval.
p. TITLE. The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material
to the business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are described
in Schedule 3(p) or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries. Any real property and
facilities held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries.
q. INSURANCE. The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be
prudent and customary in the
businesses in which the Company and its subsidiaries are engaged.
Neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
r. REGULATORY PERMITS. The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit.
s. INTERNAL ACCOUNTING CONTROLS. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
t. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor
any of its subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the
future to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries. Neither the Company nor any of its
subsidiaries is a party to any contract or agreement which in the judgment
of the Company's officers has or is expected to have a material adverse
effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its subsidiaries.
u. TAX STATUS. Except as set forth on Schedule 3(u), the Company
and each of its subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that
the Company and each of its subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations, except those being
contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
v. CERTAIN TRANSACTIONS. Except as set forth on Schedule 3(v) and
in the SEC Documents and except for arm's length transactions pursuant to
which the Company makes payments in the ordinary course of business upon
terms no less favorable than the Company could obtain from third parties
and other than the grant of stock options disclosed on Schedule 3(c), none
of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company (other than for services as
employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any corporation, partnership, trust or
other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
w. DILUTIVE EFFECT. The Company understands and acknowledges that
the number of Conversion Shares issuable upon conversion of the Debentures
will increase in certain circumstances. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion of the
Debentures in accordance with this Agreement and the Debentures is
absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other stockholders of the
Company.
x. FEES AND RIGHTS OF FIRST REFUSAL. The Company is not obligated
to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to,
current or former shareholders of the Company, underwriters, brokers,
agents, or other third parties.
y. NO DIRECTED SELLING EFFORTS IN REGARD TO THIS TRANSACTION.
Neither the Company nor, to the best knowledge of the Company, any
distributor participating in this offering, nor any person acting for the
Company or any such distributor, has conducted any "directed selling
efforts" in the United States as the term "directed selling efforts" is
defined in Rule 902 of Regulation S, which in general, means any activity
undertaken for the purpose of, or that could reasonably be expected to
have the effect of, conditioning the market in the United States for any
of the securities being offered herein. Such activity includes, without
limitation, the mailing of printed material to investors residing in the
United States, the holding of promotional seminars in the United States,
and the placement of advertisements with radio or television stations
broadcasting in the United States or in publications with a general
circulation in the United States, which discuss the offering of the such
securities.
z. FEES AND RIGHTS OF FIRST REFUSAL. The Company is not obligated
to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to,
current or former shareholders of the Company, underwriters, brokers,
agents or other third parties.
4. COVENANTS.
a. BEST EFFORTS. Each party shall use its best reasonable efforts
timely to satisfy each of the conditions to be satisfied by it as provided
in Sections 6 and 7 of this Agreement.
b. [LEFT INTENTIONALLY BLANK]
c. REPORTING STATUS. Until the earlier of (i) the date as of which
the Investors (as that term is defined in the Registration Rights
Agreement) may sell all of the Conversion Shares without restriction
pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto), or (ii) the date on which (A) the Investors shall have sold all
the Conversion Shares and (B) none of the Debentures is outstanding (the
"Registration Period"), the Company shall file all reports required to be
filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934
Act even if the 1934 Act or the rules and regulations thereunder would
otherwise permit such termination.
d. USE OF PROCEEDS. The Company will use the proceeds from the
sale of the Debentures for substantially the same purposes and in
substantially the same amounts as indicated in Schedule 4(d).
e. FINANCIAL INFORMATION. The Company agrees to send the following
to each Buyer who still holds Debentures or Conversion Shares during the
Registration Period: (i) within five (5) days after the filing thereof
with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any registration
statements or amendments filed pursuant to the 1933 Act; (ii) within one
(1) day after release thereof, copies of all press releases issued by the
Company or any of its subsidiaries and (ii) copies of the same notices and
other information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.
f. [LEFT INTENTIONALLY BLANK]
g. LISTINGS. The Company shall promptly secure the listing of the
Conversion Shares upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so
long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable under the terms of
this Agreement and the Registration Rights Agreement. The Company shall
use its best reasonable efforts to maintain the Common Stock's
authorization for quotation in the over-the counter market. The Company
shall promptly provide to each Buyer copies of any notices it receives
regarding the continued eligibility of the Common Stock for trading in the
over-the-counter market.
h. EXPENSES. Each of the Company and the Buyer shall pay all costs
and expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of this Agreement and
the Registration Rights Agreement. The costs and expenses of ▇.▇. ▇▇▇▇▇,
Inc. and its counsel shall be paid for by the Company at Closing.
i. AUTHORIZED SHARES OF COMMON STOCK, RESERVATION OF SHARES. The
Company shall at all times, so long as any of the Debentures are
outstanding, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the
Debentures, such number of shares of Common Stock equal to or greater than
150% of the number of shares of Common Stock for which are issuable upon
conversion of all of the then outstanding Debentures which are then
outstanding or which could be issued at any time under this Agreement or
the Debentures.
j. CORPORATE EXISTENCE. So long as any Debentures remain
outstanding, the Company shall not directly or indirectly consummate any
merger, reorganization, restructuring, consolidation, sale of all or
substantially all of the Company's assets or any similar transaction or
related transactions (each such transaction, a "Sale of the Company")
except if the surviving or successor entity in such transaction (i)
expressly assumes, in writing, the Company's obligations hereunder and
under the Registration Rights Agreement, the Debentures and any other
agreements and instruments entered into or delivered by the Company in
connection herewith and (ii) is a publicly traded corporation whose Common
Stock is listed for trading on the New York Stock Exchange, Inc., the
American Stock Exchange or the NASDAQ National Market or electric bulletin
board.
k. TRANSACTIONS WITH AFFILIATES. So long as (i) any Debentures are
outstanding or (ii) any Buyer owns Conversion Shares with a market value
equal to or greater than $200,000 for every $770,000 raised by the
Placement Agent on behalf of the Company hereunder, the Company shall not,
and shall cause each of its subsidiaries not to, enter into, amend, modify
or supplement, or permit any subsidiary to enter into, amend, modify or
supplement any agreement, transaction, commitment, or arrangement with any
of its or any subsidiary's officers, directors, person who were officers
or directors at any time during the previous two years, stockholders who
beneficially own 5% or more of the Common Stock, or affiliates or with any
individual related by blood, marriage, or adoption to any such individual
or with any entity in which any such entity or individual owns a 5% or
more beneficial interest (each a "Related Party"), except for (a)
customary employment arrangements and benefit programs on reasonable
terms, (b) any agreement, transaction, commitment, or arrangement on an
arms-length basis on terms no less favorable than terms which would
have been obtainable from a person other than such Related Party,
(c) any agreement transaction, commitment, or arrangement which is
approved by a majority of the disinterested directors of the Company,
for purposes hereof, any director who is also an officer of the
Company or any subsidiary of the Company shall not be a disinterested
director with respect to any such agreement, transaction, commitment, or
arrangement. "Affiliate" for purposes hereof means, with respect to any
person or entity, another person or entity that, directly or indirectly,
(i) has a 5% or more equity interest in that person or entity, (ii) has
5% or more common ownership with that person or entity, (iii) controls
that person or entity, or (iv) shares common control with that person or
entity. "Control" or "controls" for purposes hereof means that a person
or entity has the power, direct or indirect, to conduct or govern the
policies of another person or entity.
l. NO SHORT SALES OF THE COMMON STOCK. So long as (i) a Buyer or
any of its affiliates beneficially owns any Debentures, (ii) the Company
has not issued any publicly traded convertible securities and (iii) the
Company is not in default under the Debentures, such Buyer and its
affiliates shall not engage in any short sales or third party short sales
of the Common Stock or hold a "put equivalent position" with respect to
the Common Stock (as defined in Rule 16a-1 under the 1934 Act).
m. SHAREHOLDER APPROVAL. The Company covenants to submit to it,
shareholders at its next shareholder meeting a proposal for ratification
of the issuance of the Debentures and the Conversion Shares, if and as
required by the rules of the National Association of Securities Dealers,
Inc. (the "NASD") applicable to the transaction.
n. Buyer covenants to resell Debentures and Conversion Shares in
compliance with applicable securities laws.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its transfer
agent to issue certificates, registered in the name of the Buyer or its
respective nominee(s), for the Conversion Shares in such amounts as specified
from time to time by the Buyer to the Company upon conversion of the Debentures
(the "Irrevocable Transfer Agent Instructions"). The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5, and stop transfer instructions to give effect to Section
2(i) hereof (in the case of the Conversion Shares, prior to registration of
such shares under the ▇▇▇▇ ▇▇▇) will be given by the Company to its transfer
agent and that the Debentures and the Conversion Shares shall otherwise be
freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the Registration Rights Agreement.
Nothing in this Section 5 shall affect in any way the Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of the
Debentures or Conversion Shares. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of
its obligations under this Section 5 will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Section 5, that the Buyer shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the
Debentures to the Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:
a. The Buyer shall have executed this Agreement and the
Registration Rights Agreement and delivered the same to the Company.
b. The Buyer shall have delivered to the Company the Purchase Price
for the Debentures being purchased by the Buyer at the Closing by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Company.
c. The representations and warranties of the Buyer shall be true
and correct in all material respects as of the date when made and as of
the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer at or prior to the
Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer hereunder to purchase the Debentures at
the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Buyer's sole benefit and may be waived by the Buyer at any time in its sole
discretion:
a. The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Buyer.
b. The Common Stock shall be authorized for quotation on the over-
the-counter market, AMEX the NASDAQ National Market or The New York Stock
Exchange, Inc., trading in the Common Stock shall not have been suspended
for any reason and all of the Conversion Shares issuable upon conversion
of the Debentures shall be approved for listing on the over-the-counter
market, AMEX, the NASDAQ National Market or The New York Stock Exchange,
Inc.
c. The representations and warranties of the Company shall be true
and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to materiality
in Section 3 above, in which case, such representations and warranties
shall be true and correct without further qualification) as of the date
when made and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. The Buyer shall have received a certificate,
executed by the Chief Executive Officer of the Company, dated as of the
Closing Date, to the foregoing effect and as to such other matters as may
be reasonably requested by the Buyer including, without limitation an
update as of the Closing Date regarding the representation contained in
Section 3(c) above.
d. The Buyer shall have received the opinion of the Company's
counsel dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer and in substantially the form of
Exhibit "D" attached hereto.
e. The Company shall have executed and delivered to the Buyer the
Certificates (in such denominations as the Buyer shall request) for the
Debentures being purchased by the Buyer at the Closing.
f. The Board of Directors of the Company shall have adopted the
resolutions in substantially the form of Exhibit "E" attached hereto.
g. As of the Closing Date, the Company shall have reserved out of
its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Debentures, such number of shares of
Common Stock equal to or greater than 150% of the number of shares of
Common Stock for which are issuable upon conversion of all of the
Debentures which could be issued (based upon a conversion effective as
of the day before the Closing Date) under this Agreement or the
Debentures.
h. The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company's transfer agent.
8. INDEMNIFICATION.
In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Debentures and the Conversion Shares hereunder and
in addition to all of the Company's other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Buyer and each
other holder of the Debentures and the Conversion Shares and all of their
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement,
the Debentures or the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement,
the Debentures or the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee by any third
party and arising out of or resulting from the execution, delivery, performance
or enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Indemnities, any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds
of the issuance of the Debentures or the status of the Buyer or holder of the
Debentures or the Conversion Shares, as an investor in the Company. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
a. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without
regard to the principles of conflict of laws. Any dispute or controversy
between the parties arising in connection with this agreement or the
subject matter contemplated by this agreement shall be resolved by
arbitration before a three-member panel of the American Arbitration
Association in accordance with the commercial arbitration rules of said
forum and the Federal Arbitration Act, 9 U.S.C. 1 ET SEQ., with the
resulting award being final and conclusive. Said arbitrators shall be
empowered to award all forms of relief and damages claimed, including, but
not limited to, attorney's fees, expenses of litigation and arbitration,
exemplary damages, and prejudgment interest. Notwithstanding the
foregoing, Buyer may at any time and at its option, whether or not an
arbitration action is then pending, initiate a civil action for temporary
and permanent injunctive and other equitable relief against Company.
Company acknowledges that upon any breach of Buyer's conversion rights
hereunder, Buyer's resulting injury may not be adequately compensated by a
remedy at law. Accordingly, upon such breach, Buyer, at its election and
without limitation of its other remedies, shall be entitled to pursue a
claim for specific performance of this Agreement, and Company hereby
waives the right to assert any defense thereto that Purchaser has an
adequate remedy at law. The parties further agree that any arbitration
action between them shall be heard in Atlanta, Georgia, and expressly
consent to the jurisdiction and venue of the Superior Court of ▇▇▇▇▇▇
County, Georgia, and the United States District Court for the Northern
District of Georgia, Atlanta Division for the adjudication of any civil
action asserted pursuant to this Paragraph.
b. COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause four (4) additional original executed signature pages
to be physically delivered to the other party within five (5) days of the
execution and delivery hereof.
c. HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of,
this Agreement.
d. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
e. ENTIRE AGREEMENT, AMENDMENTS. This Agreement supersedes all
other prior oral or written agreements between the Buyer, the Company,
their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.
f. NOTICES. Any notices consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile,
provided a copy is mailed by U.S. certified mail, return receipt
requested; (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested, or (iv) one (I) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company:
Spatialight, Inc.
▇-▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇, ▇▇▇▇, ▇▇▇▇ & Freidenrich
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transfer Agent:
American Stock Transfer & Trust
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer, to its address and facsimile number on the Schedule of
Buyers, with copies to the Buyer's counsel as set forth on the Schedule of
Buyers. Each party shall provide five (5) days' prior written notice to
the other party of any change in address or facsimile number.
g. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors
and assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Buyer. The
Buyer may assign its rights hereunder without the consent of the Company,
provided, however, that any such assignment shall not release the Buyer
from its obligations hereunder unless such obligations are assumed by such
assignee and the Company has consented to such assignment and assumption.
h. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
i. SURVIVAL. Unless this Agreement is terminated under Section
9(l), the representations and warranties of the Company and the Buyer
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9, the indemnification provisions set forth in Section
8, shall survive the Closing. The Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.
j. PUBLICITY. The Company and the Buyer shall have the right to
approve before issuance any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the
Buyer, to make any press release or other public disclosure with respect
to such transactions as is required by applicable law and regulations
(although the Buyer shall be consulted by the Company in connection with
any such press release or other public disclosure prior to its release and
shall be provided with a copy thereof).
k. FURTHER ASSURANCES. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments
and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
1. TERMINATION. In the event that the Closing shall not have
occurred with respect to the Buyer on or before five (5) business days
from the date hereof due to the Company's or the Buyer's failure to
satisfy the conditions set forth in Sections 6 and 7 above (and the
nonbreaching party's failure to waive such unsatisfied condition(s)), the
nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date
without liability of any party to any other party- provided, however, that
if this Agreement is terminated pursuant to this Section
9(l), the Company shall remain obligated to reimburse the Buyer for the
expenses described in Section 4(h) above.
m. FINDER. The Company acknowledges that it has engaged a Finder
in connection with the sale of the Debentures, which placement agent may
have formally or informally engaged other agents on its behalf. The
Company shall be responsible for the payment of any Finder's fees (which
includes cash and warrants to purchase Common Stock) relating to or
arising out of the transactions contemplated hereby.
n. NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against
any party.
IN WITNESS WHEREOF, the Buyer and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
"COMPANY"
SPATIALIGHT, INC.
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chairman of the Board, Chief Executive
Officer, and Chief Financial Officer
"BUYER"
___________________________
By:
Name:
Title: