SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT is made this 9th day of August, 1999,
between XCEL CAPITAL, LLC a Georgia limited liability company, ("XCEL"), ▇▇▇▇▇▇
▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇"), and INTERACTIVE FLIGHT TECHNOLOGIES, INC., a
Delaware corporation ("IFT").
W I T N E S S E T H:
WHEREAS, XCEL and ▇▇▇▇▇▇ are, respectively, the holders of notes dated
October 20, 1998 and October 21, 1998 issued by The Network Connection, Inc., a
Georgia corporation with principal executive offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("TNC") having an aggregate face value of $350,000
(the "Series D Notes"), and which have aggregate accrued interest, redemption
premiums, and other amounts due thereon totaling $127,750 (the "Redemption
Premium");
WHEREAS, TNC as lessor and XCEL Investments, LLC as lessee are parties to
that certain Lease Agreement and Leased Product Agreement, each dated November
4, 1997 (collectively, the "Equipment Lease");
WHEREAS, TNC as Payee and XCEL Investments, LLC, as Obligor are parties to
that certain note dated September 4, 1997 in the original face amount of One
Hundred Thousand Dollars ($100,000) (the "XCEL Note");
WHEREAS, there is approximately Twenty-One Thousand Dollars ($21,000) of
accrued interest due on the XCEL Note; and
WHEREAS, IFT has agreed to purchase the Series D Notes in exchange for a
total of 105,000 shares of the Class A Common Stock of IFT, par value $.01 per
share (the "Common Stock") and the assignment to XCEL without recourse of the
Equipment Lease and the endorsement to XCEL without recourse of the XCEL Note.
NOW THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
I. PURCHASE AND SALE OF SERIES D NOTES
A. Transaction. XCEL and ▇▇▇▇▇▇ hereby severally agree to sell to IFT, and
IFT agrees to purchase from XCEL and ▇▇▇▇▇▇, the Series D Notes (including all
principal and the Redemption Premium, having an aggregate balance due of
$477,750), in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in accordance with the information set forth on Schedule A hereto.
B. Purchase Price; Form of Payment. The consideration for the Series D
Notes to be purchased by IFT shall be 105,000 shares of Common Stock payable to
XCEL and ▇▇▇▇▇▇ as set forth on Schedule A attached hereto, and the assignment
to XCEL without recourse of the Equipment Lease and the endorsement to XCEL
without recourse of the XCEL Note.
II. XCEL AND ▇▇▇▇▇▇'▇ REPRESENTATIONS AND WARRANTIES
XCEL and ▇▇▇▇▇▇ severally represent and warrant to IFT as follows:
A. XCEL and ▇▇▇▇▇▇ are each acquiring the Common Stock for their own
account, for investment purposes only and not with a view towards or in
connection with the public sale or distribution thereof in violation of the
Securities Act.
B. XCEL and ▇▇▇▇▇▇ are each (i) experienced in making investments of the
kind contemplated by this Agreement, (ii) capable, by reason of their respective
business and financial experience, of evaluating the relative merits and risks
of an investment in the Common Stock, and (iii) able to afford the loss of their
investment in the Common Stock.
C. XCEL and ▇▇▇▇▇▇ each understand that the Common Stock is being offered
and sold by IFT in reliance on an exemption from the registration requirements
of the Securities Act and equivalent state securities and "blue sky" laws, and
that IFT is relying upon the accuracy of, and XCEL and ▇▇▇▇▇▇'▇ compliance with,
XCEL and ▇▇▇▇▇▇'▇ respective representations, warranties and covenants set forth
in this Agreement to determine the availability of such exemption and the
eligibility of XCEL and ▇▇▇▇▇▇ to purchase the Common Stock.
D. XCEL and ▇▇▇▇▇▇ have each been furnished with or provided access to all
materials relating to the business, financial position and results of operations
of IFT and TNC, and all other materials requested by XCEL and ▇▇▇▇▇▇ to enable
them to each make an informed investment decision with respect to the Common
Stock and the Series D Notes.
E. XCEL and ▇▇▇▇▇▇ acknowledge that they have each been furnished with
copies of IFT's Annual Report on Form 10-KSB for the fiscal year ended October
31, 1998, IFT's Quarterly Report on Form 10-QSB for the fiscal quarters ended
January 31, 1999 and April 30, 1999, IFT's Schedule 13D dated May 11, 1999; and
all other reports and documents heretofore filed by IFT with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since April
30, 1999 (collectively the "Commission Filings"). XCEL and ▇▇▇▇▇▇ also
acknowledge that they have each been furnished with copies of TNC's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1998; TNC's
Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31, 1999; and
all other reports and documents heretofore filed by TNC with the Commission
pursuant to the Securities Act and the Exchange Act, since December 31, 1998.
F. XCEL and ▇▇▇▇▇▇ each acknowledge that in making their decision to
acquire the Common Stock they have each been given an opportunity to ask
questions of and to receive
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answers from IFT's and TNC's respective executive officers, directors and
management personnel concerning the business and affairs of IFT and TNC,
respectively.
G. XCEL and ▇▇▇▇▇▇ each understand that the Common Stock has not been
approved or disapproved by the Commission or any state securities commission and
that the foregoing authorities have not reviewed any documents or instruments in
connection with the offer and sale to it of the Common Stock and have not
confirmed or determined the adequacy or accuracy of any such documents or
instruments.
H. This Agreement has been duly and validly authorized, executed and
delivered by XCEL and ▇▇▇▇▇▇ and is a valid and binding agreement of both XCEL
and ▇▇▇▇▇▇ enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally.
I. Neither XCEL nor ▇▇▇▇▇▇ nor their affiliates nor any person acting on
the behalf of XCEL or ▇▇▇▇▇▇ have the intention of entering, or will enter into,
prior to the closing, any put option, short position or other similar instrument
or position with respect to the Common Stock and neither XCEL nor ▇▇▇▇▇▇ nor any
of their affiliates nor any person acting on the behalf of XCEL or ▇▇▇▇▇▇ will
use at any time shares of Common Stock acquired pursuant to this Agreement to
settle any put option, short position or other similar instrument or position
that may have been entered into prior to the execution of this Agreement.
J. XCEL owns the Series D Notes acquired from ▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇. and from Will ▇. ▇▇▇▇▇▇▇▇ on April 13, 1999 and April 23, 1999,
respectively, for value and in good faith. XCEL and ▇▇▇▇▇▇ have good,
marketable, and unencumbered title to their respective Series D Notes, free and
clear of all liens, security interests, pledges, claims, options, and rights of
others. There are no restriction on XCEL and ▇▇▇▇▇▇'▇ right to transfer the
Series D Notes to IFT pursuant to the terms of this Agreement. None of the
Series D Notes have been modified or amended. The Series D Notes are binding
obligations of TNC, in full force and effect, and enforceable in accordance with
their terms and the amounts set forth in Schedule A are a true, complete, and
accurate statement of the amounts due under the Series D Notes as of the date
hereof.
K. XCEL is a Limited Liability Company duly organized, validly existing and
in good standing under the laws of the State of Georgia with its principal place
of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇ resides at ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. XCEL and ▇▇▇▇▇▇
each have the power to acquire the Common Stock pursuant to the terms hereof.
XCEL was not organized for the purpose of acquiring the Common Stock.
L. XCEL understands and acknowledges that by virtue of the non-recourse
assignment of the Equipment Lease and the non-recourse endorsement of the XCEL
Note, respectively, and further by virtue of the General Release contemplated to
be delivered at Closing pursuant to Section VII. C, XCEL shall have no recourse
against IFT or TNC in connection with either such instrument.
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III. IFT'S REPRESENTATIONS AND WARRANTIES
IFT represents and warrants to and covenants and agrees with XCEL and
▇▇▇▇▇▇ as follows:
A. Capitalization. The authorized capital stock of IFT consists of
40,000,000 shares of Common Stock, of which 5,744,699 shares are outstanding on
the date hereof and 5,000,000 shares of Preferred Stock, of which 3,000 Series A
Preferred Shares are outstanding on the date hereof. All of the issued and
outstanding shares of Common Stock and Preferred Stock have been duly authorized
and validly issued and are fully paid and non-assessable. The Common Stock has
been duly and validly authorized, and when issued by IFT, will be duly and
validly issued, fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder.
B. Organization; Reporting IFT Status. IFT is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified as a foreign corporation in all jurisdictions in which the
failure to so qualify would have a material adverse effect on the business,
properties, prospects, condition (financial or otherwise) or results of
operations of IFT or on the consummation of any of the transactions contemplated
by this Agreement (a "Material Adverse Effect").
C. Authority; Validity and Enforceability. IFT has the requisite corporate
power and authority to enter into this Agreement and the Registration Rights
Agreement to be dated and delivered at Closing as referred to in Section VIII. F
(collectively, the "Transaction Documents"), and to perform all of its
obligations hereunder and thereunder (including the issuance, sale and delivery
to XCEL and ▇▇▇▇▇▇ of the Common Stock). The execution, delivery and performance
by IFT of the Transaction Documents, and the consummation by IFT of the
transactions contemplated hereby and thereby, has been duly authorized by all
necessary corporate action on the part of IFT. Each Transaction Document
constitutes a valid and binding obligation of IFT enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally. The Common Stock has been duly and
validly authorized for issuance by IFT and, when executed and delivered by IFT,
will be valid and binding obligations of IFT enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally.
D. Non-contravention. The execution and delivery by IFT of the Transaction
Documents, the issuance of the Common Stock, and the consummation by IFT of the
other transactions contemplated hereby and thereby, do not and will not conflict
with or result in a breach by IFT of any of the terms or provisions of, or
constitute a default (or an event which, with notice, passage of time or both,
would constitute a default) under (i) the Certificate of Incorporation or
By-laws of IFT or (ii) except for such conflict, breach or default which would
not have a Material Adverse Effect, any indenture, mortgage, deed of trust or
other material agreement or instrument to which IFT is a party or by which its
properties or assets are bound, or
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any law, rule, regulation, decree, judgment or order of any court or public or
governmental authority having jurisdiction over IFT or any of IFT's properties
or assets.
E. Approvals. No authorization, approval or consent of any court or public
or governmental authority is required to be obtained by IFT for the issuance of
the Common Stock to XCEL and ▇▇▇▇▇▇ as contemplated by this Agreement, except
such authorizations, approvals and consents that have been obtained by IFT prior
to the date hereof.
F. Commission Filings. None of the Commission Filings contained at the time
they were filed any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
G. Absence of Certain Changes. Except as disclosed in the Commission
Filings, since October 31, 1998, there has not occurred any change, event or
development in the business, financial condition, or results of operations of
IFT constituting, and there has not existed any condition having or reasonably
likely to have, a Material Adverse Effect.
H. Securities Law Matters. Based in part on the representations and
warranties of XCEL and ▇▇▇▇▇▇ set forth in Article II hereof, the offer and
issuance by IFT of the Common Stock pursuant to the terms of this Agreement is
exempt from (i) the registration and prospectus delivery requirements of the
Securities Act and the rules and regulations of the Commission thereunder and
(ii) the registration and/or qualification provisions of all applicable United
States state securities and "blue sky" laws. IFT shall not directly or
indirectly take, and shall not permit any of its directors, officers or
Affiliates directly or indirectly to take, any action, so as to make unavailable
the exemption from the Securities Act registration being relied upon by IFT for
the issuance to XCEL and ▇▇▇▇▇▇ of the Common Stock as contemplated by this
Agreement. No form of general solicitation or advertising has been used or
authorized by IFT or any of its officers, directors or Affiliates in connection
with the offer or sale of the Common Stock as contemplated by this Agreement or
any other agreement to which IFT is a party.
I. Adequacy of Consideration. The Board of Directors of IFT has determined
that the consideration to be received for the Common Stock to be issued pursuant
to the terms of this Agreement is adequate in accordance with Section 153 of the
Delaware General Corporation Law.
IV. COVENANTS AND ACKNOWLEDGMENTS.
A. Restrictive Legend. XCEL and ▇▇▇▇▇▇ acknowledge and agree that, upon
issuance pursuant to this Agreement, the Common Stock shall have endorsed
thereon legends in substantially the following forms:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE, AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY
NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR SUCH OTHER LAWS.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13)
OF CODE SECTION 10-5-9 OF THE "GEORGIA SECURITIES ACT OF 1973," AND MAY
NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
B. Filings. IFT shall make all necessary SEC and "blue sky" filings
required to be made by IFT in connection with the issuance of the Common Stock
to XCEL and ▇▇▇▇▇▇ as required by all applicable laws, and shall provide a copy
thereof to XCEL and ▇▇▇▇▇▇ promptly after such filing.
VI. CLOSING.
The date and time of the closing pursuant to this Agreement (the "Closing
Date") shall be August 12, 1999 at 11:00 a.m. local time or such other time as
shall be mutually agreed upon in writing at the offices of Mesirov ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
VII. CONDITIONS TO IFT'S OBLIGATIONS.
IFT's obligation to close hereunder is conditioned upon the following, any
of which may be waived by IFT:
A. The accuracy in all material respects on the Closing Date of the
representations and warranties of XCEL and ▇▇▇▇▇▇ contained in this Agreement as
if made on the Closing Date (except for representations and warranties which, by
their express terms, speak as of and relate to a specified date, in which case
such accuracy shall be measured as of such specified date) and the performance
by XCEL and ▇▇▇▇▇▇ in all material respects on or before the Closing Date of
their respective covenants and agreements of XCEL and ▇▇▇▇▇▇ required to be
performed by each of them pursuant to this Agreement on or before the Closing
Date;
B. The absence of any law or order, ruling, judgment or writ of any court
or public or governmental authority restraining, enjoining or otherwise
prohibiting any of the transactions contemplated by this Agreement;
C. IFT's receipt of (1) a duly executed Irrevocable Proxy from each of XCEL
and ▇▇▇▇▇▇ in form and substance satisfactory to IFT; (2) a duly executed
Allonge to Secured Promissory Note from TNC in form and substance satisfactory
to IFT; (3) a duly executed Registration Rights Agreement in form and substance
satisfactory to IFT; (4) Series D Notes duly endorsed to the order of IFT; (5) a
duly executed General Release in form and substance
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satisfactory to IFT from each of XCEL and ▇▇▇▇▇▇ in form and substance
satisfactory to IFT; (6) a duly executed Put and Call Agreement with each of
XCEL and ▇▇▇▇▇▇ in form and substance satisfactory to IFT; and (7) a Mutual
Release between TNC and First Atlanta Financial Group, LLC in form and substance
satisfactory to IFT.
VIII. CONDITIONS TO XCEL and ▇▇▇▇▇▇'▇ OBLIGATIONS.
XCEL and ▇▇▇▇▇▇'▇ obligation to close hereunder is conditioned upon the
following, any of which may be waived by XCEL and ▇▇▇▇▇▇ severally:
A. The receipt by XCEL and ▇▇▇▇▇▇, respectively, of one or more
certificates (registered in its or her name, respectively) evidencing the Common
Stock to be acquired by XCEL and ▇▇▇▇▇▇, respectively, pursuant to this
Agreement, as set forth on Schedule A attached hereto.
B. The accuracy in all material respects on the Closing Date of the
representations and warranties made by IFT in this Agreement as if made on the
Closing Date (except for representations and warranties which, by their express
terms, speak as of and relate to a specified date, in which case such accuracy
shall be measured as of such specified date) and the performance by IFT in all
material respects on or before the Closing Date of all covenants and agreements
of IFT required to be performed by it pursuant to this Agreement on or before
the Closing Date.
C. There not having occurred (i) any general suspension of trading in, or
limitation on prices listed for, the Common Stock of IFT on NASDAQ, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, or (iii) in the case of the foregoing existing at
the date of this Agreement, a material acceleration or worsening thereof.
D. There not having occurred any event or development, and there being in
existence no condition, having or which reasonably and forseeably would have a
Material Adverse Effect.
E. The absence of any law or order, ruling, judgment or writ of any court
or public or governmental authority restraining, enjoining or otherwise
prohibiting any of the transactions contemplated by this Agreement.
F. XCEL's and ▇▇▇▇▇▇'▇ receipt of (1) a duly executed Registration Rights
Agreement in form and substance satisfactory to them and (2) a duly executed Put
and Call Agreement in form and substance satisfactory to them.
G. XCEL's receipt of an Assignment of the Equipment Lease without recourse
and the XCEL Note duly endorsed to the order of XCEL without recourse and a
Mutual Release between TNC and First Atlanta Financial Group, LLC in form and
substance satisfactory to XCEL.
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IX. SURVIVAL; INDEMNIFICATION.
A. The representations, warranties and covenants made by each of IFT, XCEL
and ▇▇▇▇▇▇ in this Agreement, and any annexes, schedules and exhibits hereto and
in each instrument, agreement and certificate entered into and delivered by
either of them pursuant to this Agreement, shall survive the Closing and the
consummation of the transactions contemplated hereby for a period of one year.
In the event of a breach or violation of any of such representations, warranties
or covenants, the party to whom such representations, warranties or covenants
have been made shall have all rights and remedies for such breach or violation
available to it under the provisions of this Agreement or otherwise, whether at
law or in equity, irrespective of any investigation made by or on behalf of such
party on or prior to the Closing Date.
B. IFT hereby agrees to indemnify and hold harmless XCEL, ▇▇▇▇▇▇, their
respective affiliates and their respective officers, directors, partners and
members (collectively, the "XCEL Indemnitees"), from and against any and all
losses, claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "Losses"), and agrees to reimburse XCEL Indemnitees for all
out-of-pocket expenses (including the reasonable fees and expenses of legal
counsel), in each case promptly as incurred by XCEL Indemnitees and to the
extent arising out of or in connection with:
1. any misrepresentation, omission of fact or breach of any of IFT's
representations or warranties contained in this Agreement, the exhibits hereto
or any instrument, agreement or certificate entered into or delivered by IFT
pursuant to this Agreement; or
2. any failure by IFT to perform in any material respect any of its
covenants, agreements, undertakings or obligations set forth in this Agreement,
the exhibits hereto or any instrument, agreement or certificate entered into or
delivered by IFT pursuant to this Agreement.
C. XCEL and ▇▇▇▇▇▇ hereby agree severally to indemnify and hold harmless
IFT, its Affiliates and their respective officers, directors, partners and
members (collectively, the "IFT Indemnitees"), from and against any and all
Losses, and agrees to reimburse IFT Indemnitees for all out-of-pocket expenses
(including the reasonable fees and expenses of legal counsel), in each case
promptly as incurred by IFT Indemnitees and to the extent arising out of or in
connection with:
1. any misrepresentation, omission of fact, or breach of any of XCEL or
▇▇▇▇▇▇'▇ representations or warranties contained in this Agreement, the exhibits
hereto or any instrument, agreement or certificate entered into or delivered by
XCEL and ▇▇▇▇▇▇ pursuant to this Agreement; or
2. any failure by XCEL or ▇▇▇▇▇▇ to perform in any material respect any of
its covenants, agreements, undertakings or obligations set forth in this
Agreement or any instrument, certificate or agreement entered into or delivered
by XCEL or ▇▇▇▇▇▇ pursuant to this Agreement.
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D. Promptly after receipt by either party hereto seeking indemnification
pursuant to this Section IX (an "Indemnified Party") of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section IX is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim, the Indemnifying Party shall be entitled to assume
the defense thereof. Notwithstanding the assumption of the defense of any Claim
by the Indemnifying Party, the Indemnified Party shall have the right to employ
separate legal counsel (together with appropriate local counsel) and to
participate in the defense of such Claim, and the Indemnifying Party shall bear
the reasonable fees, out-of-pocket costs and expenses of such separate legal
counsel to the Indemnified Party if (and only if): (x) the Indemnifying Party
shall have agreed to pay such fees, out-of-pocket costs and expenses, (y) the
Indemnified Party and the Indemnifying Party reasonably shall have concluded
that representation of the Indemnified Party and the Indemnifying Party by the
same legal counsel would not be appropriate (i) due to actual or, as reasonably
determined by legal counsel to the Indemnified Party, potentially differing
interests between such parties in the conduct of the defense of such Claim, or
(ii) if there may be legal defenses available to the Indemnified Party that are
in addition to or disparate from those available to the Indemnifying Party and
which can not be presented by counsel to the Indemnifying Party, or (z) the
Indemnifying Party shall have failed to employ legal counsel reasonably
satisfactory to the Indemnified Party within a reasonable period of time after
notice of the commencement of such Claim. If the Indemnified Party employs
separate legal counsel in circumstances other than as described in clauses (x),
(y) or (z) above, the fees, costs and expenses of such legal counsel shall be
borne exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one firm of legal
counsel for the Indemnified Party (together with appropriate local counsel). The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (which consent shall not unreasonably be withheld), settle or
compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnified Party from all liabilities
with respect to such Claim or judgment.
E. In the event one party hereunder should have a claim for indemnification
that does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.
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X. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Pennsylvania, without regard to the conflicts of law
principles of such state. Each of the parties consents to the jurisdiction of
the federal courts whose districts encompass any part of the City of
Philadelphia or the state courts of Commonwealth of Pennsylvania sitting in the
City of Philadelphia in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement have been inserted for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement. 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 or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
XI. NOTICES. Except as may be otherwise provided herein, any notice or
other communication or delivery required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified mail, postage
prepaid, or by a nationally recognized overnight courier service, by facsimile
with confirmation back if followed promptly by first class mail, and shall be
deemed given when so delivered personally or by overnight courier service, or,
if mailed, three (3) days after the date of deposit in the United States mails,
as follows:
(1) if to XCEL:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(2) if to ▇▇▇▇▇▇ ▇▇▇▇▇▇:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(3) if to IFT:
10
Interactive Flight Technologies, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Mesirov ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
IFT, ▇▇▇▇▇▇ or XCEL may change their respective foregoing address for notices by
notice given pursuant to this Article XI.
XII. CONFIDENTIALITY. Each of IFT, XCEL and ▇▇▇▇▇▇ agrees to keep
confidential and not to disclose to or use for the benefit of any third party
the terms of this Agreement or any other information which at any time is
communicated by the other party as being confidential without the prior written
approval of the other party; provided, however, that this provision shall not
apply to information which, at the time of disclosure, is already part of the
public domain (except by breach of this Agreement) and information which is
required to be disclosed by law (including, without limitation, pursuant to Item
10 of Rule 601 of Regulation S-K under the Securities Act and the Exchange Act).
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the date first above written.
INTERACTIVE FLIGHT TECHNOLOGIES, INC.
By:
------------------------------
Name:
Title:
XCEL CAPITAL, LLC
By:
------------------------------
Name:
Title:
(SEAL)
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
11
SCHEDULE A
Shares of Class A Face Amount of Redemption
Common Stock of Series D Notes Premium to
Holder IFT to be Received Held August 12, 1999 Total Due
------ ------------------ -------------- --------------- ---------
XCEL Capital, LLC 75,000 $250,000 $ 91,250 $341,250
▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,000 $100,000 $ 36,500 $136,500
------ -------- ------- --------
Totals 105,000 $350,000 $127,750 $477,750
------ ------- -------- -------- --------