Exhibit 4.3
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement") is effective as of
June11, 2003 by and among Epixtar Corp a Florida corporation, with offices at
11900 Biscayne Boulevard, Miami, Florida 33181 (the "Company") and the
purchasers executing this Agreement and to be listed on the Schedule of
Purchasers attached hereto as Exhibit A as amended from time to time
(collectively, the "Purchasers)
RECITALS
Whereas, on the Closing as hereinafter defined, the Purchasers
listed on Schedule A desire to purchase shares of Series A Convertible Preferred
Stock ("Series A Preferred') of the Company and five year Warrants (the
"Warrants") to purchase common stock of the Company ("Common Stock") at an
exercise price equal to the average daily closing price of the Company's Common
Stock for the five days prior this date in accordance with Rule 506 pursuant to
the Securities Act of 1933.
Whereas, the Series A Preferred shall have the terms set forth in
the Articles of Amendment of the Company's Articles of Incorporation attached as
Exhibit B and the Warrants shall be in the form of Exhibit C.
Whereas, the Series A Preferred and the Warrants (together referred to as the
"Securities") shall be sold in "Units" consisting of one share of Series A
Preferred Stock and one Warrant to purchase 14 shares of Common Stock with up to
150,000 units offered ;
Whereas, the Company may offer Units to additional Purchasers executing this
Agreement.;
Whereas, the Company may offer to sell Common Stock in lieu of
Series A Preferred (at the price of $100 per each 28 shares purchased) to
additional Purchasers purchasing Units in which case, except as otherwise
indicated by the context, "Common Stock" shall be substituted for references to
"Series A Preferred."
Whereas, in lieu of selling the Units pursuant to this Agreement,
the Company may sell a portion of the Units pursuant to other agreements
substantially similar to this Agreement and related agreements described herein.
AGREEMENT
In consideration of the mutual promises contained herein and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties to this Agreement agree as follows:
1. Purchase and Sale of Series A Preferred; Issuance of Warrant.
(a) Purchase and Sale of Securities. Subject to the terms and
conditions of this Agreement, each Purchaser agrees to purchase at the Closing
as hereinafter defined. and the Company agrees to sell and issue to each
Purchaser shares of Series A Preferred in the amount specified on the Schedule
of Purchasers to this Agreement.
(b) Issuance of Warrant. Concurrently with the purchase and
sale of the Series A Preferred , the Purchasers shall be issued the Warrants
constituting part of the Units in the amounts set forth on the Schedule of
Purchasers to this Agreement.
(c) Closings: Delivery. The initial purchase and sale of the
Securities shall take place . at 10:00 a.m., on June 12, 2003 (Closing Date) at
such other time and at such place as the Company and the Purchasers mutually
agree upon, orally or in writing (which time and place shall be designated as
the (" Closing"). At the Closing the Company shall deliver to each Purchaser,
against payment of the purchase price by check or by wire transfer to the
Company's bank account, (i) certificates for the shares to be purchased by such
Purchaser and (ii) the Warrant to be issued to such Purchaser.
2. Representations and Warranties of the Company. Except as set
forth on the Schedule of Exceptions attached as Schedule 1 hereto, the Company
hereby represents and warrants to each Purchaser as follows:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated validly existing and in good standing under the
laws of Florida and has all requisite corporate authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted. The Company is duly qualified or licensed as a foreign corporation
and is in good standing in all jurisdictions where the nature of its business or
property makes such qualification or licensing necessary and where the failure
to do so would have a material adverse effect on its condition (financial or
otherwise), business, properties, assets, liabilities (including contingent
liabilities), results of operations or current prospects of the Company and its
subsidiaries, taken as a whole (hereinafter a "Material Adverse Effect"). The
Company has made available to the Purchasers copies of its Articles of
Incorporation and Bylaws. Said copies are true, correct and complete and contain
all amendments through the Closing Date. Except for its subsidiaries, the
Company does not currently own or control, directly or indirectly, any interest
in any other corporation, partnership, limited liability company, association or
other business entity. The Company is not a participant in any joint venture or
similar arrangement.
(b) Corporate Power. The Company will have at the Closing Date
all requisite legal and corporate power to execute and deliver this Agreement,
the Warrant, the Registration Rights Agreement in the form attached hereto as
Exhibit D (the " Registration Rights Agreement"), (the the Warrant and the
Registration Rights Agreement are hereinafter collectively referred to as the
"Related Agreements") and to consummate any other transactions contemplated by
the terms of this Agreement and the Related Agreements, including the delivery
of certificates for the Series A Preferred and to carry out and perform its
obligations under the terms of this Agreement and the Related Agreements.
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(c) Authorization, Enforcement. (i) The execution and delivery
of the Agreement and Related Agreements by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action and no further consent or authorization of the
Company or its Board of Directors or stockholders is not required, and (ii) the
Agreement and Related Agreements have been duly executed and delivered by the
Company, and at the Closing shall constitute valid and binding obligations of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.
(d) Capitalization
(i) Capital Stock. The authorized capital stock of the
Company consists or will consist, upon the filing of the Articles of Amendment
to the Company's Certificate of Incorporation ("Articles of Amendment"), of (i)
50,000,000 shares of Common Stock of which 10,003,000 shares will be issued and
outstanding immediately prior to the Initial Closing and (ii) 10,000,000 shares
of Preferred Stock to be issued in series of which by the closing date 250,000
shares shall be Series A Preferred Shares and no shares will be issued and
outstanding other than the shares to be sold hereunder.The outstanding shares of
capital stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable, and were issued in compliance with all applicable
federal and state securities laws.
(ii) Reserved Capital Stock. The Company has reserved a
sufficient number of shares of Common Stock for issuance upon conversion of the
Series A Preferred and exercise of the Warrants. The Company has presently
reserved (i) 4,000,000 shares of its Common Stock for issuance to employees,
consultants or directors under its Stock Option Plan, and (ii) 4,130,000 shares
of Common Stock for issuance pursuant to outstanding warrants.
(iii) Obligations With Respect to Capital Stock. Except
as set forth in this Agreement, no options, warrants, subscriptions or purchase
rights of any nature to acquire from the Company shares of capital stock or
other securities are authorized, issued or outstanding, nor is the Company
obligated under its charter documents or under any agreement by which the
Company is bound to issue shares of its capital stock or other securities,
except as contemplated by this Agreement. There are no restrictions on the
transfer of shares of capital stock of the Company other than those imposed by
relevant federal and state securities laws and as otherwise contemplated by this
Agreement. To the Company's best knowledge except as provided for in the
Articles of Amendment, there are no agreements, understandings, trusts or other
collaborative arrangements or understandings concerning the voting of the
capital stock of the Company.
(e) Solvency. The Company is solvent.
(f) No Conflicts. The execution, delivery and performance of
this Agreement and the Related Agreements by the Company and the consummation by
the Company of the transactions contemplated herein do not and will not (i)
violate any provision of the Company's Articles of Incorporation or Bylaws, (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 agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party, (iii) create or impose
a lien, charge or encumbrance on any property of the Company under any agreement
or any commitment to which the Company is a party or by which the Company is
bound or by which any of its respective properties or assets are bound, or (iv)
result in a violation of any federal, state, local or other foreign statute,
rule, regulation, order, judgment or decree (including any federal or state
securities laws and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries are bound or affected, except, in all cases, for such conflicts,
defaults, termination, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.
The business of the Company is not being conducted in violation of any laws,
ordinances or regulations of any governmental entity, except for violations
which singularly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under any federal, state or local law, rule
or regulation 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 this Agreement or the
Related Agreements, or issue and sell the Securities in accordance with the
terms hereof (other than any filings which may be required to be made by the
Company with the Securities Exchange Commission ("SEC") or state securities
administrators ); provided, however, that for purpose of the representations
made in this sentence, the Company is assuming and relying upon the accuracy of
the relevant representations and agreements of the Purchasers herein.
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(g) Financial Statements. The financial statements of the
Company comply as to form in all material respects with applicable accounting
requirements under GAAP or other applicable rules and regulations with respect
thereto. Such financial statements have been prepared in accordance with GAAP
applied on a consistent basis 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 not include
footnotes or may be condensed or summary statements), and fairly present in all
material respects the financial position of the Company and its subsidiaries as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). For purposes hereof, the term "GAAP" shall mean the
United States Generally Accepted Accounting Principles as those conventions,
rules and procedures are determined by the Financial Accounting Standard Board
and its predecessor agencies.
(h) No Undisclosed Liabilities. The Company has no
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) that would be
required to be disclosed on a balance sheet of the Company or any subsidiary
(including the notes thereto) in conformity with GAAP which are not disclosed in
the Schedule of Exceptions, other than those incurred in the ordinary course of
the Company's business since March 31, 2003 and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the Company.
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(i) Compliance with Law. The Company has all franchises,
permits, licenses, consents and other governmental or regulatory authorizations
and approvals necessary for the conduct of its business as now being conducted
by it unless the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(j) Taxes. The Company has filed all Tax Returns which it is
required to file under J applicable laws; all such Tax Returns are true and
accurate in all material respect, and have been prepared in compliance with all
applicable laws; except as set forth in Schedule of Exceptions the Company has
paid all Taxes due and owing by it (whether or not such Taxes are required to be
shown on a Tax Return) and has withheld and paid over to the appropriate taxing
authorities all Taxes which it is required to withhold from amounts paid or
owing to any employee, stockholder, creditor or other third parties; and since
December 31, 2002, the charges, accruals and reserves for Taxes with respect to
the Company (including any provisions for deferred income taxes) reflected on
the books of the Company are to its knowledge adequate to cover any Tax
liabilities of the Company if its current tax year were treated as ending on the
date hereof.
No claim has been made by a taxing authority in a jurisdiction where the
Company does not file tax returns that the Company is or may be subject to
taxation by that jurisdiction. Except as set forth in the Schedule of
Exceptions, there are no foreign, federal, state or local tax audits or
administrative or judicial proceedings pending or being conducted with respect
to the Company; no information related to Tax matters has been requested by any
foreign, federal, state or local taxing authority; and, except as disclosed
above, no written notice indicating an intent to open an audit or other review
has been received by the Company from any foreign, federal, state or local
taxing authority. Except as set forth in Schedule 2(h), there are no material
unresolved questions or claims concerning the Company's Tax liability. The
Company (A) has not executed or entered into a closing agreement pursuant to
Section 7121 of the Internal Revenue Code or any predecessor provision thereof
or any similar provision of state, local or foreign law; and (B) has not agreed
to or is required to make any adjustments pursuant to Section ss. 481 (a) of the
Internal Revenue Code or any similar provision of state, local or foreign law
Section by reason of a change in accounting method initiated by the Company or
any of its subsidiaries or has any knowledge that the IRS has proposed any such
adjustment or change in accounting method, or has any application pending with
any taxing authority requesting permission for any changes in accounting methods
that relate to the business or operations of the Company. The Company has not
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Internal Revenue Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Internal Revenue Code.
For purposes of this Section 2(h):
"IRS" means the United States Internal Revenue Service.
"Tax" or "Taxes" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.
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"Tax Return" means any return, information report or filing with
respect to Taxes, including any schedules attached thereto and including any
amendment thereof.
(k) SEC Reports. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934 as amended (the "Exchange Act") during the 12 months preceding the
date of this Agreement and such documents ("Securities Filings") complied as to
form in all material respects with the SEC's requirements as of their respective
filing dates, and the information contained therein as of the date thereof did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made not misleading.
(l) Books and Records. The records and documents of the
Company accurately reflect in all material respects the information relating to
the business of the Company, the location and collection of its assets, and the
nature of all transactions giving rise to the obligations or accounts receivable
of the Company
(m) Securities Laws. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Securities hereunder. Neither the Company nor
anyone acting on its behalf, directly or indirectly, has or will sell, offer to
sell or solicit offers to buy the Securities or similar securities to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person (other than the
Purchasers), so as to bring the issuance and sale of the Securities under the
registration provisions of the Securities Act of 1933 is amended (the
"Securities Act") and applicable state securities laws. 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 Securities Act) in connection with the offer or sale
of the Securities.
(n) Changes. Since March 31, 2003 (the "Statement Date"),
there has not been:
(i) any change in the assets, liabilities, financial
condition or operating results of he Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse
(ii) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the business,
properties, prospects or financial condition of the Company;
(iii) any waiver or compromise by the Company of a
valuable right or of a material debt owed to it;
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(iv) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any 91 obligation by the Company, except in the
ordinary course of business and that is not material to the business,
properties, prospects or financial condition of the Company;
(v) any change or amendment to a contract or arrangement
by which the Company or any of its assets or properties is bound or subject
which is materially adverse to the assets, properties, financial condition,
operating results or business of the Company as such business is presently
conducted, including any change or amendment to any of the governing documents
of the Company (including the Articles of Incorporation and Bylaws of the
Company, each as amended), except as contemplated hereunder;
(vi) any material change in any compensation arrangement
or agreement with any employee, officer, director or shareholder;
(vii) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(viii) any resignation or termination of employment of
any officer or key employee of the Company; and the Company, to its knowledge,
is not aware of any impending resignation or termination of employment of any
such officer or key employee;
(ix) any mortgage, pledge, transfer of a security
interest in or lien created by the Company with respect to any of its material
properties or assets, except liens for taxes not yet due or payable;
(x) any loans or guarantees made by the Company to or
for the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(xi) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any or such stock by the
Company;
(xii) any transaction entered into by the Company not in
the ordinary course of its business;
(xiii) receipt of notice that there has been a loss of,
or material order cancellation by, any major customer of the Company;
(xiv) any amount borrowed by the Company;
(xv) any material change in the manner of business or
operations of the Company;
(xvi) to the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company; or
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(xvii) any arrangement or commitment by the Company to
do any of the things described in this Section 2(n).
(o) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the Company's knowledge, threatened against, the
Company or its properties (not, to the Company's knowledge against any of the
officers or directors of the Company) before any court, arbitrator or
governmental agency which, in the case of actions, suits, proceedings or
investigations pending or threatened against officers or directors of the
Company, either in any case or in the aggregate, might result in any material
adverse change in the business or financial condition of the Company or any of
its properties or assets, or in any material impairment of the right or ability
of the Company to carry on its business as now conducted or as proposed to be
conducted, or in any material liability on the part of the Company, and none
which questions the validity of the Agreements, the right of the Company to
enter into the Agreements or consummate the transactions contemplated hereby or
thereby, or any action taken or to be taken in connection herewith, nor is the
Company aware that there is a reasonable basis for any of the foregoing. The
foregoing includes, without limitation, actions suits, proceedings or
investigations pending or threatened and known to the Company involving the
prior employment of any of the Company's employees, their use in connection with
the Company's business of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with
former employers. The Company is not a party or subject to the provisions of any
order writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit proceeding or investigation by the
Company currently pending or which the Company intends to initiate. To the
Company's knowledge, neither the Company, nor any officer, key employee or 5%
shareholder of the Company, in his/her/its capacity as such, is in default with
respect to any order, writ, injunction, decree, ruling or decision of any court,
commission, board or any other government agency which might, either
individually or in the aggregate, result in any material adverse changes in the
assets, condition or affairs of the Company, financially or otherwise.
(p) Brokers or Finders; Other Offers. Except for fees payable
to Sands Bros. As hereinafter set forth, the Company has not incurred, and will
not incur, directly or indirectly, as a result of any action taken by the
Company, any liability for brokerage or finder's fees or agent's commissions or
any similar charges in connection with this Agreement and the Related
Agreements.
(q) Disclosure. The Company has fully provided each Purchaser
with all the information which such Purchaser has requested for deciding whether
to acquire the Securities and all information which the Company believes is
reasonably necessary to enable such Purchaser to make such decision. No
representation or warranty of the Company contained in this Agreement and the
Related Agreements and the exhibits and schedules attached hereto and thereto,
any certificate furnished or to be furnished to Purchasers at the Closing or
other written information furnished to the Purchasers or their counsel in
connection with the transactions contemplated by this Agreement and the Related
Agreements contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
There is no fact known to the Company that has not been disclosed herein or in
the Related Agreements, or in any other agreement, document or written statement
furnished by the Company to the Purchasers in connection with the transactions
contemplated hereby and thereby which is specific to the Company, as opposed to
the industry in which the Company operates, and which materially adversely
affects or is reasonably likely to materially and adversely affect the business,
properties, assets or financial condition of the Company
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(r) No Conflict of Interest. The Company is not indebted,
directly or indirectly, to any of its employees, officers or directors or their
respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees, officers and directors not in
excess of $10,000, nor is the Company contemplating such indebtedness as of the
date of this Agreement. To the Company's knowledge, none of said employees,
officers or directors, or any member of their immediate families, is directly or
indirectly indebted to the Company (other than in connection with purchases of
the Company's stock) or have any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship or any firm or corporation which competes
with the Company nor is the Company contemplating such indebtedness as of the
date of this Agreement, except that employees, officers, directors and/or
shareholders of the Company may own stock in publicly traded companies (not in
excess of 1% of the outstanding capital stock thereof) which may compete the
Company. To the Company's knowledge, no employee, shareholder, officer or
director, or any member of their immediate families, is, directly or indirectly,
in whole or in part, any material tangible or intangible property that the
Company uses or contemplates using in the conduct of its business. The Company
is not a guarantor or indemnitor of any indebtedness of any other person, firm,
corporation or entity.
(s) Intellectual Property. The Company has sufficient title
and ownership of all patents, trademarks, service marks, trade names, domain
names, copyrights, source code, trade secrets, information, proprietary rights
and processes, and any applications or registrations therefore, and all
inventions, technical drawings, technology, know-how, processes, formulas,
algorithms, computer software programs, documentation, and all other tangible
and intangible information or material in any form, used or currently proposed
to be used in its business as now conducted and as proposed to be conducted
without any conflict with or infringement of the rights of others. Except as set
forth in the Schedule of Exceptions, there are no outstanding options, licenses
or agreements of any kind relating to the foregoing, nor is the Company bound by
or a party to any options, licenses or agreements of any kind with respect to
the patents, trademarks, service marks, trade names, domain names, copyrights,
source code, trade secrets, licenses, information, proprietary rights and
processes of any other person or entity. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, domain names, copyrights, source code, or trade secrets or
other proprietary rights of any other person or entity, nor is the Company aware
of any basis therefor.
(t) Customers and Suppliers. No customer or supplier that was
significant to the Company during the period covered by the Financial Statements
or that has been significant to the Company thereafter, has terminated,
materially reduced or, to the Company's knowledge, threatened to terminate or
materially reduce its purchases from or provision of products or services to the
Company, as the case may be.
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(u) Officer/Director Shareholders. Martin Miller is the only
officer or director of the Company who beneficially owns any shares of Common
Stock (other shares of Common Stock subject to options).
3. Representations and Warranties of the Purchasers. Each Purchaser
hereby severally and not jointly represents and warrants to the Company that:
(a) Purchase Entirely for Own Account. The Securities to be
acquired by the Purchaser will be acquired for investment for the Purchaser's
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Purchaser has not been formed for the specific purpose of acquiring the
Securities.
(b) Knowledge. The Purchaser is aware of the Company's
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Securities. Each Purchaser has reviewed the Securities Filings and is especially
aware of the Risk Factors set forth in the Company's Annual Report on Form 10KSB
for 2002 .
(c) Restricted Securities. The Purchaser understands that the
Securities have not been, and will not be, registered under the Securities Act ,
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the Securities are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the Securities indefinitely
unless the Securities are registered with the Securities and Exchange Commission
and qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Purchasers acknowledges that the
Company, except as set forth in the Registration Rights Agreement ,has no
obligation to register or qualify the Securities for resale. The Purchaser
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Securities,
and on requirements relating to the Company which are outside of the Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy.
(d) No Public Market. Except for the Common Stock the
Purchaser understands that no public market now exists for the Securities and
that the Company has made no assurances that a public market will ever exist for
the Securities.
(e) Legends. The Purchaser understands that the Securities may
bear legends substantially similar to the following.
(i) "THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO,
OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
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(ii) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the Securities represented by
the certificate so legended.
(f) Accredited Investor. The Purchaser is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
(g) Compliance with Law. The Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Securities or shares of Common Stock issuable upon conversion of the Series A
Preferred or exercise of the Warrant except in compliance with the Securities
Act, applicable state securities laws and the respective rules and regulations
promulgated thereunder; .
4. Conditions of the Purchaser's Obligations at Closing. The
obligations of each Purchaser to the Company under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 hereof shall be true on and as
of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
(b) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be obtained and effective as
of the Closing.
(c) Performance; Proceedings and Documents. The Company shall
have performed and complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing and all corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchasers, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request.
(d) Compliance Certificate. The Company shall deliver to each
Purchaser at the Closing a certificate dated as of the Closing and signed on its
behalf by one of the Company's executive officers certifying that the conditions
specified in Sections 4(a), (b) and (c) have been fulfilled.
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(e) Secretary's Certificate. The Purchasers shall have
received a certificate of the Secretary or Assistant Secretary of the Company
(the "Bring-Down Certificate"), in form and substance satisfactory to the
Purchasers, certifying as follows:
(i) that attached thereto are true and complete copies
of the Articles and Bylaws of the Company;
(ii) that attached thereto are true and complete copies
of the resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of this Agreement and the Related
Agreements, instruments and certificates required to be executed by it in
connection herewith and approving the consummation of the transactions in the
manner contemplated hereby including, but not limited to, the authorization and
issuance of the Securities
(iii) the names and true signatures of the officers of
the Company signing this Agreement and all other documents to be delivered in
connection with this Agreement;
(f) Opinion of Company Counsel . The Purchasers shall have
received from Michael DiGiovanna counsel for the Company, an opinion, dated as
of the Closing, in the form to be agreed upon.
(g) Delivery of Share Certificate and Warrant. Each Purchaser
shall have received (i) the share certificate for the Series A Preferred to do
with the (ii) and Warrant representing the Securities which such Purchaser is
purchasing hereunder.
(h) Additional Documents. The Company shall have delivered to
each Purchaser such additional documents relating to the transactions
contemplated by this Agreement as each Purchaser may reasonably request.
(i) Cold Comfort Letter - a cold comfort letter from the
Company's independent public accountants Liebman Goldberg &Drogin, LLP in the
form to be agreed upon.
(j) Voting Agreement. - an agreement executed by TransVoice
L.L.C.. to vote their shares of the Company in favor of the proposal referred to
in paragraph 6 (a).
(k) Consideration in Connection with the Offering. The Company
will pay to third parties fees aggregating ten 10 percent of the proceeds
received and warrants to purchase ten (10%) percent of the shares of Common
Stock subject to the Series A Preferred.
5. Conditions of the Company's Obligations at Closing. The
obligations of the Company to each Purchaser under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
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(a) Representations and Warranties. The representations and
warranties of each Purchaser contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
(b) Performance of Obligations. Each Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by him/her/it on or before the
Closing, and such Purchaser shall have delivered payment to the Company in
respect of its purchase of such Purchaser's Securities.
(c) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be obtained and effective as
of the Closing.
6. Miscellaneous.
(a) As promptly as possible after the execution and delivery
of this Agreement (but no later than September 15, 2003 Epixtar shall cause a
meeting of its stockholders (the "Epixtar Stockholder Meeting") to be held for
the purpose of voting on the approval of the transactions contemplated by the
Securities Purchase Agreement, including approval of the issuance of the
Securities (the "Transactions"). The board of directors of Epixtar (the "Board")
shall recommend approval and adoption of the Transaction. In connection with the
Epixtar Stockholder Meeting, Epixtar: (a) shall prepare and file with SEC, and
use its reasonable best efforts to have cleared by the SEC and will thereafter
mail to its stockholders as promptly as practicable a proxy statement meeting
the requirements of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Proxy Statement") and all other proxy materials
relating to the Epixtar Stockholder Meeting, which Proxy Statement shall include
the recommendation of the Board in favour of the Transactions; (b) shall ensure
that all proxies solicited in connection with the Epixtar Stockholder Meeting
are solicited in compliance with all applicable statutes, laws and regulations,
including the rules and regulations promulgated by the SEC; and (c) shall
otherwise comply with applicable law in connection with obtaining the approval
of Epixtar's stockholders If at any time after the mailing of the Proxy
Statement to Epixtar's stockholders there shall occur any event that should be
set forth in an amendment or supplement to the Proxy Statement, Epixtar will
promptly prepare and mail to its stockholders such an amendment or supplement.
Epixtar will not mail any Proxy Statement, or any amendment or supplement
thereto, to which the Purchasers reasonably object. The Company covenants that
the Proxy Statement, including any amendment or supplement thereto shall not
contain any untrue statement or a material fact or omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(b) Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
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(c) Governing Law; Jurisdiction. This Agreement and all acts
and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of New York, without giving effect to principles of conflicts of
law. In addition, the parties herto agree that (i) any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted
exclusively in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York, (ii) waive
any objection which the parties may have now or hereafter based upon forum non
conveniens or to the venue of any such suit, action or proceeding, and (iii)
irrevocably consent to the jurisdiction of the New York State Supreme Court,
County of New York and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. FURTHER, THE
PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THIS
AGREEMENT AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR CROSS CLAIM
ASSERTED IN ANY SUCH ACTION.
(d) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) Survival. The warranties, representations, agreements and
covenants of the Company contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing.
(g) Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or five days after being deposited in the U.S. mail as certified or
registered mail with postage prepaid with receipt. Such notice shall be
addressed to the Purchasers at such party's address as set forth in Exhibit A
and such notice if addressed to the Company shall be sent to the address above
(with a copy to Michael D. DiGiovanna, 212 Carnegie Center, Suite 206,
Princeton, New Jersey, 08540) or as subsequently modified by written notice.
(h) Amendments and Waivers. Any term of this Agreement may be
amended or waived only with the written consent of the Company and Purchasers
accounting for 67% in dollar amount of the purchases made in this offering.. Any
amendment or waiver affected in accordance with this Section 6(h) shall be
binding upon the Purchasers, each future holder of the Securities, and the
Company.
(i) Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then such provision
shall be excluded form this Agreement, and the balance of the Agreement shall be
enforceable in accordance with its terms.
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(j) Entire Agreement. This Agreement, and the documents
referred to herein, constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements existing between the parties hereto are expressly canceled.
(k) Exculpation Among Purchasers. Each Purchaser acknowledges
that it is not relying upon any person, firm or corporation, other than the
Company and its officers and directors, in making its investment or decision to
invest in the Company. Each Purchaser agrees that no other Purchaser nor their
respective controlling persons, officers, directors, partners, agents, or
employees, shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of then connection with the Securities.
(l) Expenses. The Company and each Purchaser shall pay their
respective costs and expenses incurred with respect to the negotiation,
execution, delivery and performance of this Agreement; provided, however, that
if the Closing is effected, the Company shall, at the Closing, pay counsel to
the Sands Brothers & Co., Inc.an amount not to exceed $25,000 for legal fees and
expenses.
(m) Board Observer - In the event the Series A Preferred
Stockholders do not elect a nominee to the Board of Directors, the Company will
permit an observer designated by holders of a majority of Series A Preferred
stockholders to be an observer at each Board of Directors meeting with expenses
of attendance paid by the Company.
[signatures on following pages]
15
SIGNATURE TO FOLLOW
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY:
Epixtar Corp.
By
Name: Martin Miller
Title: Chairman and CEO
SIGNATURE TO FOLLOW
Purchaser
By: ____________________________________
Name: __________________________________
(print)
Title: _________________________________
Address:
EXHIBIT A
---------
SCHEDULE OF PURCHASERS
Name and Address of Purchaser Series A Preferred Warrant Payment
EXHIBIT B
---------
Amended Article
EXHIBIT C
---------
FORM OF
WARRANT
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
SCHEDULE 1
----------
SCHEDULE OF EXCEPTIONS