INVESTMENT AGREEMENT
This Investment Agreement is dated as of May 19, 2000 and is entered into
by and among Capsule Communications, Inc. (the "Company"), Gold & Appel
Transfer, S.A. ("G&A") and Foundation for the International Non-governmental
Development of Space ("FINDS" and, together with G&A, "Investors").
Intending to be legally bound, the parties hereto agree as follows:
1. On the date hereof, the Company shall issue to G&A and FINDS 666,667
and 333,333 shares of the Company's common stock ("Common Stock"),
respectively, in full payment of the outstanding principal of, and accrued
interest on, the loans previously made by G&A and FINDS to the Company in the
respective original principal amounts of $1.0 million and $500,000. Investors
acknowledge that the shares of Common Stock to be so issued to them pursuant
to this Paragraph 1 have not been registered under the Securities Act of 1933
of any state securities laws, and are being acquired by them for their own
account for investment purposes and without a view to distribution.
2. Investors jointly and severally agree to purchase from the Company
additional shares of Common Stock in two installments for an aggregate
purchase price of $3.0 million, as follows:
a. On June 30, 2000, Investors will wire to the Company the
aggregate sum of $1.5 million, and in exchange therefor the Company will issue
to Investors, in such proportions as Investors may specify, a number of shares
of Common Stock equal to the quotient (rounded so as to avoid fractional
shares) that results from dividing $1.5 million by the higher of (i) the 30-
trading day average closing sale price of the Common Stock for the period
ending at the close of business on June 29, 2000 and (ii) $1.25.
b. On or before December 29, 2000, but in no event prior to
September 29, 2000 Investors will wire to the Company upon 10 days prior
notice from the Company, the aggregate sum of $1.5 million, and in exchange
therefor the Company will issue to Investors, in such proportions as Investors
may specify, a number of shares of Common Stock equal to the quotient (rounded
so as to avoid fractional shares) that results from dividing $1.5 million by
the higher of (i) the 30-trading day average closing sale price of the Common
Stock for the period ending at the close of business the day prior to the
investment and (ii) $1.25.
3. Investors acknowledge that the share of Common Stock that they will
acquire pursuant to Paragraph 2 will not have been registered under the
Securities Act of 1933 or any state securities laws, and represent and warrant
that they are acquiring such shares for their own account for investments
purposes and without a view to distribution.
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4. The obligation of Investors and the Company under Paragraph 2 may be
terminated at the election of Investors or the Company in the event that the
Company is acquired, whether by merger or other business combination.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Capsule Communications, Inc.
By: /s/ David B. Hurwitz
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Name: David B. Hurwitz
Title: President and CEO
Gold & Appel Transfer, S.A.
By: /s/ Walt Anderson
--------------------------------
Name: Walt Anderson
Title: Attorney-in-Fact
Foundation for the International
Non-governmental Development of Space
By: /s/ Walt Anderson
------------------------------------
Name: Walt Anderson
Title: President
