SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Spatialight, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
AMENDMENT NO. 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report dated July 10, 1996
on Form 8-K as set forth in the pages attached hereto, as was subsequently
amended by Form 8-K/A dated July 25, 1996:
Item 5. Other Events.
One of the investors in the private placement previously reported
has declined to participate for unspecified reasons. As a result
of that withdrawal, the Company has sold a total of 1,585,000
shares, and Warrants to purchase an additional 1,585,000 shares,
for total gross consideration of $1,783,125. The revised pro
forma balance sheet reflecting this change is attached hereto.
Item 7. Financial Statements, Pro forma Financial Information and
Exhibits.
(a) Financial Statement of Business Acquired. Not required.
(b) The registrant provides herewith the revised pro forma
condensed balance sheet of the Company as of June 30,
1996, to reflect the effect, pro forma, of the net
investment in the Company and other changes as of June 30,
1996.
(c) Exhibits.
Exhibit 4.5 Warrants (two):
(1) Jalcanto, Ltd.
(2) Sabotini, Ltd.
Exhibit 10.32 Share Purchase Agreements (two):
(1) Jalcanto, Ltd.
(2) Sabotini, Ltd.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: September 17, 1996 Spatialight, Inc.
----------------------------------------------
(Registrant)
/s/ ALAN S. LOCKWOOD
----------------------------------------------
Alan S. Lockwood, Secretary
<PAGE>
SPATIALIGHT, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet with
the Effects of the Equity Investment
(Unaudited)
The pro forma condensed consolidated balance sheet was prepared giving effect to
the equity investment, net of estimated costs, as if such transaction occurred
as of June 30, 1996. The financial data does not purport to represent what the
Company's financial position would have actually been if the transaction, in
fact, had occurred on such date or to project the Company's financial position
for any future date.
<TABLE>
<CAPTION>
Adjustment Pro Forma At
for the June 30, 1996
At June 30, Equity
1996 Investment
(A)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 364,837 $ 1,528,125 $ 1,892,962
Accounts receivable 47,255 47,255
Note receivable - current 46,971 46,971
Inventory 18,000 18,000
Prepaid expenses and other 35,072 35,072
-------------- -------------- --------------
Total current assets 512,135 1,528,125 2,040,260
-------------- -------------- --------------
Property and equipment, net 48,094 48,094
Note receivable - noncurrent 196,434 196,434
Other assets 11,888 11,888
============== ============== ==============
Total assets $ 768,551 $ 1,528,125 $ 2,296,676
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses and other current liabilities $ 139,579 $ 139,579
Deferred revenue 32,000 32,000
-------------- --------------
Total current liabilities 171,579 171,579
-------------- --------------
Stockholders' equity:
Common stock, $.01 par value 63,982 $ 15,850 79,832
Additional paid-in capital 7,205,152 1,512,275 8,717,427
Accumulated deficit (6,672,162) (6,672,162)
-------------- -------------- --------------
Total stockholders' equity 596,972 1,528,125 2,125,097
============== ============== ==============
Total liabilities and stockholders' equity $ 768,551 $ 1,528,125 $ 2,296,676
============== ============== ==============
</TABLE>
(A) Adjustment reflects the $1,783,125 proceeds from the sale of 1,585,000
shares of $.01 par value common stock for $1.125 per share less estimates for
costs for consummation of the agreement and sale and registration of the shares.
EXHIBIT 4.5
Warrants
Agreement and Warrant to Purchase 792,500 Common Shares
Spatialight, Inc.
This certifies that, for value received, Jalcanto, Ltd., the registered
holder hereof (the "Warrantholder") is entitled to purchase from Spatialight,
Inc., a New York corporation with its principal office at 8-C Commercial
Boulevard, Novato, California 94949 (the "Company") Seven Hundred Ninety Two
Thousand Five Hundred (792,500) shares of common stock of the Company (the
"Shares") at or before 5:00 p.m. Eastern Standard Time on July 15, 2001 at the
purchase price per share of $1.00 if exercised on or before July15, 1997, $1.25
if exercised between July 16, 1997 through July 15, 1999, and $1.50 thereafter
(the "Warrant Price"), subject to the following terms and conditions. The number
of Shares purchasable upon exercise of this Warrant and the Warrant Price per
Share shall be subject to adjustment from time to time as set forth herein.
1. Consideration for Warrant.
This Warrant is granted in connection with the purchase by Warrant holder of
Seven Hundred Ninety Two Thousand Five Hundred (792,500) shares of common stock
of Spatialight, Inc., pursuant to the Share Purchase Agreement dated July 10th,
1996.
2. Exercise.
This Warrant may be exercised in whole or in part at any time by presentation of
this Warrant with the Purchase Form as attached hereto duly completed and
executed, together with payment of the Warrant Price at the principal office of
the Company, provided that prior to July 15, 1997, the Warrantholder may
exercise this Warrant only to the extent that, following such exercise, the
Warrantholder would own less than 9.9 percent of the then outstanding stock of
the Company. Payment of the Warrant Price may be made in cash, by wire transfer
or by check. Upon surrender of the Warrant and payment of such Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Warrantholder and in such name or
names as the Warrantholder may designate a certificate or certificates for the
number of full Shares so purchased upon the exercise of the Warrant, together
with Fractional Warrants, as provided in Section 8 hereof, in respect of any
fractional Shares otherwise issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
Shares as of the date of the surrender of the Warrant and the payment of the
Warrant Price, as aforesaid, notwithstanding that the certificates representing
the Shares shall not actually have been delivered or that the stock transfer
books of the Company shall then be closed. The Warrant shall be exercisable, at
the election of the Warrantholder, either in full or from time to time in part
and, in the event that a certificate evidencing the Warrant is exercised in
respect of less than all of the Shares specified therein at any time prior to
the Termination Date, a new certificate evidencing the remaining Warrant will be
issued by the Company. The Company shall pay any and all transfer taxes or
similar charges which may become due upon exercise of the Warrant.
3. Reservation of Shares.
There has been reserved, and the Company shall at all times keep reserved so
long as the Warrant remains outstanding, out of its authorized Common Shares,
such number of Shares as shall be subject
<PAGE>
to purchase under the Warrant. Every transfer agent for the Common Shares and
other securities of the Company issuable upon the exercise of the Warrant will
be irrevocably authorized and directed at all times to reserve such number of
authorized Shares and other securities as shall be requisite for such purpose.
The Company will keep a copy of this Warrant on file with every transfer agent
for the Common Shares and other securities of the Company issuable upon the
exercise of the Warrant. The Company will supply such transfer agent with duly
executed stock and other certificates for such purpose.
4. Further Obligations of Company.
4.1 The Company covenants and agrees that all Shares which may be
delivered upon exercise of this Warrant shall, upon delivery, be
fully paid and non-assessable, and be free from all taxes, liens
and charges with respect to the purchase thereof hereunder, and
without limiting the generality of the foregoing, the Company
covenants and agrees that it shall from time to time take all
such action as may be necessary to assure that the par value per
share of the Common Shares is at all times equal to or less than
the then current Warrant Price per share of the Common Shares
issuable pursuant to this Warrant.
4.2 If the Warrantholder claims that this Warrant has been
mutilated, lost, destroyed or wrongfully taken, the Company
shall issue and deliver to the Warrantholder a replacement
Warrant provided that the requirements of Section 8-405 of the
New York Uniform Commercial Code has been met and, if this
Warrant has been mutilated, that it is surrendered to the
Company.
4.3 So long as the Warrants are outstanding, the Company shall not
issue any additional Shares or securities convertible into
Shares (with the exception of Shares issuable upon exercise of
options issued under the Company's existing stock option plans)
without the consent of the Warrantholder. This restriction shall
not apply, however, if the average closing price of the Company'
common stock for the five days preceding the proposed issuance
exceeds $5.00.
5. Registration and Transfer.
The Warrant shall be registered on the books of the Company when issued and
shall be transferable only on the books of the Company maintained at its
principal office in Rochester, New York, or wherever its principal executive
offices may then be located, upon delivery thereof duly endorsed by the
Warrantholder or its duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer. Upon any
registration or transfer, the Company shall execute and deliver a new Warrant to
the person entitled thereto.
6. Exchange of Warrant Certificate.
This Warrant certificate may be exchanged for another certificate or
certificates entitling the Warrantholder to purchase a like aggregate number of
Shares as the certificate or certificates surrendered then entitled the
Warrantholder to purchase. The Warrantholder desiring to exchange a Warrant
certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate evidencing the Warrant to be
so exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate as so requested.
<PAGE>
7. Adjustment of Warrant Price and Number of Shares.
7.1. General. The number of Shares purchasable upon the exercise of
-------
the Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the happening of certain events, as
follows:
7.1.1. In case the Company shall, with regard to its Common
Shares (or securities convertible into or exchangeable for
Common Shares) (A) pay a dividend in Common Shares or make
a distribution in Common Shares, (B) subdivide its
outstanding Common Shares into a greater number of Shares,
(C) combine its outstanding Common Shares into a smaller
number of Common Shares, or (D) issue by reclassification
of its Common Shares other securities of the Company, the
number of Shares purchasable upon exercise of the Warrant
immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and
number of Shares or other securities of the Company which
it would have owned or would have been entitled to receive
after the happening of any of the events described above,
had the Warrant been exercised immediately prior to the
happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this subsection
shall become effective immediately after the effective
date of such event retroactive to the record date, if any,
for such event.
7.1.2. No adjustment in the number of Shares purchasable
hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent in
the aggregate number of Shares then purchasable upon the
exercise of the Warrant; provided however, that any
adjustments which by reason of this Section 7.12 are not
required to be made immediately shall be carried forward
and taken into account in any subsequent adjustment.
7.1.3. Whenever the number of Shares purchasable upon the
exercise of the Warrant is adjusted as herein provided,
the Warrant Price payable upon exercise of the Warrant
shall be adjusted by multiplying such Warrant Price
immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of Shares
purchasable upon the exercise of the Warrant immediately
prior to such adjustment, and of which the denominator
shall be the number of shares so purchasable immediately
thereafter.
7.1.4. Whenever the number of Shares purchasable upon the
exercise of this Warrant or the Warrant Price is adjusted
as herein provided, the Company shall cause to be promptly
mailed to the Warrantholder in accordance with the
provisions of Section 11 hereof, notice of such adjustment
or adjustments and a certificate of a firm of independent
public accountants selected by the Board of Directors of
the Company (who may be the regular accountants employed
by the Company) setting forth the number of Shares
purchasable upon the exercise of the Warrant and the
Warrant Price after such adjustment, a brief statement of
the facts requiring such adjustment, and the computation
by which such adjustment was made.
<PAGE>
7.1.5. For the purpose of this Section 7.1, the term "Common
Shares" shall mean (A) the class of shares designated as
the Common Shares of the Company at the date of this
Agreement, or (B) any other class of shares resulting from
successive changes or reclassifications of such Common
Shares including changes in par value, or from par value
to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made
pursuant to this Section 7, the Warrantholder shall become
entitled to purchase any shares of the Company other than
Common Shares, thereafter the number of such other shares
so purchasable upon exercise of the Warrant and the
Warrant Price of such shares shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Shares contained in this Section 7.
7.2. No Adjustment of Dividends. Except as provided in Section 7.1, no
--------------------------
adjustment in respect of dividends shall be made during the term
of the Warrant or upon the exercise of the Warrant.
7.3. Preservation of Purchase Rights upon Reorganization,
----------------------------------------------------
Reclassification, Consolidation, Merger, etc. In case of any
---------------------------------------------
capital reorganization or reclassification of the Common Shares
of the Company, or in case of any consolidation of the Company
with or merger of the Company into another corporation or in case
of any sale or conveyance to another person of the property,
assets or business of the Company as an entirety or substantially
as an entirety, the Company or such successor or purchaser, as
the case may be, shall execute with the Warrantholder an
agreement that the Warrantholder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to
such action to purchase upon exercise of the Warrant the kind and
amount of shares and other securities and property which it would
have owned or have been entitled to receive after the happening
of such reorganization or reclassification, consolidation,
merger, sale or conveyance had the Warrant been exercised
immediately prior to such action. In the event of a merger
described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, as amended, in which the Company is the surviving
corporation, the right to purchase Shares under the Warrant shall
terminate on the date of such merger and thereupon the Warrant
shall become null and void but only if the controlling
corporation shall agree to substitute for the Warrant its warrant
which entitles the holder thereof to purchase upon its exercise
the kind and amount of shares and other securities and property
which it would have owned or had been entitled to receive had the
Warrant been exercised immediately prior to such merger. The
adjustments required by this Section 7.3 shall be effected in a
manner which shall be as nearly equivalent as may be practicable
to the adjustments provided for elsewhere in this Section 7. The
provisions of this Section 7.3 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
7.4. Statement on Warrants. Irrespective of any adjustments in the
---------------------
Warrant Price or the number or kind of Shares purchasable upon
the exercise of the Warrant, the Warrant certificate or
certificates theretofore or thereafter issued may continue to
express the same price and number and kind of Shares as are
stated in this initially issued Warrant.
<PAGE>
8. Fractional Shares.
The Company shall not be required to issue fractional Shares on the exercise of
the Warrant. If any fraction of a Share would, except for the provisions of this
Section 8, be issuable on the exercise of the Warrant (or specified portion
thereof), the Company shall issue to the Warrantholder a fractional Warrant
entitling Warrantholder, upon surrender with other fractional Warrants
aggregating one or more full Shares, to purchase such full Shares. If fractional
Warrants do not aggregate a full Share, their value (over and above their
exercise price) shall be paid in full in cash upon exercise to the exercising
Warrantholder.
9. Registration.
9.1. The Company agrees that it will immediately prepare and file a
registration statement under the Securities Act of 1933 (the
"Act") covering all of the Shares together with the shares
purchased by the Warrant holder pursuant to the Shares Purchase
Agreement and will use its best efforts to cause such
registration statement to become effective as soon as practicable
(but no later than October 15, 1996) and to remain effective and
current, and take all other action necessary under any Federal or
state law or regulation of any governmental authority, including
but not limited to the filing of post effective amendments, if
necessary, to permit all Warrant Shares to be sold or otherwise
disposed of and will maintain such compliance with each such
Federal and state law and regulation of any governmental
authority for the period necessary for the Holder and such
Holders to effect the sale or disposition thereof.
9.2. To the extent not registered under Section 9.1 above, if at any
time before July 15, 2001, the Company proposes to register or
qualify any of its securities under the Act or any other
applicable federal or state law or regulation of governmental
authority, it will each such time give written notice to all the
then holders of this Warrant, if this Warrant has not yet
expired, and to all holders of Shares acquired by reason of
exercise of this Warrant, of its intention to do so and, upon the
written request of any such holder given within thirty (30) days
after receipt of any such notice (which request shall specify the
number of Shares intended to be sold or disposed of and describe
the nature of any proposed sale or other disposition thereof),
the Company will use its best efforts to cause such Shares so
specified to be registered or qualified under such laws or
regulations, to the extent requisite to permit the sale or other
disposition thereof (in accordance with the method described by
such holder, provided such method is in accordance with law). The
Company will keep effective and maintain any registration or
qualification specified in this Section 9.2 for a period of not
less than six months.
9.3. Whenever the Company is required by the provisions of Section 9.1
or 9.2 of this Section 9 to effect a registration or
qualification of any Shares, the Company will furnish to each
holder whose Shares are the subject of such registration or
qualification such number of copies of any prospectus (including
any preliminary or summary prospectus) or other like document as
such holder may reasonably request in order to effect the sale of
the securities to be sold by such holder, and will use its best
efforts to qualify such securities under such state securities or
Blue Sky laws as may be requisite for such purpose. All expenses
incurred by the Company in connection with any registration or
qualification, including registration or filing fees, printing
expenses and
<PAGE>
fees, compensation of regular employees of the Company and
disbursements of counsel and of independent accountants of the
Company shall be borne by the Company. Underwriters' commissions
(if any) and the fees of counsel for any holder of Shares
subject to such registration or qualification shall be borne (in
such respective amounts as shall be determined by them) by the
person or persons requesting such registration or qualification
pursuant to this Section 9.
9.4. Each holder whose securities are the subject of registration or
qualification under this Section 9 agrees to furnish to the
Company such information concerning such holder as may be
requested by the Company which is necessary in connection with
any such registration or qualification.
9.5. In the event that the Company shall be obligated to use its best
efforts to effect any registration or qualification under either
Section 9.1 or 9.2:
9.5.1. The Company will indemnify and hold harmless each holder
whose securities are the subject of a registration or
qualification under this Section 9 and each underwriter
of the securities so registered or qualified (including
any broker or dealer through whom such securities may be
sold) and each person, if any, who controls any such
holder or any such underwriter within the meaning of
Section 15 of the Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint
or several, to which they or any of them may become
subject under the Act or under any other statute or at
common law or otherwise, and except as hereinafter
provided, will reimburse each such holder and each of
the underwriters and each such controlling person, if
any, for any legal or other expenses reasonably incurred
by them or any of them in connection with investigating
or defending any actions, whether or not resulting in
any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue
statement of a material fact contained in the
registration statement, in any preliminary or amended
preliminary prospectus or in the prospectus (or the
registration statement or prospectus as from time to
time amended or supplemented by the Company), or arise
out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary in order to make the
statements therein not misleading, unless such untrue
statement or omission was made in such registration
statement, preliminary or amended preliminary prospectus
or prospectus in reliance upon and in conformity with
information furnished in writing to the Company in
connection therewith by such holder or any underwriter
expressly for use therein. Promptly after receipt by any
holder or any underwriter or any person controlling such
holder or such underwriter of notice of the commencement
of any action in respect of which indemnity may be
sought against the Company, such holder or such
underwriter, as the case may be, will notify the Company
in writing of the commencement thereof, and subject to
the provisions hereinafter stated, the Company shall
assume the defense of such action (including the
employment of counsel, who shall be counsel satisfactory
to such holder or such underwriter or such person, as
the case may be), and the payment of expenses insofar as
such action shall relate to any alleged liability in
respect of which indemnity
<PAGE>
may be sought against the Company. Each holder or any
underwriter or any such controlling person shall have
the right to employ separate counsel in any such action
and to participate in the defense thereof but the fees
and expenses of such counsel shall not be at the expense
of the Company unless the employment of such counsel has
been specifically authorized by the Company. The Company
shall not be liable to indemnify any person for any
settlement of any such action effected without the
Company's consent; and
9.5.2. each holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who
has signed the registration statement and each person,
if any, who controls the Company within the meaning of
Section 15 of the Act from and against any and all
losses, claims, damages, expenses or liabilities, joint
or several, to which they or any of them may become
subject under the Act or under any other statute or at
common law or otherwise, and except as hereinafter
provided, will reimburse the Company and each such
director, officer or controlling person for any legal or
other expenses reasonably incurred by them or any of
them in connection with investigating or defending any
actions whether or not resulting in any liability,
insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a
material fact contained in the registration statement,
in any preliminary or amended preliminary prospectus or
in the prospectus (or the registration statement or
prospectus as from time to time amended or supplemented)
or arise out of or are based upon the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary in order to
make the statements therein not misleading, but only
insofar as any such statement or omission was made in
reliance upon and in conformity with information
furnished in writing to the Company in connection
therewith by such holder expressly for use therein.
Promptly after receipt of notice of the commencement of
any action in respect of which indemnity may be sought
against any holder, the Company will notify such holder
in writing of the commencement thereof, and such holder,
the Company will notify such holder in writing of the
commencement thereof, and such holder shall, subject to
the provisions hereinafter stated, assume the defense of
such action (including the employment of counsel, who
shall be counsel satisfactory to the Company) and the
payment of expenses insofar as such action shall relate
to an alleged liability in respect of which indemnity
may be sought against such holder. The Company and each
such director, officer or controlling person shall have
the right to employ separate counsel in any such action
and to participate in the defense thereof but the fees
and expenses of such counsel shall not be at such
holder's expense unless the employment of such counsel
has been specifically authorized by such holder. Such
holder shall not be liable to indemnify any person for
any settlement of any such action effected without such
holder's consent.
10. No Rights as Shareholder; Notices to Warrantholder.
Nothing contained in this Agreement or in any of the Warrants shall be construed
as conferring upon the Warrantholder or its transferees any rights as a
shareholder of the Company, including the right to
<PAGE>
vote, receive dividends, or consent as a shareholder in respect of any meeting
of shareholders for the election of directors of the Company or any other
matter. However, the Company shall be required to give notice in writing to the
Warrantholder of any meeting of shareholders of the Company or any proposed
consent of the shareholders as provided in Section 11 hereof at least twenty
(20) days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the shareholders entitled to any
relevant dividend, distribution, subscription rights or other rights or for the
determination of shareholders entitled to vote at any such meeting or as to
which any consent is requested. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be.
11. Notices.
Any notice pursuant to this Agreement by the Company or by the Warrantholder
shall be in writing and shall be deemed to have been duly given if delivered by
hand or if mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
11.1. If to the Warrantholder - addressed to
------------------------------------------------------.
11.2. If to the Company - addressed to Spatialight, Inc., 8-C
Commercial Boulevard, Novato, California 94949, or to such other
address as any such party may designate by notice to the other
party. Notices shall be deemed given at the time they are
delivered personally or three days after they are mailed in the
manner set forth above.
12. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Warrantholder shall bind and inure to the benefit of their
respective successors and assigns hereunder.
13. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into any other corporation or
sell all or substantially all of its property to another person, unless the
provisions of Section 7.3 are complied with.
14. Applicable Law.
This Agreement shall be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be construed in accordance with the laws
of said State applicable to contracts made and to be performed entirely within
such State.
15. Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
<PAGE>
16. Further Assurances.
From time to time after the Closing, the Company shall promptly execute and
deliver to each Warrantholder such further agreements, assurances or other
instruments of transfer as the Warrantholder may reasonably request in order to
vest and confirm ownership of the Shares and the Warrants in the Warrantholder
and to effectuate the purposes, terms and conditions of this Agreement.
17. Headings.
The headings in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officers and the corporate seal hereunto fixed.
SPATIALIGHT, INC.
(corporate seal)
By: /s/ William E. Hollis
---------------------
Attest: William E. Hollis
President
/s/ Alan S. Lockwood
- --------------------
Alan S. Lockwood
Secretary
<PAGE>
Agreement and Warrant to Purchase 792,500 Common Shares
Spatialight, Inc.
This certifies that, for value received, Sabotini, Ltd., the registered
holder hereof (the "Warrantholder") is entitled to purchase from Spatialight,
Inc., a New York corporation with its principal office at 8-C Commercial
Boulevard, Novato, California 94949 (the "Company") Seven Hundred Ninety Two
Thousand Five Hundred (792,500) shares of common stock of the Company (the
"Shares") at or before 5:00 p.m. Eastern Standard Time on July 15, 2001 at the
purchase price per share of $1.00 if exercised on or before July15, 1997, $1.25
if exercised between July 16, 1997 through July 15, 1999, and $1.50 thereafter
(the "Warrant Price"), subject to the following terms and conditions. The number
of Shares purchasable upon exercise of this Warrant and the Warrant Price per
Share shall be subject to adjustment from time to time as set forth herein.
1. Consideration for Warrant.
This Warrant is granted in connection with the purchase by Warrant holder of
Seven Hundred Ninety Two Thousand Five Hundred (792,500) shares of common stock
of Spatialight, Inc., pursuant to the Share Purchase Agreement dated July 10th,
1996.
2. Exercise.
This Warrant may be exercised in whole or in part at any time by presentation of
this Warrant with the Purchase Form as attached hereto duly completed and
executed, together with payment of the Warrant Price at the principal office of
the Company, provided that prior to July 15, 1997, the Warrantholder may
exercise this Warrant only to the extent that, following such exercise, the
Warrantholder would own less than 9.9 percent of the then outstanding stock of
the Company. Payment of the Warrant Price may be made in cash, by wire transfer
or by check. Upon surrender of the Warrant and payment of such Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Warrantholder and in such name or
names as the Warrantholder may designate a certificate or certificates for the
number of full Shares so purchased upon the exercise of the Warrant, together
with Fractional Warrants, as provided in Section 8 hereof, in respect of any
fractional Shares otherwise issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
Shares as of the date of the surrender of the Warrant and the payment of the
Warrant Price, as aforesaid, notwithstanding that the certificates representing
the Shares shall not actually have been delivered or that the stock transfer
books of the Company shall then be closed. The Warrant shall be exercisable, at
the election of the Warrantholder, either in full or from time to time in part
and, in the event that a certificate evidencing the Warrant is exercised in
respect of less than all of the Shares specified therein at any time prior to
the Termination Date, a new certificate evidencing the remaining Warrant will be
issued by the Company. The Company shall pay any and all transfer taxes or
similar charges which may become due upon exercise of the Warrant.
<PAGE>
3. Reservation of Shares.
There has been reserved, and the Company shall at all times keep reserved so
long as the Warrant remains outstanding, out of its authorized Common Shares,
such number of Shares as shall be subject to purchase under the Warrant. Every
transfer agent for the Common Shares and other securities of the Company
issuable upon the exercise of the Warrant will be irrevocably authorized and
directed at all times to reserve such number of authorized Shares and other
securities as shall be requisite for such purpose. The Company will keep a copy
of this Warrant on file with every transfer agent for the Common Shares and
other securities of the Company issuable upon the exercise of the Warrant. The
Company will supply such transfer agent with duly executed stock and other
certificates for such purpose.
4. Further Obligations of Company.
4.1 The Company covenants and agrees that all Shares which may be
delivered upon exercise of this Warrant shall, upon delivery, be
fully paid and non-assessable, and be free from all taxes, liens
and charges with respect to the purchase thereof hereunder, and
without limiting the generality of the foregoing, the Company
covenants and agrees that it shall from time to time take all
such action as may be necessary to assure that the par value per
share of the Common Shares is at all times equal to or less than
the then current Warrant Price per share of the Common Shares
issuable pursuant to this Warrant.
4.2 If the Warrantholder claims that this Warrant has been
mutilated, lost, destroyed or wrongfully taken, the Company
shall issue and deliver to the Warrantholder a replacement
Warrant provided that the requirements of Section 8-405 of the
New York Uniform Commercial Code has been met and, if this
Warrant has been mutilated, that it is surrendered to the
Company.
4.3 So long as the Warrants are outstanding, the Company shall not
issue any additional Shares or securities convertible into
Shares (with the exception of Shares issuable upon exercise of
options issued under the Company's existing stock option plans)
without the consent of the Warrantholder. This restriction shall
not apply, however, if the average closing price of the Company'
common stock for the five days preceding the proposed issuance
exceeds $5.00.
5. Registration and Transfer.
The Warrant shall be registered on the books of the Company when issued and
shall be transferable only on the books of the Company maintained at its
principal office in Rochester, New York, or wherever its principal executive
offices may then be located, upon delivery thereof duly endorsed by the
Warrantholder or its duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer. Upon any
registration or transfer, the Company shall execute and deliver a new Warrant to
the person entitled thereto.
6. Exchange of Warrant Certificate.
This Warrant certificate may be exchanged for another certificate or
certificates entitling the Warrantholder to purchase a like aggregate number of
Shares as the certificate or certificates surrendered then entitled the
Warrantholder to purchase. The Warrantholder desiring to exchange a
<PAGE>
Warrant certificate shall make such request in writing delivered to the Company,
and shall surrender, properly endorsed, the certificate evidencing the Warrant
to be so exchanged. Thereupon, the Company shall execute and deliver to the
person entitled thereto a new Warrant certificate as so requested.
7. Adjustment of Warrant Price and Number of Shares.
7.1 General. The number of Shares purchasable upon the exercise of
-------
the Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the happening of certain events, as
follows:
7.2 In case the Company shall, with regard to its Common Shares (or
securities convertible into or exchangeable for Common Shares)
(A) pay a dividend in Common Shares or make a distribution in
Common Shares, (B) subdivide its outstanding Common Shares into
a greater number of Shares, (C) combine its outstanding Common
Shares into a smaller number of Common Shares, or (D) issue by
reclassification of its Common Shares other securities of the
Company, the number of Shares purchasable upon exercise of the
Warrant immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number
of Shares or other securities of the Company which it would have
owned or would have been entitled to receive after the happening
of any of the events described above, had the Warrant been
exercised immediately prior to the happening of such event or
any record date with respect thereto. Any adjustment made
pursuant to this subsection shall become effective immediately
after the effective date of such event retroactive to the record
date, if any, for such event.
7.3 No adjustment in the number of Shares purchasable hereunder
shall be required unless such adjustment would require an
increase or decrease of at least one percent in the aggregate
number of Shares then purchasable upon the exercise of the
Warrant; provided however, that any adjustments which by reason
of this Section 7.12 are not required to be made immediately
shall be carried forward and taken into account in any
subsequent adjustment.
7.4 Whenever the number of Shares purchasable upon the exercise of
the Warrant is adjusted as herein provided, the Warrant Price
payable upon exercise of the Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the
number of Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment, and of which the
denominator shall be the number of shares so purchasable
immediately thereafter.
7.5 Whenever the number of Shares purchasable upon the exercise of
this Warrant or the Warrant Price is adjusted as herein
provided, the Company shall cause to be promptly mailed to the
Warrantholder in accordance with the provisions of Section 11
hereof, notice of such adjustment or adjustments and a
certificate of a firm of independent public accountants selected
by the Board of Directors of the Company (who may be
<PAGE>
the regular accountants employed by the Company) setting forth
the number of Shares purchasable upon the exercise of the
Warrant and the Warrant Price after such adjustment, a brief
statement of the facts requiring such adjustment, and the
computation by which such adjustment was made.
7.6 For the purpose of this Section 7.1, the term "Common Shares"
shall mean (A) the class of shares designated as the Common
Shares of the Company at the date of this Agreement, or (B) any
other class of shares resulting from successive changes or
reclassifications of such Common Shares including changes in par
value, or from par value to no par value, or from no par value
to par value. In the event that at any time, as a result of an
adjustment made pursuant to this Section 7, the Warrantholder
shall become entitled to purchase any shares of the Company
other than Common Shares, thereafter the number of such other
shares so purchasable upon exercise of the Warrant and the
Warrant Price of such shares shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares
contained in this Section 7.
7.7 No Adjustment of Dividends. Except as provided in Section 7.1,
--------------------------
no adjustment in respect of dividends shall be made during the
term of the Warrant or upon the exercise of the Warrant.
7.8 Preservation of Purchase Rights upon Reorganization,
----------------------------------------------------
Reclassification, Consolidation, Merger, etc. In case of any
--------------------------------------------
capital reorganization or reclassification of the Common Shares
of the Company, or in case of any consolidation of the Company
with or merger of the Company into another corporation or in
case of any sale or conveyance to another person of the
property, assets or business of the Company as an entirety or
substantially as an entirety, the Company or such successor or
purchaser, as the case may be, shall execute with the
Warrantholder an agreement that the Warrantholder shall have the
right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of
the Warrant the kind and amount of shares and other securities
and property which it would have owned or have been entitled to
receive after the happening of such reorganization or
reclassification, consolidation, merger, sale or conveyance had
the Warrant been exercised immediately prior to such action. In
the event of a merger described in Section 368(a)(2)(E) of the
Internal Revenue Code of 1986, as amended, in which the Company
is the surviving corporation, the right to purchase Shares under
the Warrant shall terminate on the date of such merger and
thereupon the Warrant shall become null and void but only if the
controlling corporation shall agree to substitute for the
Warrant its warrant which entitles the holder thereof to
purchase upon its exercise the kind and amount of shares and
other securities and property which it would have owned or had
been entitled to receive had the Warrant been exercised
immediately prior to such merger. The adjustments required by
this Section 7.3 shall be effected in a manner which shall be as
nearly equivalent as may be practicable to the adjustments
provided for elsewhere in this Section 7. The provisions of this
Section 7.3 shall similarly apply to successive consolidations,
mergers, sales or conveyances.
7.9 Statement on Warrants. Irrespective of any adjustments in the
---------------------
Warrant Price or the number or kind of Shares purchasable upon
the exercise of the Warrant, the Warrant
<PAGE>
certificate or certificates theretofore or thereafter issued may
continue to express the same price and number and kind of Shares
as are stated in this initially issued Warrant.
8. Fractional Shares.
The Company shall not be required to issue fractional Shares on the exercise of
the Warrant. If any fraction of a Share would, except for the provisions of this
Section 8, be issuable on the exercise of the Warrant (or specified portion
thereof), the Company shall issue to the Warrantholder a fractional Warrant
entitling Warrantholder, upon surrender with other fractional Warrants
aggregating one or more full Shares, to purchase such full Shares. If fractional
Warrants do not aggregate a full Share, their value (over and above their
exercise price) shall be paid in full in cash upon exercise to the exercising
Warrantholder.
9. Registration.
9.1 The Company agrees that it will immediately prepare and file a
registration statement under the Securities Act of 1933 (the
"Act") covering all of the Shares together with the shares
purchased by the Warrant holder pursuant to the Shares Purchase
Agreement and will use its best efforts to cause such
registration statement to become effective as soon as
practicable (but no later than October 15, 1996) and to remain
effective and current, and take all other action necessary under
any Federal or state law or regulation of any governmental
authority, including but not limited to the filing of post
effective amendments, if necessary, to permit all Warrant Shares
to be sold or otherwise disposed of and will maintain such
compliance with each such Federal and state law and regulation
of any governmental authority for the period necessary for the
Holder and such Holders to effect the sale or disposition
thereof.
9.2 To the extent not registered under Section 9.1 above, if at any
time before July 15, 2001, the Company proposes to register or
qualify any of its securities under the Act or any other
applicable federal or state law or regulation of governmental
authority, it will each such time give written notice to all the
then holders of this Warrant, if this Warrant has not yet
expired, and to all holders of Shares acquired by reason of
exercise of this Warrant, of its intention to do so and, upon
the written request of any such holder given within thirty (30)
days after receipt of any such notice (which request shall
specify the number of Shares intended to be sold or disposed of
and describe the nature of any proposed sale or other
disposition thereof), the Company will use its best efforts to
cause such Shares so specified to be registered or qualified
under such laws or regulations, to the extent requisite to
permit the sale or other disposition thereof (in accordance with
the method described by such holder, provided such method is in
accordance with law). The Company will keep effective and
maintain any registration or qualification specified in this
Section 9.2 for a period of not less than six months.
9.3 Whenever the Company is required by the provisions of Section
9.1 or 9.2 of this Section 9 to effect a registration or
qualification of any Shares, the Company will furnish to each
holder whose Shares are the subject of such registration or
qualification such number of copies of any prospectus (including
any preliminary or summary prospectus) or other like document as
such holder may reasonably request in order to effect the sale
of the securities to be sold by such holder, and will use its
best efforts to
<PAGE>
qualify such securities under such state securities or Blue Sky
laws as may be requisite for such purpose. All expenses incurred
by the Company in connection with any registration or
qualification, including registration or filing fees, printing
expenses and fees, compensation of regular employees of the
Company and disbursements of counsel and of independent
accountants of the Company shall be borne by the Company.
Underwriters' commissions (if any) and the fees of counsel for
any holder of Shares subject to such registration or
qualification shall be borne (in such respective amounts as
shall be determined by them) by the person or persons requesting
such registration or qualification pursuant to this Section 9.
9.4 Each holder whose securities are the subject of registration or
qualification under this Section 9 agrees to furnish to the
Company such information concerning such holder as may be
requested by the Company which is necessary in connection with
any such registration or qualification.
9.5 In the event that the Company shall be obligated to use its best
efforts to effect any registration or qualification under either
Section 9.1 or 9.2:
9.6 The Company will indemnify and hold harmless each holder whose
securities are the subject of a registration or qualification
under this Section 9 and each underwriter of the securities so
registered or qualified (including any broker or dealer through
whom such securities may be sold) and each person, if any, who
controls any such holder or any such underwriter within the
meaning of Section 15 of the Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under
the Act or under any other statute or at common law or
otherwise, and except as hereinafter provided, will reimburse
each such holder and each of the underwriters and each such
controlling person, if any, for any legal or other expenses
reasonably incurred by them or any of them in connection with
investigating or defending any actions, whether or not resulting
in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, in any preliminary
or amended preliminary prospectus or in the prospectus (or the
registration statement or prospectus as from time to time
amended or supplemented by the Company), or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such
untrue statement or omission was made in such registration
statement, preliminary or amended preliminary prospectus or
prospectus in reliance upon and in conformity with information
furnished in writing to the Company in connection therewith by
such holder or any underwriter expressly for use therein.
Promptly after receipt by any holder or any underwriter or any
person controlling such holder or such underwriter of notice of
the commencement of any action in respect of which indemnity may
be sought against the Company, such holder or such underwriter,
as the case may be, will notify the Company in writing of the
commencement thereof, and subject to the provisions hereinafter
stated, the Company shall assume the defense of such action
(including the employment of counsel, who shall be counsel
satisfactory to such holder or such underwriter or such person,
as the case may be), and the payment of expenses insofar as such
action shall relate to any alleged liability in respect of
<PAGE>
which indemnity may be sought against the Company. Each holder
or any underwriter or any such controlling person shall have the
right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Company unless
the employment of such counsel has been specifically authorized
by the Company. The Company shall not be liable to indemnify any
person for any settlement of any such action effected without
the Company's consent; and
9.7 each holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the
registration statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act from and
against any and all losses, claims, damages, expenses or
liabilities, joint or several, to which they or any of them may
become subject under the Act or under any other statute or at
common law or otherwise, and except as hereinafter provided, will
reimburse the Company and each such director, officer or
controlling person for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating
or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in the registration statement, in any preliminary or
amended preliminary prospectus or in the prospectus (or the
registration statement or prospectus as from time to time amended
or supplemented) or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with
information furnished in writing to the Company in connection
therewith by such holder expressly for use therein. Promptly
after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against any holder, the
Company will notify such holder in writing of the commencement
thereof, and such holder, the Company will notify such holder in
writing of the commencement thereof, and such holder shall,
subject to the provisions hereinafter stated, assume the defense
of such action (including the employment of counsel, who shall be
counsel satisfactory to the Company) and the payment of expenses
insofar as such action shall relate to an alleged liability in
respect of which indemnity may be sought against such holder. The
Company and each such director, officer or controlling person
shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and
expenses of such counsel shall not be at such holder's expense
unless the employment of such counsel has been specifically
authorized by such holder. Such holder shall not be liable to
indemnify any person for any settlement of any such action
effected without such holder's consent.
10. No Rights as Shareholder; Notices to Warrantholder.
Nothing contained in this Agreement or in any of the Warrants shall be construed
as conferring upon the Warrantholder or its transferees any rights as a
shareholder of the Company, including the right to vote, receive dividends, or
consent as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter. However, the Company
shall be required to give notice in writing to the Warrantholder of any meeting
of shareholders of the Company or any
<PAGE>
proposed consent of the shareholders as provided in Section 11 hereof at least
twenty (20) days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the shareholders entitled to any
relevant dividend, distribution, subscription rights or other rights or for the
determination of shareholders entitled to vote at any such meeting or as to
which any consent is requested. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be.
11. Notices.
Any notice pursuant to this Agreement by the Company or by the Warrantholder
shall be in writing and shall be deemed to have been duly given if delivered by
hand or if mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
11.1 If to the Warrantholder - addressed
to ______________________________________________________.
11.2 If to the Company - addressed to Spatialight, Inc., 8-C Commercial
Boulevard, Novato, California 94949, or to such other address as any
such party may designate by notice to the other party. Notices shall
be deemed given at the time they are delivered personally or three
days after they are mailed in the manner set forth above.
12. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Warrantholder shall bind and inure to the benefit of their
respective successors and assigns hereunder.
13. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into any other corporation or
sell all or substantially all of its property to another person, unless the
provisions of Section 7.3 are complied with.
14. Applicable Law.
This Agreement shall be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be construed in accordance with the laws
of said State applicable to contracts made and to be performed entirely within
such State.
15. Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
16. Further Assurances.
From time to time after the Closing, the Company shall promptly execute and
deliver to each Warrantholder such further agreements, assurances or other
instruments of transfer as the Warrantholder may reasonably request in order to
vest and confirm ownership of the Shares and the
<PAGE>
Warrants in the Warrantholder and to effectuate the purposes, terms and
conditions of this Agreement.
17. Headings.
The headings in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officers and the corporate seal hereunto fixed.
SPATIALIGHT, INC.
(corporate seal)
By: /s/ William E. Hollis
---------------------
Attest: William E. Hollis
President
/s/ Alan S. Lockwood
- --------------------
Alan S. Lockwood
Secretary
EXHIBIT 10.32
Share Purchase Agreements
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement is made the 10 day of July, 1996, by and
between Spatialight, Inc., a New York corporation with a principal place of
business at 8-C Commercial Boulevard, Novato, California 94949 ("Spatialight")
and Jalcanto Ltd. (the "Investor").
RECITALS
The Investor desires to purchase and Company desires to issue and sell
792,500 shares of common stock, par value $.01, of the Company (the "Shares")
together with Warrants to purchase additional 792,500 shares for the
consideration recited in this Agreement.
1. Sale of the Shares; Purchase Price; Payment and Security
1.1. Subject to the terms and conditions hereof, the Company will
sell to the Investor, and the Investor will purchase, the Shares
and Warrants for the Purchase Price set forth herein on the
Closing Date. The Investor will purchase that number of Shares
and Warrants set forth below.. .
1.2. The Purchase Price shall be $1.125 per share, or an aggregate of
$891,562.50, payable in cash upon delivery of the stock.
2. Closing Date and Delivery
2.1. Closing Date. The closing of the purchase and sale of the Shares
(the "Closing") shall be held at 14 East 82nd Street, New York,
New York, on or before July 15, 1996 (the "Closing Date").
2.2. Delivery. At the Closing, the Company will deliver to Investor
certificate for the Shares and an executed Warrant Agreement
representing the securities. The Investor shall deliver to the
Company the Purchase Price, by wire transfer to coordinates
provided by the Company.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Investor as follows:
3.1 Organization and Standing. Spatialight, Inc. is a corporation
duly organized and validly existing under the laws of the State
of New York and is in good standing as a domestic corporation
under the laws of said state, is qualified to do business in
each jurisdiction in which failure to so qualify would have a
material adverse effect on the Company, and has the corporate
power and authority to own or lease its properties and to carry
on its business as now being conducted. Each of the subsidiaries
identified in the Company's Form 10-K for the fiscal year ended
December 31, 1995 ("1995 10-K") is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation is qualified to do business in
each jurisdiction in which failure to so qualify would have a
material adverse effect on such subsidiary, and has the power
and authority to own or lease and operate its properties and to
carry on its business as now being conducted.
<PAGE>
3.2. Authorization. The execution, delivery and performance of this
Agreement, and the issuance and delivery of the Shares and
Warrants by the Company have been duly authorized by all
requisite corporate action, and this Agreement constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms, subject as to enforcement of remedies
to applicable bankruptcy, insolvency, reorganization or similar
laws relating to or affecting the enforcement of creditors'
rights.
3.3. No Violation. The execution, delivery and performance of this
Agreement will not violate any provisions of the Certificate of
Incorporation or by-laws of the Company, or cause default under
any agreement or instrument to which the Company is a party or
by which any of its property or assets is bound, or any order,
rule or regulation to which the Company is a party or by which
they may be bound.
3.4. Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, par value of $.01
per share, of which 6,353,191 shares are issued and outstanding
on the date of this Agreement and there are no shares held in
the treasury. All outstanding shares of Common Stock of the
Company are duly authorized and validly issued, fully paid and
non-assessable and have not been issued in violation of any
pre-emptive rights of stockholders. All of the issued and
outstanding shares of capital stock of the subsidiaries of the
Company are duly authorized and validly issued, are fully paid
and non-assessable and have not been issued in violation of any
pre-emptive rights of stockholders, and are owned by the Company
free and clear of all liens, charges, claims and encumbrances.
3.5. Voting Agreements; Stockholders' Agreements. There are no voting
trusts or other agreements or undertakings with respect to the
voting of the Common Stock.
3.6. Options. Except for options to purchase an aggregate of 550,000
shares of the Company's Common Stock outstanding pursuant to the
Company's 1991 Stock Option Plan, 1993 Employee Stock Option
Plan and 1993 Director Stock Option Plan, there are no
outstanding subscriptions, options, warrants, rights or other
agreements or commitments providing for the issuance of, or the
granting of rights to acquire from the Company, any shares of
Common Stock of the Company or any securities convertible into
or exchangeable for, Common Stock of the Company. All shares of
the Company's Common Stock reserved or issuance upon exercise of
outstanding options, are issuable without violation of any
pre-emptive rights of stockholders.
3.7. No Breach of Statute or Contract; Governmental Authorization.
Neither the execution and delivery of this Agreement nor
compliance with the terms and conditions hereof by the Company
will breach any statute or regulation of any governmental
authority, domestic or foreign, or will result in a breach of
any term, condition or provision of any judgment, order,
injunction, decree or ruling of any court or governmental
authority, domestic or foreign, to which the Company is a party
or by which it is bound or constitute a material default
thereunder, in each case the breach of which or default
thereunder would have, or in the future would have, a materially
adverse effect upon the Company, or give to others any interest
or right, in or with respect to any of the properties, assets,
in or with respect to any of the properties, assets, agreements,
contracts or business operations of the Company.
3.8. Prospectuses; Proxy Statements; SEC Reports. The Company has
previously furnished to the Investor true and complete copies of
(1) the definitive proxy statement filed by the Company with the
Securities and Exchange Commission ("SEC") dated
<PAGE>
April 15, 1996, for the annual meeting of stockholders; and (b)
the Company's 1995 10-K, the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996 (the "First Quarter
10-Q") and all other reports filed by the Company with the SEC
on or after March 31, 1996; all documents listed in subsections
(a) and (b) together with all exhibits thereto being referred to
collectively as the "Company's SEC filings". The Company has
duly filed all reports required to be filed by it with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934
Act"). The Company's SEC filings and all such reports are
complete and correct in all material respects, conform in all
material respects to the requirements of the 1934 Act and the
rules and regulations promulgated thereunder and at the time
they were filed did not contain any untrue statements of a
material fact or fail to state any material facts necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, except that the SEC has
notified the Company that it neglected to file a Financial Data
Schedule with its Form 10-Q for the period ended March 31, 1996
(which Financial Data Schedule shall be prepared and filed as
soon as practicable). All amendments, if any, required to update
the Company's SEC filings have been filed.
3.9. NASDAQ Filings. The Company has made all necessary filings with
the NASDAQ Stock Market, and is current in all such filings. The
Company has received no notices of violation from the NASD,
except that NASD has notified the Company that its net capital
falls below the minimum for continued listing as a NASDAQ Small
Cap stock. The consummation of the transactions contemplated
herein will cure the deficiency.
3.10. Financial Statements. The Company has previously furnished to
Investor a true and complete copy of its 1995 10-K and First
Quarter 10-Q. The audited consolidated financial statements
included in the 1995 10-K and, subject to normal adjustments not
material in amount or effect, the necessity of which an audit
would reveal, the unaudited financial statements included in the
First Quarter 10-Q fairly present the consolidated financial
position of the Company and its subsidiaries and results of
operations for the respective periods or as of the respective
dates therein set forth, in accordance with generally accepted
accounting principles consistently applied during the periods
involved (except as otherwise stated therein). There has not
been any change between March 31, 1996 and the date of this
Agreement which has affected materially or adversely the
business or properties or condition, financial or other, or
results of operation of the Company, and no fact or condition
exists or, to the knowledge of the Company, is contemplated or
threatened which might cause any such change at any time in the
future.
3.11. Absence of Material Adverse Change; Conduct of Business. Except
as described in any of the Company's SEC Filings, since March
31, 1996 (a) there has not been any change in the financial
condition, properties, business, results of operations or
prospects (financial or otherwise) of the Company and its
subsidiaries taken as a whole which has affected or may
reasonably be expected to materially and adversely affect the
business or financial condition of the Company and its
subsidiaries taken as a whole; and (b) the Company and each of
its subsidiaries have conducted its businesses only in, and has
not taken any action other than in, the ordinary course of
business.
3.12. Litigation; Investigation. Except as described in the Company's
SEC Filings or otherwise disclosed herein: (a) no notice has
been received that a material investigation or review by any
governmental entity with respect to the Company or any
<PAGE>
of its subsidiaries is pending nor is any such investigation or
review threatened, nor has any governmental entity indicated to
the Company or any of its subsidiaries an intention to conduct
the same; and (b) there is no action, suit, arbitration or claim
or proceeding pending or, threatened against or affecting the
Company or any of its subsidiaries at law or in equity, or
before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality
which either singularly or in the aggregate would, if adversely
determined, result in any material adverse change in the
financial condition, properties, business, result of operations
or prospects (financial or otherwise) of the Company and its
subsidiaries taken as a whole; and (c) no suit, action,
proceeding or investigation is pending or threatened before any
court or governmental agency to restrain or prohibit, or to
obtain damages, a discovery order or other release in connection
with this Agreement or the consummation of the transactions
contemplated hereby.
3.13. Income Taxes; Other Taxes. The Company and each of its
subsidiaries has filed all Federal, state, county and local
income and franchise taxes, sales taxes, use taxes, gross
receipts taxes or employment, payroll and withholding taxes and
all of the tax returns, reports and declarations which are or
have been required to be filed by it and has paid or made
provisions for the payment of, all such taxes which were due
pursuant to said returns or pursuant to any assessments received
by it except with respect to any such returns, taxes, or
assessments as to which the failure to file or make payment
would not have a material adverse affect on the business or
assets of the Company and its subsidiaries taken as a whole. The
Company files a consolidated income tax return with all of its
subsidiaries. The Federal income tax returns of the Company and
its subsidiaries have not been subject to any audits. Neither
the Company nor any of its subsidiaries is a party to any
pending action or proceeding by any governmental authority, for
assessment or collection of taxes, except for such taxes,
penalties and interests which in the aggregate are not material
in amount. Neither the Company nor any of its subsidiaries know
of any basis for a deficiency assessment in any Federal, state,
county or local income taxes or franchise taxes, sales taxes,
use taxes, gross receipt taxes of employment, payroll and
withholding taxes against it, except for such taxes, penalties
and interests which in the aggregate are not material in amount.
Compliance with Applicable Law. The operation of the Company and
its subsidiaries substantially complies with all applicable
laws, ordinances, regulations, decrees and orders of any court
or governmental entity ("Rules"), except in respect to such
Rules as to which failure to comply would not materially and
adversely affect the financial condition, properties, business,
results of operations or prospects (financial or otherwise) of
the Company and its subsidiaries taken as a whole.
3.14 Compliance with Applicable Law. The operation of the Company
and its subsidiaries substantially complies with all applicable
laws, ordinances, regulations, decrees and orders of any court
or governmental entity ("Rules"), except in respect to such
Rules as to which failure to comply would not materially and
adversely affect the financial condition, properties, business,
results of operations or prospects (financial or otherwise)
of the Company and its subsidiaries taken as a whole.
3.15. No Default. Neither the Company nor any of its subsidiaries is
in default or violation in any respect of any term, condition or
provision of any of the following, the violation or default of
which would have a material adverse effect on the financial
condition, properties, business, results of operations, or
prospects (financial or otherwise) of the Company and its
subsidiaries taken as a whole:
3.15.1. The Certificate of Incorporation or By-laws of the
Company;
3.15.2. any mortgage, indenture, contract, agreement, lease or
other instrument to which the Company or any of its
subsidiaries is now a party or by which it or any of its
respective properties or assets may be bound;
<PAGE>
3.15.3. any agreement pursuant to which the Company has borrowed
or has the right to borrow monies; or
3.15.4. any judgment, decree or order applicable to the Company
or any of its subsidiaries.
3.16. Disclosure. Neither any of the information contained herein and
the documents specifically referred to herein furnished or to be
furnished to the Company and any other documents or material
furnished or made available to the Company contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated therein or
herein or necessary in order to make the statements therein or
herein, in light of the circumstances under which they shall
have been made, not misleading.
4. Representations and Warranties of the Investor. The Investor represents
and warrants to the Company as follows:
4.1. The Investor will execute and deliver a Subscription Agreement
in the form attached hereto as Exhibit B, and hereby makes the
representations and warranties set forth therein.
4.2. The Investor has the requisite capacity and authority for the
execution, delivery and performance of this Agreement. This
Agreement constitutes a valid and binding obligation of each
Investor enforceable in accordance with its terms, subject as to
enforcement of remedies to applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights.
4.3. The Investor acknowledges that the Company is a public company.
The Investor confirms that it has reviewed the periodic filings
of the Company with the SEC, had an opportunity to ask questions
of officials of the Company concerning the business of the
Company, and otherwise had full opportunity to obtain such
information as it deems necessary to making its decision to
purchase the Shares and Warrants upon the terms and conditions
set forth in this Agreement.
4.4. The Shares are not being purchased for resale, resyndication,
distribution, subdivision or fractionalization thereof nor are
the Shares being purchased with a view to or for sale in
connection with any distribution within the meaning of the
Securities Act of 1933, as amended
5. Company Covenants. The Company hereby covenants with the Investor as
follows:
5.1. The Company shall immediately commence the preparation and
filing of a registration statement registering the Shares and
the Shares underlying the Warrants for sale with the SEC. The
Company shall diligently prosecute the registration and shall
register the Shares no later than ninety (90) days after the
closing, and shall take any and all actions necessary to
maintain the effectiveness of the registration, including filing
post-effective amendments, if necessary, until each Investor
shall have disposed of its Shares (and the Shares underlying the
Warrants). Failure to complete the registration of the Shares
and the Shares underlying the Warranties within such ninety (90)
day period shall be and be deemed to be a material breach of
this Agreement.
5.2. The Company will use its best efforts to have its largest
shareholder, Raymond L. Bauch, agree that, for a period of two
(2) years following the closing, he will sell no more than one
percent (1%) of the outstanding stock of the Company in any
calendar quarter; provided, that Mr. Bauch shall be entitled to
participate as a selling
<PAGE>
shareholder if and to the extent, that the purchase is a selling
shareholder in a secondary public offering of the Company's
shares.
5.3. The Company agrees that it will pay a finder fee to Mr. Todd
McMahon of McMahon & Associates upon successful completion of
the transaction outlined herein, as negotiated between Mr.
McMahon and the Company. The parties hereto mutually represent
and warrant each to the other that no other broker or finder was
involved in arranging this transaction or has the right to
receive a commission or fee in connection herewith.
5.4. So long as the Warrants are outstanding, the Company shall not
issue any additional Shares or securities convertible into
Shares (with the exception of Shares issuable upon exercise of
options issued under the Company's existing stock option plans)
without the consent of the Purchaser. This restriction shall not
apply, however, if the average closing price of the Company'
common stock for the five days preceding the proposed issuance
exceeds $5.00.
5.5. Purchaser shall have the right of first refusal to provide debt
financing which the Company may require.
6. Further Assurances. From time to time after the Closing, the Company
shall promptly execute and deliver to each Investor such further
agreements, assurances or other instruments of transfer as the Investor
may reasonably request in order to vest and confirm ownership of the
Shares in the Buyer and to effectuate the purposes, terms and conditions
of this Agreement.
7. Indemnification. The Company shall indemnify and hold each Investor
harmless from and against any loss, damage or expense which may result
from (i) the inaccuracy or falsity of any representation or warranty of
Company hereunder, or (ii) the failure of Company to fulfill its
covenants hereunder.
8. Miscellaneous.
8.1. Amendments. Neither this Agreement nor any provisions hereof may
be changed, waived, discharged or terminated orally, but only by
a signed statement in writing.
8.2. Governing Laws. This Agreement shall be governed in all respects
by the laws of the State of New York.
8.3. Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the
transactions contemplated hereby.
8.4. Successors and Assigns. No party may assign this Agreement
without the express written consent of the other. Except as
otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties
hereto.
8.5. Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to
the subjects hereof and thereof.
8.6. Execution. Each party hereto may evidence its execution and
delivery hereof by facsimile delivery of an original signature
page at or prior to closing, which facsimile shall be deemed to
be an original for all purposes. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one in the
same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
SPATIALIGHT, INC.
By: /s/ William E. Hollis
---------------------
(signed in counterparts)
William E. Hollis
President
JALCANTO LTD.
By: /s/ Sharon F. Cairos
--------------------
(signed in counterparts)
Sharon F. Cairos
Director
<PAGE>
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement is made the 10 day of July, 1996, by and
between Spatialight, Inc., a New York corporation with a principal place of
business at 8-C Commercial Boulevard, Novato, California 94949 ("Spatialight")
and Sabotini Ltd. (the "Investor").
RECITALS
The Investor desires to purchase and Company desires to issue and sell
792,500 shares of common stock, par value $.01, of the Company (the "Shares")
together with Warrants to purchase additional 792,500 shares for the
consideration recited in this Agreement.
1. Sale of the Shares; Purchase Price; Payment and Security
1.1. Subject to the terms and conditions hereof, the Company will
sell to the Investor, and the Investor will purchase, the Shares
and Warrants for the Purchase Price set forth herein on the
Closing Date. The Investor will purchase that number of Shares
and Warrants set forth below.. .
1.2. The Purchase Price shall be $1.125 per share, or an aggregate of
$891,562.50, payable in cash upon delivery of the stock.
2. Closing Date and Delivery
2.1. Closing Date. The closing of the purchase and sale of the Shares
(the "Closing") shall be held at 14 East 82nd Street, New York,
New York, on or before July 15, 1996 (the "Closing Date").
2.2. Delivery. At the Closing, the Company will deliver to Investor
certificate for the Shares and an executed Warrant Agreement
representing the securities. The Investor shall deliver to the
Company the Purchase Price, by wire transfer to coordinates
provided by the Company.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Investor as follows:
3.1. Organization and Standing. Spatialight, Inc. is a corporation
duly organized and validly existing under the laws of the State
of New York and is in good standing as a domestic corporation
under the laws of said state, is qualified to do business in
each jurisdiction in which failure to so qualify would have a
material adverse effect on the Company, and has the corporate
power and authority to own or lease its properties and to carry
on its business as now being conducted. Each of the subsidiaries
identified in the Company's Form 10-K for the fiscal year ended
December 31, 1995 ("1995 10-K") is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation is qualified to do business in
each jurisdiction in which failure to so qualify would have a
material adverse effect on such subsidiary, and has the power
and authority to own or lease and operate its properties and to
carry on its business as now being conducted.
3.2. Authorization. The execution, delivery and performance of this
Agreement, and the issuance and delivery of the Shares and
Warrants by the Company have been duly authorized by all
requisite corporate action, and this Agreement constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms, subject as
<PAGE>
to enforcement of remedies to applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights.
3.3. No Violation. The execution, delivery and performance of this
Agreement will not violate any provisions of the Certificate of
Incorporation or by-laws of the Company, or cause default under
any agreement or instrument to which the Company is a party or
by which any of its property or assets is bound, or any order,
rule or regulation to which the Company is a party or by which
they may be bound.
3.4. Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, par value of $.01
per share, of which 6,353,191 shares are issued and outstanding
on the date of this Agreement and there are no shares held in
the treasury. All outstanding shares of Common Stock of the
Company are duly authorized and validly issued, fully paid and
non-assessable and have not been issued in violation of any
pre-emptive rights of stockholders. All of the issued and
outstanding shares of capital stock of the subsidiaries of the
Company are duly authorized and validly issued, are fully paid
and non-assessable and have not been issued in violation of any
pre-emptive rights of stockholders, and are owned by the Company
free and clear of all liens, charges, claims and encumbrances.
3.5. Voting Agreements; Stockholders' Agreements. There are no voting
trusts or other agreements or undertakings with respect to the
voting of the Common Stock.
3.6. Options. Except for options to purchase an aggregate of 550,000
shares of the Company's Common Stock outstanding pursuant to the
Company's 1991 Stock Option Plan, 1993 Employee Stock Option
Plan and 1993 Director Stock Option Plan, there are no
outstanding subscriptions, options, warrants, rights or other
agreements or commitments providing for the issuance of, or the
granting of rights to acquire from the Company, any shares of
Common Stock of the Company or any securities convertible into
or exchangeable for, Common Stock of the Company. All shares of
the Company's Common Stock reserved or issuance upon exercise of
outstanding options, are issuable without violation of any
pre-emptive rights of stockholders.
3.7. No Breach of Statute or Contract; Governmental Authorization.
Neither the execution and delivery of this Agreement nor
compliance with the terms and conditions hereof by the Company
will breach any statute or regulation of any governmental
authority, domestic or foreign, or will result in a breach of
any term, condition or provision of any judgment, order,
injunction, decree or ruling of any court or governmental
authority, domestic or foreign, to which the Company is a party
or by which it is bound or constitute a material default
thereunder, in each case the breach of which or default
thereunder would have, or in the future would have, a materially
adverse effect upon the Company, or give to others any interest
or right, in or with respect to any of the properties, assets,
in or with respect to any of the properties, assets, agreements,
contracts or business operations of the Company.
3.8. Prospectuses; Proxy Statements; SEC Reports. The Company has
previously furnished to the Investor true and complete copies of
(1) the definitive proxy statement filed by the Company with the
Securities and Exchange Commission ("SEC") dated April 15, 1996,
for the annual meeting of stockholders; and (b) the Company's
1995 10-K, the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 (the "First Quarter 10-Q") and all
other reports filed by the Company with the SEC on or after
March 31, 1996; all documents listed in subsections (a) and (b)
<PAGE>
together with all exhibits thereto being referred to
collectively as the "Company's SEC filings". The Company has
duly filed all reports required to be filed by it with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934
Act"). The Company's SEC filings and all such reports are
complete and correct in all material respects, conform in all
material respects to the requirements of the 1934 Act and the
rules and regulations promulgated thereunder and at the time
they were filed did not contain any untrue statements of a
material fact or fail to state any material facts necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, except that the SEC has
notified the Company that it neglected to file a Financial Data
Schedule with its Form 10-Q for the period ended March 31, 1996
(which Financial Data Schedule shall be prepared and filed as
soon as practicable). All amendments, if any, required to update
the Company's SEC filings have been filed.
3.9. NASDAQ Filings. The Company has made all necessary filings with
the NASDAQ Stock Market, and is current in all such filings. The
Company has received no notices of violation from the NASD,
except that NASD has notified the Company that its net capital
falls below the minimum for continued listing as a NASDAQ Small
Cap stock. The consummation of the transactions contemplated
herein will cure the deficiency.
3.10. Financial Statements. The Company has previously furnished to
Investor a true and complete copy of its 1995 10-K and First
Quarter 10-Q. The audited consolidated financial statements
included in the 1995 10-K and, subject to normal adjustments not
material in amount or effect, the necessity of which an audit
would reveal, the unaudited financial statements included in the
First Quarter 10-Q fairly present the consolidated financial
position of the Company and its subsidiaries and results of
operations for the respective periods or as of the respective
dates therein set forth, in accordance with generally accepted
accounting principles consistently applied during the periods
involved (except as otherwise stated therein). There has not
been any change between March 31, 1996 and the date of this
Agreement which has affected materially or adversely the
business or properties or condition, financial or other, or
results of operation of the Company, and no fact or condition
exists or, to the knowledge of the Company, is contemplated or
threatened which might cause any such change at any time in the
future.
3.11. Absence of Material Adverse Change; Conduct of Business. Except
as described in any of the Company's SEC Filings, since March
31, 1996 (a) there has not been any change in the financial
condition, properties, business, results of operations or
prospects (financial or otherwise) of the Company and its
subsidiaries taken as a whole which has affected or may
reasonably be expected to materially and adversely affect the
business or financial condition of the Company and its
subsidiaries taken as a whole; and (b) the Company and each of
its subsidiaries have conducted its businesses only in, and has
not taken any action other than in, the ordinary course of
business.
3.12. Litigation; Investigation. Except as described in the Company's
SEC Filings or otherwise disclosed herein: (a) no notice has
been received that a material investigation or review by any
governmental entity with respect to the Company or any of its
subsidiaries is pending nor is any such investigation or review
threatened, nor has any governmental entity indicated to the
Company or any of its subsidiaries an intention to conduct the
same; and (b) there is no action, suit, arbitration or claim or
proceeding pending or, threatened against or affecting the
Company or any of its
<PAGE>
subsidiaries at law or in equity, or before any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality which either singularly or in
the aggregate would, if adversely determined, result in any
material adverse change in the financial condition, properties,
business, result of operations or prospects (financial or
otherwise) of the Company and its subsidiaries taken as a whole;
and (c) no suit, action, proceeding or investigation is pending
or threatened before any court or governmental agency to
restrain or prohibit, or to obtain damages, a discovery order or
other release in connection with this Agreement or the
consummation of the transactions contemplated hereby.
3.13. Income Taxes; Other Taxes. The Company and each of its
subsidiaries has filed all Federal, state, county and local
income and franchise taxes, sales taxes, use taxes, gross
receipts taxes or employment, payroll and withholding taxes and
all of the tax returns, reports and declarations which are or
have been required to be filed by it and has paid or made
provisions for the payment of, all such taxes which were due
pursuant to said returns or pursuant to any assessments received
by it except with respect to any such returns, taxes, or
assessments as to which the failure to file or make payment
would not have a material adverse affect on the business or
assets of the Company and its subsidiaries taken as a whole. The
Company files a consolidated income tax return with all of its
subsidiaries. The Federal income tax returns of the Company and
its subsidiaries have not been subject to any audits. Neither
the Company nor any of its subsidiaries is a party to any
pending action or proceeding by any governmental authority, for
assessment or collection of taxes, except for such taxes,
penalties and interests which in the aggregate are not material
in amount. Neither the Company nor any of its subsidiaries know
of any basis for a deficiency assessment in any Federal, state,
county or local income taxes or franchise taxes, sales taxes,
use taxes, gross receipt taxes of employment, payroll and
withholding taxes against it, except for such taxes, penalties
and interests which in the aggregate are not material in amount.
3.14. Compliance with Applicable Law. The operation of the Company and
its subsidiaries substantially complies with all applicable
laws, ordinances, regulations, decrees and orders of any court
or governmental entity ("Rules"), except in respect to such
Rules as to which failure to comply would not materially and
adversely affect the financial condition, properties, business,
results of operations or prospects (financial or otherwise) of
the Company and its subsidiaries taken as a whole.
3.15. No Default. Neither the Company nor any of its subsidiaries is
in default or violation in any respect of any term, condition or
provision of any of the following, the violation or default of
which would have a material adverse effect on the financial
condition, properties, business, results of operations, or
prospects (financial or otherwise) of the Company and its
subsidiaries taken as a whole:
3.15.1. The Certificate of Incorporation or By-laws of the
Company;
3.15.2. any mortgage, indenture, contract, agreement, lease or
other instrument to which the Company or any of its
subsidiaries is now a party or by which it or any of its
respective properties or assets may be bound;
3.15.3. any agreement pursuant to which the Company has borrowed
or has the right to borrow monies; or
<PAGE>
3.15.4. any judgment, decree or order applicable to the Company
or any of its subsidiaries.
3.16. Disclosure. Neither any of the information contained herein and
the documents specifically referred to herein furnished or to be
furnished to the Company and any other documents or material
furnished or made available to the Company contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated therein or
herein or necessary in order to make the statements therein or
herein, in light of the circumstances under which they shall
have been made, not misleading.
4. Representations and Warranties of the Investor. The Investor represents
and warrants to the Company as follows:
4.1. The Investor will execute and deliver a Subscription Agreement
in the form attached hereto as Exhibit B, and hereby makes the
representations and warranties set forth therein.
4.2. The Investor has the requisite capacity and authority for the
execution, delivery and performance of this Agreement. This
Agreement constitutes a valid and binding obligation of each
Investor enforceable in accordance with its terms, subject as to
enforcement of remedies to applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights.
4.3. The Investor acknowledges that the Company is a public company.
The Investor confirms that it has reviewed the periodic filings
of the Company with the SEC, had an opportunity to ask questions
of officials of the Company concerning the business of the
Company, and otherwise had full opportunity to obtain such
information as it deems necessary to making its decision to
purchase the Shares and Warrants upon the terms and conditions
set forth in this Agreement.
4.4. The Shares are not being purchased for resale, resyndication,
distribution, subdivision or fractionalization thereof nor are
the Shares being purchased with a view to or for sale in
connection with any distribution within the meaning of the
Securities Act of 1933, as amended
5. Company Covenants. The Company hereby covenants with the Investor as
follows:
5.1. The Company shall immediately commence the preparation and
filing of a registration statement registering the Shares and
the Shares underlying the Warrants for sale with the SEC. The
Company shall diligently prosecute the registration and shall
register the Shares no later than ninety (90) days after the
closing, and shall take any and all actions necessary to
maintain the effectiveness of the registration, including filing
post-effective amendments, if necessary, until each Investor
shall have disposed of its Shares (and the Shares underlying the
Warrants). Failure to complete the registration of the Shares
and the Shares underlying the Warranties within such ninety (90)
day period shall be and be deemed to be a material breach of
this Agreement.
5.2. The Company will use its best efforts to have its largest
shareholder, Raymond L. Bauch, agree that, for a period of two
(2) years following the closing, he will sell no more than one
percent (1%) of the outstanding stock of the Company in any
calendar quarter; provided, that Mr. Bauch shall be entitled to
participate as a selling shareholder if and to the extent, that
the purchase is a selling shareholder in a secondary public
offering of the Company's shares.
<PAGE>
5.3. The Company agrees that it will pay a finder fee to Mr. Todd
McMahon of McMahon & Associates upon successful completion of
the transaction outlined herein, as negotiated between Mr.
McMahon and the Company. The parties hereto mutually represent
and warrant each to the other that no other broker or finder was
involved in arranging this transaction or has the right to
receive a commission or fee in connection herewith.
5.4. So long as the Warrants are outstanding, the Company shall not
issue any additional Shares or securities convertible into
Shares (with the exception of Shares issuable upon exercise of
options issued under the Company's existing stock option plans)
without the consent of the Purchaser. This restriction shall not
apply, however, if the average closing price of the Company'
common stock for the five days preceding the proposed issuance
exceeds $5.00.
5.5. Purchaser shall have the right of first refusal to provide debt
financing which the Company may require.
6. Further Assurances. From time to time after the Closing, the Company
shall promptly execute and deliver to each Investor such further
agreements, assurances or other instruments of transfer as the Investor
may reasonably request in order to vest and confirm ownership of the
Shares in the Buyer and to effectuate the purposes, terms and conditions
of this Agreement.
7. Indemnification. The Company shall indemnify and hold each Investor
harmless from and against any loss, damage or expense which may result
from (i) the inaccuracy or falsity of any representation or warranty of
Company hereunder, or (ii) the failure of Company to fulfill its
covenants hereunder.
8. Miscellaneous.
8.1. Amendments. Neither this Agreement nor any provisions hereof may
be changed, waived, discharged or terminated orally, but only by
a signed statement in writing.
8.2. Governing Laws. This Agreement shall be governed in all respects
by the laws of the State of New York.
8.3. Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the
transactions contemplated hereby.
8.4. Successors and Assigns. No party may assign this Agreement
without the express written consent of the other. Except as
otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties
hereto.
8.5. Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to
the subjects hereof and thereof.
8.6. Execution. Each party hereto may evidence its execution and
delivery hereof by facsimile delivery of an original signature
page at or prior to closing, which facsimile shall be deemed to
be an original for all purposes. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one in the
same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
SPATIALIGHT, INC.
By: /s/ William E. Hollis
---------------------
(signed in counterparts)
William E. Hollis
President
SABOTINI LTD.
By: Sharon F. Cairos
-----------------
(signed in counterparts)
Sharon F. Cairos
Director
