**Exhibit 10.59**

 

PREFERRED STOCK PURCHASE AGREEMENT

 

This Preferred StockPurchase Agreement (this “Agreement”) is made as of March 3, 2003, by andbetween Vista Medical Technologies, Inc., a Delaware corporation (the“Company”), and the parties listed on Schedule A hereto (each, a“Purchaser and collectively, the “Purchasers”).

 

THE PARTIES HEREBY AGREEAS FOLLOWS:

 

1.                                       Saleand Issuance of Preferred Stock. Subject to the terms and conditions of this Agreement, each Purchaseragrees to purchase at the Closing, and the Company agrees to sell and issue toeach Purchaser at the Closing, that number of shares (the “Shares”) of theCompany’s Series A Preferred Stock set forth opposite such Purchaser’s name on ScheduleA, at a per share purchase price of $0.95.

 

2                                          Closing.  The purchase and sale of the Shares shalltake place at the offices of the Company, simultaneous with the execution ofthis Agreement, or at such other place and time as the Company and thePurchasers acquiring more than 50% of the Shares mutually agree, either orallyor in writing (the “Closing”).  At theClosing, subject to the terms and conditions hereof, the Company shall deliverto each Purchaser a certificate, in the name of such Purchaser, representingthe Shares purchased by such Purchaser, dated as of the Closing.

 

3                                          Representationsand Warranties of the Company.  TheCompany hereby (i) represents and warrants to the Purchasers those items inSections 3(a) -3(o) (except as disclosed in the Company Reports (as defined inSection 3(n) below) and (ii) covenants to the Purchasers the item in Section3(p) as follows:

 

(a)          No consent, approval,authorization or order of any court, governmental agency or body or arbitratorhaving jurisdiction over the Company is required for the execution of this Agreementor the sale of the Shares to the Purchaser. The Company is not required to give notice to, or make any filing orregistration with, any court or other federal state, local or othergovernmental authority or other person or entity in connection with theexecution and delivery of this Agreement and the Registration Rights Agreement(the “Registration Rights Agreement”) to be entered into simultaneously amongthe Company and the Purchasers (each, a “Transaction Document” and, together,the “Transaction Documents”), other than the application to The Nasdaq StockMarket (“Nasdaq”) for the listing of the Common Stock to be issued uponconversion of the Shares  (the“Conversion Shares”) into which the Shares are convertible, the filing of aForm D with the Securities and Exchange Commission (the “SEC”), the filing of aForm 8-K with the SEC and notification to Nasdaq with respect to the same, andapplicable Blue Sky filings in those states where necessary.

 

(b)         The Company is an entityduly incorporated or otherwise organized, validly existing and in good standingunder the laws of the jurisdiction of its incorporation, with the requisitepower and authority to own and use its properties and assets and to carry onits business as currently conducted. The Company is not in violation of any of the provisions of itscertificate or articles of incorporation, bylaws or other organizational orcharter documents.  The Company is dulyqualified to conduct business and is in good standing as a foreign corporation

 

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in each jurisdiction in which the nature of the business conducted orproperty owned by it makes such qualification necessary, except where thefailure to be so qualified or in good standing, as the case may be, would not,individually or in the aggregate, have or reasonably be expected to result in:(i) a material adverse effect on the legality, validity or enforceability ofthe Transaction Documents, (ii) a material adverse effect on the results ofoperations, assets, prospects, business or financial condition of the Company,or (iii) a material adverse impairment to the Company’s ability to performfully on a timely basis its obligations under any Transaction Document (any of(i), (ii) or (iii), a “Material Adverse Effect”).

 

(c)          Neither the sale of theShares nor the performance of the Company’s other obligations pursuant to thisAgreement will violate, conflict with, result in a breach of, or constitute adefault (or an event that with notice or lapse of time or both would become adefault) under (i) the Certificate of Incorporation or the Bylaws of theCompany, (ii) any decree, judgment, order or determination of any court,governmental agency or body, or arbitrator having jurisdiction over the Companyor any of the Company’s properties or assets; (iii) any law, treaty, rule orregulation applicable to the Company (including the federal securities laws,and the requirements of Nasdaq); or (iv) the terms of any bond, debenture, noteor other evidence of indebtedness, in any event above, which violation,conflict or breach would have a Material Adverse Effect on the Company.

 

(d)         The Company has therequisite corporate power and corporate authority to enter into and toconsummate the transactions contemplated by each of the Transaction Documentsand otherwise to carry out its obligations thereunder.  The Company has taken all corporate actionrequired to authorize the execution and delivery of each of the TransactionDocuments and the performance of its obligation thereunder, and when each isdelivered in accordance with the terms hereof, such will constitute the validand binding obligation of the Company enforceable against the Company inaccordance with its terms.

 

(e)          The Company has dulyauthorized the issuance of the Shares and has reserved sufficient shares ofCommon Stock to be issued upon conversion thereof (the “ConversionShares”).  When issued and delivered to(and paid for by) the Purchasers in accordance with the terms hereof, theShares will be duly and validly issued, fully paid and nonassessable.  When issued in accordance with theprovisions of the Company’s Certificate of Incorporation, the Conversion Shareswill be duly and validly issued, fully paid and nonassessable.

 

(f)            As of February 25,2003 (without giving effect to the sale of the Shares hereunder), the Companyhad a total of 5,001,749 shares of Common Stock issued and outstanding;approximately 967,701 shares of Common Stock were subject to outstandingoptions granted under the Company’s 1997 Stock Option/Stock Issuance Plan; approximately100,000 shares of Common Stock were reserved for issuance under the Company’sEmployee Stock Purchase Plan or which 82,400 shares have been issued; and49,805 shares were reserved for issuance pursuant to exercise of outstandingwarrants.  No securities of the Companyare entitled to preemptive or similar rights, and no person has any right offirst refusal, preemptive right, right of participation, or any similar rightto participate in the transactions contemplated by the Transaction Documents.  The issue and sale of the Shares andConversion Shares will not,

 

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immediately or with the passage of time, obligate the Company to issueshares of Common Stock or other securities to any person (other than thePurchasers or their successors) and will not result in a right of any holder ofCompany securities to adjust the exercise, conversion, exchange or reset priceunder such securities.

 

(g)         There is no action, suitor proceeding before or by any court or governmental agency or body, domesticor foreign, now pending, or, to the knowledge of the Company, threatened,against or affecting the Company which, singly or in the aggregate, mightresult in any material adverse change in the condition, financial or otherwise,or in the earnings, business affairs or business prospects of the Company, orwhich might materially and adversely affect the consummation of the TransactionDocuments or the Company’s performance thereunder.

 

(h)         The Company is not : (i)in default under or in violation of (and no event has occurred that has notbeen waived that, with notice or lapse of time or both, would result in adefault by the Company under), nor has the Company received notice of a claimthat it is in default under or that it is in violation of, any loan or creditagreement or any other agreement or instrument to which it is a party or bywhich it or any of its properties is bound (whether or not such default orviolation has been waived), (ii) in violation of any order of any court,arbitrator or governmental body, or (iii) in violation of any statute, rule orregulation of any governmental authority, including without limitation allforeign, federal, state and local laws relating to taxes, environmentalprotection, occupational health and safety, product quality and safety andemployment and labor matters, except in each case as does not, individually orin the aggregate, have or reasonably be expected to result in a MaterialAdverse Effect.

 

(i)             The Company, to the bestof its knowledge in the course of diligent inquiry, owns or is licensed to useall patents, patent applications, inventions, trademarks, trade names,applications for registration of trademarks, service marks, service markapplications, copyrights, know-how, manufacturing processes, formulae, tradesecrets, license and rights in any thereof and any other intangible propertyand assets that are material to the business of the Company as now conductedand as proposed to be conducted (in this Agreement called the “ProprietaryRights”), or is seeking, or will seek, to obtain rights to use such ProprietaryRights that are material to the business of the Company as proposed to beconducted.

 

(1)          The Company has notreceived written notice of any pending conflict with or infringement upon suchthird-party proprietary rights.

 

(2)          The Company has notentered into any consent, indemnification, forbearance to sue or settlementagreement with respect to Proprietary Rights other than in the ordinary courseof business.  No claims have beenasserted by any person with respect to the validity of the Company’s ownershipor right to use the Proprietary Rights and, to the best knowledge of theCompany, there is no reasonable basis for any such claim to be successful.

 

(3)          The to best knowledge ofthe Company, no person is infringing on or violating the Proprietary Rights.

 

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(j)             The Company possessesand is operating in compliance with all material licenses, certificates, consents,authorities, approvals and permits from all state, federal, foreign and otherregulatory agencies or bodies necessary to conduct the businesses now operatedby it, and the Company has not received any notice of proceedings relating tothe revocation or modification of any such permit.

 

(k)          The Company has good andmarketable title to its properties, free and clear of all material securityinterests, mortgages, pledges, liens, charges, encumbrances and claims ofrecord.  The properties of the Companyare, in the aggregate, in good repair (reasonable wear and tear excepted), andsuitable for their respective uses.  Anyreal property held under lease by the Company is held under valid, subsistingand enforceable leases with such exceptions as are not material and do notinterfere with the conduct of the business of the Company.  The Company owns or leases all suchproperties as are necessary to its business or operations as now conducted.

 

(l)             No brokerage orfinder’s fees or commissions are or will be payable by the Company to anybroker, financial advisor or consultant, finder, placement agent, investmentbanker, bank or other person with respect to the transactions contemplated bythis Agreement.  The Purchasers shallhave no obligation with respect to any fees or with respect to any claims madeby or on behalf of other persons for fees of a type contemplated in thisSection that may be due in connection with the transactions contemplated bythis Agreement.  The Company shallindemnify and hold harmless the Purchasers, their employees, officers,directors, agents, and partners, and their respective affiliates, from andagainst all claims, losses, damages, costs (including the costs of preparationand attorney’s fees) and expenses suffered in respect of any such claimed orexisting fees, as such fees and expenses are incurred.

 

(m)       The Company is eligible toregister the resale of the Conversion Shares under Form S-3 as promulgatedunder the Securities Act of 1933, as amended. Except for the Company’s registration obligations pursuant to theRegistration Rights Agreement, the Company has not granted or agreed to grantto any person any rights (including “piggy–back” registration rights) to haveany securities of the Company registered with the Securities and ExchangeCommission or any other governmental authority that have not been satisfied infull.

 

(n)         Reports and FinancialStatements.  The Company haspreviously furnished or made available to Purchaser complete and accuratecopies, as amended or supplemented, of its (a) Form 10-Q for the periodended September, 2002 as filed with the Securities and Exchange Commission(“SEC”) and (b) all other reports filed by the Company underSection 13 or subsections (a) or (c) of Section 14 of theExchange Act with the SEC since January, 2002 (such reports are collectivelyreferred to herein as the “Company Reports”). The Company Reports constitute all of the documents required to be filedby the Company under Section 13 or subsections (a) or (c) ofSection 14 of the Securities Exchange Act of 1934, as amended (the“Exchange Act”) with the SEC from January, 2002 through the date of thisAgreement.  The Company Reports havebeen duly and timely filed, were in compliance in all material respects withthe requirements of the Exchange Act and the rules and regulations thereunderwhen filed, and were complete and correct in all material respects as of thedates at which the information

 

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therein was furnished.  As oftheir respective dates, the Company Reports did not contain any untruestatement of a material fact or omit to state a material fact required to bestated therein or necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading.  The audited financial statements andunaudited interim financial statements of the Company included in the CompanyReports (i) complied as to form in all material respects with applicable accountingrequirements and the published rules and regulations of the SEC with respectthereto when filed, (ii) were prepared in accordance with generallyaccepted accounting principles applied on a consistent basis throughout theperiods covered thereby (except as may be indicated therein or in the notesthereto, and in the case of quarterly financial statements, as permitted byForm 10-Q under the Exchange Act), (iii) fairly present theconsolidated financial condition, results of operations and cash flows of theCompany as of the respective dates thereof and for the periods referred totherein, and (iv) are consistent with the books and records of theCompany.  To the knowledge of theCompany, all reports required to be filed by stockholders, officers anddirectors of the Company pursuant to Section 16(a) of the Exchange Act havebeen timely filed.

 

(o)         Material Changes.  Since the date of the latest auditedfinancial statements included within the Company Reports, except asspecifically disclosed in the Company Reports, (i) there has been no event, occurrenceor development that has had or that could result in a Material Adverse Effect,(ii) the Company has not incurred any liabilities (contingent or otherwise)other than (A) trade payables and accrued expenses incurred in the ordinarycourse of business consistent with past practice and (B) liabilities notrequired to be reflected in the Company’s financial statements pursuant to GAAPor required to be disclosed in filings made with the Commission, (iii) theCompany has not altered its method of accounting or the identity of itsauditors, (iv) the Company has not declared or made any dividend ordistribution of cash or other property to its stockholders or purchased,redeemed or made any agreements to purchase or redeem any shares of its capitalstock other than as contained in the Certificate of Designations filed inconnection herewith, and (v) the Company has not issued any equity securitiesto any officer, director or affiliate, except pursuant to existing Companystock option plans. The Company does not have pending before the Securities andExchange Commission any request for confidential treatment of information.

 

(p)         Sale of TechnologyAssets.  The Company shall use itsbest efforts with respect to its engagement of Adams Harkness & Hill toachieve the disposition of its OEM endoscopic and 3D business lines.

 

4.                                       Representationsand Warranties of the Purchasers. Each Purchaser hereby represents and warrants to the Company as follows:

 

(a)          Authorization.  The Purchaser has the requisite legal powerand authority to enter into this Agreement and this Agreement, when executed,shall constitute a valid and legally binding obligation of the Purchaser.

 

(b)         Investment Intent.  This Agreement is made with the Purchaser inreliance upon the Purchaser’s representation to the Company, which by thePurchaser’s execution hereof

 

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the Purchaser confirms, that the Shares have been acquired with thePurchaser’s own property for investment for an indefinite period for thePurchaser’s own account, not as a nominee or agent, and not with a view to thesale or distribution of any part thereof, and that the Purchaser has no presentintention of selling, granting participation in, or otherwise distributing thesame.  By executing this Agreement, thePurchaser further represents that the Purchaser does not have any contract,undertaking, agreement or arrangement with any person to sell, transfer, orgrant participations, to such person or to any third person, with respect toany of the Shares acquired pursuant to this Agreement.

 

(c)          Reliance Upon thePurchaser’s Representations.  ThePurchaser understands (i) that the Shares are not registered under theSecurities Act or qualified under the California Corporate Securities Law of1968, as amended (the “Law”), and (ii) that the Shares are being issued to thePurchaser on the ground that the sale provided for in this Agreement and theissuance of securities hereunder is exempt from registration under theSecurities Act pursuant to Section 4(2) thereof and/or Regulation D promulgatedthereunder and the exemption from qualification provided by Section 25102(f) ofthe Law, and (iii) that the Company’s reliance on such exemptions is predicatedon the Purchaser’s representations set forth herein.  The Purchaser realizes that the basis for the exemptions may notbe present if, notwithstanding such representations, the Purchaser has in mindmerely acquiring the Common Stock for a fixed or determinable period in thefuture, or for a market rise, or for sale if the market does not rise.  The Purchaser does not have any suchintention.  These exemptions only exemptthe issuance of the Shares to the Purchaser and not any sale or otherdisposition of the Shares or any interest therein by the Purchaser.

 

(d)         Restricted Securities.  The Purchaser hereby confirms that thePurchaser has been informed that the Shares are restricted securities under theSecurities Act and may not be resold or transferred unless the Shares are firstregistered under the Federal securities laws or unless an exemption from suchregistration is available.  In addition,the Purchaser understands that any resale or transfer must comply withapplicable state securities laws. Accordingly, the Purchaser hereby acknowledges that the Purchaser isprepared to hold the Shares for an indefinite period, and that the Purchaser isfamiliar with the provisions of Rule 144 of the Securities and ExchangeCommission issued under the Securities Act, and is aware that Rule 144 is notpresently available to exempt the sale of the Shares from the registrationrequirements of the Securities Act. Nothing contained herein shall be deemed a representation or warranty bysuch Purchaser to hold Shares or Conversion Shares for any period of time.

 

(e)          Receipt ofInformation.  The Purchaseracknowledges that the Purchaser has received all the information the Purchaserconsiders necessary or appropriate for deciding whether to purchase theShares.  The Purchaser furtherrepresents that the Purchaser has had an opportunity to ask questions andreceive answers from the Company regarding the terms and conditions of theoffering of the Shares and the business, properties, prospects, and financialcondition of the Company and to obtain additional information (to the extentthe Company possessed such information or could acquire it without unreasonableeffort or expense) necessary to verify the accuracy of any informationfurnished to the Purchaser or to which the Purchaser had access.

 

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(f)            InvestmentExperience.  In connection withrepresentations made herein, the Purchaser represents that the Purchaser hassuch knowledge and experience in financial and business matters as to becapable of evaluating the merits and risks of the Purchaser’s investment, hasthe ability to bear the economic risks of the Purchaser’s investment and hasbeen furnished with and has had access to all of the information the Purchaserconsiders necessary or appropriate to evaluate the risks and merits of aninvestment in the Shares, and the Purchaser had an opportunity to discuss theCompany’s business, management and financial affairs with the Company’smanagement.

 

(g)         Limitations onDisposition.  The Purchaser agreesthat in no event will the Purchaser make a disposition of any of the Shares,unless and until (a) the Purchaser shall have notified the Company of theproposed disposition and shall have furnished the Company with a statement ofthe circumstances surrounding the proposed disposition, and (b) the Purchasershall have furnished the Company with an opinion of counsel satisfactory to theCompany to the effect that (i) such disposition will not require registrationof such Shares under the Securities Act, or (ii) that appropriate actionnecessary for compliance with the Securities Act has been taken, or (c) theCompany shall have waived, expressly and in writing, its rights under clauses(a) and (b) of this subparagraph.  Theopinion shall also indicate that the disposition is exempt from, in compliancewith, or qualified under all applicable state securities laws.  Nothing contained herein shall limit adisposition of the Shares pursuant to an effective registration statement underthe Securities Act.

 

(h)         Legends.  All certificates representing any shares ofthe Company subject to the provisions of this Agreement shall have endorsedthereon customary legends regarding:

 

(1)          Restrictions on transferunder the Federal Securities Act of 1933.

 

(2)          Any legend required bystate securities laws.

 

5.                                       Indemnification.

 

(a)          The Company agrees toindemnify and hold harmless each Purchaser, each person, if any, who controls aPurchaser, within the meaning of Section 15 of the Act and each officer,director, employee and agent of the Purchaser and of any such controllingperson against any and all liabilities, claims, damages or expenses whatsoever,as incurred arising out of or resulting from any breach or alleged breach orother violation of any representation, warranty, covenant or undertaking by theCompany contained in this Agreement, and the Company will reimburse thePurchaser for its reasonable legal and other expenses (including the reasonablecost of any investigation and preparation, and including the reasonable feesand expenses of counsel) incurred in connection therewith.

 

(b)         Each Purchaser severallyagrees to indemnify and hold harmless the Company, each person, if any, whocontrols the Company within the meaning of Section 15 of the Act and eachofficer, director, employee and agent of the Company and of any suchcontrolling person against any and all losses, liabilities, claims, damages orexpenses whatsoever,

 

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as incurred arising out of or resulting from any breach or allegedbreach or other violation or alleged violation of any representation, warranty,covenant or undertaking by the Purchaser contained in this Agreement, and thePurchaser will reimburse the Company for its reasonable legal and otherexpenses (including the reasonable cost of any investigation and preparation,and including the reasonable fees and expenses of counsel) incurred inconnection therewith.

 

6.                                       ClosingDeliveries.

 

(a)          At the Closing, theCompany shall deliver or cause to be delivered to each Purchaser the following:

 

(1)          A certificate in thename of each Purchaser, representing the Shares purchased by each Purchaser,dated as of the Closing.

 

(2)          A legal opinion ofCompany counsel, in agreed form, addressed to the Purchasers.

 

(3)          A Registration RightsAgreement duly executed by the Company;

 

(b)         At the Closing, eachPurchaser shall deliver or cause to be delivered to the Company the following:

 

(1)          The subscription amountfor the Shares purchased by such Purchaser;

 

(2)          A Registration RightsAgreement duly executed by such Purchaser;

 

7.                                       Miscellaneous.

 

(a)          Further Assurances.  Each of the parties hereby agrees to executeand deliver such other documents and to take such further actions as mayreasonably be requested by the other party in order to consummate thetransactions contemplated herein or to carry out the intent of this Agreement.

 

(b)         Fees and Expenses.  At the Closing, the Company shall reimbursePurchasers up to $15,000 for their legal fees and due diligence expenses inconnection with the preparation and negotiation of the Transaction Documents.

 

(c)          Notices.  Any notice required or permitted hereundershall be given in writing and shall be deemed effectively given upon personaldelivery or upon deposit in the United States Post Office, by registered orcertified mail with postage and fees prepaid, addressed to the other partieshereto at the addresses hereinafter shown below such parties’ signatures or atsuch other addresses as such parties may designate by advance written notice tothe other parties hereto.

 

(d)         Governing Law.  This Agreement has been negotiated, executedand delivered in the State of California. The parties hereto agree that all questions pertaining to the validity

 

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and interpretation of this Agreement shall be determined in accordancewith the laws of the State of California.

 

(e)          Successors andAssigns.  Except as otherwiseprovided herein, the terms and conditions of this Agreement shall inure to thebenefit of the successors and assigns of the Company and, subject to therestrictions on transfer herein set forth, be binding upon the Purchasers, andtheir respective successors and assigns.

 

(f)            Amendments andWaivers.  This Agreement representsthe entire understanding of the parties with respect to the subject matterhereof and supersedes all previous understandings, written or oral.  This Agreement may only be amended with thewritten consent of the Company and Purchasers holding a majority of the Sharesthen-outstanding, or the successors or assigns of the foregoing, and no oralwaiver or amendment shall be effective under any circumstances whatsoever.

 

(g)         Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall be considered one and the same Agreementand shall become effective when one or more counterparts have been signed byeach of the parties and delivered to the other party.  In the event that any signature is delivered by facsimiletransmission, such signature shall create a valid and binding obligation of theparty executing (or on whose behalf such signature is executed) with the sameforce and effect as if such facsimile signature page were an original thereof.

 

(h)         Severable Provisions.  The provisions of this Agreement areseverable, and if any one or more provisions may be determined to be judiciallyunenforceable, in whole or in part, the remaining provisions shall neverthelessbe binding and enforceable.

 

(i)             Entire Agreement.  This Agreement and the documents referred toherein constitute the entire agreement among the parties and no party shall beliable or bound to any other party in any manner by any warranties,representations or covenants except as specially set forth herein or therein.

 

(j)             Survival ofWarranties.  The warranties,representations and covenants of the Company and the Purchasers contained in ormade pursuant to this Agreement shall survive the execution and delivery ofthis Agreement and the Closing for two years and shall in no way be affected byany investigation of the subject matter thereof made by or on behalf of thePurchasers or the Company.

 

[REMAINDER OF THISPAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executedthis Agreement as of the day and year first above written.

 
| COMPANY:    | VISTA MEDICAL  TECHNOLOGIES, INC., |
|-------------|------------------------------------|
|        | a Delaware corporation             |
|        |                               |
|        |                               |
|        | /s/ John R. Lyon                   |   |
|        | John R. Lyon, President  and CEO   |
|        |                               |
|        | Address:                           | 2101 Faraday Avenue |   |
|        |                               | Carlsbad, CA 92008 |   |
|        |                               |
|        |                               |
| PURCHASERS: | VECTRA PARTNERS LLC                |
|        |                               |
|        |                               |
|        | By: /s/ Scott Pancoast             |   |
|        |                               |   |
|        | Name:Scott Pancoast                |   |
|        |                               |   |
|        | Title: Manager                     |   |
|        |                               |
|        | Address:                           | P.O. Box 675161 |   |
|        |                               | Rancho Santa Fe, CA  92067 |   |
|        |                               |
|        |                               |
|        | SBIC PARTNERS, L.P.                |
|        | 201 Main Street                    |
|        | Suite 2700                         |
|        | Fort Worth, Texas  76102      |
|        |                               |
|        |                               |
|        | By:                                | Forrest Binkley & Brown L.P., |   |
|        |                               | General Partner |   |
|        |                               |
|        |                               | By: | Forrest Binkley & Brown Venture Co., |   |
|        |                               | General Partner |
|        |                               |
|        |                               |
|        | By:                                | /s/ Nicholas B. Binkley |   |
|        |                               | Nicholas B. Binkley |
|        |                               | Office of the President |
|        |                               |
|        | Address:                           | 265 Santa Helena #110 |
|        |                               | Solana Beach, CA 92075 |
|             |                                    |  |  |  |  |  |  |

 

[SIGNATURE PAGE TOPREFERRED STOCK PURCHASE AGREEMENT]

 

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**SCHEDULEA**

 

**SCHEDULEOF INVESTORS**

 

 
| **Name**             |   | **Number of Shares** |       | **Aggregate Purchase Price** |        |
|----------------------|--------|----------------------|------------|------------------------------|-------------|
| Vectra  Partners LLC |   | 631,579              |       | $                            | 600,000     |   |
| SBIC  Partners, L.P. |   | 368,421              |       | $                            | 350,000     |   |
|                 |   |                 |       |                         |        |
| **Total**            |   | **1,000,000**        | ** ** | **$**                        | **950,000** | ** ** |

 

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