CUSIP No. 917296204

SCHEDULE 13D

Page 3 of 16 Pages

 

1	NAMES OF REPORTING PERSONS
	I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
	Robert Averick
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☒
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			-0-
		8	SHARED VOTING POWER
			3,399,000 shares of Common Stock(1)
		9	SOLE DISPOSITIVE POWER
			-0-
		10	SHARED DISPOSITIVE POWER
			3,399,000 shares of Common Stock(1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	3,399,000 shares of Common Stock(1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	16.5% of outstanding shares of Common Stock(2)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	IN

 

1	NAMES OF REPORTING PERSONS
	I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
	Piton Capital Partners LLC 47-3106673
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☒
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			2,000,000 shares of Common Stock(1)(2)
		8	SHARED VOTING POWER
			-0-
		9	SOLE DISPOSITIVE POWER
			2,000,000 shares of Common Stock(1)(2)
		10	SHARED DISPOSITIVE POWER
			-0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,000,000 shares of Common Stock(1)(2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	9.9% of outstanding shares of Common Stock(3)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	OO

 

 

 

 

 

 

 

 

 

---

Options expire on December 20, 2021 and may be exercised by Piton immediately in one or more transactions.

Each Reporting Person funded such prior purchases out of their available cash on hand.

Item 4.

Purpose of Transaction.

The Shares held by each of the Reporting Persons were acquired in the ordinary course of business for investment purposes.  On December 20, 2016, each Seller sold 500,000 Shares at $1.00 per share to Piton (the "Purchased Shares"), along with the Options.  Each Seller sold the Purchased Shares and Options to Piton in simultaneous private transactions.  This Schedule 13D is being filed in connection with Piton's acquisition of the Purchased Shares and Options.

The Reporting Persons intend to review their investment in the Issuer on an ongoing basis and have discussions with representatives of the Issuer concerning the Issuer's strategy, business and operations.  In addition, the Reporting Persons may engage in communications regarding the Issuer with other stockholders of the Issuer, knowledgeable industry or market observers, industry participants, or other persons in respect of the Issuer's strategy, business and operations.

The Reporting Persons may take a number of actions to maximize the value of their investment, including increasing or decreasing the size of their investment in the Issuer, depending upon numerous factors, including, among other things, the price and availability of securities of the Issuer; subsequent developments affecting the Issuer; the Issuer's business and prospects; general stock market and money market and economic conditions; tax considerations; ongoing evaluation of the Issuer's business, financial condition, operations, prospects and strategic alternatives; the relative attractiveness of alternative business and investment opportunities; the attitudes and actions of the Board of Directors and management of the Issuer; and other factors deemed relevant.  Notwithstanding anything to the contrary herein, the Reporting Persons specifically reserve the right to exercise any and all of their respective rights as shareholders of the Issuer in a manner consistent with their equity interests, including, without limitation, those matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D, namely: (i) the acquisition by any person of any additional securities of the Issuer, or the disposition of securities of the Issuer; (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (iii) the sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (iv) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (v) any material change in the present capitalization or dividend policy of the Issuer; (vi) any other material change in the Issuer's business or corporate structure; (vii) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (viii) causing a class of securities of the Issuer to be delisted from a national securities

---

CUSIP No. 917296204

SCHEDULE 13D

Page 9 of 16 Pages

 

 

 

---

CUSIP No. 917296204

SCHEDULE 13D

Page 10 of 16 Pages

 

		Shares Beneficially Owned	Percent of Class1
(a) and (b)	1. The Trust2
	Sole Voting Power	825,000	4.0%
	Shared Voting Power	-0-	0%
	Sole Dispositive Power	825,000	4.0%
	Shared Dispositive Power	-0-	0%
	Aggregate Voting and Dispositive Power	825,000	4.0%
	2. M3C3
	Sole Voting Power	450,000	2.2%
	Shared Voting Power	-0-	0%
	Sole Dispositive Power	450,000	2.2%
	Shared Dispositive Power	-0-	0%
	Aggregate Voting and Dispositive Power	450,000	2.2%

---

 

---

 

CUSIP No. 917296204

SCHEDULE 13D

Page 11 of 16 Pages

 

 

COMMON STOCK PURCHASE AND OPTION AGREEMENT

This COMMON STOCK PURCHASE AND OPTION AGREEMENT (this "Agreement") is dated December 20, 2016 ("Agreement Date") by and between Piton Capital Partners LLC (the "Purchaser") and Brian Tepfer (the "Seller").

RECITALS

A.	The Seller is the owner of not less than 1,000,000 shares of the common stock, par value $0.0001 per share (the "Shares"), of usell.com, Inc., a Delaware corporation (the "Company");

B.	The Purchaser wishes to purchase, and the Seller wishes to sell, 500,000 Shares (the "Purchased Shares") on the terms and conditions set forth in this Agreement; and

C.	The Seller wishes to grant to Purchaser an option to purchase up to an additional 500,000 Shares (the "Option Shares") on the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

 

2.

Option.

 

a.

Subject to the terms and conditions of this Agreement and in further consideration of the purchase of the Purchased Shares, Seller hereby grants to Purchaser, and Purchaser hereby accepts, the right and option (but not the obligation) to purchase from Seller up to an aggregate of 500,000 of the Option Shares (the "Option").  The Option shall expire on the fifth (5th) anniversary of the Agreement Date (the "Expiration Date").

b.

The Purchaser may exercise the Option in whole or in part, at any time, and from time to time, in one or more transactions, from the Agreement Date until the Expiration Date.  In consideration of the payment of the applicable Option Price, Seller will sell, transfer, assign, grant and convey to the Purchaser the number of Option Shares set forth in the relevant Notice (defined below) free and clear of all Encumbrances.

c.

Any exercise of the Option shall take place on the date specified by Purchaser in a written notice delivered to Seller pursuant to Section 8(b) (each such date, a "Closing Date"), which written notice will set forth the amount of Option Shares that Purchaser elects to purchase pursuant to the Option (each such notice, a "Notice").  In connection with each Closing Date, (i) Purchaser shall deliver to the Escrow Agent the aggregate Option Price for the Option Shares being purchased on such Closing Date by wiring such amount, in immediately available funds, to the Escrow Account and (ii) Seller shall execute and/or deliver or cause to be delivered to Escrow Agent at least three (3) Business Days before such Closing Date (y) duly issued certificate(s) for all of the Option Shares being purchased on such Closing Date, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, with all required stock transfer tax stamps affixed thereto and (z) a certificate executed by Seller confirming that the representations and warranties of Seller set forth in this Agreement remain true and correct as of such Closing Date, except to the extent they relate to a specified date, in which case they remain true and correct as of such specified date.  Purchaser may, within two (2) Business Days after the date on which Escrow Agent receives the certificates referenced in (y) and (z) above, object to the condition or nature of any such certificate, in which case Escrow Agent will return the certificates referenced in (y) and (z) to Seller and will return the Purchase Price to Purchaser.  If Purchaser does not make such an objection within two (2) Business Days after the date on which Escrow Agent receives the certificates referenced in (y) and (z) above, then on the Closing Date the Escrow Agent shall transfer the Option Price to Seller's Account and shall transfer the certificates referenced in (y) and (z) above to Purchaser.

d.

The purchase price to be paid by Purchaser to the Seller for the purchase of the applicable Option Shares shall be One Dollar ($1.00) per Option Share (the "Option Price").  The number of Option Shares subject to the Option and the Option Price shall be equitably adjusted in the event of a stock split, stock dividend or other subdivision, consolidation or combination of the Shares such that upon exercise of the Option for the same aggregate Option Price, Purchaser shall receive the same corresponding value as Purchaser would have received had it exercised the Option immediately prior to such stock split, stock divided or other subdivision or consolidation of the Shares and participated in such stock split, stock dividend or other subdivision, consolidation or combination.  Additionally, if at any time after the Agreement Date the Company distributes cash, securities, evidence of indebtedness or other assets or property (including, for example, a cash dividend) and such distribution is not contemplated by the second sentence of this Section 2(d), then the Option Price shall be automatically reduced by the fair market value of the cash, securities, evidence of indebtedness or other assets or property applicable to one share of the Shares to the extent such distribution is (or will be) received by Seller.

 

 

2

 

e.

From the date hereof until the Expiration Date, Seller shall at all times reserve and keep available, solely for the purpose of delivery upon the exercise of the Option, the maximum number of Option Shares deliverable upon the exercise of the Option and shall not (i) sell, transfer, assign, grant or convey such reserved Option Shares or any interest in such reserved Option Shares other than in accordance with this Agreement or (ii) otherwise subject such reserved Option Shares to any Encumbrance.  Additionally, from the Agreement Date through the Expiration Date, Seller agrees that Chadbourne & Parke LLP shall hold Seller's stock certificates evidencing the maximum number of Option Shares deliverable upon Purchaser's exercise of the Option at any point in time.

f.

If the Company undergoes a merger, consolidation, acquisition, or plan of exchange pursuant to which the Option Shares are converted into cash or other stock, securities or property, or a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company, then, at the election of Purchaser in its sole discretion, either:

i.

If applicable, the Option shall be converted into an option to acquire the stock of the surviving or acquiring corporation received by Seller in the applicable transaction (and the Purchaser may thereafter exercise the Option in whole or in part pursuant to Section 2(b)), with the amount and type of shares subject thereto and Option Price thereof to be determined by reference to the relative values of the companies involved in the applicable transaction and the exchange rate used in determining shares of the surviving corporation to be held by the former holders of the Shares following the applicable transaction, and disregarding fractional shares; or

ii.	Purchaser shall have the right to receive the kind and amount of shares of stock or other securities or property receivable upon such consolidation, merger, acquisition or exchange by Seller upon exercise of the Option immediately prior to such transaction.

 

 

3

a.	Seller has full power and capacity to execute and deliver this Agreement and to perform its obligations under this Agreement.

b.

Seller's execution, delivery, and performance of this Agreement has not resulted and will not result in a conflict, breach or violation of any provision of (i) any statute, law, writ, order, rule or regulation of any governmental authority applicable to Seller; (ii) any judgment, injunction, decree or determination applicable to Seller; or (iii) any contract, indenture, mortgage, loan agreement, note, lease or other agreement, document or instrument to which Seller may be a party, by which Seller may be bound or to which any of the assets of Seller is subject.

c.

(i) This Agreement (A) has been duly and validly executed and delivered by Seller and (B) is the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except that such enforceability against Seller may be limited by bankruptcy, insolvency, or other similar laws of general applicability affecting the enforcement of creditors' rights generally and by the court's discretion in relation to equitable remedies; and (ii) no notice to, registration with, consent or approval of or any other action by any relevant governmental authority or other person is, will be, or was required for Seller to execute, deliver, and perform its obligations under this Agreement, assuming that the representations and warranties of Purchaser are true and correct.

d.

Seller is the sole legal and beneficial owner of and has good title to the Purchased Shares and the Option Shares, free and clear of any charge, claim, hypothecation, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, security arrangement, mortgage, easement, encroachment, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership or other adverse claim against title of any kind ("Encumbrance"). The Purchased Shares and the Option Shares are not subject to any prior sale, transfer, assignment or participation by Seller or any agreement by Seller to assign, convey, transfer or participate, in whole or in part.

e.

No proceedings are pending against Seller or to Seller's knowledge, threatened against Seller before any relevant governmental authority that, in the aggregate, will materially and adversely affect (i) the Purchased Shares and the Option Shares or (ii) any action taken or to be taken by Seller under this Agreement.

f.

Seller has not engaged in any acts or conduct or made any omissions that will result in Purchaser receiving proportionately less in payments or distributions under, or less favorable treatment for, the Purchased Shares and the Option Shares than is received by other holders holding Shares of the same tranche, class or type as the Purchased Shares and the Option Shares.

 

4

 

g.	No broker, finder or other entity acting under Seller's authority is entitled to any broker's commission or other fee in connection with the transactions contemplated by this Agreement for which Purchaser could be responsible.

h.

Seller acknowledges that the consideration given for the purchase by the Purchaser of the Purchased Shares and the Option Shares may differ both in kind and in amount from any payments or distributions which the Purchaser may ultimately receive with respect to the Purchased Shares and the Option Shares, and the Seller shall not have any recourse to the Purchaser for any deficiency.

i.

Seller (i) is a sophisticated seller with respect to the sale of the Purchased Shares and the Option Shares, (ii) has adequate information concerning the business and financial condition of the Company to make an informed decision regarding the sale of the Purchased Shares and the Option Shares and (iii) has independently and without reliance upon Purchaser, and based on such information as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement. Seller acknowledges that Purchaser has not given Seller any investment advice, credit information, or opinion on whether the sale of the Purchased Shares and the Option Shares is prudent.

j.

Seller acknowledges that (i) Purchaser currently may have, and later may come into possession of, information with respect to the Shares, the Company or any of its affiliates that is not known to Seller and that may be material to a decision to sell the Purchased Shares and the Option Shares ("Seller Excluded Information"), (ii) Seller has determined to sell the Shares notwithstanding its lack of knowledge of the Seller Excluded Information and (iii) Purchaser shall have no liability to Seller, and Seller waives and releases any claims that it might have against Purchaser whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Seller Excluded Information in connection with the transactions contemplated by this Agreement; provided, however, that the Seller Excluded Information shall not and does not affect the truth or accuracy of Purchaser representations or warranties in this Agreement.

k.

The Purchased Shares and the Option Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), are "restricted securities" as defined in Rule 144 under the Act, and may not be offered, sold or otherwise transferred in the absence of an effective registration statement with respect to the Purchased Shares and the Option Shares or an exemption from the registration requirements under the Act. Seller has not made any offers to sell, or solicitations of any offers to buy, all or any portion of the Purchased Shares and the Option Shares in violation of any applicable securities laws.

 

5

 

l.	Seller is not a party to, or bound by, any document or agreement that could adversely affect the Purchased Shares and the Option Shares or Purchaser rights and remedies under this Agreement.

m.	Seller has not and, to the best of Seller's knowledge, no one acting on its behalf has, taken any action, other than in connection with the transactions contemplated by this Agreement, which could subject the sale of the Purchased Shares and the Option Shares to Section 5 of the Act.

n.

Seller is fully aware that, with regard to the sale of the Purchased Shares and the Option Shares, the Purchaser is relying upon the truth and accuracy of these representations and warranties. No representation or warranty by Seller in this Agreement and no statement contained in this Agreement or any certificate or other document furnished or to be furnished to Purchaser pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

o.	The Purchased Shares and the Option Shares transferred to Purchaser hereunder are being delivered pursuant to an exemption from the registration requirements under the Act in reliance upon the representations and warranties of Purchaser.

p.

Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code")) during the applicable period specified in Section 897(c)(1)(a) of the Code.

q.

Except as provided in Schedule 3(q), to Seller's knowledge, there has been no event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to the Company since the date of the Company's last public  filing pursuant to the Act or the Securities Exchange Act of 1934, as the case may be, and the applicable rules and regulations promulgated thereunder.  "Material Adverse Effect" means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (i) the business, results of operations, condition (financial or otherwise) or assets of the Company, or (ii) the ability of Seller to consummate the transactions contemplated hereby on a timely basis.

a.	The Purchaser has all necessary corporate or other power and authority to enter into this Agreement and to purchase the Purchased Shares and the Option Shares;

 

6

 

 

b.

The Purchaser is a sophisticated institutional investor that is an "accredited investor" within the meaning of Rule 501 under the Act and has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of its investment in the Purchased Shares and the Option Shares and is able to bear the economic risk of such investment.

c.	The Purchaser is acquiring the Purchased Shares and the Option Shares for its own account, and not with a view to, or for sale in connection with any, distribution thereof.

d.	The Purchased Shares and the Option Shares were not offered or sold to Purchaser by any form of general solicitation or general advertising.

e.

Purchaser acknowledges that the Purchased Shares and any Option Shares purchased pursuant to this Agreement will be "restricted securities" as defined in Rule 144 under the Act and may not be offered, sold or otherwise transferred by Purchaser in the absence of an effective registration statement with respect to the Purchased Shares and the Option Shares or an exemption from the registration requirements under the Act.

f.	Purchaser acknowledges that the certificate(s) representing the Purchased Shares and any Option Shares will contain a standard securities law restrictive legend.

g.	Purchaser acknowledges that Company maintains an equity incentive plan (the "Plan") under which stock options have been or will be issued; however, Purchaser acknowledges that any Option Shares acquired by Purchaser pursuant to this Agreement are not subject to or governed by the Plan.

5.	Seller Covenants.

a.

Seller agrees to take all actions as may be required, including delivery of opinions of counsel, to effect the transfer of the Purchased Shares and Option Shares purchased by Purchaser and to register Purchaser as the record owner of such Purchased Shares and Option Shares on the stock transfer records of the Company.

b.

From time to time, at the request of Purchaser and without further consideration, Seller shall execute and deliver to Purchaser such other documents, and take such other action, as Purchaser may reasonably request in order to consummate or evidence more effectively the transactions contemplated hereby and to vest in Purchaser good, valid, and marketable title to the Shares, the Option and the Option Shares (as applicable).

c.	On demand of Purchaser and prior to Closing the purchase of the Purchased Shares, Seller agrees to deliver to Purchaser a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Code.

 

 

7

 

d.

All transfer, documentary, sales, use, stamp, registration, value added and other such taxes, expenses, costs and fees (including any penalties and interest) incurred in connection with this Agreement (including any real property transfer tax and any other similar tax) shall be borne and paid by Seller when due. Seller shall, at its own expense, timely file or submit any tax return or other document with respect to such taxes, expenses, costs or fees (and Purchaser shall cooperate with respect thereto as necessary).

6.	Conditions to Closing.

The obligations of Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Purchaser's written waiver of each of the following conditions:

a.

On or prior to the Agreement Date, the Company shall have executed and delivered the Registration Rights Agreement attached as Annex II hereto (the "Registration Agreement") pursuant to which the Company agrees to file and maintain a registration statement on Form S-1 with the Securities and Exchange Commission (the "Registration Statement") to register the Purchased Shares and the Option Shares for resale by the Purchaser and certain additional Shares owned by certain other clients of Kokino LLC (including any Shares to be issued upon exercise of warrants), from time to time in one or more resale transactions.

7.	Indemnification.

a.

Seller agrees to indemnify and hold the Purchaser harmless against and in respect of any and all damages, losses, liabilities, obligations, costs and expenses (including reasonable attorney's fees) (collectively "Damages") that the Purchaser may suffer or incur as a result of a breach of any of the representations, warranties or agreements by the Seller set forth herein.

b.	Purchaser agrees to indemnify and hold the Seller harmless against and in respect of any and all Damages that the Seller may suffer or incur as a result of a breach of any of the representations, warranties or agreements by the Purchaser set forth herein.

c.	All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

 

 

8

 

8.	Miscellaneous.

a.	Expenses. Each party shall bear the costs and expenses (including, without limitation, attorney's fees) incurred by such party in connection with the transactions contemplated by this Agreement.

b.

Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8(b)):

Brian Tepfer

We Sell Cellular LLC

150 Executive Drive

Ste Q

Edgewood, NY 11717

E-mail: btepfer@wesellcellular.com

with a copy to:

Nason, Yeager, Gerson, White & Lioce, PA

3001 PGA Blvd, Suite 305

Palm Beach Gardens, FL 33410

E-mail: mharris@nasonyeager.com

Attention: Michael D. Harris, Esq.

If to Purchaser:

Piton Capital Partners LLC

c/o Kokino LLC

201 Tresser Boulevard, 3^rd Floor

Stamford, CT 06901

E-mail: glynam@kokino.com; raverick@kokino.com

Attention: Garrett Lynam

 

 

9

with a copy to:

Chadbourne & Parke LLP

1301 Avenue of the Americas

New York, NY 10019

E-mail: fvellucci@chadbourne.com

Attention: Frank S. Vellucci

c.

Entire Agreement. This Agreement, including any other documents or writings referred to herein or delivered pursuant hereto, all of which form a part hereof, contains the entire understanding of the parties with respect to its subject matter. There are no agreements, promises, warranties, covenants, or undertakings other than those expressly set forth herein or therein. This Agreement merges with and supersedes all prior and contemporaneous agreements and understandings between the parties with respect to its subject matter.  The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

d.	Governing Law; Submission to Jurisdiction.

i.	This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

ii.

Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby shall be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the City of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

iii.	EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

 

10

 

e.

Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

f.

Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the successors, assigns and heirs of the Purchaser and Seller. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party; provided, that the Option and the rights and obligations conferred by this Agreement related thereto may be assigned by Purchaser without the consent of Seller.

g.

Amendment and Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

h.

Severability. If any provision of this Agreement, or the application thereof, shall for any reason or to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances shall continue in full force and effect and in no way be affected, impaired or invalidated.

i.	No Waiver. The failure of any party to enforce any of the provisions hereof shall not be construed to be a waiver of the right of such party thereafter to enforce such provisions.

j.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original as against any party whose signature appears thereon and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as signatories. A signed copy of this Agreement delivered by e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

Signature Page Follows

 

 

11

 

IN WITNESS WHEREOF, the Seller and the Purchaser has executed this Agreement as of the Agreement Date.

SELLER:

Brian Tepfer

PURCHASER:

PITON CAPITAL PARTNERS LLC

By: Piton Capital Management LLC, its managing member

By: Kokino LLC, its managing member

By:     /s/ Stephen A. Ives                              

      Name: Stephen A. Ives

      Title: Vice President

 

 

 

 

Exhibit D

 

---

(i)

a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement (A) to become effective as soon as practicable (and with respect to a registration statement described under Section 2(a), within 60 days after the initial filing thereof with the Commission) and (B) to remain effective as provided in Section 5(a); and

(ii)

such amendments to such registration statement (including post-effective amendments) and supplements to the prospectus included therein as may be necessary to keep such registration statement effective, subject to the qualifications in Section 5(a), and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement during such period in accordance with the intended methods of disposition by the Investor  set forth in such registration statement;

furnish to the Investor on behalf of the Kokino Clients such number of copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such

---

---

of the kind described in Section 4(d) herein, the Investor shall cause the Kokino Clients to forthwith discontinue sales of Registrable Securities pursuant to the registration statement covering such Registrable Securities until the Investor's receipt on behalf of the Kokino Clients of the copies of the supplemented or amended prospectus contemplated by said Section 4(d) and, if so directed by the Company, shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in the Investor's possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

(a) The Company shall, whether or not any such registration shall become effective, from time to time, pay all expenses (other than Selling Expenses, which shall be borne by the holders of the Registrable Securities as provided in Section 5(c)) incurred in connection with any registration of Registrable Securities pursuant to Section 2(a) or 3, including all registration, filing and qualification fees and expenses incurred in connection with compliance with securities or blue sky laws; printers' and accounting fees; and fees and disbursements of counsel for the Company and all independent public accountants and other Persons retained by the Company (collectively, "Registration Expenses"); provided, that in connection with each registration pursuant to Section 2(a), each of the Kokino Clients shall severally, and not jointly, reimburse the Company for the Kokino Clients' pro rata portion of the following Registration Expenses based upon the number of Registrable Shares held by the Kokino Clients that are included in the registration statement: (i) the Commission registration fee with respect to the

---

registration of the Registrable Securities,   (ii) the reasonable fees and disbursements of Nason, Yeager, Gerson, White & Lioce, P.A. in connection with (x) the preparation, filing and initial effectiveness of the registration statement for the registration of Registrable Securities, which reimbursement shall not exceed $30,000.00 in the aggregate for each registration, and (y) the preparation, filing and effectiveness of any post-effective amendment to such registration statement, and (iii) the reasonable fees and disbursements of the Company's independent auditors in connection with the preparation, filing and initial effectiveness of the registration statement and any post-effective amendment to such registration statement, other than the customary fees associated with the quarterly reviews and annual audits of the Company's financial statements included in its periodic reports filed with the Commission under the Exchange Act.

---

of-pocket expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to the Investor in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in said registration statement, said preliminary prospectus, said prospectus, or said amendment or supplement or any document incident to registration or qualification of any  Registrable Securities pursuant to Section 4(c) hereof in reliance upon and in conformity with written information furnished to the Company by the Investor or such Kokino Client specifically for use in the preparation thereof or (ii) any act or failure to act of the Investor or such Kokino Client including the failure of the Investor or such Kokino Client to deliver a prospectus as required by Section 5 of the Securities Act.

---

respectively.  No indemnified party shall make any settlement of any claims indemnified against hereunder without the written consent of the indemnifying party, which consent shall not be unreasonably withheld.  In the event that any indemnifying party enters into any settlement without the written consent of the indemnified party the indemnifying party shall not, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff of a release of such indemnified party from all liability in respect to such claim or litigation.

---

period not to exceed 70 days), effect a public sale or distribution (including any short sale) of any Registrable Securities or any security convertible into or exchangeable or exercisable for shares of Common Stock. The foregoing provisions of this Section 8 shall be applicable only if all officers and directors of the Company and all stockholders owning more than 10% of the Company's outstanding Common Stock are subject to the same restrictions. Each holder of Registrable Securities agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. Notwithstanding anything to the contrary contained in this Section 8, each holder of Registrable Securities shall be released, pro rata, from any lock-up agreement entered into pursuant to this Section 8 in the event and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to any officer, director or holder of greater than 10% of the outstanding Common Stock.

---

Upon request of the Investor, the Company will deliver to the Investor a written statement as to whether it has complied with such requirements.

171 Madison Avenue, 17th Floor

New York, New York

Telephone: (212) 213-6805

Email:  nik@usell.com

Nason, Yeager, Gerson, White & Lioce, P.A.

3001 PGA Blvd

Suite 305

Palm Beach Gardens, FL 33401

Email: mharris@nasonyeager.com

c/o Kokino LLC

201 Tresser Boulevard, 3rd Floor

Stamford, CT 06901

E-mail: glynam@kokino.com; raverick@kokino.com

Attention: Garrett Lynam

1301 Avenue of the Americas

New York, NY 10019

E-mail: fvellucci@chadbourne.com

Attention: Frank S. Vellucci

---

or to such other address as any of them, by notice to the other may designate from time to time.  Time shall be counted from the date of transmission.

[Signature Page Follows]

 

 

12

 

 

 

 

 

 

 

13