-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HXmziFWBQduFMveVTQD57CZn3p0k11rv4j8p8YCdtenAmHhnBZA5+t7ALIOIowZs GoL+hZikr/nvJF44t9aP2Q== 0000891554-01-504156.txt : 20010815 0000891554-01-504156.hdr.sgml : 20010815 ACCESSION NUMBER: 0000891554-01-504156 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010813 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANISYS TECHNOLOGY INC CENTRAL INDEX KEY: 0000929775 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 742675493 STATE OF INCORPORATION: WY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29038 FILM NUMBER: 1710192 BUSINESS ADDRESS: STREET 1: 12201 TECHNOLOGY BOULEVARD STREET 2: SUITE 125 CITY: AUSTIN STATE: TX ZIP: 78727-6101 BUSINESS PHONE: 5123354440 MAIL ADDRESS: STREET 1: 12201 TECHNOLOGY BLVD STREET 2: SUITE 130 CITY: AUSTIN STATE: TX ZIP: 78727-6101 8-K 1 d70580_8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 13, 2001 TANISYS TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Wyoming 0-29038 74-2675493 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification Number) 12201 Technology Blvd., Suite 125 Austin, Texas 78727 (Address of principal executive offices) (Zip Code) (512) 335-4440 (Registrant's Telephone Number, Including Area Code) 1 Item 1. Changes in Control of Registrant On August 13, 2001, Tanisys Technology, Inc., a Wyoming corporation ("Tanisys" or the "Registrant") sold 2,575,000 shares of its Series A Preferred Stock for $1.00 per share pursuant to a Series A Preferred Stock Purchase Agreement dated August 13, 2001 (the " Purchase Agreement") to the Purchasers named therein, including New Century Equity Holdings Corp., a Delaware corporation ("New Century"), which purchased 1,000,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is initially convertible into 33.334 shares of the Registrant's common stock. The amount of consideration paid by New Century for the 1,000,000 shares it purchased was $1,000,000. The percentage of the voting securities of the Registrant now beneficially owned directly or indirectly by New Century is 30%. New Century has informed the Registrant that the source of the funds it used to purchase the Series A Preferred Stock was cash on hand. Mr. Parris H. Holmes, Jr. serves as Chairman of the Board of Directors of both New Century and the Registrant. Effective August 13, 2001, each of Mr. Gordon Matthews and Mr. William D. Jobe resigned from their positions as members of the board of directors of the Registrant, and Mr. David P. Tusa and Mr. Justin Ferrero, both of whom were nominated by New Century, were appointed to the board of directors. Subject to compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended, and with any other applicable law, New Century will also have the right to replace Mr. Parris H. Holmes, Jr. with another nominee of New Century. In connection with the financing, the Registrant has agreed to make payments to the holders of the Series A Preferred Stock, to the extent its cash flow meets certain levels, until the holders have received the amount of their investment in the Series A Preferred Stock. At the sole option of New Century, these payments must be made by the Registrant's delivery of additional shares of Series A Preferred Stock to the holders of the Series A Preferred Stock. The Registrant has granted a security interest in all of its assets to secure its obligation to make these payments, and has agreed to issue additional shares of Series A Preferred Stock equal to 50% of the then fully diluted common stock to the holders if the Registrant fails to return the amount of their investment, plus cumulative dividends at the rate of 15% annually, by July 15, 2003. At the sole option of New Century, dividend payments must be made by the Registrant's delivery of additional shares of Series A Preferred Stock to the holders of the Series A Preferred Stock. The Registrant has also agreed to issue, at up to six different times, additional shares of Series A Preferred Stock to the holders of the Series A Preferred Stock equal to 25% of the then fully diluted common stock if the Registrant fails to meet any of certain financial requirements for six periods of time, beginning with the quarters ending September 30, 2001 and December 31, 2001, and then for the four six-month periods ending June 30, 2002, December 31, 2002, June 30, 2003 and December 31, 2003. If the slowdown in the worldwide semiconductor industry continues, the Registrant may not meet one or more of the specified financial targets, thus triggering the issuance of additional shares of Series A Preferred Stock. Each failure to meet any one of several financial requirements in any of the six periods will result in the Registrant being 2 required to issue additional shares of Series A Preferred Stock, for no additional consideration, to the holders of the Series A Preferred Stock. The Registrant has agreed to call a special meeting of its shareholders to vote on a proposal to authorize additional common stock so as to permit the conversion of the Series A Preferred Stock. The holders of the Series A Preferred Stock will be entitled to vote with the holders of the common stock at the special meeting, and will control sufficient votes to approve the proposal. If the Registrant issues all of the shares of Series A Preferred Stock that it could potentially be required to issue pursuant to the Purchase Agreement, and if New Century continues to hold all shares of Series A Preferred Stock it acquires as described above, the percentage of the voting securities of the Registrant then beneficially owned directly or indirectly by New Century would be approximately 38% by January 31, 2004, assuming that the Registrant issues no other equity securities. The following exhibit is filed as part of this report. Exhibit No. Description ---------- ----------- 3.3 Form of Amendment to Amended and Restated Articles of Incorporation of the Registrant 99.3 Series A Preferred Stock Purchase Agreement dated August 13, 2001 by and among the Registrant and the Purchasers named therein 99.4 Promissory Note dated August 13, 2001 made by the Registrant in favor of the Purchasers identified therein 99.5 Security Agreement - Pledge of Tangible and Intangible Assets dated August 13, 2001 between the Registrant and New Century Equity Holdings Corp., for itself and as agent for the Purchasers identified therein 99.6 Registration Rights Agreement dated August 13, 2001 between the Registrant and New Century Equity Holdings Corp. and the other Purchasers identified in the Series A Preferred Stock Purchase Agreement filed as Exhibit 99.3 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TANISYS TECHNOLOGY, INC. Date: August 13, 2001 By: /s/ CHARLES T. COMISO -------------------------------- Charles T. Comiso Chief Executive Officer, President and Director 4 EXHIBIT INDEX Exhibit No. Description ---------- ----------- 3.3 Form of Amendment to Amended and Restated Articles of Incorporation of the Registrant 99.3 Series A Preferred Stock Purchase Agreement dated August 13, 2001 by and among the Registrant and the Purchasers named therein 99.4 Promissory Note dated August 13, 2001 made by the Registrant in favor of the Purchasers identified therein 99.5 Security Agreement - Pledge of Tangible and Intangible Assets dated August 13, 2001 between the Registrant and New Century Equity Holdings Corp., for itself and as agent for the Purchasers identified therein 99.6 Registration Rights Agreement dated August 13, 2001 between the Registrant and New Century Equity Holdings Corp. and the other Purchasers identified in the Series A Preferred Stock Purchase Agreement filed as Exhibit 99.3 5 EX-3.3 3 d70580_ex-33.txt Exhibit 3.3 ARTICLES OF AMENDMENT OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF TANISYS TECHNOLOGY, INC. Tanisys Technology, Inc., a corporation duly existing under the laws of the State of Wyoming, acting pursuant to the approval of its Board of Directors on August 6, 2001, on a matter not requiring shareholder approval, hereby certifies as follows: 1. The name of the corporation is: Tanisys Technology, Inc. 2. Pursuant to Article 17-16-602 of the Wyoming Business Corporation Act (the "Act") and authority contained in the Amended and Restated Articles of Incorporation, the Board of Directors has determined the preferences, limitations and relative rights, with the limits set forth in Section 17-16-601 of the Act, of a series of Preferred Stock, par value $1.00 per share, designated as Series A Preferred Stock, and the text of the amendment determining the terms of the series of the shares is as follows: Article 4.C. is hereby included in its entirety as follows: Section 1. Designation. The distinctive serial designation of said series shall be "Series A Preferred Stock" (hereinafter called "Series A"). Each share of Series A shall be identical in all respects with all other shares of Series A except as to the dates from and after which dividends thereon shall be cumulative. Section 2. Number of Shares. The number of shares in Series A shall initially be 3,000,000, which number may from time to time be increased or decreased (but not below the number thereof then outstanding), by the Board of Directors. Shares of Series A that are redeemed, purchased or otherwise acquired by the Corporation or converted into Common Stock shall be canceled and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series. Section 3. Dividends. The holders of shares of Series A shall be entitled to receive, but only out of funds legally available therefor, cumulative cash dividends at the annual rate of $0.0045 per share, payable quarterly on the first days of April, July, October and January respectively, in each year with respect to the quarterly dividend period (or portion thereof) ending on the day preceding such respective dividend payment date, to holders of record on the respective date, not more than sixty nor less than ten days preceding such dividend payment date, fixed for such purpose by the Board of Directors in advance of payment of each particular dividend. At the sole option of New Century, dividends shall be paid in additional shares of Series A, at a price of $0.03 per share, provided such price shall be adjusted from time to time as -1- provided in Section 6 below. If the holders of Series A shares elect payment in additional shares of Series A, such shares shall be delivered in the manner specified hereinabove relating to the payment of cash dividends. Dividends on shares of Series A shall be cumulative from the date of issuance thereof as follows: (a) if issued prior to the record date for the first dividend on shares of Series A, from the date of issuance thereof; (b) if issued during the period commencing immediately after a record date for a dividend on shares of Series A and ending on the payment date for such dividend, from such dividend payment date; and (c) otherwise from the first day of April, July, October and January preceding the date of issuance of such shares. So long as any share of Series A remains outstanding, no dividend whatever shall be paid or declared and no distribution shall be made on any junior stock, other than a dividend payable solely in junior stock, and no shares of junior stock shall be purchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than as a result of a reclassification of junior stock, or the exchange or conversion of one share of junior stock, in each case, for or into another share of junior stock, and other than through the use of the proceeds of a substantially contemporaneous sale of other shares of junior stock), unless all accrued dividends on all outstanding shares of Series A for all past quarterly dividend periods shall have been paid and the full dividend thereon for the then current quarterly dividend period shall have been paid or declared and set apart for payment. Subject to the foregoing, and not otherwise, such dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors may be declared and paid on any junior stock from time to time out of any funds legally available therefor, and the shares of Series A shall not be entitled to participate therein. Section 4. Liquidation Rights and Preference. In the event of any voluntary or involuntary liquidation, sale, merger, consolidation, dissolution or winding up of the affairs of the Corporation ("Liquidation Event"), the holders of shares of Series A shall be entitled at the election of 50.1% of the holders of Series A, before any distribution or payment is made to the holders of any junior stock, to be paid an amount equal to five (5) times the Conversion Price, (as defined hereinafter), together with accrued dividends to such distribution or payment date whether or not earned or declared. If such amount shall have been paid in full to all holders of shares of Series A, the remaining assets of the Corporation shall be distributed among the holders of junior stock and the Series A (as if the same was fully converted into Common Stock immediately prior to such distribution or payment date), according to their respective rights and preferences and in each case according to their respective numbers of shares. -2- Section 5. Redemption. The Corporation shall have no rights to redeem the Series A. In the case of a Liquidation Event, the Series A shall be redeemable, out of funds legally available therefor, solely upon the election of 50.1% of the holders of Series A, in accordance with the terms of Section 4 above. Section 6. Conversion Rights. The holders of shares of Series A shall have the right, at their option, to convert such shares into shares of Common Stock of the Corporation at any time on and after the Closing Date and subject to the following terms and conditions: (a) The shares of Series A shall be convertible at the office of any transfer agent for the Common Stock or the principal office of the Corporation and at such other office or offices, if any, as the Board of Directors may designate, into fully paid and non-assessable shares (calculated as to each conversion to the nearest 1/100th of a share) of Common Stock of the Corporation, at the initial conversion ratio of one share of Series A for 33.334 shares of Common Stock ("Conversion Ratio"), subject to adjustment from time to time as provided below. The price fixed for purposes of any such conversion initially shall be $0.03 per share of Common Stock ("Conversion Price"), subject to adjustment from time to time as provided below. (b) In order to convert shares of Series A into Common Stock the holder thereof shall surrender at the office or offices hereinabove mentioned the certificate or certificates therefor, duly endorsed or assigned to the Corporation or in blank, and give written notice to the Corporation at said office or offices that such holder elects to convert such shares. Shares of Series A surrendered for conversion during the period from the close of business on any record date for the payment of a dividend on the shares of Series A to the opening of business on the date for payment of such dividend shall be accompanied by a payment of an amount equal to the dividend payable on such dividend payment date on the shares of Series A being surrendered for conversion. Shares of Series A shall be deemed to have been converted immediately prior to the close of business on the day of the surrender of the certificates for such shares for conversion in accordance with the foregoing provisions, and the person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock at such time. As promptly as practicable on or after the conversion date, the Corporation shall issue and shall deliver at such office a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion, together with payment in lieu of any fraction of a share, as hereinafter provided, to the person or persons entitled to receive the same. (c) No fractional shares of Common Stock shall be issued upon conversion of shares of Series A, but, instead of any fraction of a share which would otherwise be issuable, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction times the price per share of $0.03. -3- (d) So long as any Series A is issued and outstanding, in the event the Corporation shall issue any shares of equity securities, including Common Stock or other shares convertible into Common Stock, without consideration or for a consideration less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in each such event the Conversion Price shall be reduced, concurrently with such issue to such lower price. In any such event, the Corporation shall issue the aggregate number of additional shares of Series A to the holders of Series A, pro rata, within ten (10) days of the issuance of other securities sold for no consideration or for consideration per share less than the Conversion Price, equal in number to that determined by a fraction, the numerator of which shall be the number of shares of Series A issued and outstanding immediately prior to any such issuance, and the denominator of which shall be the Conversion Price, as adjusted pursuant to the foregoing provisions of this subsection (d), less the number of shares of Series A issued and outstanding immediately prior to any such issuance. (e) The Conversion Ratio, and the corresponding number of shares of securities to be received upon conversion of the Series A, shall be adjusted from time to time under this subsection (e), as follows: (i) In the event the outstanding shares of Common Stock shall be subdivided by stock split, stock dividend or otherwise; into a greater number of shares of Common Stock, the Conversion Price of Series A then in effect shall concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined or consolidated into a lesser number of shares of Common Stock, the Conversion Price of Series A then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. (ii) In the event the Corporation makes, or fixes a record date for the determination of holders of Common Stock entitled to receive any distribution payable in property or in equity securities of the Corporation other than shares of Common Stock, and other than as otherwise adjusted for in this subsection (e), then in each such event the holders of Series A shall receive, at the time of such distribution, the amount of property or the number of equity securities of the Corporation that they would have received had their Series A been converted into Common Stock on the date of such event. (iii) If the Common Stock shall be changed into the same or a different number of shares of any other class or classes of stock or other equity securities or property, whether by capital reorganization, reclassification or otherwise, then each share of Series A shall thereafter be convertible into the number of shares of stock or other equity securities or property to which a holder of the number of shares of Common Stock deliverable upon conversion of such shares of Series A shall have been entitled upon such reorganization, reclassification or other event. -4- (iv) In any case in which this subsection (d) shall require that an adjustment as a result of any event become effective from and after a record date, the Corporation may elect to defer until after the occurrence of such event (A) issuing to the holder of any shares of Series A converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion over and above the shares issuable on the basis of the Conversion Price in effect immediately prior to adjustment and (B) paying to such holder any amount in cash in lieu of a fractional share of Common Stock pursuant to subsection (c) above. In lieu of the shares the issuance of which is deferred pursuant to item (A) above, the Corporation shall issue or cause one of its transfer agents to issue due bills or other appropriate evidence of the right to receive such shares. (v) The Board of Directors may make such adjustments in the Conversion Price or Conversion Ratio, in addition to those required by this subsection (d), as shall be determined by the Board of Directors to be advisable in order to avoid taxation so far as practicable of any dividend of stock or stock rights or any event treated as such for Federal income tax purposes to the recipients. The Board of Directors, with the consent of a majority the issued and outstanding Series A, shall have the power to resolve any ambiguity or correct any error in this subsection (d), and its action in so doing shall be final and conclusive. (vi) In the event that any time, as a result of an adjustment made pursuant to this subsection (e), the holder of any shares of Series A thereafter surrendered for conversion shall become entitled to receive any shares of capital stock of the Corporation other than Common Stock, thereafter the number of such other shares so receivable upon conversion of such shares of Series A 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 Common Stock contained in this subsection (e). (f) Whenever the Conversion Price or Conversion Ratio is adjusted as herein provided: (i) The Corporation shall compute the adjusted Conversion Price or Conversion Ratio in accordance with this Section 6 and shall cause to be prepared a certificate signed by the Corporation's treasurer setting forth the adjusted Conversion Price or Conversion Ratio and showing in reasonable detail the fact upon which such adjustment is based, and such certificate shall forthwith be filed with each transfer agent for the shares of Series A; and (ii) A notice stating that the Conversion Price or Conversion Ratio has been adjusted and setting forth the adjusted Conversion Price or Conversion Ratio shall, as soon as practicable, be mailed to the holders of record of outstanding -5- shares of Series A. (g) In case: (i) The Corporation shall declare a dividend or other distribution on its Common Stock payable otherwise than in cash out of retained earnings; (ii) The Corporation shall authorize the issuance to the holders of its Common Stock of rights or warrants entitling them to subscribe for or purchase any shares of capital stock of any class or any other subscription rights or warrants; or (iii) Of any reclassification of the capital stock of the Corporation (other than a subdivision or combination of its outstanding shares of Common Stock), or of any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or of the sale, transfer or other disposition of all or substantially all of the assets of the Corporation; or (iv) Of the voluntary or involuntary liquidation, dissolution or winding up of the Corporation; then the Corporation shall cause to be filed with each transfer agent for the shares of Series A and shall cause to be mailed to the holders of record of the outstanding shares of Series A, at least 20 days (or 10 days in any case specified in clause (i) or (ii) above) prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date as of which the holders of record of Common Stock to be entitled to such dividend, distribution, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, disposition, liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of record of Common Stock shall be entitled to exchange their shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, disposition, liquidation, dissolution or winding up. Failure to give notice as required by this subsection (g), or any defect therein, shall not affect the legality or validity of any such dividend, distribution, right, warrant, reclassification, consolidation, merger, sale, transfer, disposition, liquidation, dissolution or winding up, or the vote on any action authorizing such. (h) The Corporation shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of issuance upon conversion of shares of Series A, the full number of shares of Common Stock then deliverable upon the conversion of all shares of Series A then outstanding. (i) The Corporation will pay any and all taxes that may be payable in respect -6- of the issuance or delivery of shares of Common Stock on conversion of shares of Series A pursuant thereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A so converted were registered, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the Corporation the amount of any such tax or has established to the satisfaction of the Corporation that such tax has been paid. (j) The certificate of any independent firm of public accountants of recognized standing selected by the Board of Directors shall be presumptive evidence of the correctness of any computation made under this Section 6. Section 7. Voting Rights. The holders of shares of Series A shall be entitled to one vote for each share of Common Stock into which the shares of Series A are convertible and, except as hereinafter provided, shall vote together with the holders of shares of Common Stock (and of any other class or series which may similarly be entitled to vote with the holders of shares of Common Stock) as a single class upon all matters upon which stockholders are entitled to vote, provided if the Corporation shall be in default hereunder or under any terms of that certain Series A Preferred Stock Purchase Agreement, and more than $500,000 of the Series A is then outstanding (determined by reference to the Conversion Price then in effect), the Conversion Ratio of the Series A shall in each such instance be adjusted to provide the holders of Series A the number of votes equal to that that number of shares of Common Stock required to vote 66 2/3% of the issued and outstanding Common Stock then entitled to vote on all matters to come before the stockholders of the Corporation. So long as the Series A and any other class or series of stock of the Corporation ranking on a parity with Series A as to payment of dividends (any such class or series being herein referred to as "parity stock") shall be issued and outstanding, and subject to the requirements of Section 14(f) of the Securities Exchange Act of 1934, as amended, to the extent applicable, and other applicable law, the number of directors then constituting the Board of Directors shall be increased (at the election of the Series A stockholders as hereinafter provided) in order to effect not less than fifty and one/tenth percent (50.1%) representation on the Corporation's Board of Directors and the holders of shares of Series A, voting separately as a class, shall be entitled to elect such additional directors at any annual meeting of stockholders or any special meeting of the holders of shares of Series A as hereinafter provided. At any time after such voting power shall have been so vested in the holders of shares of Series A and parity stock, the Secretary of the Corporation may, and upon the written request of any holder of shares of Series A (addressed to the Secretary at the principal office of the Corporation) shall, call a special meeting of the holders of the shares of Series A and parity stock for the election of the two or more directors to be elected by them as herein provided, such call to be made by notice similar to that provided in the by-laws for a special meeting of the stockholders or as required by law. If any such special meeting required to be called as above provided shall not be called by the Secretary within 20 days after receipt of any such request, then any holder of shares of Series A may call such meeting, upon the notice above provided, and for that purpose shall have access to the stock books of the Corporation. The directors elected at any such special meeting shall hold office until -7- the next annual meeting of the stockholders if such office shall not have previously terminated as above provided. In case any vacancy shall occur among the directors elected by the holders of the shares of Series A and parity stock, a successor shall be elected by the Board of Directors to serve until the next annual meeting of the stockholders upon the nomination of the then remaining director elected by the holders of the shares of Series A and parity stock or the successor of such remaining director. If the holders of shares of Series A become entitled under the foregoing provisions to elect or participate in the election of two or more directors such entitlement shall not affect the right of such holders to vote as stated in the first paragraph of this Section 7, including the right to vote in the election of the remaining directors. So long as any shares of Series A are outstanding, in addition to any other vote or consent of stockholders required by law or by the certificate of incorporation, the consent of the holders of at least 66 2/3 % of the shares of Series A, acting as a single class regardless of series, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating: (i) Any amendment, alteration or repeal of any of the provisions of the certificate of incorporation, or of the by-laws, of the Corporation, which would alter or change the powers, preferences or special rights of the holders of the Series A and of all such other series of the Preferred Stock so as to affect them adversely; provided, however, that the amendment of the provisions of the certificate of incorporation so as to authorize or create, or to increase the authorized amount of Series A, and any junior stock or any shares of any class or series ranking on a parity with the shares of Series A and all such other series of the Preferred Stock shall not be deemed to affect adversely the powers, preferences or special tights of the holders of the shares of Series A and all such other series of the Preferred Stock and provided, further, that if any such amendment, alteration or repeal would affect adversely any powers, preferences or special rights of the holders of the shares of Series A which are not enjoyed by some or all of the holders of other series otherwise entitled to vote in accordance with this paragraph, the consent of the holders of at least 66 2/3 % of the shares of Series A and of all other series similarly affected, similarly given, shall be required in lieu of the consent of the holders of at least 66 2/3 % of the shares of Series A and of all other series of the Preferred Stock otherwise entitled to vote in accordance with this paragraph; (ii) Any amendment, alteration or repeal of any of the provisions of the certificate of the incorporation, or of the by-laws of the Corporation, which would alter or change the size or composition of the Board of Directors of the Corporation; (iii) The authorization or creation of, or the increase in the authorized amount of, any shares of any class or any security convertible into shares of any class ranking prior to the shares of Series A and all such other series of the -8- Preferred Stock in the distribution of assets on any liquidation, dissolution, or winding up of the Corporation or in the payment of dividends; (iv) The merger or consolidation of the Corporation with or into any other corporation, unless the surviving or resulting corporation will thereafter have no class or series of shares and no other securities either authorized or outstanding ranking prior to the Series A in the distribution of assets on liquidation, dissolution or winding up or in the payment of dividends, except the same number of shares and the same amount of other securities with the same rights and preferences as the shares and securities of the Corporation respectively authorized and outstanding immediately preceding such merger or consolidation, and each holder of shares of Series A immediately preceding such merger or consolidation shall receive the same number of shares, with the same rights and preferences, of the surviving or resulting corporation; (v) Any increase in the size of the pool of Common Stock or common stock equivalents, including options, or warrants or other rights to subscribe, available for award to employees, consultants or other third parties; or (vi) A substantial change or modification of the major business lines or plans of the Corporation. So long as any shares of Series A are outstanding, in addition to any other vote or consent of stockholders required by law or by the certificate of incorporation, the consent of the holders of at least a majority of the shares of Series A and of all other series of the Preferred Stock similarly entitled to vote upon the matters specified in this paragraph at the time outstanding, acting as a single class regardless of series, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating any increase or decrease (but not below the number of shares thereof then outstanding) in the authorized number of shares of Preferred Stock, or the authorization or creation of, or the increase in the authorized number of, any shares of any class or series or any security convertible into shares of any class or series ranking on a parity with the Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up of the Corporation or in the payment of dividends. Section 8. Preemptive Rights. If the Corporation shall issue Common Stock or other equity securities ("Equity Securities"), each holder of Series A shall be entitled to purchase the portion of such Common Stock or Equity Securities to be issued necessary in order that the aggregate shares of Common Stock and Equity Securities held by such holder constitute the same percentage of all Common Stock (assuming the conversion, exercise or exchange of all Equity Securities) after the issuance of such Common Stock or Equity Securities as before the issuance thereof; provided, however, that such preemptive right shall not apply to (a) issuances of Common Stock or Equity Securities upon the conversion, exercise or exchange of Equity Securities to which the preemptive right was applicable; (b) issuances of Common Stock or Equity Securities in connection with the preemptive rights granted hereunder; (c) issuances of -9- shares pursuant to that certain Series A Preferred Stock Purchase Agreement, or upon conversion of the Series A; (d) issuances of Common Stock upon the exercise of options issued under the Corporation's employee stock option plan(s); (e) issuances of Common Stock upon the exercise of warrants issued by the Corporation; or (f) other issuances of Common Stock or Equity Securities authorized by the Board of Directors of the Corporation. The price of securities which each holder becomes entitled to purchase by reason hereof shall be the same price at which such securities are offered to others. A holder may exercise its right under this Section 8 to purchase Equity Securities by paying the purchase price therefor at the principal office of the Corporation within ten (10) days after receipt of notice from the Corporation (which notice by the Corporation shall be given at least fifteen (15) days before the issuance of the Equity Securities) stating the number of amount of Equity Securities it intends to issue, the price and characteristics thereof and the number of shares that such holder is entitled to purchase. The holder shall pay such purchase price in cash or by check or wire transfer; provided, however, that if the Corporation is indebted to such holder, the holder shall be entitled, at the holder's sole option, to credit against the purchase price all or any portion of the Corporation's indebtedness to such holder which is then due (accrued but unpaid dividends on the Series A shall not be deemed to be indebtedness of purposes of such credit). A holder's preemptive rights hereunder shall be deemed to exercised immediately prior to the close of business on the day of payment of the purchase price in accordance with the foregoing provisions, and at such time such holder shall be treated for all purposes as the record holder of the Equity Securities. As promptly as practicable (and in any event within ten (10) days) on or after the Purchase Date, the Corporation shall issue and deliver at its principal office a certificate or certificates for the number of full shares of Common Stock or the number of full shares or amount, whichever is applicable, of Equity Securities together with cash for any fraction of a share or portion of an Equity Security at the Purchase Price to which the holder is entitled hereunder. Section 9. Definitions. As used herein with respect to Series A, the following terms shall have the following meanings: (a) The term "junior stock" shall mean the Common Stock and any other class or series of stock of the Corporation hereafter authorized over which Series A has preference or priority in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. (b) The term "accrued dividends" with respect to any share of any class or series, shall mean an amount computed at the annual dividend rate for the class or series of which the particular share is a part, from the date on which dividends on such share became cumulative to and including the date to which such dividends are to be accrued, less the aggregate amount of all dividends theretofore paid thereon. (c) The term "business day" shall mean each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in San Antonio, Texas are not authorized or obligated by law or executive order to close. (d) The term "New Century" shall mean New Century Equity Holdings Corp., -10- a Delaware corporation, or its lawful successors or assigns. Section 10. Other Rights. The shares of Series A shall not have any powers, preferences or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein. IN WITNESS WHEREOF, Tanisys Technology, Inc. has caused this certificate to be signed by its President, this 6th day of August, 2001. TANISYS TECHNOLOGY, INC. A Wyoming Corporation By: /s/Charles T. Comiso Its President -11- EX-99.3 4 d70580_ex-993.txt Exhibit 99.3 SERIES A PREFERRED STOCK PURCHASE AGREEMENT AMONG TANISYS TECHNOLOGY, INC. AND THE PERSONS AND ENTITIES LISTED ON THE SCHEDULE OF PURCHASERS HERETO TABLE OF CONTENTS Page ---- ARTICLE I Investment and Purchase of Convertible Preferred Stock 1.1 Authorization 1 1.2 Sale of Series A Preferred 2 1.3 Adjustment of Purchase Price, Issuance of Additional Shares 2 1.4 Issuance of Additional Series A Preferred 2 1.5 Additional Consideration; Required Payments 3 1.6 Board Representation 3 1.7 Employee Stock Option Limitations 3 1.8 Special Information Rights 4 1.9 Security Interest 4 1.10 Registration Rights 4 1.11 Ordinary Course Operations 4 ARTICLE II Closing and Delivery 2.1 The Closing 4 2.2 Delivery 4 ARTICLE III Representations and Warranties of the Company 3.1 Organization 5 3.2 Corporate Power 5 3.3 Subsidiaries 5 3.4 Capitalization 5 3.5 Authorization 6 3.6 Consents and Approvals; No Violations 6 3.7 Financial Information 6 3.8 Changes 7 3.9 Absence of Undisclosed Liabilities 8 3.10 Title to Properties and Assets; Liens, etc 8 3.11 Legal Compliance; Compliance with Instruments 8 3.12 Intellectual Property Rights 8 3.13 Litigation 9 3.14 Registration Rights 9 3.15 Governmental Consents, etc. 9 3.16 Offering 9 3.17 Brokers or Finders; Other Offers 10 3.18 Tax Matters 10 3.19 Environmental and Safety Regulations 10 3.20 Disclosure 10 i ARTICLE IV Representations and Warranties of the Purchasers 4.1 Authorization 11 4.2 Experience 11 4.3 Investment 11 4.4 Restrictive Legend/Rule 144 11 4.5 Access to Information 12 4.6 No Broker 12 4.7 Accredited Purchaser 13 ARTICLE V Purchasers' Conditions to Closing 5.1 Representations and Warranties Correct 13 5.2 Covenants 13 5.3 Reservation of Shares 13 5.4 Deliveries 13 5.5 Corporate Proceedings; Consents, etc. 13 5.6 Amendment to Restated Certificate of Incorporation 13 5.7 Blue Sky Matters 14 5.8 Certificate of Secretary 14 5.9 Opinion of Counsel 14 5.10 Directors' and Officers' Liability Coverage 14 ARTICLE VI Company's Conditions to Closing 6.1 Representations 14 6.2 Compliance with State Securities Laws 14 6.3 Amendment to Restated Certificate of Incorporation 15 6.4 Payment of Purchase Price 15 ARTICLE VII Miscellaneous 7.1 Fees 15 7.2 Exchanges; Lost, Stolen or Mutilated Certificates 15 7.3 Survival of Representations, Warranties and Agreements, etc. 15 7.4 Indemnification 15 7.5 Remedies 16 7.6 Successors and Assigns; Parties in Interest 16 7.7 Entire Agreement 16 7.8 Notices 16 7.9 Changes 17 7.10 Counterparts 17 7.11 Headings 17 7.12 Governing Law 17 ii 7.13 Severability 18 7.14 Jurisdiction 18 7.15 Exculpation Among Purchasers 18 7.16 Definitions 18 Schedule A Schedule of Purchasers Schedule B Schedule of Exceptions Exhibit A Articles of Amendment of Certificate Exhibit B Financial Performance Objectives Exhibit C Promissory Note Exhibit D Security Agreement Exhibit E Registration Rights Agreement Exhibit F Opinion of Company's Counsel iii TANISYS TECHNOLOGY, INC. SERIES A PREFERRED STOCK PURCHASE AGREEMENT This Series A Preferred Stock Purchase Agreement ("Agreement") is made and entered into as of the 13th day of August 2001, by and among Tanisys Technology, Inc., a Wyoming corporation ("Company") having its principal office at 12201 Technology Blvd., Suite 125, Austin, Texas 78727; and New Century Equity Holdings Corp., a Delaware corporation ("New Century"), and the persons and entities listed on the Schedule of Purchasers attached hereto as Schedule A (individually, New Century and all such persons and entities may be referred to as "Purchaser," and, collectively, New Century and all such persons and entities may be referred to as "Purchasers"). WITNESSETH: WHEREAS, the Company is engaged in the business of designing, developing and manufacturing production level automated test equipment for a wide variety of semiconductor memory technologies; WHEREAS, 24,147,534 shares of the Company's common stock, no par value per share ("Common Stock"), and no shares of the Company's preferred stock, par value $1.00 per share ("Preferred Stock") are currently issued and outstanding; WHEREAS, the Company intends to authorize and issue shares of a Series A Preferred Stock, par value $1.00 per share ("Series A Preferred"), and the Purchasers desire to purchase such shares of Series A Preferred, pursuant and subject to the terms and conditions contained herein; and WHEREAS, the Company intends to file with the Office of the Secretary of State of the State of Wyoming an amendment to its Certificate of Incorporation, as amended ("Certificate") setting forth, among other things, the designations, rights, preferences and privileges and the qualifications, limitations and restrictions of the Series A Preferred; NOW, THEREFORE, in consideration of the premises contained herein and other good and valuable consideration, receipt of which is mutually acknowledged, the parties hereto agree as follows: ARTICLE I Investment and Purchase of Convertible Preferred Stock 1.1 Authorization. Subject to the terms and conditions hereof, the Company has (i) authorized the sale and issuance of up to 50,000,000 shares of its Series A Preferred, having the rights, privileges, preferences and restrictions as set forth in the Certificate of the Company 1 attached hereto as Exhibit A, and (ii) agreed to amend its Certificate to authorize an aggregate of 50,000,000 shares of Preferred Stock and 1,000,000,000 (One Billion) shares of Common Stock, and to reserve for issuance up to 50,000,000 shares of Preferred Stock and 1,000,000,000 (One Billion) shares of Common Stock required for conversion of the Series A Preferred ("Reserved Shares"). The shares of Common Stock into which the Series A Preferred will be convertible are referred to herein as the "Conversion Stock." The Company shall obtain from its shareholders prior to December 31, 2001 approval for the authorization of the amended Certificate described above, except in the case of any review of or comment on the Company's proxy statement by the Securities and Exchange Commission, in which case the foregoing date shall be extended for the period of review or comment. 1.2 Sale of Series A Preferred. Subject to the terms and conditions hereof, the Company hereby agrees to severally issue and sell and each Purchaser hereby agrees to severally purchase from the Company at the Closing the number of shares of Series A Preferred set forth beside such Purchaser's name in the Schedule of Purchasers at a price of $1.00 per share (the "Purchase Price"). 1.3 Adjustment of Purchase Price, Issuance of Additional Shares. So long as any Series A Preferred is issued and outstanding, if the Company shall issue any shares of Common Stock, Preferred Stock, any other shares convertible into Common Stock, or common stock equivalents, including but not limited to any options, warrants or other rights to subscribe for or acquire any Common Stock, without consideration or for consideration less than the Purchase Price, then and in each such event the Company shall issue additional shares of Series A Preferred to the Purchasers, pro rata, within ten (10) days of the issuance of other securities sold for no consideration or for consideration per share less than the Purchase Price as provided in the Certificate. 1.4 Issuance of Additional Series A Preferred. The Company and Purchasers acknowledge that the Purchase Price has been negotiated based upon certain financial performance projections proposed by the Company. If the Company's actual financial performance, as determined by Generally Accepted Accounting Principles, consistently applied, in any quarterly or semi-annual period does not meet or exceed all of the financial performance objectives described in Exhibit B (calculated prior to any expenses or costs incurred by the Company in order to comply with the Company's various obligations or undertakings under this Agreement or other agreements related to this Agreement) ("Financial Performance Objectives"), the Company shall issue to the Purchasers, pro rata, additional Series A Preferred equal in number to twenty-five percent (25%) of the then outstanding Common Stock, Preferred Stock (including the outstanding Series A Preferred) and any common stock equivalents, including but not limited to any options, warrants or other rights to subscribe for or acquire any Common Stock, on an as-if converted and fully diluted basis. Any issuance of additional Series A Preferred pursuant to the provisions of this Section 1.4 shall be made not later than thirty (30) days after the applicable quarterly or semi-annual period referred to in Exhibit B. 2 1.5 Promissory Note; Required Payments. A sum equal to the aggregate amount set forth in Schedule A ("Additional Consideration") shall be paid by the Company, in accordance with the provisions of that certain promissory note attached hereto as Exhibit C, (the "Note") in quarterly installments to the holders of Series A Preferred, commencing March 31, 2002. The payments required hereinabove in Section 1.5 shall be calculated by multiplying the excess of the quarterly EBITDA for the Company (as defined hereinafter) less quarterly capital expenditures over $300,000, by .5 (or 50%). Such payments shall be paid until the Additional Consideration has been repaid in full. The affirmative consent of New Century shall be required and sufficient to approve any capital expenditures that would exceed the budget contained in Exhibit B. At the sole option of New Century, the payments required hereinabove in Section 1.5 may be converted into Series A Preferred, in lieu of cash, at a price equal to the Series A Preferred Purchase Price (or as such Price may be adjusted as provided above in Section 1.3). If New Century does not elect to convert such required payments into Series A Preferred, the required payments shall be paid in cash in accordance with the foregoing provisions. If the Additional Consideration is not repaid in full to the Purchasers on or before July 15, 2003, the Company shall issue to the Purchasers, pro rata, additional Series A Preferred equal in number to fifty percent (50%) of the then outstanding Common Stock and Preferred Stock (including the outstanding Series A Preferred), and any Common Stock equivalents, including but not limited to any options, warrants or other rights to subscribe for any Common Stock, on an as-if converted and fully diluted basis. 1.6 Board Representation. On the Closing Date, the Board of Directors of the Company shall be reconstituted to a total of five (5) directors, and New Century shall appoint two (2) such directors. Thereafter, upon compliance with applicable law relating to appropriate information to or solicitation of the Company's stockholders, and in accordance with the Certificate, New Century shall be entitled to appoint three (3) such directors. All such directors shall have all rights, including voting rights and access to information, as are then held by the members of the Company's Board of Directors. 1.7 Employee Stock Option Limitations. As of and after the Closing Date, the Company may issue or grant stock options, warrants or other securities in favor of eligible employees or consultants in an aggregate amount not to exceed, as of the Closing Date, fifteen percent (15%) of the total issued and outstanding Common Stock of the Company, and the Common Stock into which the Series A Preferred and any other issued and outstanding securities of the Company are convertible (it being understood that such options may not be exercised prior to shareholder approval of the amendment of the Company Certificate pursuant to Section 1.1). The terms and conditions of any such issuances or grants shall be fixed by the Board of Directors, as the same is reconstituted on the Closing Date; and the Company's Registration Statement on Form S-8 shall be amended to cover all of the shares that may be issued pursuant to the option plan, or a new Form S-8 shall be filed covering such shares. 3 1.8 Special Information Rights. So long as any shares of Series A Preferred remain outstanding having a value of Five Hundred Thousand Dollars ($500,000), calculated by reference to the Purchase Price, the Company shall provide all holders of Series A Preferred: (i) audited annual financial statements within ninety (90) days after the end of each fiscal year; (ii) monthly financial and operating statements compared against the Company's operating plan or budget, within thirty (30) days after the end of each month, or forty-five (45) days after the end of each fiscal quarter; (iii) an annual operating plan or budget, not later than thirty (30) days prior to the beginning of each fiscal year; (iv) inspection and visitation rights, as reasonably requested; and (v) any other Company information (operational, financial or otherwise), as reasonably requested. 1.9 Security Interest. The obligations of the Company in favor of the Series A Preferred shall be secured by the grant of a lien upon all tangible and intangible assets of the Company, including but not limited to all cash and equivalents, accounts receivable, inventory, equipment and general intangibles (including all Intellectual Property Rights of any kind held by the Company), as further set forth in the Security Agreement, attached hereto as Exhibit D. The lien shall be subordinate to the lien granted by the Company in connection with its existing credit agreement with Silicon Valley Bank and shall be structured so as to avoid any breach of, or default under, such credit agreement. 1.10 Registration Rights. In connection with the execution of this Agreement, the Company and the Purchasers shall enter into a Registration Rights Agreement by which the Company will grant the Purchasers certain registration rights for the shares of Series A Preferred and any other securities of the Company that the Purchasers acquire under this Agreement or any related agreement. The Company shall execute and deliver to the Purchasers at Closing a Registration Rights Agreement substantially in the form attached hereto as Exhibit E. 1.11 Ordinary Course Operations. From and after the Closing Date, the Company shall obtain the Board of Directors' approval for any and all transactions not in the ordinary course of business of the Company. ARTICLE II Closing and Delivery 2.1 The Closing. The closing of the purchase and sale of the Series A Preferred shall be held at the offices of Loeffler, Jonas & Tuggey, LLP at 10:00 a.m. local time on August 13, 2001 ("Closing Date") or at such other time and place upon which the Company and the Purchasers shall agree ("Closing"). 2.2 Delivery. At the Closing the Company will deliver to each Purchaser a certificate or certificates, registered in such Purchaser's name as set forth on the Schedule of Purchasers, representing the number of shares of Series A Preferred purchased by such Purchaser. Delivery of the certificates will be made against payment of the Purchase Price by the Purchasers, 4 by certified check or checks payable to the order of the Company or by wire transfer funds to the account of the Company per the Company's instructions. ARTICLE III Representations and Warranties of the Company Except as set forth on the Schedule of Exceptions attached hereto as Schedule B, the Company represents and warrants to the Purchasers as follows: 3.1 Organization. The Company is a corporation duly continued and existing under the laws of the State of Wyoming. The Company has requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified as a foreign corporation and in good standing to do business in all such jurisdictions in which the conduct of its business or its ownership, leasing or operation of property requires such qualification, except for those jurisdictions in which failure to so qualify would not have a material adverse effect on the Company's business as now conducted or proposed to be conducted. The Company has furnished each Purchaser or its counsel with copies of its Certificate and Bylaws, as amended. Said copies are true, correct and complete and contain all amendments through the Closing Date. 3.2 Corporate Power. The Company has all requisite legal and corporate power and authority to execute and deliver this Agreement, to sell and issue the Series A Preferred hereunder, and to carry out and perform its obligations under the terms of this Agreement. After the amendment of the Company's Certificate to authorize additional shares of Common Stock and Preferred Stock as contemplated by Section 1.1, the Company will have the requisite legal and corporate power and authority to increase the number of shares of authorized preferred and common stock. 3.3 Subsidiaries. The Company has no subsidiaries or affiliated companies and does not otherwise own or control, directly or indirectly, any equity interest in any corporation, association or business entity. 3.4 Capitalization. Immediately prior to the Closing, the authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, of which 24,147,534 shares are issued and outstanding, and 10,000,000 shares of Preferred Stock, of which no shares are outstanding. The outstanding shares have been duly authorized and validly issued, and are fully paid and nonassessable. As of the Closing Date, the Company has reserved or agreed to reserve 50,000,000 shares of Series A Preferred for issuance hereunder, 1,000,000,000 (One Billion) shares of Common Stock for issuance upon conversion of the Series A Preferred, and the number of shares of Common Stock described in Schedule B for issuance to employees, consultants or directors under stock plans or arrangements approved by the Board of Directors. Options to purchase 4,810,450 shares of Common Stock are issued and outstanding under the Company's employee stock option plan, and 383,334 shares of Common Stock are issued and outstanding under warrants issued by the Company. 5 All outstanding securities of the Company were issued in compliance with applicable state and federal securities laws. The Series A Preferred shall have the rights, preferences, privileges and restrictions set forth in the Certificate. 3.5 Authorization. The Company has full corporate power and authority to issue the Series A Preferred and to execute and deliver this Agreement, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized and approved by the Board of Directors of the Company and, except as described in Section 1.1, no other corporate governance action on the part of the Company is necessary to authorize the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by an authorized officer of the Company and is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except to the extent that its respective enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally or by general equitable principles. 3.6 Consents and Approvals; No Violations. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not, with or without the giving of notice or the lapse of time or both (i) violate, conflict with, or result in a breach or default under any provision of the charter or bylaws of the Company, (ii) violate any statute, ordinance, rule, regulation, order, judgment or decree of any court or of any governmental or regulatory body, agency or authority applicable to the Company or by which any of its properties or assets may be bound, (iii) require any filing by the Company with, or require the Company to obtain any permit of, or require the Company to give any notice to, any governmental or regulatory body, agency or authority or (iv) result in a violation or breach by the Company of, conflict with, constitute (with or without due notice or lapse of time or both) a default by the Company (or give rise to any right of termination, cancellation, payment or acceleration) under or result in the creation of any encumbrance upon any of the assets or properties of the Company under any of the terms, conditions, or provisions of any note, bond, mortgage, indenture, permit, contract, lease or other instrument, agreement or obligation to which the Company is a party, or by which it or any of its assets or properties may be bound. 3.7 Financial Information. (a) Since May 15, 2001, the Company has filed with the SEC all required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) required under the Securities Act of 1933, the Securities Exchange Act of 1934, and the rules and regulations promulgated under the Securities Act and the Exchange Act (the "Company SEC Documents"). As of their respective dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents, and none of the Company SEC Documents at the time they were filed contained any untrue statement of a material fact or 6 omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Company SEC Documents comply as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, and have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of the Company's operations, stockholders' equity and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal recurring year-end audit adjustments) and are consistent in all material respects with the books and records of the Company. Since May 15, 2001, there has been no change in any of the significant accounting (including tax accounting) policies, practices or procedures of the Company. Except for liabilities or obligations that are accrued or reserved against the Company's financial statements included in the Company SEC Documents, the Company has no liabilities or obligations (whether absolute, accrued, contingent or otherwise, and whether due or to become due) that would be required by GAAP to be reflected on a consolidated balance sheet, or the notes thereto. (b) Except for liabilities or obligations (i) reflected in the financial statements or in the notes thereto included in the Company SEC Documents, (ii) incurred in the ordinary course of business consistent with past practice since the date of the most recent audited financial statements of the Company contained in the Company SEC Documents or (iii) incurred in connection with this Agreement or the transactions contemplated hereby, the Company has no liabilities or obligations (whether absolute, accrued, contingent or otherwise) of any nature which, individually or in the aggregate, would have material adverse effect on the Company's financial condition of operations. 3.8 Changes. Since May 15, 2001, (i) the Company has not entered into any transaction which was not in the ordinary course of business, (ii) there has been no material adverse change, individually or in the aggregate, in the condition (financial or otherwise), business, property, assets or liabilities of the Company other than changes in the ordinary course of business, (iii) there has been no damage to, destruction of or loss of physical property materially and adversely affecting the business or operations of the Company, (iv) the Company has not declared or paid any dividend or made any distribution on its stock or redeemed, purchased or otherwise acquired any of its stock, (v) the Company has not increased the compensation of any of its officers, or the rate of pay of its employees as a group, except as part of regular compensation increases in the ordinary course of business, (vi) there has been no resignation or termination of employment of any key officer, consultant or employee of the Company and the Company does not know of the impending resignation or termination of employment of any key officer, consultant or employee of the Company that if consummated would have a materially adverse effect on its business, (vii) there has not been any change other than in the ordinary course of business in the contingent obligations of the Company by way of 7 guaranty, endorsement, indemnity, warranty or otherwise, (viii) there have not been any loans made by the Company to any of its employees, officers or directors other than in the ordinary course of business and (ix) to the best knowledge of the Company, there has not been any other event or condition of any character pertaining to and materially and adversely affecting the assets or business of the Company. 3.9 Absence of Undisclosed Liabilities. On the Closing Date, except as disclosed in the Company SEC Documents (i) the Company had no liability in excess of $25,000, in the aggregate, of any nature (matured or unmatured, fixed or contingent) which was not provided for or disclosed, and (ii) all liability reserves established by the Company were adequate in all material respects. There were no loss contingencies (as such term is used in Statement of Financial Accounting Standards No. 5 issued by the Financial Accounting Standards Board) which were not adequately provided for in all material respects. 3.10 Title to Properties and Assets; Liens, etc. The Company has good and marketable title to its properties and assets and has good title to all its leasehold interests, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than the lien of current taxes not yet due and payable and liens and pledges pertaining to debt instruments presented on the Balance Sheet. 3.11 Legal Compliance; Compliance with Instruments. The Company is not in violation of any provision of its Certificate or Bylaws, as amended, or of any loan agreement or other agreement to which it is a party, other than violations which singly or in the aggregate will not have a material adverse effect on the business, condition (financial or otherwise), assets, properties or operations or prospects of the Company or any of its subsidiaries taken as a whole. The Company is not, nor is it alleged to be, in violation or default of any applicable law, statute, order, rule or regulation promulgated thereunder, relating to or affecting the operation, conduct or ownership of the property or business of the Company, which violation or default or alleged violation or default would, individually or in the aggregate, have a material adverse effect on the business of the Company or any of its properties or assets. There are no adverse orders, judgments, writs, injunctions, decrees or demands of any court or administrative body, domestic or foreign, or of any other governmental agency or instrumentality, domestic or foreign, outstanding against the Company or any of its subsidiaries. 3.12 Intellectual Property Rights. To the best knowledge of the Company, the Company owns or has the right to use all Intellectual Property Rights (as such term is defined in Section 7.16) that are required to carry out the Company's business plan. Except with respect to regulatory approvals which may in the future be required with respect to products or services offered or to be offered by the Company, the Company has all governmental approvals, authorizations, consents and permits necessary or required to conduct its business as presently conducted or as presently proposed to be conducted. To the best knowledge of the Company, no product or service presently proposed to be manufactured, marketed or sold by the Company will violate any license or infringe any legally valid Intellectual Property Right or the assumed name of another. There are no outstanding options, licenses or agreements of any kind relating to such 8 Intellectual Property Rights. The Company has not received any communications alleging that the Company has violated or, by conducting its business as proposed, would violate any of the Intellectual Property Rights of any other person or entity. The Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company's business as proposed to be conducted. Neither the execution nor delivery of this Agreement, nor the carrying on of the Company's business as proposed, will, to the Company's knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated. The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company, except for inventions, trade secrets or proprietary information that have been assigned or licensed to the Company. 3.13 Litigation. There is no action, suit, proceeding at law or in equity, arbitration or administrative or other proceeding by or before (or any investigation by) any governmental or other instrumentality or agency, pending, or, to the best knowledge of the Company, threatened, against or affecting the properties or rights of the Company, and the Company does not know of any valid basis for any such action, proceeding or investigation. There are no such suits, actions, claims, proceedings or investigations pending or to the best knowledge of the Company, threatened, seeking to prevent or challenge the transactions contemplated by this Agreement. 3.14 Registration Rights. Except as set forth in the Registration Rights Agreement attached hereto as Exhibit E, the Company is not under any contractual obligation to register any of its presently outstanding securities or any of its securities which may hereafter be issued. 3.15 Governmental Consents; etc. No consent, approval or authorization of (or designation, declaration or filing with) any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or issuance of the Series A Preferred and the Conversion Stock, or the consummation of any other transaction contemplated hereby, except qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series A Preferred and the Conversion Stock under applicable federal and state securities laws, which filings and qualifications, if required, will be accomplished in a timely manner. 3.16 Offering. Subject to the accuracy of the Purchasers' representations in Article IV hereof, the offer, sale and issuance of the Series A Preferred to be issued in conformity with the terms of this Agreement and the issuance of the Conversion Stock upon conversion of the Series A Preferred constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended ("Securities Act"). 9 3.17 Brokers or Finders; Other Offers. The Company has not incurred and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or similar charges in connection with this Agreement. 3.18 Tax Matters. The Company (i) has timely filed all required tax returns with all appropriate federal, state, county and local governmental agencies (and all such returns fairly reflect the Company's operations for tax purposes), (ii) has timely paid all taxes owed by it for which it is obligated to withhold from amounts owing to any employee (including without limitation social security taxes), creditor or third party (other than taxes the validity of which are being contested in good faith by appropriate proceedings) and (iii) has not waived any statute of limitations with respect to taxes or agreed to any extension of time with respect to a tax assessment or deficiency. The assessment of any additional taxes for periods for which returns have been filed is not expected to exceed the recorded liability therefor, and to the best of the Company's knowledge, there are no material unresolved questions or claims concerning the Company's tax liability. The Company's tax returns have not been reviewed or audited by any federal, state, local or county taxing authority. There is no pending dispute with any taxing authority relating to any of said returns which, if determined adversely to the Company, would result in the assertion by any taxing authority of any valid deficiency in any material amount for taxes. 3.19 Environmental and Safety Regulations. The Company knows of no violation or violations by the Company, its employees or agents of any environmental or safety statute, law or regulation that in the aggregate would have a material adverse effect on the business, properties, prospects or financial condition of the Company, and to the best of the Company's knowledge no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. No action, proceeding, permit revocation, writ, injunction or claim is pending or, to the best knowledge of the Company threatened, concerning the Company's facilities and the Company is not aware of any fact or circumstance which could involve the Company in any environmental litigation or impose any material environmental liability upon the Company. 3.20 Disclosure. This Agreement and the Exhibits and Schedules hereto, when taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading in light of the circumstances under which they were made. ARTICLE IV Representations and Warranties of the Purchasers Each Purchaser hereby severally represents and warrants to the Company with respect to the purchase of shares of Series A Preferred as follows: 10 4.1 Authorization. The execution, delivery and performance by it of this Agreement has been duly authorized by all requisite action by it and constitutes a valid and binding obligation, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditor's rights, and (ii) general principles of equity that restrict the availability of equitable remedies. 4.2 Experience. It has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment and has the capacity to protect its own interests. 4.3 Investment. It is acquiring the Series A Preferred and the Conversion Stock for investment for its own account, not as a nominee or agent and not with the view to or for resale in connection with any distribution thereof. It understands that the Series A Preferred and the Conversion Stock have not been, and will not be registered under the Securities Act by reason of specific exemption from the registration provisions of the Securities Act and applicable state securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchasers' representations as expressed herein. 4.4 Restrictive Legend/Rule 144. Each certificate for the Series A Preferred and any shares of capital stock received in respect thereof, whether by reason of a stock split or share reclassification thereof, a stock dividend thereon or otherwise and each certificate for any such securities issued to subsequent transferees of any such certificate shall (unless otherwise permitted by the provisions of other written agreement executed by the Company and Purchasers) be stamped or otherwise imprinted with legends in substantially the following form: [remainder of page left blank intentionally] 11 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. UNLESS OTHERWISE PERMISSIBLE UNDER THE SECURITIES ACT OF 1933, THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN SERIES A PREFERRED STOCK PURCHASE AGREEMENT DATED AUGUST 6, 2001, AMONG THE ISSUER AND CERTAIN OTHER SIGNATORIES THERETO, AND NO TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF CERTAIN OF SUCH CONDITIONS, THE ISSUER HAS AGREED TO DELIVER TO THE HOLDER HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE HOLDER HEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE ISSUER. The Purchaser understands that the exemption from registration afforded by Rule 144 (the provisions of which are known to the Purchasers) promulgated under the Securities Act depends on the satisfaction of various conditions and is not currently available to the Purchaser, and that, if and when applicable, Rule 144 may afford the basis for sales by a Purchaser only in limited amounts. 4.5 Access to Information. The Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with directors, officers and management of the Company, to review the Company's operations and facilities and has received all information as such Purchaser has deemed necessary or appropriate as a prudent and knowledgeable Purchaser in evaluating its purchase of the Securities being purchased by the Purchaser. 4.6 No Broker. The Purchaser has not employed any broker or finder in connection with the transactions contemplated by this Agreement. Neither the Purchaser nor any affiliate of the Purchaser has or will assert any right or claim to any broker's fee, finder's fee or other commission or payment of any nature whatsoever in connection with, or as a result of, the transaction contemplated by this Agreement, and Purchaser hereby indemnifies the Company and 12 the Company's affiliates against any and all damages, losses, and expenses they or any of them may incur in the event Purchaser or any affiliate of Purchaser asserts any such right or claim. 4.7 Accredited Purchaser. The Purchaser is an "Accredited Investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. ARTICLE V Purchasers' Conditions to Closing The Purchasers' obligations to purchase the Series A Preferred at the Closing or at any Additional Closings are subject to the fulfillment of the following conditions, any of which may be waived or modified with the written consent of New Century: 5.1 Representations and Warranties Correct. The representations and warranties made by the Company in Article III hereof shall be true, correct and complete when made and upon the Closing Date. 5.2 Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects. 5.3 Reservation of Shares. The shares issuable upon conversion of the Series A Preferred shall have been duly authorized by the Board of Directors and reserved for issuance upon such conversion, subject only to stockholder approval. At closing the holders of Series A Preferred shall be entitled to vote upon such reservation on an as if converted basis. 5.4 Deliveries. Each Purchaser shall have received a stock certificate evidencing its ownership of duly authorized and issued shares of Series A Preferred in the amount of shares of Series A Preferred set forth beside such Purchasers name in the Schedule of Purchasers. The Purchasers shall have also received the Note and Security Agreement, duly executed by the authorized representative of the Company. 5.5 Corporate Proceedings: Consents, etc. All corporate and other proceedings to be taken and all waivers, permits and consents to be obtained in connection with the transactions and all documents incident thereto shall be satisfactory in form and substance to the Purchasers and their counsel, and the Purchasers shall have received all such originals or certified or other copies of such documents either may reasonably request. 5.6 Amendment to Restated Certificate of Incorporation. The amendment to the Certificate attached hereto as Exhibit A shall have duly set forth, in form acceptable to the Investors, the designations, rights, preferences, privileges and restrictions of the Series A Preferred and evidence of filing of the foregoing with the Secretary of State of Wyoming in form satisfactory to the Purchasers shall have been delivered to the Purchasers. 13 5.7 Blue Sky Matters. All consents, approvals, qualifications and registrations required to be obtained, if any, or effected under any applicable state securities or "blue sky" laws in connection with the designation, issuance, sale and delivery of the Series A Preferred and the issuance, sale and delivery of the Conversion Stock shall have been obtained or effected (except for the filing of any notice subsequent to the Closing or any Additional Closings which may be required under applicable state securities laws which, if required, shall be filed on a timely basis as may be so required) and copies of the same delivered to the Purchasers. 5.8 Certificate of Secretary. The Purchasers shall have received a certificate of the Secretary of the Company, dated the Closing Date, to the effect that: (i) attached thereto is a true and complete copy of the Certificate (as amended through such date) and the Bylaws of the Company as in effect on the date thereof; (ii) the Restated Certificate and the Bylaws, each as amended, are sufficient in form and substance to permit the transactions contemplated in this Agreement with respect to the voting rights and powers of the Series A Preferred; (iii) attached thereto is a true and complete copy of resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery and performance of this Agreement, the issuance of the Series A Preferred and reserving the Conversion Stock for issuance upon conversion of the Series A Preferred; (iv) the Company is in good standing in reliance upon a good standing certificate from the Office of the Secretary of State of the State of Wyoming, as of a recent date; and (v) such other matters as may be reasonably requested by the Purchasers. 5.9 Opinion of Counsel. At the Closing, the Purchasers shall have received, from counsel for the Company, its opinion addressed to the Company and the Purchasers, dated as of the Closing Date and substantially in the form of Exhibit F attached hereto. 5.10 Directors' and Officers' Liability Coverage. At the Closing, New Century shall have received from the Company evidence satisfactory to New Century, at its sole discretion, of adequate directors' and officers' liability coverage. ARTICLE VI Company's Conditions to Closing The Company's obligation to sell and issue the Series A Preferred at the Closing Date is, at the sole option and discretion of the Company, subject to the fulfillment as of the Closing Date of the following conditions: 6.1 Representations. The representations made by the Purchasers in Article IV hereof shall be true, complete and correct when made and on the Closing Date. 6.2 Compliance with State Securities Laws. The Company shall have obtained all permits and qualifications required by any state for the offer and sale of the Series A Preferred and the Conversion Stock, or shall have the availability of exemption therefrom. 14 6.3 Amendment to Certificate of Incorporation. The Company shall have received the necessary consents required to effect the amendment to the Certificate, to the extent of designation of the rights of the Series A Preferred. 6.4 Payment of Purchase Price. The Company shall have received payment of 100% of the aggregate Purchase Price of the shares of the Series A Preferred to be issued and sold at the Closing. ARTICLE VII Miscellaneous 7.1 Fees. The Company will (i) pay, and save the Purchasers harmless against all liability for the payment of, all costs and other expenses incurred in connection with the Company's performance of and compliance with all agreements and conditions contained herein on its part to be performed or complied with, and (ii) pay, up to a maximum of $45,000, the fees and disbursements of special counsel selected by the Purchasers, for its services in connection with the transactions contemplated by this Agreement, which fees and disbursements will be paid by the Company at the Closing. 7.2 Exchanges, Lost, Stolen or Mutilated Certificates. Upon surrender by a Purchaser to the Company of any certificate representing Series A Preferred or Conversion Stock purchased or acquired hereunder, the Company at its expense will issue in exchange therefor and deliver to such Purchaser, a new certificate or certificates representing such shares in such denominations as may be requested by the Purchasers. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate representing any Series A Preferred or Conversion Stock purchased or acquired by the Purchasers hereunder, and in case of any such loss, theft or destruction, upon delivery of any indemnity agreement satisfactory to the Company, or in case of any such mutilation, upon surrender and cancellation of such certificate, the Company at its expense will issue and deliver to the Purchasers a new certificate for such Series A Preferred or Conversion Stock of like tenor, in lieu of such lost, stolen, destroyed or mutilated certificate. 7.3 Survival of Representations, Warranties and Agreements; etc. All representations, warranties and covenants made hereunder shall survive any investigation made by any Purchaser and the Closing for a period of two years, provided that any representation or warranty which was fraudulently made shall survive indefinitely. All statements contained in any certificate or other instrument delivered by or on behalf of the Company through the date hereof pursuant to this Agreement or in connection with the transactions contemplated by this Agreement shall constitute representations and warranties by the Company under this Agreement. All covenants contained herein shall survive indefinitely until, by their respective terms, they are no longer operative. 7.4 Indemnification. The Company shall, with respect to the representations, warranties, covenants and agreements made by the Company herein, indemnify, defend and hold 15 the Purchasers harmless against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any such representations, warranties, covenants or agreements of the Company. Without limiting the generality of the foregoing, the Purchasers shall be deemed to have suffered liability, loss or damage as a result of the untruth, inaccuracy or breach of any such representations, warranties, covenants or agreements if such liability, loss or damage shall be suffered by the Company as a result of, or in connection with, such untruth, inaccuracy or breach or any facts or circumstances constituting such untruth, inaccuracy or breach. The Purchasers shall with respect to the representations, warranties, covenants and agreements made by the Purchasers herein, indemnify, defend and hold the Company harmless against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses), arising from the untruth, inaccuracy or breach of any such representations, warranties, covenants or agreements of the Purchasers. 7.5 Remedies. In case any one or more of the covenants and agreements set forth in this Agreement shall have been breached by any party, or any other party may proceed to protect and enforce its rights either by suit in equity or by action at law, including, but not limited to, an action for damages as a result of any such breach or an action for specific performance of any such covenant or agreement contained in this Agreement. A party acting pursuant to this Section 7.5 shall be indemnified against all liability, loss or damage, together with all reasonable costs and expenses related thereto (including legal and accounting fees and expenses) in accordance with Section 7.4 hereof. 7.6 Successors and Assigns; Parties in Interest. This Agreement shall bind and inure to the benefit of the Company, its successors and assigns and the Purchasers. 7.7 Entire Agreement. This Agreement and the other writings referred to herein or delivered pursuant hereto contain the entire agreement among the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or understandings with respect to the purchase of the Series A Preferred. 7.8 Notices. All notices, requests, consents and other communications made to any party shall be deemed to be sufficient if contained in a written instrument delivered by courier, sent by facsimile transmission to the telephone number set forth below or such other number as may hereinafter be designated in writing by the recipient to the sender listing all parties, or duly sent by first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by the addressee to the addressor listing all parties: 16 (a) If to the Company, to: Tanisys Technology, Inc. 12201 Technology Blvd., Suite 125 Austin, Texas 78727 Facsimile No: (512) 258-3689 (b) If to the Purchasers, to the addresses and fax numbers listed on Schedule A. with a copy to: Loeffler, Jonas & Tuggey, LLP 700 N. St. Mary's Street, Suite 800 San Antonio, Texas 78205 Facsimile: (210)354-4034 Attn: Timothy N. Tuggey All such notices, requests, consents and other communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of facsimile transmission, on the date of transmission if sent during normal business hours of the recipient, if not, then on the next business day or (iii) in the case of mailing, on the third day after the posting thereof. 7.9 Changes. The terms and provisions of this Agreement may not be modified or amended or any of the provisions hereof waived, temporarily or permanently, except pursuant to the written consent of the Company and the holders of at least a majority of the total number of shares of Series A Preferred (and Common Stock into which any shares of Series A Preferred are converted) held by the Purchasers, provided, however, that New Century shall be authorized to modify any provision of this Agreement so long as any such modification shall not materially and adversely affect the rights of other Purchasers. 7.10 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Signatures to the Agreement may be facsimile signatures. 7.11 Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. 7.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS, EXCEPT TO THE EXTENT FEDERAL LAW APPLIES AND, TO THE EXTENT REQUIRED BY LAW, MATTERS OF CORPORATE LAW WILL BE GOVERNED BY THE WYOMING GENERAL CORPORATION LAW. 17 7.13 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.14 Jurisdiction. The parties hereto agree that any suit, action or proceeding instituted against one or more of them with respect to this Agreement (including any exhibits hereto) may be brought in any federal or state court located in the State of Texas. The parties hereto, by the execution and delivery of this Agreement, irrevocably waive any obligation or any right of immunity on the ground of venue, the convenience of the forum or the jurisdiction of such courts, or from the execution of judgments resulting therefrom, and the parties hereto irrevocably accept and submit to the jurisdiction of the aforesaid courts in any suit, action or proceeding and consent to the service of process by certified mail at the address set forth in Section 7.8 hereof 7.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon any person, firm or company other than the Company, in making its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor the respective controlling persons, officers, directors, partners, agents of employees of any Purchaser shall be liable for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the shares of Series A Preferred and Conversion Stock. 7.16 Definitions. For the purposes of this Agreement: "EBITDA" shall mean earnings of the Company before deductions for interest, taxes, depreciation and amortization in accordance with generally accepted accounting principles, consistently applied. "Intellectual Property Rights" shall mean all intellectual property rights, including, without limitation, trade secrets, know-how, patents and patent applications, mask works, trademark and trademark applications, copyrights and notices of intent to use copyrights, Proprietary Information, trade names, service marks, service mark applications, certificates of public convenience and necessity, franchises, licenses, proprietary processes and formulae. "Proprietary Information" shall mean the Company's Intellectual Property Rights and all customer lists, source and object code, algorithms, architecture, structure, display screens, layouts, processes, inventions, know-how, development tools and other proprietary rights owned by the Company pertaining to the identification, research and development of technologies, methods and know-how for use in producing semiconductors testing equipment and used, employed or exploited in the development, license, sale, marketing or distribution or maintenance thereof, and all documentation and media constituting, describing or relating to the above, including without limitation, manuals, memoranda, notebooks, records and disclosures. 18 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf. THE COMPANY TANISYS TECHNOLOGY, INC. /s/ Charles T. Comiso ------------------------------------ Charles T. Comiso, President and Chief Executive Officer THE PURCHASERS BY THEIR EXECUTION OF THE SUBSCRIPTION AGREEMENT 19 SCHEDULE A SCHEDULE OF PURCHASERS - -------------------------------------------------------------------------------- Name Address Preferred Stock - -------------------------------------------------------------------------------- TOTAL 2,575,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 20 SCHEDULE B SCHEDULE OF EXCEPTIONS EXHIBIT A ARTICLES OF AMENDMENT OF CERTIFICATE EXHIBIT B FINANCIAL PERFORMANCE OBJECTIVES Below find a summary of the forecast of key financial items, as further detailed in Exhibit A (000's): Quarter Gross EBITDA Ended Revenues Profit Less Cap. Exp. - ----- -------- ------ -------------- 9/30/01 $1,600 $ 959 $ (295) 12/31/01 $2,391 $ 1,598 $ 215 Six Months Gross EBITDA Ended Revenue Profit Less Cap. Exp. - ----- ------- ------ -------------- 6/30/02 $ 7,899 $ 5,626 $2,463 12/31/02 $10,125 $ 7,061 $3,560 6/30/03 $17,206 $10,525 $6,384 12/31/03 $20,988 $11,861 $7,444 Should the Company not meet any one of the three financial goals in any performance period noted above, the Series A holders will be issued additional Series A shares equal to 25% of the fully diluted shares of the Company at the end of each such determination period. The foregoing is based upon financial performance objectives developed by the Company, as set forth on the attachment hereto. EX-99.4 5 d70580_ex-994.txt Exhibit 99.4 PROMISSORY NOTE Amount: Aggregate amount set forth in Schedule A of August 13, 2001 Purchase Agreement (as defined below) FOR VALUE RECEIVED, pursuant to the terms of that certain Series A Stock Purchase Agreement ("Purchase Agreement," all of the terms and defined terms of which are incorporated herein) among Tanisys Technology, Inc., a Wyoming corporation ("Borrower"), and the Persons and Entities Listed on the Schedule of Purchasers Thereto ("Purchasers or Lenders"), Borrower promises to pay to the order of the Lenders the principal sum equal to the aggregate amount set forth in Section 1.5 of the Purchase Agreement (the "Debt"). All sums hereunder are payable to Lenders at their addresses, as listed in the Schedule of Purchasers attached to the Purchase Agreement, or at such other locations as Lenders may designate in writing from time to time, in lawful currency of the United States of America and in immediately available funds. All payments and prepayments made hereunder shall be made without setoff, counterclaim or deduction of any kind. 1. Terms and Repayment. This Note shall be paid by the Borrower in quarterly installments to the Lenders commencing March 31, 2002. The payments shall be calculated by multiplying the excess of the quarterly EBITDA for the Borrower less quarterly capital expenditures over $300,000, by .5 (or 50%). Such payments shall be paid until the Debt has been repaid in full. The affirmative consent of New Century shall be required and sufficient to approve any capital expenditures that would exceed the budget contained in Exhibit B to the Purchase Agreement. At the sole option of New Century, the payments required herein may be converted into Series A Preferred shares, in lieu of cash, at a price equal to the Series A Preferred Purchase Price (or as such Price may be adjusted as provided in Section 1.3 of the Purchase Agreement). If New Century does not elect to convert such required payments into Series A Preferred, the required payments shall be paid in cash in accordance with the foregoing provisions. If the Debt is not repaid in full to the Lenders on or before July 15, 2003, at New Century's sole option, the Borrower shall issue to the Lenders, pro rata, additional Series A Preferred equal in number to fifty percent (50%) of the then outstanding Common Stock and Preferred Stock (including the outstanding Series A Preferred), and any Common Stock equivalents, including but not limited to any options, warrants or other rights to subscribe for any Common Stock, on an as-if converted and fully diluted basis; provided, if such option is not exercised, the Debt shall then mature and be payable in full on July 13, 2003. The Debt may not be prepaid. Prior to maturity, the Debt shall not include any interest payable thereupon; upon maturity, and until such time that New Century exercises the option described immediately hereinabove, the Debt shall accrue interest at 18% per annum. 2. Waiver. Borrower, and each surety, endorser, guarantor and other party now or hereafter liable for the payment of any sums of money payable on this Note, hereby severally (a) waive demand, presentment for payment, notice of nonpayment, protest, notice of protest, notice of intent to accelerate, notice of acceleration and all other notices, filing of suit and diligence in collecting this Note or enforcing any other security with respect to same, (b) agree to any substitution, subordination, exchange or release of any such security or the release of any parties primarily or secondarily liable hereon, (c) agree that Lenders shall not be required first to institute suit or exhaust its remedies hereon against Borrower, or others liable or to become liable hereon or to enforce its rights against them or any security with respect to same, (d) consent to any and all renewals, extensions, indulgences, releases or changes, regardless of the number of such renewals, extensions, indulgences, releases or changes, without notice thereof, and (e) agree to the application of any deposit balance with Lenders as payment or part payment hereon or as an offset hereto. 3. No Waiver. The failure to exercise the option to accelerate the maturity of this Note upon the happening of any one or more event of default shall not constitute a waiver of the right of Lenders to exercise the same or any other remedy at that time or at any subsequent time with respect to such event of default or any other event of default. The remedies of Lenders, as provided in this Note, shall be cumulative and concurrent and may be pursued separately, successively or together, as often as occasion therefor shall arise, at the sole discretion of Lenders. The acceptance by Lenders of any payment under this Note which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of or impair, reduce, release or extinguish any of the rights or remedies of Lenders to exercise the foregoing remedy or any other remedy granted to Lenders in this Note, at that time or at any subsequent time, or nullify any prior exercise of any such remedy. 4. Event of Default. Failure to pay this Note or any installment hereof, or the occurrence of any event of default, as defined in the Security Agreement attached as an exhibit to the Purchase Agreement ("Security Agreement") and signed by the Borrower, after written notice by Lenders to Borrower with no required cure pursuant to the terms of the Security Agreement, shall mature this Note and the principal then remaining unpaid, which shall at once become due and payable and Lenders may enforce all their rights and remedies as provided in the Purchase Agreement, the Security Agreement and all other documents related thereto. 5. Purpose. Borrower warrants and represents that the proceeds of this Note are to be used for the business purposes and no portion thereof will be used for personal, family or household use. 6. Attorney's Fees and Cost of Collection. If this Note is not paid at maturity (whether by acceleration or otherwise) and is placed in the hands of an attorney for collection, or if it is collected through a bankruptcy or any other court, then Lenders shall be entitled to reasonable attorneys' fees and other costs of collection. 7. Limitation on Interest. Borrower acknowledges and agrees that it is the intention of the Lenders and Borrower to conform strictly to the usury laws in force that apply to this transaction. Accordingly, all agreements between Lenders and Borrower (including, without limitation, this Note), whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of acceleration of the maturity of the Note or otherwise, shall any interest (and all other sums that are deemed to be interest) contracted 22 for, charged or received by Lenders exceed the interest permitted under applicable law of the State of Texas, or any other applicable law. 8. Exchange. At New Century's sole option, this instrument may be exchanged for one or more instruments, issuable by Borrower to each holder of Series A Preferred, pro rata, in the aggregate amount of the Debt. 9. Subordination. This instrument and the Debt shall be subordinate to Borrower's obligations to Silicon Valley Bank. 10. GOVERNING LAW/VENUE. THIS NOTE SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA. BORROWER: Tanisys Technology, Inc., a Wyoming corporation /s/ Charles T. Comiso --------------------------- Charles T. Comiso President 3 EX-99.5 6 d70580_ex-995.txt EXHIBIT 99.5 SECURITY AGREEMENT SECURITY AGREEMENT - PLEDGE OF TANGIBLE AND INTANGIBLE ASSETS This SECURITY AGREEMENT-PLEDGE OF TANGIBLE AND INTANGIBLE ASSETS (this "Agreement") is made and entered into as of the 13th day of August, 2001, by and between Tanisys Technology, Inc., a Wyoming corporation, and its subsidiaries ("Company") (hereafter referred to as the "Pledgors"), and New Century Equity Holdings Corp., a Delaware corporation ("New Century"), for itself and as agent for the Purchasers, and the persons and entities listed on the Schedule of Purchasers ("Purchasers") on that certain Series A Preferred Stock Purchase Agreement ("Purchase Agreement"), executed on even date herewith (hereafter, New Century and Purchasers are referred to as the "Secured Party"). All defined terms set forth in the Purchase Agreement shall have the same meaning herein. In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS For all purposes of this Agreement, unless the context requires otherwise: (a) "Collateral". In order to secure the obligations of the Company in favor of the Series A Preferred as further described in the Purchase Agreement, and the performance of the obligations, covenants, agreements and undertaking of Pledgors herein described, Pledgors hereby grant to Secured Party a security interest in: (i) All tangible assets of the Company (including all cash and equivalents, inventory and equipment), wherever located, including those located at Company's corporate headquarters located at 12201 Technology Boulevard, Suite 125, Austin, Texas 78727. (ii) All accounts receivables of the Company; and (iii) General intangibles (including all Intellectual Property Rights of any kind) now held by the Company or later acquired; and (iv) Personal Property now owned by the Company or later acquired as defined in the Uniform Commercial Code; and (v) Any real property that the Company has acquired or may acquire in the future. (b) "Event of Default" shall have the meaning set forth in Section 5.1. (c) "Indebtedness" shall mean the following items of indebtedness: 1 (i) The performance of the Company's obligations in favor of the Series A Preferred and the compliance with all agreements and contained in, arising out of or in connection with the Purchase Agreement; and (ii) All sums advanced or expenses or costs incurred by Secured Party that are made or incurred pursuant to, or permitted by, the terms of this Agreement and the Purchase Agreement or the incurring of such expenses or costs until reimbursed, including, but not limited to, all costs incurred by Secured Party to obtain, preserve and enforce the Purchase Agreement and this Agreement, collect the Indebtedness and maintain and preserve any of the Collateral securing the Indebtedness, including, without limitation, all taxes, assessments, reasonable attorney's fees and legal expenses of sale. (iii) Any and all other indebtedness or liability of Company to Secured Party of every kind, nature and description direct or indirect, primary or secondary, secured or unsecured (including overdrafts), joint or several, absolute or contingent, due or to become due, now existing or hereafter arising regardless of how it may be evidenced, and whether originally payable to Secured Party or to a third party and subsequently acquired by Secured Party, including, without limitation, all future advances whether or not presently contemplated by the parties hereto. (iv) The performance by the respective parties hereto or thereto (other than Secured Party) of all obligations undertaken by such parties in accordance with the particular terms and provisions of this Agreement and the Purchase Agreement. (v) Any extensions, renewals, restatements, amendments or modifications of all or any part of such Indebtedness hereinabove described, whether or not evidenced in writing. ARTICLE II GRANT OF SECURITY INTEREST 2.1. Grant of Security Interest. As security and collateral for the due performance and compliance with all of the terms and conditions of this Agreement and the Purchase Agreement, Pledgors hereby deliver, set over, transfer, pledge, grant a continuing security interest in and assign to Secured Party all of their right, title and interest in and to the Collateral, and any proceeds thereof, to be held by Secured Party upon the terms and conditions set forth in this Agreement. If any of the Pledgors hereafter own or acquire or become entitled to receive or receive any Collateral, Pledgors shall accept same as Secured Party's agent, in trust for Secured Party as part of the Collateral. 2 2.2. Duty of Secured Party. Secured Party's duty with reference to the Collateral shall be solely to use reasonable care in the custody of the Collateral in Secured Party's possession. Secured Party shall have no obligation or duty to take any other steps to protect, preserve or enforce any rights with respect to the Collateral, nor shall Secured Party be responsible in any way for any depreciation in the value of the Collateral. 2.3. Financing Statements. Pledgors agree to sign, execute, and deliver to Secured Party any Financing Statement or other document or procure any document, which Secured Party may reasonably request, and pay all connected costs, necessary to protect the security interest granted hereby against the right or interests of third persons. In addition, a carbon, photographic or other reproduction of this Agreement or of any financing statement relating to this Agreement shall be sufficient as a financing statement. 2.4. Defense of Claims. Pledgors will notify Secured Party, in writing, promptly upon the commencement of any legal proceedings affecting the lien hereof or the Collateral, or any part thereof, and will take such action, including employing attorneys acceptable to Secured Party, as may be necessary to preserve Pledgors' and Secured Party's rights affected thereby; and should Pledgors fail or refuse to take any such action, Secured Party may, upon giving prior written notice thereof to Pledgors, take such action in behalf and in the name of Pledgors and at Pledgors' expense. Secured Party may take such independent action in connection therewith as it may, in its discretion, deem proper. At Secured Party's option, it may discharge taxes, liens, levies, security interests or other encumbrances at any time levied or placed upon the Collateral, and may otherwise incur expenses for the preservation of the Collateral. 2.5. Advances by Secured Party. Each and every agreement and covenant herein contained shall be performed and kept by Pledgors solely at Pledgors' expense. If Pledgors shall fail to perform or keep any of the agreements or covenants of whatsoever kind or nature contained in this Agreement, Secured Party may, but shall not be obligated to, make advances to perform the same on Pledgors' behalf. No such advance shall be deemed to relieve Pledgors from any default hereunder. 2.6. Preservation of Rights in Collateral. Pledgors shall take any action necessary to preserve rights against any prior parties (including endorsers) on any instrument or instruments constituting the Collateral hereunder. Secured Party may, but need not, take any action to preserve such rights. No failure to act by Secured Party shall relieve Pledgors of Pledgors' duties under this paragraph or in any way impair or discharge Pledgors' obligations hereunder or under the Purchase Agreement and no failure to act by Secured Party shall result in any liability to Pledgors on the part of Secured Party. 2.7. Termination of Secured Party's Interest. If (i) the Indebtedness and all covenants, conditions, warranties, representations, and other obligations made or undertaken by Company, or others, under the Purchase Agreement have been satisfied, and (ii) no Event of Default shall exist under this Agreement or the Purchase Agreement, then Secured Party in such case shall, upon the request of Pledgors and at Pledgors' cost and expense, deliver to the Pledgors (i) termination statements with respect to any financing statements filed with respect hereto, and (ii) without warranty or recourse, any of the Collateral in the possession of Secured Party; provided, however, 3 until Secured Party takes such actions upon request of Pledgors, this Agreement and all of the rights, powers and remedies of Secured Party hereunder shall continue in full force and effect. ARTICLE III REPRESENTATIONS AND WARRANTIES WITH PLEDGORS Pledgors jointly and severally represent and warrant: (a) That no bankruptcy or insolvency proceedings are pending or to Pledgors' knowledge, or are contemplated by or against Pledgors; (b) That all information, reports, statements and other data furnished by Pledgors to Secured Party contemporaneously with or subsequent to the execution of this Agreement or in connection with the indebtedness secured hereby are and shall be true and correct and do not and will not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (c) That Pledgors have good right and authority to grant a security interest in the Collateral; (d) That the Collateral is free and clear from all security interests and encumbrances except the security interest held by Silicon Valley Bank; (e) That there is no financing statement (or similar statement or instrument of registration under the laws of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral or its proceeds on file or registered in any public office, other than by Silicon Valley Bank; (f) That the Collateral and the intended use thereof by Pledgors comply with all applicable laws, rules and regulations; (g) That the Collateral is free from damage caused by fire or other casualty; (h) That this Agreement constitutes the legal, valid and binding obligation of Pledgors enforceable against Pledgors in accordance with its terms; (i) That the execution, delivery and performance of this Agreement does not and will not contravene or violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect and applicable to Pledgors or result in a breach of or constitute a default (with or without the giving of notice of the lapse of time or both) under any indenture or any loan, credit or other agreement to which Pledgors are a party or by which Pledgors may be bound or affected; (j) No part of the proceeds of the Indebtedness will be used to purchase or carry, directly or indirectly, any "margin stock" within the meaning of Regulation U of the 4 Board of Governors of the Federal Reserve System or to extend credit to others for the purpose of purchasing or carrying any such margin stock, or for any other purpose which would involve Secured Party in a violation of said Regulation U. (k) That the execution, delivery and performance of this Agreement does not require the consent or approval of any person, including, without limitation, any regulatory body or governmental authority, except the consent by Silicon Valley Bank; (l) That Pledgors will warrant and forever defend the title to the Collateral and its proceeds against the claims of all persons whomsoever claiming or to claim the same or any part thereof; (m) That the location of Pledgors is the address set forth in Section 6.10 of this Agreement and in this regard, Pledgors' location is defined to mean (i) Pledgors' place of business if Pledgors have only one such place of business; (ii) Pledgors' chief executive office if Pledgors have more than one place of business; or (iii) Pledgors' residence if Pledgors have no place of business; (n) That Pledgors' books and records with regard to the Collateral are maintained and kept at the address of Pledgors set forth in this Agreement; (o) That Pledgors have heretofore obtained the written consent of all necessary parties, if any, required to be obtained to authorize the assignment, transfer and pledge of the Collateral evidenced by this Agreement. ARTICLE IV COVENANTS OF PLEDGORS 4.1. Pledgors hereby covenant that, until all the Indebtedness has been satisfied in full: (a) Pledgors shall make promptly perform the obligations, as the same become due, of all indebtedness secured hereby in accordance with the terms and provisions of the Purchase Agreement and any related agreements evidencing such indebtedness. (b) Subject only to the rights of Silicon Valley Bank, Pledgors shall promptly perform the obligations, immediately upon receipt, deliver to Secured Party, all cash, checks, drafts and other instruments representing the proceeds of the Collateral received by Pledgors. Pledgors shall at Pledgors' own expense take all reasonable and appropriate steps when necessary to enforce the collection of the Collateral and items representing proceeds thereof. (c) Pledgors shall at all times keep accurate books and records reflecting all facts concerning the Collateral, including those pertaining to Pledgors' warranties, representations and agreements under this Agreement. Pledgors will allow Secured Party or its authorized representative to inspect Pledgors' books and records and will assist Secured 5 Party or said representative in whatever reasonable way necessary to make such inspections. (d) Pledgors will cause to be paid prior to delinquency all taxes, charges, liens and assessments heretofore or hereafter levied or assessed against the Collateral, or any part thereof, or against the Secured Party for or on account of the indebtedness secured hereby or the interest created by this Agreement and will upon request furnish Secured Party with receipts showing payment of such taxes and assessments at least ten (10) days prior to the applicable default date therefor. (e) If the validity or priority of this Agreement or of any rights, titles, security interests or other interests created or evidenced hereby shall be attacked, endangered or questioned or if any legal proceedings are instituted with respect thereto, Pledgors will give prompt written notice thereof to Secured Party and at Pledgors' own cost and expense will diligently endeavor to cure any defect that may be developed or claimed, and will take all necessary and proper steps for the defense of such legal proceedings, and Secured Party (whether or not named as a party to legal proceedings with respect thereto) is hereby authorized and empowered to take such additional steps as in its judgment and discretion may be necessary or proper for the defense of any such legal proceedings or the protection of the validity or priority of this Agreement and the rights, titles, security interests and other interests created or evidenced hereby, and all expenses so incurred of every kind and character shall be a demand obligation owing by Pledgors and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment. (f) Pledgors will, on request of Secured Party, (i) promptly correct any defect, error or omission which may be discovered in the contents of this Agreement or in any other instrument executed in connection herewith or in the execution or acknowledgment thereof; (ii) execute, acknowledged, deliver and record or file such further instruments (including without limitation further security agreements, financing statements, and continuation statements) and do such further acts as may be necessary, desirable or proper to carry out the purposes of this Agreement and such other instruments and to subject to the security interests hereof and thereof any property intended by the terms hereof and thereof to be covered hereby and thereby including specifically, but without limitation, any renewals, additions, substitutions, replacements or appurtenances to the then Collateral; and (iii) execute, acknowledge, deliver, procure and record or file any document or instrument (including specifically any financing statement) deemed advisable by Secured Party to protect the security interest hereunder against the rights or interests of third persons, and Pledgors will pay all costs connected with any of the foregoing. (g) Notwithstanding the security interest in proceeds granted herein, Pledgors will not sell, lease, exchange, lend, rent, assign, transfer or otherwise dispose of all or any part of the Collateral or any interest therein or permit the title to the Collateral, or any interest therein, to be vested in any other party, in any manner whatsoever, by operation of law or otherwise, without the prior written consent of Secured Party. (h) Pledgors will pay all appraisal fees, filing fees, taxes, brokerage fees and commissions, Uniform Commercial Code search fees, escrow fees, attorneys' fees, and all 6 other costs and expenses of every character reasonably incurred by Pledgors or Secured Party in connection with the secured indebtedness, and will reimburse Secured Party for all such reasonable costs and expenses incurred by it. Pledgors shall pay all expenses and reimburse Secured Party for any expenditures, including reasonable attorneys' fees and legal expenses, incurred or expended in connection with Secured Party's exercise of any of its rights and remedies hereunder or Secured Party's protection of the Collateral and its security interest therein. Any amount to be paid hereunder by Pledgors to Secured Party shall be a demand obligation owing by Pledgors to Secured Party and shall bear interest from date of expenditure until paid at the rate of ten percent (10%) per annum (herein called the "Past Due Rate"). (i) Pledgors shall account fully and faithfully for and, if Secured Party so elects, shall promptly pay or turn over to Secured Party the proceeds in whatever form received from the sale or disposition in any manner of any of the Collateral, the order and method of application to be in the sole discretion of Secured Party, except as otherwise specifically authorized herein. Pledgors shall at all times keep the Collateral and its proceeds separate and distinct from other property of Pledgors and shall keep accurate and complete records of the Collateral and its proceeds. (j) Pledgors will not change their address, location, name, identity or corporate structure without notifying Secured Party of such change in writing at least thirty (30) days prior to the effective date of such change, and shall have taken such action, satisfactory to Secured Party, to have caused the security interest of Secured Party in the Collateral to be at all times fully perfected and in full force and effect. (k) Pledgors shall furnish Secured Party all such information as Secured Party may reasonably request with respect to the Collateral. (l) Pledgors agree to furnish to Secured Party all executed original written consents, if any, required as a condition precedent to the creation of this security interest promptly upon request by Secured Party. (m) Pledgors will notify Secured Party immediately of the receipt of any written notice with respect to the Collateral. (n) Pledgors will: (i) perform or cause to be performed all of the terms, covenants and conditions on their part to be performed under the Collateral; (ii) promptly to notify Secured Party in writing of (x) the occurrence of any default (of which Pledgors have knowledge) in the observance or performance of any of the terms, covenants and conditions to be performed with respect to the Collateral, and (y) the giving of any notice of any such default; and (z) whenever required by Secured Party, at the sole cost and expense of Pledgors, to take all such action as may be so requested to enforce or secure the performance of any term, covenant or condition of any of the Collateral, and to exercise any right of Pledgors under the Collateral. (o) Until such time as Secured Party shall notify Pledgors of the revocation of 7 such power and authority, Pledgors will, at their own expense, endeavor to collect, as and when due, all amounts due with respect to any of the Collateral, including the taking of such action with respect to such collection as the Secured Party may reasonably request or, in the absence of such request, as Pledgors may deem advisable. Secured Party, however, may at any time, whether before or after any revocation of such power and authority or the maturity of any of the indebtedness secured hereby, notify any party to the Collateral to make direct payment to Secured Party of any amounts due or to become due Pledgors under the Collateral. (p) Pledgors will (except as Secured Party may otherwise consent in writing) forthwith, upon receipt, transmit and deliver to Secured Party, in the form received, all cash, checks, drafts, chattel paper and other instruments or writings for the payment of money (properly endorsed, where required, so that such items may be collected by Secured Party) which may be received by Pledgors at any time as proceeds of any of the Collateral. Except as Secured Party may otherwise consent in writing, any such items which may be received by Pledgors will not be commingled with any other of its funds or property, but will be held separate and apart from its own funds and property and upon express trust for Secured Party until delivery is made to Secured Party. Pledgors will comply with the terms and conditions of any consent given by Secured Party pursuant to the provisions of this paragraph. (q) Pledgors shall furnish to Secured Party such powers of attorney, instruments of assignment and transfer and/or chattel paper relating to the Collateral and other instruments as may be required by Secured Party to assure the transferability of the Collateral when and as often as may be requested by Secured Party. 4.2. Pledgors agree that, if Pledgors fail to perform any act or to take any action which hereunder Pledgors are required to perform or take, or to pay any money which hereunder Pledgors are required to pay, Secured Party, in Pledgors' name or in its own name, may but shall not be obligated to perform or cause to be performed such act or take such action or pay such money, and any expenses so incurred by Secured Party, and any money so paid by Secured Party, shall be a demand obligation owing by Pledgors to Secured Party and Secured Party, upon making such payment, shall be subrogated to all of the rights of the person, corporation or body politic receiving such payment. 4.3. It is expressly agreed that, anything herein contained to the contrary notwithstanding, Pledgors shall remain liable to perform all of the obligations assumed by it thereunder and Secured Party shall have no obligation or liability with respect to the Collateral by reason of or arising out of this Agreement, nor shall Secured Party be required or obligated by reason of this Agreement in any manner to perform or fulfill any obligation of Pledgors under or pursuant to the policy or to make any payment or to make any inquiry as to the nature and sufficiency of any payment received by it to which it may be entitled at any time or times. In particular, and without limiting the generality of the foregoing, Secured Party shall be under no obligation to pay any premium, or the principal of or interest on any loans or advances on the Collateral, whether or not obtained by Secured Party, or any other charges on the Collateral, but any such amounts so paid by Secured Party from its own funds shall become a part of the indebtedness 8 secured hereby, shall be due immediately, and shall draw interest at the Past Due Rate. 4.4. Pledgors hereby constitute Secured Party, and its successors and assigns, Pledgors' true and lawful attorney, irrevocably, with full power (in the name of Pledgors or otherwise) in its discretion, after Pledgors' default, to ask, require, demand, receive, compound and give acquittance for any and all amounts which may be or become due under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which Secured Party may deem to be necessary or advisable in the premises. 4.5. After an Event of Default, Secured Party in its discretion may, if and only if any of the indebtedness secured hereby be due, in its name or in the name of Pledgors or otherwise, demand, sue for, collect or receive any money or other property at any time payable or receivable on account of or in exchange for, or make any compromise settlement deemed desirable with respect to, any of the Collateral, but Secured Party shall be under no obligation so to do. After an Event of Default, Secured Party may extend the time of performance or payment, arrange for payment (as defined in the Settlement Agreement) in installments, otherwise modify the term of, or release, any of the Collateral, without thereby incurring responsibility to, or discharging or otherwise affecting any liability of, Pledgors. Secured Party shall not be required to take steps necessary to preserve any rights against prior parties to any of the Collateral. 4.6. To the fullest extent that it lawfully may, Pledgors agree that the rights assigned hereunder with respect to the Collateral include, in addition to the rights set forth herein, and without limitation, Pledgors' right and power to (a) terminate all or any part of the Collateral; (b) exercise any right in the performance of any of the Collateral. The exercise of any right, option, privilege or power herein given to Secured Party shall be at the option of Secured Party, but, except as provided in this Section 4.6 hereof, Secured Party may exercise any such right, option, privilege or power without notice to, or assent by, and without affecting the liability of, or releasing any interest hereby assigned by, Pledgors. ARTICLE V DEFAULT AND REMEDIES 5.1. Events of Default. Pledgors shall be in default under this Agreement upon the happening of any one or more of the following events or conditions (hereinafter called an "Event of Default"): (a) Default in the punctual performance of or compliance with any of the obligations, covenants, terms or provisions contained herein, the Purchase Agreement, and related agreements, which default continues for a period of ten (10) days after Secured Party gives notice of such default to Pledgors; 9 (b) If any warranty or representation made herein and the Purchase Agreement by Pledgors proves to have been false when made; (c) The levy of an attachment, execution or other process against the Collateral; (d) The entry of any judgment, consent decree or similar order or instrument, in an aggregate amount in excess of $200,000, enforceable against the Collateral; (e) The repossession or foreclosure, or notice or attempt thereof, by Silicon Valley Bank or any other third party, against the Collateral, or (f) If any of the Pledgors shall make a general assignment for the benefit of creditors or shall admit its inability to pay its debts as they become due, or shall file a voluntary petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking for itself, or consenting to, or acquiescing in, any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or shall file an answer or other pleading admitting or shall fail to deny or contest the material allegations of a petition filed against it in any such proceedings, or shall seek, or consent to or acquiesce in, the appointment of any trustee, receiver or liquidator of any of the Pledgors. 5.2. Remedies of Secured Party. In addition to such other rights and remedies as may be provided for herein, upon the occurrence of any Event of Default and at any time thereafter, Secured Party may, without waiving any rights and remedies of a Secured Party under the Uniform Commercial Code of Texas and without any further notice, exercise one or more of the following remedies as Secured Party, in its sole discretion, may elect: (a) Secured Party may declare the Indebtedness and any interest accrued and earned thereon immediately due and payable. (b) Secured Party shall have, then or at any time thereafter, the rights and remedies provided in the Uniform Commercial Code in force in the State of Texas at the date of execution of this Security Agreement or the date of any Event of Default. (c) Secured Party may, in accordance with the terms of Section 5.3 below, in its discretion, sell, assign and deliver all or any part of the Collateral at public or private sale and bid and become purchaser at any such sale, without any notice, advertisement or demand whatsoever except for the notice provided for in Section 5.3 below. (d) All income, dividends, distributions or benefits attributable or accruing to the Collateral delivered to Secured Party may be held by Secured Party as security for the Indebtedness or applied by Secured Party on the principal amount of the Indebtedness, whether or not then due, and all interest accrued thereon, in such order or manner as Secured Party may elect. 10 (e) Secured Party may exercise any one or more of the other rights and remedies provided for in this Agreement or the Purchase Agreement, including, but not limited to, the rights and remedies provided for in Section 4.2 and Section 4.5 above. Provided, however, Secured Party shall have no duty to exercise any of the aforesaid rights, privileges or options provided for in this Section 5.2 and shall not be responsible for any failure to do so or delay in so doing and shall not do so if such act would create or result in a violation of the federal Change in Bank Control Act or Bank Holding Company Act or any other federal, state of other governmental statute, law, rule or regulation. The Pledgors will execute all such applications and other instruments as may be necessary or appropriate to obtain any consent, approval or authorization of any federal, state or other governmental department, agency or authority as shall be necessary to effectuate any of the foregoing rights or remedies and will otherwise use their best efforts to secure the same. 5.3. Application of Proceeds. The proceeds of any sale of the Collateral or any part thereof, whether under the power of sale herein granted and conferred, by virtue of judicial proceedings or otherwise, shall be applied as follows: First: To the payment of all costs and expenses incurred in connection with such sale of the Collateral and the collection of such proceeds, including, without limitation, the expenses of preparing for sale, selling and the like, and attorney's fees and legal expenses incurred by Secured Party in connection therewith; Second: To the payment of the Indebtedness, with interest accrued to the date of such payment; and Third: Any surplus thereafter remaining shall be paid to the appropriate Parties, as their interests shall appear. 5.4. Costs and Expenses. All costs and expenses (including attorney's fees) incurred by Secured Party in protecting and enforcing its rights hereunder shall constitute a demand obligation owing by Pledgors to Secured Party and shall bear interest at the highest rate permitted under applicable law, all of which shall constitute a portion of the Indebtedness. 5.5. Additional Remedies. All remedies herein expressly provided are in addition to any and all other remedies now or hereafter existing at law or in equity, and the resort to any remedy provided for hereunder or provided for by law shall not prevent the concurrent or subsequent employment of any other appropriate remedy or remedies. ARTICLE VI GENERAL PROVISIONS 6.1. Limitation on Interest. This Agreement is subject to and shall be controlled by the 11 provisions of the Purchase Agreement regarding limitations on the maximum rate of interest. 6.2. Unenforceable or Inapplicable Provisions. If any provision hereof or of the Purchase Agreement is invalid or unenforceable in any jurisdiction, the other provisions hereof or of the Purchase Agreement shall remain in full force and effect in such jurisdiction, and the invalidity of any provision hereof or the Purchase Agreement in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction. 6.3. Rights Cumulative. Each and every right, power and remedy given to Secured Party by this Agreement or the Purchase Agreement, or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and not exclusive; and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by Secured Party; and the exercise, or the beginning of the exercise, of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter, any other right, power or remedy. No delay or omission by Secured Party in the exercise of any right, power or remedy shall impair any such right, power or remedy then or thereafter existing. 6.4. Waiver by Secured Party. Any and all covenants in this instrument may from time to time by instrument in writing signed by Secured Party be waived to such extent and in such manner as Secured Party may desire, but no such waiver shall affect or impair Secured Party's rights or liens hereunder, except to the extent specifically stated in such written instrument. Secured Party may waive any default without waiving any prior or subsequent default. 6.5. Successors and Assigns. This instrument is binding upon and shall inure to the benefit of Secured Party and Pledgors, their respective heirs executors or administrators, successors, representatives, receivers, trustees or assigns. 6.6. Article and Section Headings. The article and section headings in this instrument are inserted for convenience and shall not be considered a part of this instrument or used in its interpretation. 6.7. Counterparts. This instrument may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original, and all of which shall constitute one and the same document. 6.8. Joint and Several Liability. The liability of Pledgors shall be joint and several, and Secured Party may pursue any remedy it may have hereunder against any one or more of such parties without joinder of the remaining Pledgors and without waiving any cause of action against any of the Pledgors not so joined. 6.9. Applicable Law. This Agreement is performable in San Antonio, Bexar County, Texas, and shall be governed in all respects by the laws of the State of Texas. 6.10. Notices. Any notice or communication authorized or required hereunder shall be deemed to have been given to the party in question if given in writing and forwarded by registered 12 mail, postage prepaid, to such party at the address reflected below: If to Secured Party: To the addresses and facsimile numbers set forth on Schedule A of the Purchase Agreement. with copy to: LOEFFLER, JONAS & TUGGEY, L.L.P. 700 North Saint Mary's Street, Suite 800 San Antonio, Texas 78205 Attn: Timothy N. Tuggey If to Pledgors: TANISYS TECHNOLOGY, INC. 12201 Technology Blvd., Suite 125 Austin, Texas 78727 Attn: Chief Executive Officer Such address may be changed by giving notice in accordance herewith; provided, however, that any such change in address shall not be effective until five (5) days after actual receipt of the notice of such change. 6.11. Complete Agreement. This Agreement is the complete and exclusive statement of the Agreement between the parties and supersedes all prior communications or representations, oral or written, between the parties relating to the subject matter hereof. No modification, termination or waiver of any provision hereof shall be binding unless executed in writing by all parties hereto. 6.12. Interpretation. Wherever the context shall require, words in the male gender shall be deemed to include the female or neuter gender, words in the neuter gender shall be deemed to include the male or female gender, all singular words shall include the plural, and all plural words shall include the singular. 6.13. Pledgors' Obligations Absolute. The obligations of Pledgors under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated, lessened or otherwise affected by any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, substitution, amendment or modification of or addition or supplement to or deletion from the Purchase Agreement or this Agreement, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Purchase Agreement or this Agreement, or any exercise or non-exercise of any right, remedy, power or privilege under or in respect of the Purchase Agreement, or this Agreement; (c) any furnishing of any additional collateral or security to the Secured Party or its assignee or any acceptance thereof or any release of any collateral or security in whole or in part by the Secured Party or its assignee under this Agreement or under the Purchase 13 Agreement, or otherwise; (d) any limitation on any party's liability or obligations under the Purchase Agreement or under this Agreement, or any invalidity or unenforceability in whole or in part, of any such instrument or any term thereof; (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Pledgors or the Corporations, or any action taken with respect to this Agreement or the Purchase Agreement by any trustee or receiver, or by any court, in any such proceeding; or (f) any other circumstances; whether or not the Pledgors shall have notice or knowledge of any of the foregoing. 6.14. Renewals, Amendments and Other Security. The security interest herein granted shall not be affected by nor affect any other security taken for the Indebtedness, or any part thereof. Any extensions or renewals may be made of the Indebtedness and the security interest created hereby and any releases may be executed of the Collateral, or any part thereof, without affecting Secured Party's priority or the validity thereof with reference to any third person. Secured Party may take or may now hold other security for the Indebtedness. Secured Party may resort first to such other security or any part thereof, or from time to time to either or both, even to the partial or complete abandonment of either security, and such action shall not be a waiver of any rights conferred by this instrument. 6.15. Assignment by Secured Party. This Agreement, Secured Party's rights hereunder or the Indebtedness may be assigned from time to time by Secured Party, and in any case the assignee shall be entitled to all of the rights, privileges and remedies granted in this Agreement to Secured Party. 6.16. Further Assurances. Pledgors, at their expense, will execute, acknowledge and deliver all such instruments and take all such action as the Secured Party may request in order further to effectuate the purpose of this Agreement and to carry out the terms hereof. 6.17. Liability Disclaimer. Under no circumstances whatsoever shall the Secured Party be deemed to assume any responsibility for or obligation or duty with respect to any part or all of the Collateral, of any nature or kind whatsoever, or any matter or proceedings arising out of or relating thereto. The Secured Party shall not be required to take any action of any kind to collect or protect any interest in the Collateral, including, but not limited to, any action necessary to preserve its or Pledgors' rights against prior parties to any of the Collateral. The Secured Party shall not be liable or responsible in any way for the safekeeping, care or custody of any of the Collateral, or for any loss or damage thereto, or for any diminution in the value thereof, or for any act or default of any agent or bailee of the Secured Party or Pledgors, or of any carrier, forwarding agency or other person whomsoever, or for the collection of any proceeds, but the same shall be at the Pledgors' sole risk at all times. The Pledgors hereby release the Secured Party from any claims, causes of action and demands at any time arising out of or with respect to this Agreement or the Purchase Agreement or the Indebtedness, and any action taken or omitted to be taken by the Secured Party 14 with respect thereto, and Pledgors hereby agree to hold the Secured Party harmless from and with respect to any and all such claims, causes of action and demands. The Secured Party's Prior recourse to any part or all of the Collateral shall not constitute a condition of any demand for payment of the Indebtedness or of any suit or other proceeding for the collection of the Indebtedness. WITNESS THE EXECUTION HEREOF, as of the date first above written. PLEDGOR: TANISYS TECHNOLOGY, INC. BY: /s/ Charles T. Comiso -------------------------------------- NAME: Charles T. Comiso TITLE: President and Chief Executive Officer SECURED PARTY: NEW CENTURY EQUITY HOLDINGS CORP. BY: -------------------------------------- NAME: -------------------------------------- TITLE: -------------------------------------- OTHER PURCHASERS BY THEIR EXECUTION OF VARIOUS SUBSCRIPTION AGREEMENTS 15 STATE OF TEXAS ss. ss. COUNTY OF TRAVIS ss. The foregoing instrument was acknowledged before me this _____ day of __________, _____, by _______________________, ______________ of Tanisys Technology, Inc., a Wyoming corporation, on behalf of said corporation. ----------------------------- Notary Public, State of Texas STATE OF TEXAS ss. ss. COUNTY OF BEXAR ss. The foregoing instrument was acknowledged before me this _____ day of __________, _____, by _______________________, ______________ of New Century Equity Holdings Corp., a Delaware corporation, on behalf of said corporation. ----------------------------- Notary Public, State of Texas 16 EX-99.6 7 d70580_ex-996.txt Exhibit 99.6 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of August 13th, 2001 (the "Closing Date") by and between Tanisys Technology, Inc., a Wyoming corporation (the "Company") and New Century Equity Holdings Corp., a Delaware corporation ("New Century") and the persons and entities listed on Schedule A of that certain Series A Preferred Stock Purchase Agreement dated as of even date herewith (the "Purchase Agreement") (individually, New Century and all such persons and entities may be referred to as "Purchaser," and, collectively, New Century and all such persons and entities may be referred to as "Purchasers"). RECITALS A. The Company and Purchasers have entered into the Purchase Agreement, pursuant to which the Purchasers are purchasing that number of shares of the Series A Preferred Stock of the Company ("Series A Preferred") specified in Section 1.1 of the Purchase Agreement, subject to the terms provided therein (the "Investment Securities"). B. As a condition to the consummation of the Purchase Agreement, the Purchase Agreement provides that the Purchasers of Series A Preferred may convert such Series A Preferred into Common Stock, and shall be granted certain registration rights with respect to the shares of the Common Stock into which the Series A Preferred may be converted, to be issued pursuant to the terms of the Purchase Agreement, all as more fully set forth herein. NOW, THEREFORE, in consideration of the agreements set forth in the Purchase Agreement and of the mutual agreements and covenants hereinafter and therein contained, the parties hereto agree as follows: AGREEMENT 1. REGISTRATION RIGHTS. 1.1 Definitions. For purposes of this Section 1: (a) Registration. The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of effectiveness of such registration statement. (b) Registrable Securities. The term "Registrable Securities" means: any shares of Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in conversion or exchange for, or in replacement of Series A Preferred; excluding in all cases, however, any Registrable Securities sold by a person in a transaction in Page 1 which rights under this Section 1 are not assigned in accordance with this Agreement or any Registrable Securities sold or eligible for sale to the public or sold, or eligible for sale, pursuant to Rule 144 promulgated under the Securities Act. (c) SEC. The term "SEC or "Commission" means the U.S. Securities and Exchange Commission. (d) Closing Date. The term "Closing Date" shall have the same meaning that is given to such term in the Purchase Agreement. 1.2 Demand Registration. (a) Request by the Purchasers. At any time after sixty (60) days after the Closing Date if the Company shall receive at any time a written request ("Request") from New Century requesting that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities pursuant to this Section 1.2, then the Company shall effect the registration under the Securities Act of all Registrable Securities within ninety (90) days of such request. (b) Underwriting. The Registrable Securities covered by the Request may be offered by means of an underwriting if a majority of the holders of the Series A Preferred so request and the Company so consents, which consent will not be unreasonably withheld, and a majority of the holders of the Series A Preferred shall so advise the Company as a part of its Request. If an underwriting is requested by a majority of the holders of the Series A Preferred in their Request, then such holders and the Company shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the mutual agreement of the Company and such holders; provided, that neither the Company nor such holders shall unreasonably refuse to agree to a managing underwriter selected by the other, but shall in good faith attempt to select mutually agreeable managing underwriters. Notwithstanding any other provision of this Section 1.2, if the underwriters advise the Company in writing that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise such holders, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriters; provided, that the number of shares of Registrable Securities to be included in such underwriting and registration shall be reduced on a pro rata basis with all other securities of the Company and any other selling security holder. Any Registrable Securities excluded and withdrawn from such underwriting shall be withdrawn from the registration. (c) Maximum Number of Demand Registrations. The Company is obligated to effect only two (2) such registration pursuant to this Section 1.2. (d) Expenses. The Company shall bear all direct costs related to the registration, including, without limitation, all federal and "blue sky" registration and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company. The selling stockholders shall bear all underwriting discounts and commission Page 2 payable in connection with their sale of shares hereunder. (e) Rights of the Company. Notwithstanding anything to the contrary in this Section 1.2 or otherwise in this Agreement, the Company shall not be obligated to take any action to effect any such registration pursuant to this Section 1.2 as follows: (i) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; (ii) If the Company, within ten (10) days of the receipt of a registration Request under Section 1.2, gives written notice to the holders of all Series A Preferred of the Company's bona fide intention to effect the filing, within forty-five (45) days of receipt of such Request, of a registration statement with the Commission for the sale of securities by the Company (other than with respect to a registration statement relating to a Rule 145 transaction, an offering solely to employees or any other registration which is not appropriate for the registration of Registrable Securities), in which event, (x) the holders of all Series A Preferred shall be entitled to exercise their piggyback registration rights under Section 1.3 hereof with respect to such registration, (y) the Company shall be required in good faith to employ all reasonable efforts to cause its registration statement to become effective and to give prompt written notice to the holders of all Series A Preferred if the Company abandons its effort to file or causes its registration statement to become effective, and (z) in the event the Company gives notice that it has abandoned its registration statement efforts, the Company shall promptly renew its best efforts to register the Registrable Securities that were the subject of the Series A Preferred demand registration Request if so requested in writing by the holders of all Series A within ten (10) days after the holders of all Series A Preferred's receipt of notice that the Company has abandoned its registration efforts; (iii) During the period starting with the filing of and ending on the date ninety (90) days immediately following the effective date of any registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; (iv) If the Company shall furnish to the holders of Series A Preferred a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company it would be seriously detrimental, for the specific reasons stated in such certificate, to the Company or its shareholders for a registration Page 3 statement to be filed in the near future, then the Company's obligation to use its best efforts to register under this Section 1.2 shall be deferred for a period not to exceed one hundred and twenty (120) days from the date of receipt of the written Request from the holders of Series A Preferred; or (v) Unless at least one hundred and eighty (180) days shall have expired from the effectiveness of a previous registration of Registrable Securities pursuant to this Section 1.2, or pursuant to a previous registration under Section 1.3 below in which the holders of shares of Series A Preferred were given the opportunity to include in such registration at least the lesser of (i) twenty-five percent (25%) of the Registrable Securities held by the holders of Series A Preferred, or (ii) all Registrable Securities then owned by the holders of Preferred shares. Subject to the foregoing clauses (i) through (v), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the holders of Series A Preferred. 1.3 Piggyback Registrations. The Company shall notify the holders of Series A Preferred in writing at least twenty (20) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating solely to any registration under Section 1.2 of this Agreement or any employee benefit plan or a Rule 145 transaction) and will afford the holders of Series A Preferred, subject to the terms and conditions set forth herein, an opportunity to include in such registration statement all or any part of the Registrable Securities then held by the holders of shares of Series A. The holders of Series A Preferred shall, within five (5) business days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities the holders of Series A Preferred wishes to include in such registration statement. If the holders of Series A Preferred decide not to include all of their Registrable Securities in any registration statement thereafter filed by the Company, the holders of Series A Preferred shall nevertheless continue to have the right to include any Registrable Securities not included in such registration statement in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. If the holders of Series A Preferred are given the opportunity to include in any registration statement filed under this Section 1.3 at least the lesser of (i) twenty-five percent (25%) of the Registrable Securities issued to the holders of Series A Preferred pursuant to the Agreement, or (ii) all Registrable Securities then owned by the holders of Series A Preferred, then the holders of Series A Preferred shall not make a request for registration under Section 1.2 hereof for at least one hundred and eighty (180) days after the earlier of the termination of such offering or the effectiveness of such registration statement. (a) Underwriting. If a registration statement under which the Company gives notice under this Section 1.3 is for an underwritten offering, then the Company shall so Page 4 advise the holders of Series A Preferred. In such event, the holders of Series A Preferred's right to include Registrable Securities in a registration pursuant to this Section 1.3 shall be conditioned upon the holders of the Series A Preferred s participation in the extent provided herein. The holders of the Series A Preferred shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected by the Company for such underwriting. Notwithstanding any other provision of this Purchase Agreement, if the managing underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriters may exclude shares (including Registrable Securities) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company, and second to the holders of the Series A Preferred; provided however, that the right of the underwriters to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that: (i) all shares that are not Registrable Securities and are held by other shareholders of the Company, (except those shareholders with registration rights that, as of the Effective Date of the Purchase Agreement, are senior to or on a pari passu basis with those of the holders of the Series A Preferred and are disclosed to the holders of the Series A Preferred in the Purchase Agreement or any disclosure letter delivered to the holders of the Series A Preferred pursuant to the Purchase Agreement), shall be reduced on a pro rata basis with all other securities of the Company and any other selling security holder; and (ii) the number of Registrable Securities included in any such registration is not reduced below twenty percent (20%) of the shares included in the registration, except if such lesser number of shares is caused because of the pro rata reduction of (i) above. If a majority of the holders of the Series A Preferred disapprove of the terms of any such underwriting, the Series A Preferred may elect to withdraw therefrom by written notice to the Company and the managing underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. (b) Expenses. The holders of Series A Preferred shall bear all discounts, commissions or other amounts payable to underwriters or brokers with respect to the sale of Registrable Securities by the holders of the Series A Preferred in any offering registered under this Section 1.3 and fees and disbursements of counsel for the holders of the Series A Preferred in connection with such offering. Other expenses incurred in connection with a registration pursuant to this Section 1.3, including, without limitation all federal and "blue sky" registration and qualification fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be borne by the Company. Page 5 1.4. Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement, and except as otherwise provided in this Section or otherwise in this Agreement, the Company shall, as expeditiously as reasonably possible: (a) Prepare promptly and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, keep such registration statement effective for ninety (90) days (or until the earlier sale of the Registrable Securities covered thereby), which registration statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. (b) Prepare promptly and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Series A Preferred shareholders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as it may reasonably request in order to facilitate the disposition of the Registrable Securities owned by it that are included in such registration. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the holders of Series A Preferred, provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriters of such offering. (f) Notify the Series A Preferred shareholders at any time when a prospectus relating to the Registrable Securities is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. (g) Furnish, at the request of the Series A Preferred shareholders, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes Page 6 effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to the Series A Preferred shareholders, addressed to the underwriters, if any, and to the Series A Preferred shareholders, and (ii) a "comfort" letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a the Series A Preferred shareholders, addressed to the underwriters, if any, and to the Series A Preferred shareholders. (h) Make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 promulgated under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date of any registration statement and any post-effective amendment thereto. (i) Cooperate with the Series A Preferred shareholders, any underwriter participating in any underwritten offering of Registrable Securities, and any attorney, accountant or other agent retained by the Series A Preferred shareholders or any such underwriter by providing any information reasonably requested by any such persons in connection with their due diligence investigation relating to the filing of the registration statement relating to the Registrable Securities. (j) Use its best efforts to cause all the Registrable Securities covered by any registration statement to be listed on a national securities exchange, if the Common Stock is then listed on a national securities exchange and the listing of such Registrable Securities is then permitted under the rules of such exchange. (k) Provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of any registration statement. (l) Cooperate with the Series A Preferred shareholders and the managing underwriter or underwriters of any offering involving Registrable Securities, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be sold pursuant to a registration effected hereto, and enable such certificates to be in such denominations or amounts as the case may be, and registered in such names as the managing underwriter or underwriters, if any, or the holders of Series A Preferred, may reasonable request. (m) Take all other reasonable actions necessary to expedite and facilitate the disposition of the Registrable Securities pursuant to the registration statement. 1.5 Furnish Information. It shall be a condition precedent to the obligations of Page 7 the Company to take any action pursuant to Sections 1.2, or1.3 that the Series A Preferred shareholders shall furnish to the Company such information regarding it, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to timely effect the registration of its Registrable Securities. 1.6 Indemnification. In the event any Registrable Securities are included in a registration statement under 1.2 or 1.3: (a) By the Company. To the extent permitted by law, the Company will indemnify and hold harmless the Series A Preferred shareholders, officers and directors of the Series A Preferred shareholders, any underwriter (as defined in the Securities Act) for the Series A Preferred shareholders and each person, if any, who controls the Series A Preferred shareholders or such underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in a registration statement filed pursuant to this Section 1, including any preliminary prospectus or final prospectus contained therein or in any amendments or supplements thereto; (ii) the omission or alleged omission to state in a registration statement filed pursuant to this Section 1 (including any preliminary prospectus or final prospectus contained therein or in any amendments or supplements thereto), a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the 1934 Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the 1934 Act or any federal or state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each of the Series A Preferred shareholders, such officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action, provided however, that the indemnity agreement contained in this subsection 1.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with information furnished expressly for use in connection with such registration by the Series A Preferred shareholders, or by such, officer, director, underwriter or controlling person, or other authorized agents, of the Series A Preferred shareholders. Page 8 (b) By the Series A Preferred Shareholders. To the extent permitted by law, the Series A Preferred shareholders will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, and any underwriter, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person or underwriter may become subject under the Securities Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) (1) arise out of or are based upon a Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with information furnished by the Series A Preferred shareholders expressly for use in connection with such registration, or (ii) any violation or alleged violation by the Series A Preferred shareholders of the Securities Act, the 1934 Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the 1934 Act or any federal or state securities law in connection with the offering covered by such registration statement; and the Series A Preferred shareholders will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this subsection 1.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Series A Preferred shareholders, which consent shall not be unreasonably withheld; and provided further, that the total amounts payable in indemnity by the Series A Preferred shareholders under this Section 1.6(b) in respect of any Violation shall not exceed the net proceeds received by the Series A Preferred shareholders in the registered offering out of which such Violation arises. (c) Notice. Promptly after receipt by an indemnified party under this Section 1.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim for indemnification in respect thereof is to be made against any indemnifying party under this Section 1.6, deliver to the indemnifying party a written notice of the commencement of such an action and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.6, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.6. (d) Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of the Company and Series A Preferred shareholders are subject to the condition that, Page 9 insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or in the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity agreements shall not inure to the benefit of any person if a copy of the Final Prospectus was furnished to the indemnified party and was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act. (e) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) the Series A Preferred shareholders or the Company (and/or any officer, director, underwriter or controlling person who may be indemnified under Section 1.6(a) or Section 1.6(b)), makes a claim for indemnification pursuant to this Section 1.6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 1.6 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Series A Preferred shareholders or the Company (and/or any officer, director, underwriter or controlling person who may be indemnified under Section 1.6(a) or 1.6(b)) in circumstances for which indemnification is provided under this Section 1.6; then, and in each such case, the Company and the Series A Preferred shareholders (and/or such other person) will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in proportion to their relative fault as determined by a court of competent jurisdiction; provided, however, that in no event (i) shall the Series A Preferred shareholders be responsible for more than the portion represented by the percentage that the public offering price of the Registrable Securities offered and sold by the Series A Preferred shareholders under the registration statement bears to the public offering price of all securities offered and sold under such registration statement and (ii) shall the Series A Preferred shareholders be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by the Series A Preferred shareholders pursuant to such registration statement, and in any event, no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) Survival. The obligations of the Company and the Series A Preferred shareholders under this Section 1.6 shall survive the completion of any offering of Registrable Securities in a registration statement, and otherwise. 1.7 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, for so long as the Series A Preferred shareholders owns any Registrable Securities, the Company agrees to: (a) Make and keep public information available, as those terms are Page 10 understood and defined in Rule 144 under the Securities Act, at all times; (b) File with the Commission in a timely manner all reports and other documents required of the Company under the 1934 Act; and (c) So long as the Series A Preferred shareholders own any Registrable Securities, to furnish to the Series A Preferred shareholders forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as the Series A Preferred shareholders may reasonably request in availing itself of any rule or regulation of the Commission allowing any such shareholder to sell any such securities without registration. 1.8 Termination of the Company's Obligations. The Company shall have no obligations to register Registrable Securities held by the Series A Preferred shareholders (i) if all Registrable Securities have been registered and sold pursuant to registrations effected pursuant to this Agreement; or (ii) to the extent such Registrable Securities are eligible for resale pursuant to Rule 144 under the Securities Act. 1.9 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the holders of a majority the Series A Preferred, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 1.2 or1.3 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of the Series A Preferred shareholders which is included, or (b) to make a demand registration which could result in such registration statement being declared effective (i) during the effectiveness of any registration statement effected pursuant to Section 1.2, or (ii) within one hundred twenty (120) days of the effective date of any registration effected pursuant to Section 1.2. 2. ASSIGNMENT. 2.1 Assignment. Notwithstanding anything herein to the contrary, the registration rights of the Series A Preferred shareholders under Section 1 hereof may be assigned only to (a) any family member or trust for the benefit of a Series A Preferred shareholder, (b) any party who acquires ownership or control of any Series A Preferred shareholder through a merger, consolidation, sale of assets or similar business combination, (c) any transferree who acquires not less than 2,500,000 shares of Registrable Securities, or (d) any affiliate of any Series A Preferred shareholders; provided however that no party may be assigned any of the foregoing rights until the Company is given written notice by the assigning party at the time of such assignment stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and provided further, that any such assignee shall Page 11 receive such assigned rights subject to all the terms and conditions of this Agreement, including without limitation the provisions of this Section 2. 3. GENERAL PROVISIONS 3.1 Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if deposited in the U.S. mail by registered or certified mail, return receipt requested, postage prepaid, as follows: (a) If to the Company, at: Tanisys Technology, Inc. 12201 Technology Blvd., Suite 125 Austin, Texas 78727 Attention: Chief Executive Officer (b) If to the Purchasers, to the addresses and facsimile numbers set forth on Schedule A to the Agreement. with a copy to: Loeffler, Jonas & Tuggey LLP 700 North St. Mary's Street, Suite 800 San Antonio, Texas 78205 Attn: Timothy N. Tuggey Telephone: (210) 354-4300 Facsimile: (210) 354-4034 Any party hereto (and such party's permitted assigns) may by notice so given provide and change its address for future notices hereunder. Notice shall conclusively be deemed to have been given when personally delivered or when deposited in the mail in the manner set forth above. 3.3 Entire Agreement. This Agreement constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof. 3.4 Amendment of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of New Century (and/or any of their permitted successors or assigns). Page 12 3.5 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of Texas as applied to agreements among Texas residents entered into and to be performed entirely within Texas, excluding that body of law relating to conflict of laws and choice of law. 3.6 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 3.7 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement. 3.8 Successors And Assigns. Subject to the provisions of Section 2.1, the provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. 3.9 Captions. The captions to sections of this Agreement have been inserted for identification and reference purposes only and shall not be used to construe or interpret this Agreement. 3.10 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 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. THE COMPANY: TANISYS TECHNOLOGY, INC., a Wyoming Corporation By: /s/ Charles T. Comiso --------------------- Its President THE PURCHASERS: By their Execution of the Subscription Agreement Page 14 -----END PRIVACY-ENHANCED MESSAGE-----