SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the "Agreement"), dated as of _______, 1997,
is entered into by and between___________, (the "Purchaser") and ▇▇▇▇▇▇▇▇
TECHNOLOGIES, INC., (the "Company").
The parties hereto agree as follows:
1. Purchase and Sale of Convertible Notes. Upon the basis of
the representations and warranties, and subject to the terms and conditions, set
forth in this Agreement, the Company covenants and agrees to sell to the
Purchaser, at a purchase price of $______ (the "Purchase Price"), (i) a
convertible note in registered form in a principal amount of $______ and
substantially in the form of Exhibit A hereto (the "Note"), such Note
convertible at the option of the holder thereof into a number of Note Shares
determined pursuant to Article 3 of the Note according to the terms and
conditions set forth in the Note, and (ii) a warrant to purchase ______ shares
of the Company's Common Stock, $.01 par value per share (the "Common Stock") in
substantially the form of Exhibit B hereto (the "Warrant"), and upon the basis
of the representations and warranties, and subject to the terms and conditions
set forth in this Agreement, the Purchaser covenants and agrees to purchase from
the Company, the Note and the Warrant at the Purchase Price. All capitalized
terms not otherwise defined herein shall have the meanings attributed to them in
the Note and the Warrant.
2. Representations. Warranties and Covenants of the Purchaser.
The Purchaser understands, and represents and warrants to, and agrees with, the
Company, that:
(a) The Note, the Note Shares, the Warrant and the
shares issuable upon exercise of the Warrant (the "Warrant Shares")
(hereinafter, the Note, the Note Shares, the Warrant and the Warrant Shares are
collectively referred to as the "Securities") have not been and, unless
registered under the Securities Act of 1933, as amended (the "Securities Act"),
will not be registered under the Securities Act, or any other applicable
securities law, and, accordingly, may not be offered, sold, transferred,
pledged, hypothecated or otherwise disposed of ("Transferred") unless registered
under the Securities Act or Transferred in a transaction exempt from
registration under the Securities Act and any other applicable securities law;
(b) The Purchaser is an "accredited investor" within
the meaning of Rule 501(a) under the Securities Act (an "Accredited Investor"),
and is acquiring or will acquire the Securities for its own account. The
Purchaser has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Securities. The Purchaser is aware that it may be required to bear the economic
risk of an investment in the Securities for an indefinite period, and it is able
to bear such risk for an indefinite period;
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(c) The Purchaser is acquiring or will acquire the
Securities for its own account for investment purposes and not with a view to,
or for offer or sale in connection with, any distribution thereof. The Purchaser
agrees to offer, sell or otherwise transfer the Securities only (i) in
accordance with the terms of this Agreement, the Note and the Warrant, as
applicable, and (ii) pursuant to registration under the Securities Act or an
exemption from registration under the Securities Act and any other applicable
securities law; and
(d) The Purchaser acknowledges that the Company and
others will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and further agrees that if any of the
acknowledgments, representations and agreements deemed to have been made by the
Purchaser by its acquisition of the Securities are no longer accurate, it shall
promptly notify the Company.
(e) The Company has furnished or made available to
the Purchaser a full and complete set of its Annual Report on Form 10-KSB for
its most recently completed fiscal year, its Form 10-QSB's for each of its
fiscal quarters since the end of its most recently completed fiscal year and any
Form 8-K's filed during its current fiscal year (collectively, the "SEC
Documents"), which the Company has filed pursuant to the Securities Exchange Act
of 1934, as amended.
3. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchaser that:
(a) The Company has been duly incorporated and is
validly existing as a corporation under the laws of Delaware.
(b) This Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement, enforceable
in accordance with its terms, and the Company has full corporate power and
authority necessary to enter into this Agreement and to perform its obligations
hereunder.
(c) No consent, approval, authorization or order of
any court, governmental agency or body or arbitrator having jurisdiction over
the Company or any of its affiliates is required for execution of this Agreement
and the performance of its obligations hereunder, including without limitation,
the issuance and sale of the Securities.
(d) The Note and Warrant, when issued and delivered
pursuant to this Agreement, will have been duly authorized, executed, issued and
delivered and will constitute a legal, valid, binding and enforceable obligation
of the Company.
4. Covenants of the Company. The Company covenants and agrees
with the Purchaser:
(a) to cause the Note Shares and Warrant Shares to
be, when converted and exercised in accordance with the terms of the Note and
the Warrant, upon
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delivery, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges, security interests or other encumbrances; and
(b) have at all times authorized and reserved for
issuance, free from preemptive rights, a sufficient number of shares of Common
Stock to yield a number of Note Shares and Warrant Shares sufficient to satisfy
the conversion rights of the Purchaser pursuant to the terms and conditions of
the Note and the Warrant.
5. Transfer of Securities.
(a) Securities Act Legend. Each certificate
evidencing the Note, the Note Shares, the Warrant, the Warrant Shares and any
certificates issued upon transfer or exchange of the Note, the Note Shares, the
Warrant or the Warrant Shares shall be stamped or imprinted with a legend
substantially as follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE; AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION
FROM, THE REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
(b) Securities Act Compliance. Each holder (a
"Holder") of a certificate evidencing the Note, the Note Shares, the Warrant or
the Warrant Shares which bears the restrictive legend set forth in Section 8(a)
above (the "Restricted Securities"), and who proposes to Transfer (as defined in
Section 3(a) of this Agreement) any Restricted Securities, shall give written
notice to the Company of such Holder's intention to effect such Transfer. Each
such notice shall describe the manner and circumstances of the proposed sale or
other disposition in sufficient detail and may be accompanied by an opinion of
legal counsel to the Holder. Promptly upon receipt of such notice, the Company
shall present a copy thereof (together with any accompanying opinion of legal
counsel to the Holder) to its legal counsel, and the following provisions shall
apply:
(i) If, in the opinion of legal counsel to
such Holder, satisfactory in form and substance to the Company and its legal
counsel, or if such notice was not accompanied by an opinion of legal counsel to
the Holder, then, if, in the opinion of legal counsel to the Company, the
proposed sale or other disposition may be effected without registering the
Restricted Securities involved under the Securities Act or under state
securities laws, such Holder shall be entitled to Transfer such Restricted
Securities in accordance with the terms of the notice delivered to the Company.
The Company will advise the Holder, within five (5) business days after
submission of such notice, whether such Holder is entitled to so Transfer the
Restricted Securities. If the Holder is entitled to so Transfer, he shall submit
the stock certificate or certificates evidencing the Restricted Securities to be
Transferred to the Company in proper form for Transfer and accompanied by
appropriate instruments of Transfer. Restricted Securities thus
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Transferred (and each of the certificates evidencing any untransferred balance
of the Securities not so transferred) shall bear the restrictive legend set
forth in Section 8(a), unless, in the opinion of both such legal counsel (or
legal counsel to the Company if the Holder did not present an opinion of its
legal counsel), such legend is not required by the applicable provisions of the
Securities Act or state securities laws; and
(ii) If in the reasonable opinion of either
of such legal counsel (or legal counsel to the Company if the Holder did not
present an opinion of its legal counsel), the proposed Transfer cannot be
effected without registering the Securities involved under the Securities Act or
state securities laws, such Holder shall not offer to Transfer or Transfer such
Restricted Securities unless and until such Restricted Securities have been
registered under the Securities Act or state securities laws for such purpose or
an exemption from such registration becomes available pursuant to Section
8(b)(i) above.
6. Piggy-Back Registration Rights. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company shall
file with the Securities and Exchange Commission (the "SEC") a registration
statement (the "Registration Statement") under the Securities Act of 1933 (the
"1933 Act") relating to (i) a firm underwritten offering for its own account or
the account of others under the 1933 Act of any of its equity securities or (ii)
any other offering for its own account or the account of others under the 1933
Act of any of its equity securities (other than on Form S-4 or Form S-8 or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans) the Company shall
send to the Purchaser written notice of such determination and, if within
fifteen (15) days after the effective date of such notice, the Purchaser shall
so request in writing, the Company shall include in such Registration Statement
all or any part of the Note Shares or Warrant Shares the Purchaser requests to
be registered, except that if, in connection with any underwritten public
offering for the account of the Company the managing underwriter(s) thereof
shall impose a limitation on the number of shares of Common Stock that may be
included in the Registration Statement because, in such underwriter(s)'
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include
in such Registration Statement only such limited portion of the Note Shares or
Warrant Shares with respect to which the Purchaser has requested inclusion
hereunder as the underwriter shall permit. Any exclusion of Note Shares or
Warrant Shares shall be made pro rata among the Purchasers seeking to include
Note Shares or Warrant Shares, in proportion to the number of Note Shares or
Warrant Shares sought to be included by such Purchaser; provided, however, that
the Company shall not exclude any Note Shares or Warrant Shares unless the
Company has first excluded all outstanding securities, the holders of which are
not entitled to inclusion of such securities in such Registration Statement or
are not entitled to pro rata inclusion with the Note Shares or Warrant Shares;
and provided, further, however, that, after giving effect to the immediately
preceding proviso, any exclusion of Note Shares or Warrant Shares shall be made
pro rata with holders of other securities having the right to include such
securities in the Registration Statement other than holders of securities
entitled to inclusion of their securities in such Registration Statement by
reason of demand registration rights. If an offering in connection with
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which an Investor is entitled to registration under this Section is an
underwritten offering, then each Purchaser whose Note Shares and Warrant Shares
are included in such Registration Statement shall, unless otherwise agreed by
the Company, offer and sell such Note Shares or Warrant Shares in an
underwritten offering using the same underwriter or underwriters and, subject to
the provisions of this Agreement, on the same terms and conditions as other
shares of Common Stock included in such underwritten offering. All reasonable
expenses, other than underwriting discounts and commissions, included in
connection with the registration of the Note Shares and Warrant Shares pursuant
to the foregoing provision, shall be borne by the Company.
7. Survival of the Representations. Warranties. etc. The
respective agreements, representations, warranties, indemnities and other
statements made by or on behalf of the Company and the Purchaser, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of the other party to this Agreement or
any officer, director or employee of, or person controlling or under common
control with, such party and will survive delivery of any payment for the
Securities.
8. Notices. All notices, requests and other communications
hereunder must be in writing and delivered to the parties at the following
addresses or facsimile numbers:
If to the Purchaser, to: [Name & Address]
Telecopy:
If to the Company, to:
▇▇▇▇▇▇▇▇ Technologies Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail or reputable courier service in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
9. Third Party Beneficiary. Any permitted transferee of any
part of the Securities shall be a third party beneficiary of the Company's
obligations under this Agreement, the Note and the Warrant. Such person shall
have all the rights of a third party beneficiary with respect to the enforcement
against the Company of any provision of this Agreement, the Note and the
Warrant.
10. Miscellaneous.
(a) This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties appear on
the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
(b) This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective successors and permitted
assigns.
(c) This agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to conflicts of laws principles). With respect to any suit, action or
proceedings relating to this Agreement, each of the Company and the Purchaser
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan in the City of New York and hereby waives to the fullest extent
permitted by applicable law any claim that any such suit, action or proceeding
has been brought in an inconvenient forum. Subject to applicable law, the
Company agrees that final judgment against it in any legal action or proceeding
arising out of or relating to this Agreement, the Note or the Warrant shall be
conclusive and may be enforced in any other jurisdiction within or outside the
United States by suit on the judgment, a certified copy of which judgment shall
be conclusive evidence thereof and the amount of its indebtedness, or by such
other means provided by law.
(d) The headings of the sections of this document
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
(e) The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in
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any jurisdiction, then such invalidity or unenforceability shall affect in that
jurisdiction only such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Agreement in any jurisdiction.
(f) This Agreement, including the schedules and
exhibits hereto, constitutes the sole and entire agreement of the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer(s) of each party hereto as of the date
first above written.
▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
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