Exhibit 4.16
AGREEMENT FOR PURCHASE AND SALE
This Agreement for Purchase and Sale (the "Agreement"), is made and entered
into as of February 9, 1998, by and between Photran Corporation, a Minnesota
corporation ("Seller"), and St. ▇▇▇▇▇ Capital Partners, L.P., a Delaware limited
partnership ("Purchaser"), and sets forth the terms and conditions of the sale
and purchase of a $3,500,000 10% Convertible Promissory Note, the form of which
is set forth on EXHIBIT A hereto (the "Note").
WHEREAS, Seller desires to issue and sell to Purchaser, and Purchaser
desires to purchase and accept from Seller, the Note, on the terms and subject
to the conditions set forth herein.
WHEREAS, the obligations of Seller under the Note are secured by that
certain Security Agreement dated as of the date hereof, between Seller and
Purchaser (the "Security Agreement"), the form of which is set forth on EXHIBIT
B hereto.
WHEREAS, the provisions of the Note and the Security Agreement are subject
to the terms and conditions set forth in that certain Intercreditor and
Subordination Agreement among Seller, Purchaser, ▇▇▇▇▇▇ ▇▇▇▇, Community National
Bank and ▇▇▇▇▇▇ & Efron, P.A., dated as of the date hereof (the "Intercreditor
and Subordination Agreement"), the form of which is set forth on EXHIBIT C
hereto.
WHEREAS, Seller and Purchaser desire to make certain representations,
warranties and agreements in connection with the purchase and sale of the Note
contemplated hereby.
WHEREAS, Seller desires to sell to Purchaser at the Closing (as defined
herein) warrants to purchase 1,225,000 shares of Seller's Common Stock (the
"Warrants"), no par value (the "Common Stock"), which Warrants shall have the
terms and be subject to the conditions set forth in the form of Warrant (the
"Warrant") attached hereto as EXHIBIT D and shall be subject to the terms and
conditions set forth herein.
WHEREAS, Seller desires to grant to Purchaser certain registration rights
in respect to the shares of Seller's Common Stock that may be acquired on the
exercise of the Warrants and/or conversion of the Note, which registration
rights shall have the terms and be subject to the conditions set forth in the
Registration Rights Agreement (the "Registration Rights Agreement"), the form of
which is set forth on EXHIBIT E hereto (this Agreement, the Note, the Security
Agreement, the Intercreditor and Subordination Agreement, the Warrant and the
Registration Rights Agreement are collectively referred to as the "Transaction
Documents").
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NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASE AND SALE OF THE NOTE AND THE WARRANTS. Subject to the terms
of this Agreement, Seller agrees to and does hereby issue, sell and deliver the
Note and the Warrants to Purchaser at the Closing (as defined herein) and
Purchaser agrees to and does hereby purchase and accept the Note and the
Warrants from Seller.
1.2 CONSIDERATION FOR PURCHASE OF THE NOTE. Subject to the terms of this
Agreement, Purchaser hereby agrees to pay to, or on behalf of, Seller, by check
or wire transfer (i) $700,000, on the Closing Date (as defined herein), to the
account of Seller, less any expenses payable or reimbursable by Seller
hereunder, and (ii) $2,800,000, simultaneously with the funding of the
settlement with Shenzen WABO Group Company Limited, $1,500,000 of which shall be
deposited in an account designated by Shenzen WABO Group Company Limited and
$1,300,000 of which shall be deposited in the account of Seller, pursuant to the
Note, as the consideration for the purchase of the Note, less any expenses
payable or reimbursable by Seller hereunder (the "Note Consideration").
1.3 CONSIDERATION FOR PURCHASE OF THE WARRANTS. Subject to the terms of
this Agreement, Purchaser hereby agrees to pay to Seller, by check or wire
transfer to the account of Seller, $36,750 or $.03 per share at Closing, as the
consideration for the purchase of the Warrants (the "Warrant Consideration;" the
Note Consideration and the Warrant Consideration are collectively referred to as
the "Consideration").
1.4 ORIGINATION FEE. Seller agrees to pay Purchaser at Closing, a
one-time origination fee in the amount of $35,000 (the "Origination Fee") for
the payment of the Note Consideration.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
2.1 ORGANIZATION, STANDING AND QUALIFICATION. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as it is
now being conducted. Seller is licensed and qualified to do business as a
foreign corporation in each jurisdiction in which the character of Seller's
properties, owned or leased, or the nature of its activities makes such
qualification or license necessary, except where
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failure to be so qualified or licensed would not have a material adverse
effect on Seller or Seller's properties, financial condition or results of
operations.
2.2 AUTHORITY; NO DEFAULTS. Seller has all requisite corporate power and
authority to enter into the Transaction Documents and to consummate the
transactions contemplated thereby. The execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of Seller.
The Transaction Documents have been executed and delivered by Seller and
constitute the valid and binding obligation of Seller, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, moratorium and other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law). The execution, delivery and performance of the
Transaction Documents do not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with or result in a breach of
or the acceleration of any obligation under, or constitute a default or event of
default (or event which, with notice or lapse of time or both, would constitute
a default or event of default) under, any provision of any charter, bylaw,
indenture, mortgage, lien, lease, agreement, contract, instrument, order,
judgment, decree, ordinance or regulation, or any restriction to which any
property of Seller is subject or by which Seller is bound, the effect of which
would be materially adverse to Seller, except as set forth on SCHEDULE 2.2 and
for other obligations of Seller which will have been discharged, written
consents of third parties which will have been obtained and conflicts which will
have been waived in writing on or before the Closing. Seller is not, and Seller
does not have knowledge that it is alleged to be, in material violation or
default of any applicable law, statute, order, rule or regulation promulgated or
judgment entered by any court, administrative agency or commission or other
governmental agency or instrumentality, domestic or foreign (a "Governmental
Entity"), relating to or affecting the operation, conduct or ownership of the
property or business of Seller which violation or default would have a material
adverse effect on Seller.
2.3 APPROVALS. There is no legal impediment to the execution and delivery
of the Transaction Documents by Seller or to the consummation of the
transactions contemplated thereby, and no filing or registration with, or
authorization, consent or approval of, a Governmental Entity, shareholders or
any other third party is necessary for the consummation by Seller of the
transactions contemplated thereby except as may be required to perfect any
security interest granted to Purchaser under the Security Agreement and any
exemption under applicable securities laws.
2.4 ARTICLES OF INCORPORATION AND BYLAWS. Seller has furnished to
Purchaser true and complete copies of its articles of incorporation and bylaws,
each as amended to date and as presently in effect.
2.5 LITIGATION. Except as set forth on SCHEDULE 2.5, as of the date of
this Agreement, there is no suit, action, proceeding or investigation pending
or, to the best knowledge of Seller, threatened against or affecting Seller (or
any of its respective officers or directors in connection
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with the business of Seller), nor is there any outstanding judgment, order,
writ, injunction or decree against Seller, which judgment would have a
material adverse effect on Seller. Seller is not subject to any court order,
writ, injunction, decree, settlement agreement or judgment that contains or
orders any on-going obligations, whether prohibitory or mandatory in nature,
the performance of which would have a material adverse effect on Seller.
2.6 CAPITALIZATION. (a) Seller has authorized capital stock of (a)
24,000,000 shares of Common Stock, no par value, of which, as of the date
hereof, there are 5,219,985 shares issued and outstanding, and (b) 6,000,000
shares of undesignated preferred stock, no par value per share ("Preferred
Stock"), of which, as of the date hereof, no shares are issued and
outstanding. Except as set forth on SCHEDULE 2.6, all of the issued and
outstanding shares of Common Stock were duly and validly issued and are fully
paid and non-assessable. None of the outstanding shares of Common Stock or
Preferred Stock has been issued in violation of any preemptive rights of the
current or past shareholders of Seller. As of the date hereof, Seller has or
will have reserved for issuance (i) an aggregate of 725,000 shares of Common
Stock issuable on exercise of stock options issued to employees, officers,
directors and other persons, 358,750 shares of which are currently subject to
outstanding options, (ii) an aggregate of 1,316,950 shares of Common Stock
issuable on exercise of currently outstanding convertible securities or
convertible promissory notes other than those listed in (i) above and (iii)
an aggregate of 200,000 shares of Common Stock to be issued to Shenzen WABO
Group Company Limited pursuant to the Settlement Agreement between Seller and
Shenzen WABO Group Company Limited (the "WABO Settlement Agreement"). Except
as set forth on SCHEDULE 2.6 or described above in (i), (ii) or (iii), there
are no outstanding options, warrants or rights to subscribe for, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of Seller
or contracts, commitments, understandings or arrangements by which Seller is
or may be obligated to issue additional shares of its capital stock or
options, warrants, or rights to purchase or acquire any additional shares of
its capital stock.
(b) All of the Common Stock issued on the exercise of the Warrants and the
conversion of the Note will be fully paid, non-assessable and free and clear of
any Encumbrances, except for (i) restrictions on transfer resulting from and
requiring compliance with applicable securities laws and (ii) restrictions on
registration and resale pursuant to the Registration Rights Agreement. As used
in this Agreement, the term "Encumbrance" means and includes (i) any security
interest, mortgage, deed of trust, lien, charge, pledge, proxy, adverse claim,
equity, power of attorney, or restriction of any kind, including but not limited
to, any restriction or servitude on the use, transfer, receipt of income, or
other exercise of any attributes of ownership, and (ii) any Uniform Commercial
Code financing statement or other public filing, notice or record that by its
terms purports to evidence or notify interested parties of any of the matters
referred to in clause (i) that has not been terminated or released by another
proper public filing, notice or record.
2.7 SUBSIDIARIES. The Seller has no subsidiaries.
2.8 SEC DOCUMENTS. Except as set forth on SCHEDULE 2.8, Seller has made
all filings with the Securities and Exchange Commission ("SEC") that it has been
required to make under
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the Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since May
29, 1996. Seller has provided to Purchaser a true, complete and correct copy
of Seller's annual report on Form 10-KSB for the calendar year ended December
31, 1996, together with all amendments thereto, and any and all filings with
the SEC made by Seller (including all requested exhibits to such filings)
since the filing of said Form 10-KSB (all such documents that have been filed
with the SEC since May 29, 1996, as amended, are referred to as the "Seller
SEC Documents"). As of their respective dates, and except as amended, the
Seller SEC Documents complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and none of
the Seller SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Seller included
in the Seller SEC Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted
by Form 10-QSB) and fairly present (subject, in the case of the unaudited
statements, to normal recurring audit adjustments) the financial position of
Seller as of the dates thereof and the results of its operations and cash
flows for the periods then ended. Except as set forth in the Seller SEC
Documents and SCHEDULE 2.8, since September 30, 1997, (i) there have been no
material adverse changes in Seller's business, operations or financial
condition and (ii) Seller's operations have been conducted in the ordinary
course of business except as disclosed in writing to Purchaser.
2.9 LIABILITIES. Except as set forth in SCHEDULE 2.9, Seller has no
liabilities or obligations, either accrued, absolute, contingent, or otherwise
that have a material adverse effect on the value or business of Seller, and
Seller has no knowledge of any potential liability that it reasonably believes
would likely result in a material adverse effect on the value or business of
Seller, other than those (a) reflected or reserved against in the unaudited
balance sheet of Seller at September 30, 1997 or (b) incurred in the ordinary
course of business since September 30, 1997.
2.10 LICENSES, PERMITS, AUTHORIZATIONS, ETC. Seller holds all approvals,
authorizations, consents, licenses, orders, franchises, rights, registrations
and permits of any type required to operate its business as presently conducted,
except where failure to hold such would not have a material adverse effect on
the business, financial condition or results of operations of Seller. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any revocation,
cancellation, suspension or modification of any such approval, authorization,
consent, license, order, franchise, right, registration or permit.
2.11 TITLE TO ASSETS; ENCUMBRANCES. Except as set forth in SCHEDULE 2.11:
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(a) Seller has good and indefeasible title to its assets, whether
real, personal or intangible, free and clear of all Encumbrances except (i)
liens for current taxes and assessments not yet due or being contested in
good faith by appropriate proceedings, (ii) mechanic's liens arising under
the operation of law for actions contested in good faith or for which
payment arrangements have been made, (iii) liens granted or incurred by
Seller in the ordinary course of its business or financing or lease of
equipment, office space, furniture and computers in the ordinary course of
its business, and (iv) easements, rights of way, encroachments or other
reductions or matters affecting title which do not prevent the assets from
being used for the purpose for which they are currently being used.
(b) There are no parties in possession of any of the assets of Seller
other than personal property held by third parties in the reasonable and
ordinary course of business. Seller enjoys full, free and exclusive use
and quiet enjoyment of its assets and its rights pertaining thereto.
Seller enjoys peaceful and undisturbed possession under all leases under
which it is a lessee, and all such leases are legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms.
2.12 TAXES AND RETURNS. Except as set forth on SCHEDULE 2.12, Seller has
filed all required tax returns and reports. Except as set forth on SCHEDULE
2.12, Seller has paid all taxes, assessments and governmental charges and
penalties which it has incurred, except such as are being or may be contested in
good faith by appropriate proceedings. Seller is not delinquent in the payment
of any tax, assessment or governmental charge. No deficiencies for any taxes
have been proposed, asserted, or assessed against Seller, and no requests for
waivers of the time to assess any such taxes are pending. For the purposes of
this Agreement, the term "tax" (including, with correlative meaning, the terms
"taxes" and "taxable") shall include all federal, state, local and foreign
income, profits, franchise, gross receipts, payroll, sales, employment, use,
property, withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts.
2.13 INSURANCE. Except as set forth on SCHEDULE 2.13, each policy of
property, fire and casualty, product liability, worker's compensation,
professional liability and title insurance and other forms of insurance (except
group, health and life policies) and each bond issued or posted by any person
with respect to any operations or other activities of Seller is, to the
knowledge of Seller, the legal, valid and binding obligation of the insurer or
bond issuer, enforceable in accordance with its terms, and is in an amount and
provides for coverage as is customary in the ordinary business practices of
Seller's industry.
2.14 PATENTS, TRADEMARKS, ETC. Attached hereto as SCHEDULE 2.14 is a
schedule of all patents, trademarks, service marks, works of authorship,
tradenames, brandnames and copyrights, and licenses or other rights with respect
to any of the foregoing, and other licenses, rights or permits, owned or
possessed by Seller, all of which are in good standing, in full force and
effect, and are free and clear of all Encumbrances. SCHEDULE 2.14 also lists
all applications of Seller for any of the foregoing presently on file and
pending or which are presently being prepared for filing
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and all intellectual property necessary for Seller's business as now
conducted and as proposed to be conducted. No patent or patent application
of Seller is involved in any interference proceeding. Seller is not using,
and does not have any plan to manufacture, use or sell anything which would
violate or infringe on any patent or proprietary right (of which Seller is
aware) of any other person, firm or corporation or which would require a
license under any such patent or proprietary right. Seller has not received
any communications alleging that Seller has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, tradenames, copyrights, works of authorship or trade secrets or other
proprietary rights in processes of any other person or entity.
2.15 MATERIAL CONTRACTS AND OBLIGATIONS. Set forth on SCHEDULE 2.15 is a
list of all material agreements of any nature to which Seller is a party or by
which it or any of its properties is bound, including without limitation, all
employment and consulting agreements, loan agreements, leases, purchase
contracts, employee benefit, bonus, pension, stock option, stock purchase and
similar plans and arrangements, and distributor and sales representative
agreements. True and complete copies of such written agreements have been
provided to Purchaser. All such agreements and contracts are valid, binding and
in full force and effect. Seller is not in default on any of the agreements
listed on SCHEDULE 2.15.
2.16 COMPLIANCE. Except as set forth on SCHEDULE 2.16, Seller has complied
in all material respects with all laws, and is not in violation of any charter
or other corporate restrictions or any law, ordinance, requirement, regulation,
judgment, injunction, award, decree, or other order applicable to its business.
There is no term or provision of any mortgage, indenture, contract, agreement or
instrument to which Seller is a party or by which it is bound, any provision of
any state or federal judgment, decree, order, injunction, writ, statute, rule or
regulation applicable to or binding upon Seller, which materially adversely
affects or, to the knowledge of Seller, in the future is reasonably likely to
affect materially and adversely the business, prospects, condition, affairs or
operations of Seller or any of its properties or assets. To the knowledge of
Seller, no employee of Seller is in violation of any term of any employment
contract, patent or other proprietary information disclosure agreement or any
other contract or agreement relating to the employment of such employee with
Seller.
2.17 EMPLOYEES. Seller has complied in all material respects with all
applicable and material state and federal laws respecting employment and
employment practices, terms and conditions of employment, wages and hours and
other laws related to employment, and there are no arrears in the payment of
wages, or social security taxes.
2.18 TRANSACTIONS WITH AFFILIATES AND STOCKHOLDERS. Except as set forth on
SCHEDULE 2.18, no shareholder, officer, director or employee of Seller, nor any
"affiliate" or "associate" of such persons (as such terms are defined in the
rules and regulations promulgated under the Securities Act), is presently a
party to any transaction with Seller, including without limitation, any
contract, agreement or other arrangement providing for the employment of,
furnishing of
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services by, rental of real or personal property from or otherwise
requiring payments to, any such person or entity.
2.19 USE OF PROCEEDS. Seller may use the Consideration to fund obligations
in connection with Seller's dispute resolutions with Shenzen WABO Group Company
Limited and to provide working capital required by Seller to expand its
operations and for the general corporate purposes set forth on SCHEDULE 2.19.
2.20 SHAREHOLDER AGREEMENTS. Except as set forth in SCHEDULE 2.20 or as
contemplated by this Agreement, there are no agreements, written or oral,
between Seller and any holder of its capital stock, or, to the knowledge of
Seller, among any holders of its capital stock, relating to the acquisition,
disposition or voting of the capital stock of Seller.
2.21 HAZARDOUS WASTES AND SUBSTANCES. Neither the operations of Seller nor
the use of its assets violates, in any material way, any applicable federal,
state or local law, statute, ordinance, rule, regulation, memorandum of
understanding, order or notice requirement pertaining to the collection,
transportation, storage, treatment, discharge, release or disposal of hazardous
or non-hazardous waste or substances, including without limitation (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C, Sections 9601 ET SEQ.), as amended from time to time on or before the
Closing Date ("CERCLA") (including, without limitation, as amended pursuant to
the Superfund Amendments and Reauthorization Act of 1986), and such regulations
promulgated under CERCLA on or before the Closing Date, (ii) the Resources
Conservation and Recovery Act of 1976 (42 U.S C. Sections 6901 ET SEQ.), as
amended from time to time ("RCRA") on or before the Closing Date, and such
regulations promulgated under RCRA, (iii) any applicable federal, state or local
laws or regulations relating to the environment in effect on the Closing Date
(collectively, the "Applicable Environmental Laws"). None of the operations of
Seller has ever been conducted nor have any of its assets been used in such a
manner as to constitute a material violation of any of the Applicable
Environmental Laws. No notice has been served on Seller by any person or
Governmental Entity regarding any existing, pending or threatened investigation
or inquiry related to violations under any Applicable Environmental Law, or
regarding any claims for corrective action, remedial obligations or contribution
for removal costs or damages under any Applicable Environmental Law, or
regarding the designation of Seller or any of its affiliates as a potentially
responsible party for any facility under the Applicable Environmental Laws, nor
does any fact or circumstance exist which, if disclosed publicly, would be
reasonably likely to result in the service on Seller of any such notice. There
has been no action taken, or omitted to be taken by Seller which has caused, or
would be reasonably likely to cause, a "release" of any "hazardous substance" at
any "facility," without limitation, within the meaning of such terms as defined
in the Applicable Environmental Laws, which release would have a material
adverse effect on the business, financial condition or results of operations of
Seller as a result of enforcement of Applicable Environmental Laws.
2.22 DISCLOSURES. Neither this Agreement nor any Exhibit or Schedule
hereto, nor any certificate or other instrument furnished to Purchaser or its
counsel by Seller in connection with
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the transactions contemplated hereby, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which they were made, not misleading.
2.23 BROKERS AND FINDERS. Seller has not employed any broker or finder or
incurred any liability for any financial advisor fees, brokerage fees,
commissions, or finders' fees, and no broker or finder has acted directly or
indirectly in connection with this Agreement or the transactions contemplated
hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
3.1 ORGANIZATION. Purchaser is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite partnership power and authority to conduct its business as
it is now being conducted and to enter into and consummate this Agreement and
the transactions contemplated hereby.
3.2 AUTHORITY; NO DEFAULTS. Purchaser has all requisite partnership power
and authority to enter into the Transaction Documents to which Purchaser is a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of the Transaction Documents to which Purchaser is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action. The Transaction Documents to
which Purchaser is a party have been duly executed and delivered by Purchaser
and constitute the valid and binding obligations of Purchaser, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The execution and delivery of the Transaction
Documents to which Purchaser is a party do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with or result
in a breach of or the acceleration of any obligation under, or constitute a
default or an event of default under the partnership agreement of Purchaser or
any other material contract to which the Purchaser is bound, the effect of which
would be materially adverse to Seller.
3.3 APPROVALS. There is no legal impediment to the execution and delivery
of the Transaction Documents to which Purchaser is a party by Purchaser or to
the consummation of the transactions contemplated thereby, and no filing or
registration with, or authorization, consent or approval of, a Governmental
Entity, the partners of Purchaser or any other third party is necessary for the
consummation by Purchaser of the transactions contemplated thereby other than
perfection of the security interest granted to Purchaser as contemplated by the
Security Agreement or consents of any lender of Purchaser.
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3.4 INVESTMENT INTENT. The Note and the Warrants are being acquired for
Purchaser's own account and not with a view to public distribution and Purchaser
acknowledges that the purchase and sale of the Note and the Warrants is intended
to be exempt from registration under the Securities Act by virtue of Section
4(2) of the Securities Act.
3.5 ACCREDITED INVESTOR. The Purchaser is an accredited investor within
the meaning of Rule 501 under the Securities Act.
3.6 RESTRICTED SECURITIES. The Purchaser acknowledges that the Note and
the Warrants have not been registered under the Securities Act and therefore
cannot be sold or transferred unless either they are subsequently registered
under the Securities Act (as well as under any applicable state securities laws)
or an exemption from such registration is available. The Note and the Warrants
will be "restricted securities" under Rule 144 promulgated under the Securities
Act, and unless and until registered under the Securities Act, the Note and the
Warrants may be subject to limitations on resale set forth in Rule 144 or in
administrative interpretations of the Securities Act by the SEC or in other
rules and regulations in effect at the time of the proposed sale or other
disposition of the Note or the Warrants.
3.7 BROKERS AND FINDERS. Purchaser has not employed any broker or finder
or incurred any liability for any financial advisor fees, brokerage fees,
commissions, or finders' fees, and no broker or finder has acted directly or
indirectly in connection with this Agreement or the transactions contemplated
hereby.
ARTICLE IV
THE CLOSING
4.1 TIME AND PLACE. The closing of the purchase and sale of the Note and
the Warrants (the "Closing") will take place on the date agreed to by the
parties (the "Closing Date"), at the offices of Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., unless another time and place are agreed to by the parties.
4.2 CONDITIONS TO THE CLOSING OBLIGATION OF SELLER. The obligation of
Seller to effect the Closing is subject to Purchaser delivering, or causing to
be delivered, to Seller at the Closing the following payment and the following
executed documents:
4.2.1 $700,000 of the Consideration;
4.2.2 the Agreement;
4.2.3 the Registration Rights Agreement;
4.2.4 the Security Agreement; and
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4.2.5 the Intercreditor and Subordination Agreement.
4.3 CONDITIONS TO THE CLOSING OBLIGATION OF PURCHASER. The obligation of
Purchaser to effect the Closing is subject to Seller delivering, or causing to
be delivered, to Purchaser at the Closing the following payment and the
following executed documents:
4.3.1 copies of the Articles of Incorporation of Seller, and all
amendments thereto, certified by the Secretary of Seller as of the Closing Date;
4.3.2 copies of the bylaws of Seller, and all amendments thereto,
certified by the Secretary of Seller as of the Closing Date;
4.3.3 copies, certified by a certificate of the Secretary of
Seller as of the Closing Date, of resolutions duly adopted by the board of
directors of Seller, authorizing the execution and delivery by Seller of the
Transaction Documents and all other agreements attached hereto as Exhibits or
contemplated herein, the completion of the sale of the Note and Warrants and the
taking of all such other corporate action as shall have been required as a
condition to, or in connection with, the sale of the Note and Warrants;
4.3.4 the Agreement;
4.3.5 the Note;
4.3.6 the Warrant;
4.3.7 the Registration Rights Agreement;
4.3.8 the Security Agreement;
4.3.9 the Intercreditor and Subordination Agreement;
4.3.10 an opinion of ▇▇▇▇▇▇ & Efron, P.A., counsel to Seller, in
form and substance acceptable to Purchaser and addressing the matters set forth
in Sections 2.1, 2.2, 2.3, 2.5, 2.6 and 2.7;
4.3.11 the Origination Fee; and
4.3.12 an executed copy of the WABO Settlement Agreement, whether
or not such WABO Settlement Agreement has been accepted and approved by the
Arbitration Tribunal duly formed in accordance with the Arbitration Rules of the
China International Economic and Trade Arbitration Commission.
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ARTICLE V
GENERAL PROVISIONS
5.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties and agreements contained in this Agreement shall
survive the Closing.
5.2 NOTICES. All notices or other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, transmitted by telecopier (with
receipt confirmed) or mailed by registered or certified mail, postage prepaid,
return receipt requested, to the parties hereto at the address set forth below
(as the same may be changed from time to time by notice similarly given) or the
last known business or residence address of such other person as may be
designated by either party hereto in writing.
(a) If to Seller:
Photran Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
(b) If to Purchaser:
St. ▇▇▇▇▇ Capital Partners, L.P.
c/o St. ▇▇▇▇▇ Capital Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
5.3 MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof, (ii) shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns and is not intended to confer
upon any other person any rights or remedies hereunder, and (iii) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Minnesota.
5.4 PUBLICITY. Seller and Purchaser promptly shall advise and cooperate
with the other prior to issuing, or permitting any of its directors, officers,
employees or agents to issue, any press release with respect to this Agreement
or the transactions contemplated hereby. Notwithstanding the foregoing, without
the prior consent of Purchaser, neither Seller nor any of its directors,
officers, employees or agents shall issue any press release which includes the
name of Purchaser or any of Purchaser's affiliates.
39
5.5 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of the parties hereto
(whether by operation of law or otherwise) (other than as contemplated pursuant
to Section 3.6 hereof) without the prior written consent of the other party.
5.6 SCHEDULES. All statements contained in any exhibit, schedule,
appendix, certificate or other instrument delivered by or on behalf of the
parties hereto, or in connection with the transactions contemplated hereby, are
an integral part of this Agreement and shall be deemed representations and
warranties hereunder.
5.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which constitutes an original execution and, in the
aggregate, constitute a single document.
5.8 EXPENSE REIMBURSEMENTS. At Closing, Seller will reimburse to
Purchaser all of Purchaser's expenses relating to the negotiation, documentation
and closing of the transactions contemplated by this Agreement, including
without limitation the direct fees and expenses of Purchaser's counsel, and
other direct fees and expenses of Purchaser.
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SELLER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Seller has signed this Agreement as of the date first
written above.
PHOTRAN CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer
-------------------------------------
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date first
written above.
ST. ▇▇▇▇▇ CAPITAL PARTNERS, L.P.
By: St. ▇▇▇▇▇ Capital Corp., its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ E, Underbrink, CEO
-------------------------------------
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