EXHIBIT 10.70
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between ▇▇▇▇▇▇▇▇
Technologies, Inc, a Delaware corporation, with headquarters located at ▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Company") and the undersigned
(the "Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in reliance upon certain exemptions from securities
registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, 8% Convertible Debentures (the
"Debentures"), of the Company which will be convertible into shares of Common
Stock, $.01 par value per share (the "Common Stock"), of the Company upon the
terms and subject to the conditions of such Debentures (the Common Stock and the
Debentures sometimes referred to herein as the "Securities"), and subject to
acceptance of this Agreement by the Company.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to purchase from
the Company up to $_________ in principal amount of Debentures, $_______
principal amount at the Closing Date as defined below, and the balance as more
specifically set forth in P. 4(i) hereof. The purchase price for each Debenture
shall be 100% of the principal amount of such Debenture (the "Purchase Price")
and shall be payable in United States Dollars. The Debentures offered hereby are
part of an aggregate offering of up to $3,600,000 in principal amount of
Debentures, including $1,600,000 principal amount at the First Closing. The
Debentures shall be substantially in the form attacged hereto as Annex I. In the
event that any buyer in the offering does not fulfill its obligation to purchase
Additional Debentures (as defined in P. 4(j) hereof), then the Buyer shall have
the right, but not the obligation to purchase such Additional Debentures.
b. Form of Payment. The Buyer shall pay the Purchase Price for
each Debenture by delivering immediately available good funds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions") as
set forth below. Promptly following payment by the Buyer to the Escrow Agent of
the Purchase Price of the Debenture, the Company shall deliver the Debenture
duly executed on behalf of the Company to the Escrow Agent. By signing this
Agreement, the
Buyer and the Company, and subject to acceptance by the Escrow Agent, each
agrees to all of the terms and conditions of, and becomes a party to, the Joint
Escrow Instructions, all of the provisions of which are incorporated herein by
this reference as if set forth in full.
c. Method of Payment. Payment into escrow of the Purchase
Price for each Debenture shall be made by wire transfer of funds to:
Gersten, Savage, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Account Name: ▇▇▇▇▇▇▇, Savange et. al. Escrow Account
Citibank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
ABA #: ▇▇▇▇▇▇▇▇▇
Account No.: ▇▇▇▇▇▇▇▇
F/B/▇ ▇▇▇▇▇▇▇▇ Technologies, Inc
Not later than 1:00 p.m., New York time, on the date which is one (1)
New York Stock Exchange trading day after the Company shall have accepted this
Agreement and returned a signed counterpart of this Agreement to the Escrow
Agent by facsimile (the "Closing Date"), the Buyer shall deposit with the Escrow
Agent the Purchase Price for the initial $_______ Debenture, in currently
available funds. Time is of the essence with respect to such payment on the
Closing Date and each Additional Closing Date (as defined in P. 4j hereof), and
failure by the Buyer to make such payment, shall allow the Company to cancel
this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
a. Without limiting Buyer's right to sell the Common Stock
pursuant to the Registration Statement as defined in the Registration Rights
Agreement, the Buyer is purchasing the Debentures and will be acquiring the
shares of Common Stock issuable upon conversion of the Debentures for its own
account for investment only and not with a view towards the public sale or
distribution thereof and not with a view to or for sale in connection with any
distribution thereof;
b. The Buyer is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company
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or any of its affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the
Securities;
c. All subsequent offers and sales of the Debentures and the
shares of Common Stock issuable upon conversion of, or issued as interest on,
the Debentures (the "Shares" or "Common Stock" and, together with the
Debentures, the "Securities") by the Buyer shall be made pursuant to
registration of the Shares under the 1933 Act or pursuant to an exemption from
registration;
d. The Buyer understands that the Debentures are being offered
and sold, and the Shares are being offered, to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Debentures and to receive an offer of the Shares, and Buyer shall
indemnify and hold harmless the Company from and against any liability incurred
by the Company proximately caused by any breach thereof by Buyer;
e. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Debentures and the
offer of the Shares which have been requested by the Buyer, including Annex VI
hereto. The Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and have received complete and satisfactory
answers to any such inquiries. Without limiting the generality of the foregoing,
the Buyer has also had the opportunity to obtain and to review the Company's (1)
Annual Report on Form 10-KSB for the fiscal year ended May 31, 1997, as amended,
(2) Quarterly Report on Form 10-QSB for the fiscal quarter ended August 31,
1997, and (3) Registration Statement on Form S-3 (file No. 333-27625) (the
"Company's SEC Documents");
f. The Buyer understands that its investment in the Securities
involves a high degree of risk;
g. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities;
h. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally;
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i. Neither Buyer, nor any affiliate of Buyer, shall enter
into, any put option, short position, or other similar position with respect to
the Debentures or the Shares; provided, however, that the foregoing shall not in
any manner restrict the Buyer from selling any Shares simultaneous with, or
following the delivery of a Conversion Notice.
j. Notwithstanding the provisions hereof or of the Debentures,
in no event, other than the automatic conversion of the outstanding amount of a
Debenture at maturity, shall the holder be entitled to convert any Debenture to
the extent after such conversion, the sum of (1) the number of shares of Common
Stock beneficially owned by the Buyer and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debenture), and (2) the number of shares of Common
Stock issuable upon the conversion of the Debenture with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Buyer and its affiliates of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13 D-G
thereunder, except as otherwise provided in clause (1) of such proviso.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a. Concerning the Shares. There are no preemptive rights of
any stockholder of the Company, as such, to acquire the Common Shares;
b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has registered its Common Stock pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Common Stock is listed and traded on the NASDAQ/Small Cap. The Company has
received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for such listing;
c. Authorized Shares. The Company has sufficient authorized
and unissued Shares as may be reasonably necessary to effect the conversion of
the Debentures. The Shares have been duly authorized and, when issued upon
conversion of, or as interest on, the Debentures, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder;
d. Securities Purchase Agreement; Registration Rights
Agreement and Stock. This Agreement and the Registration Rights Agreement, the
form of which is attached hereto as Annex IV (the "Registration Rights
Agreement"), and the transactions contemplated thereby, have been duly and
validly authorized by the Company, this Agreement has been duly executed and
delivered by the Company and this Agreement is, and the Registration Rights
Agreement, when executed and delivered by the Company, will be, valid and
binding agreements of the Company enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting the
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enforcement of creditors' rights generally; and the Debenture will be duly and
validly authorized and, when executed and delivered on behalf of the Company in
accordance with this Agreement, will be a valid and binding obligation of the
Company in accordance with its terms, subject to general principles of equity
and to bankruptcy, insolvency, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally;
e. Non-contravention. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company, the issuance of
the Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Debentures do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the articles of incorporation or by-laws of the Company, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
including any listing agreement for the Common Stock except as herein set forth,
(iii) any existing applicable law, rule, or regulation or any applicable decree,
judgment, or (iv) order of any court, United States federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over
the Company or any of its properties or assets, except such conflict, breach or
default which would not have a material adverse effect on the transactions
contemplated herein;
f. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or of
any stock exchange or market or the stockholders of the Company is required to
be obtained by the Company for the issuance and sale of the Securities to the
Buyer as contemplated by this Agreement, except such authorizations, approvals
and consents that have been obtained;
g. SEC Filings. None of the SEC Filings with the Securities
and Exchange Commission since June 1, 1996 contained, at the time they were
filed, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements made
therein in light of the circumstances under which they were made, not
misleading. The Company has since June 1, 1996 timely filed all requisite forms,
reports and exhibits thereto with the Securities and Exchange Commission;
h. Absence of Certain Changes. Since June 1, 1997, there has
been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, or results of operations
of the Company, except as disclosed in Annex VI or in the documents referred to
in Section 2(e) hereof;
i. Full Disclosure. There is no fact known to the Company
(other than general economic conditions known to the public generally) or as
disclosed in the documents referred to in Section 2(e), that has not been
disclosed in writing to the Buyer that (i) could reasonably be expected to have
a material adverse effect on the condition (financial or otherwise) or in the
earnings, business affairs, properties or assets of the Company or (ii) could
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to this Agreement;
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j. Absence of Litigation. Except as set forth in Annex VI
hereto, and in the documents referred to in Section 2(e), which the Buyer has
reviewed, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or affecting the Company
or any of its subsidiaries, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the properties, business, condition
(financial or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by this Agreement
or any of the documents contemplated hereby or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of such other documents;
k. Absence of Events of Default. Except as set forth in Annex
VI hereto, no Event of Default, as defined in the respective agreement to which
the Company is a party, and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default (as so defined), has
occurred and is continuing, which would have a material adverse effect on the
Company's financial condition or results of operations;
l. No Default. Except as set forth on Annex VI, the Company is
not in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it or its property is bound, and neither the execution, nor the delivery
by the Company, nor the performance by the Company of its obligations under this
Agreement or the Debentures, other than the conversion provision thereof, will
conflict with or result in the breach or violation of any of the terms or
provisions of, or constitute a default or result in the creation or imposition
of any lien or charge on any assets or properties of the Company under, any
material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or by
which it is bound or any statute or the Articles of Incorporation or By-Laws of
the Company, or any decree, judgment, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
properties, or the Company's listing agreement for its Common Stock;
m. Prior Issues. During the twelve (12) months preceding the
date hereof, the Company has not issued any securities except as set forth in
the documents listed in P. 2e hereof. Except as set forth in Annex VI hereto, no
person holds any registration rights or conversion rights with respect to any
securities of the Company.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1) the
Debentures have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company and its transfer agent,
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such
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registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
b. Restrictive Legend. The Buyer acknowledges and agrees that
the Debentures, and, until such time as the Common Stock has been registered
under the 1933 Act as contemplated by the Registration Rights Agreement and sold
in accordance with such Registration Statement, the shares of Common Stock
issued to the Holder upon conversion of the Debentures shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the Debenture and such shares of Common Stock):
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR
CANADIAN PROVINCE, OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES ARE RESTRICTED AND MAY NOT BE
OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
c. Registration Rights Agreement. The parties hereto agree to
enter into the Registration Rights Agreement, in substantially the form attached
hereto as Annex IV, on or before the Initial Closing Date.
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Debentures to the Buyer
under any United States laws and regulations, or by any domestic securities
exchange or trading market, and to provide a copy thereof to the Buyer promptly
after such filing.
e. Reporting Status. So long as the Buyer beneficially owns
any of the Debentures, the Company shall file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would permit such termination.
f. Use of Proceeds. The Company will use the proceeds from the
sale of the Debentures (excluding amounts paid by the Company for legal fees and
finder's fees in connection
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with the sale of the Debentures) for internal working capital purposes , and
shall not, directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership enterprise or other person,
except for wholly owned subsidiaries or for the purpose of making acquisitions
of businesses.
g. Certain Agreements. For a period of fifteen (15) months
following the First Closing, the Purchaser shall have a five (5) day right of
first refusal (together with any other purchasers in this offering to the extent
of their original investment in this financing) to purchase any debt or equity
securities of the Company which the Company intends to offer in a private
placement transaction for cash proceeds. However, this provision shall not apply
to (x) the issuance of securities (other than for cash) in connection with a
merger, consolidation, sale of assets, disposition of a business, sale of
products or granting of a license by the Company in the ordinary course of
business, strategic alliance, bank loan or agreement, compensation to employees
or consultants, the exercise of outstanding options and warrants, or the
conversion of any outstanding covertible securities or (y) the exchange of the
capital stock for assets, stock, partnership, limited liability company, or
other joint venture interests.
h. Available Shares. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield the number of Common Stock issuable at
conversion as may be required to satisfy the conversion rights of the Buyer
pursuant to the terms and conditions of the Debentures.
i. Warrants. The Company agrees to issue to Buyer at the
Closing, transferable divisible warrants (the "Warrants") for ______ shares of
Common Stock. Such Warrants shall bear an exercise price per share of Common
Stock as follows: 110% of the Market Price, as defined in the Debenture, on the
Closing Date, and shall be exercisable two (2) business days following issuance,
and for a period of two (2) years thereafter, in the form annexed hereto as
Annex V, and the shares of Common Stock issuable upon exercise of the Warrant
shallbe registered in accordance with the Registration Rights Agreement annexed
hereto as Annex IV. At each date on which Additional Debentures (as defined in
P. 4(j) below) are issued (each an "Additional Closing Date"), the Company shall
issue to the Buyer at each such closing, additional Warrants (as defined in this
P. 4(i)) at the rate of one Warrant for the purchase of 100,000 shares of Common
Stock for each $1 million of Additional Debentures purchased, or pro rated for
any portion thereof.
j. The Buyer irrevocably agrees to purchase up to an
additional $_______ of Debentures (the "Additional Debentures") in a series of
tranches, commencing thirty (30) days after the effective date of the
registration statement contemplated by the Registration Rights Agreement
attached hereto as Annex IV (the "Effective Date") and ending 12 months
following the Effective Date, upon the same terms and conditions and
substantially in the form as those applicable to the initial Debentures issued
pursuant to the Agreement except as set forth in 4(j)(d) and the maturity date
of such Additional Debenture shall be December 15, 2000. Buyer's obligation to
purchase the Additional Debentures, on each Additional Closing Date (which shall
occur not less than thirty (30) days apart), shall be contingent upon the
satisfaction of the following conditions:
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(a) The Company shall give the Buyer seven (7) days prior
written notice and at least thirty (30) days shall have lapsed since the closing
of the prior tranche;
(b) The Debentures issued in each tranche shall be not less
than $75,000 nor in excess of $175,000 principal amount;
(c) On each Additional Closing Date:
(i) the Registration Statement required to be filed under
the Registration Rights Agreement, is effective;
(ii) The representations and warranties contained in
Section 3 shall be true and correct in all material respects;
(iii) The share value of the Company's Common Stock must
be $.60 or greater and the average daily trading volume of the Company's Common
Stock for the previous three months must exceed 50,000 shares per day;
(iv) The dollar value of the average daily trading volume
of the Company's Common Stock for the previous three months must exceed $600,000
per month;
(v) The number of shares issuable upon conversion of the
Debentures, together with the Shares of Common Stock issued prior thereto
pursuant to this Agreement, will not exceed 20% of the outstanding Common Shares
of the Company.
(d) The conversion price for shares to be issued upon
conversion of the Additional Debentures shall be 75% of the Market Price (as
defined in the Debentures) on the Conversion Date (as defined in the
Debentures). The maximum conversion rate will be 100% of the average closing bid
price of the Common Stock on the five consecutive trading days preceding the
Additional Closing Date.
(e) In the event that the Company does not exercise its option
to require the Buyer to purchase at least $1,219,000 of Debentures (including
the $750,000 at the First Closing), the Company will, not later than twelve (12)
months after the date hereof, issue to the Buyer an additional 46,900 Warrants
upon the terms and conditions of P. 4i hereof. In any event, the Company's
obligations under the Registration Rights Agreement, shall be to register the
necessary Common Stock underlying $3,600,000 in Debentures, and the shares
underlying 360,000 Warrants to purchase Common Stock.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company will permit the Buyer to exercise its right to
convert the Debenture and/or exercise the Warrant, as the case may be, by
telecopying an executed and completed Notice of Conversion or Exercice Notice,
as the case may be, in the respective forms attached to the Form of Debenture
attached hereto as Annex I and Form of Warrant attached hereto as Annex V, to
the Company and delivering within three business days thereafter, the original
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Notice of Conversion and the Debenture representing the Shares, or the original
Exercise Notice and Warrant, to the Company by express courier to the Transfer
Agent. Each date on which a Notice of Conversion or Exercise Notice is
telecopied to and received by the Company in accordance with the provisions
hereof shall be deemed a Conversion Date or exercise date. The Company will
transmit, or cause to be transmitted, the certificates representing the Shares
of Common Stock issuable upon conversion of any Debenture (together with a
replacement Debenture representing any principal amount not so converted) or
exercise of the Warrant (together with a replacement Warrant representing any
portion not exercised) to the Buyer via express courier, by electronic transfer
or otherwise, within three (3) business days after receipt by the Company or its
transfer agent of the original Notice of Conversion and the Debenture
representing the Shares to be converted or the original Exercise Notice and
Warrant (the "Delivery Date").
b. In lieu of delivering physical certificate representing the
Common Stock issuable upon conversion of a Debenture or exercise of a Warrant,
provided the company's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer program, upon request of the
Buyer and its compliance with the provisions contained in this paragraph, so
long as the certificates do not bear a legend and the Buyer thereof is not
obligated to return such certificate for the placement of a legend thereon, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion or exercise to the Buyer by
crediting the account of Buyer's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission system.
c. The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date could result in economic loss to
the Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments to the Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond three (3) business days from
Delivery Date):
Late Payment For Each
$10,000 of Debenture
No. Business Days Late Principal Amount Being Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 +$200 for each
Business Day Late beyond
10 days
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The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Nothing herein shall limit Buyer's right to pursue
actual damages for the Company's failure to issue and deliver Common Stock to
the Buyer. Furthermore, in addition to any other remedies which may be available
to the Buyer, in the event that the Company fails for any reason to effect
delivery of such shares of Common Stock within five business days after the
Delivery Date, the Buyer will be entitled to revoke the relevant Notice of
Conversion by delivering a notice to such effect to the Company whereupon the
Company and the Buyer shall each be restored to their respective positions
immediately prior to delivery of such Notice of Conversion.
6. DELIVERY INSTRUCTIONS.
Each Debenture shall be delivered by the Company to the Escrow
Agent pursuant to Section 1(b) hereof, or a delivery against payment basis at
each closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the initial
$1,600,000 Debenture (the "Closing Date") shall occur no later than 12:00 Noon,
New York time on the second NYSE trading day after the fulfillment or waiver of
all Closing conditions pursuant to Sections 8 and 9, or such other mutually
agreed to time. The Closing shall occur on such date at the offices of the
Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the funds representing the Purchase
Price for the Debenture, and the Debenture only upon satisfaction of the
conditions set forth in Section 8 hereof. The Additional Debentures shall be
issued and sold on the Additional Closing Dates in accordance with this section
and the Joint Escrow Instructions.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell
the Debentures on the Closing Date and Additional Closing Dates to the Buyer
pursuant to this Agreement is conditioned upon:
a. The receipt and acceptance by the Buyer of this Agreement
as evidenced by execution of this Agreement by the Buyer for at least Seven
Hundred Fifty Thousand ($750,000.00) Dollars in Debenture (or such lesser amount
as the Company, in its sole discretion, shall determine);
b. Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the Purchase Price for the Debenture in
accordance with Section 1(c) hereof;
c. The accuracy on the Closing Date and each Additional
Closing Date of the representations and warranties of the Buyer contained in
this Agreement as if made on the Closing Date and the performance by the Buyer
on or before the Closing Date and each Additional Closing Date of all covenants
and agreements of the Buyer required to be performed on or before the Closing
Date and each Additional Closing Date;
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d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Debentures on the Closing Date and each Additional Closing Date is
conditioned upon:
a. Acceptance by the Company of this Agreement for the sale of
Debentures, as indicated by execution of this Agreement;
b. Delivery by the Company to the Escrow Agent of the
appropriate Debenture and Warrant in accordance with this Agreement;
c. The accuracy in all material respects on the Closing Date
and each Additional Closing Date of the representations and warranties of the
Company contained in this Agreement as if made on the Closing Date and such
Additional Closing Date and the performance by the Company on or before the
Closing Date and each Additional Closing Date of all covenants and agreements of
the Company required to be performed on or before the Closing Date and such
Additional Closing Date, and as to Additional Debentures, the conditions set
forth in P. 4j; and
d. On the Closing Date and each Additional Closing Date, the
Buyer having received an opinion of counsel for the Company, dated the Closing
Date and each Additional Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer, to the effect set forth in Annex III attached hereto,
and on the First Closing Date only, the Registration Rights Agreement annexed
hereto as Annex IV.
10. GOVERNING LAW; COST OF COLLECTION; MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
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Any costs (including attorneys fees and disbursements) incurred by Buyer with
respect to any default by the Company under this Agreement, the Registration
Rights Agreement, or the Debenture, shall be the obligation of the Company.
11. NOTICES. Any notice required or permitted hereunder shall
be given in writing (unless otherwise specified herein) and shall be deemed
effectively given upon, (a) by personal delivery or fax (with written
confirmation copy by recognized overnight delivery service), or (b) one business
day after deposit with a nationally recognized overnight delivery service such
as Federal Express, with postage and fees prepaid, addressed to each of the
other parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by ten days advance written notice to each of
the other parties hereto.
COMPANY: ▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC
▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & Worcester, LLP
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASER: At the address set forth on the signature page of
the Agreement.
with a copy to:
▇▇▇▇▇▇▇ & Prager, Esqs.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
ESCROW AGENT: Gersten, Savage, Kaplowitz & ▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Company's representations and warranties shall survive the execution and
delivery hereof of this Agreement and the delivery of the Debenture.
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AGGREGATE INITIAL PURCHASE PRICE OF SUCH DEBENTURE: $ _______
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Securities Purchase
Agreement to be duly executed on its behalf this ___ day of December, 1997.
Amro International S.A.
By: ________________________________
(Signature of Authorized Person)
Address:
=====================
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Print Name and Title
Jurisdiction of Incorporation
or Organization
This Agreement has been accepted as of the date set forth
below.
▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.
By:
Title:
Date:
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▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
ANNEX II JOINT ESCROW INSTRUCTIONS
ANNEX III OPINION OF COUNSEL
ANNEX IV REGISTRATION RIGHTS AGREEMENT
ANNEX V FORM OF WARRANT
ANNEX VI COMPANY DISCLOSURE MATERIALS
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ANNEX VI
COMPANY DISCLOSURE
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