EXHIBIT 10.2
XENONICS HOLDINGS, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT ("AGREEMENT") is made and entered
into as of _________ __, 2004 between Xenonics Holdings, Inc., a Nevada
corporation ("CORPORATION"), and the purchasers of the Corporation's common
stock listed on the signature page of this Agreement (each and "INVESTOR" and
collectively, the "INVESTORS"). In consideration of the mutual promises,
covenants and conditions hereinafter set forth, the parties hereby agree as
follows:
1. PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, at the Closing referred to in Section 2 below, the
Corporation agrees to issue and sell to Investors, and Investors hereby agree to
purchase from the Corporation, an aggregate of Six Hundred Thousand (600,000)
shares of the Corporation's Common Stock ("SHARES"), at a price of $2.50 per
share, for an aggregate purchase price of $_________. The number of Shares to be
purchased by each Investor is set forth below the Investor's name on the
signature page hereof. The obligations of each of the Investors hereunder are
several and not joint, and the sale of the Shares to each of the Investors is a
separate transaction; provided, however, that the Corporation shall not be
obligated to consummate the sale of any of the Shares unless all of the Shares
are sold.
2. CLOSING OF PURCHASE AND SALE. The consummation of the purchase and
sale of the Shares provided for herein ("CLOSING") will take place at the
offices of the Corporation as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on __________, 2004, or at such other date, time and place upon
which the Corporation and the Investors shall agree ("CLOSING DATE"). At the
Closing, the Corporation will deliver to each Investor a certificate
representing the Shares being purchased by that Investor hereunder against
delivery to the Corporation by each Investor of the full amount of the purchase
price of such Shares by a check payable to the Corporation's order or in cash.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INVESTOR. As a
material inducement to the Corporation to sell and issue the Shares to
Investors, each Investor hereby represents and warrants on its own behalf to the
Corporation, and agrees with the Corporation, as follows:
3.1 Authorization; Enforceability. Such Investor has all requisite
power and authority to enter into this Agreement and to purchase the Shares
listed under the Investor's name on the signature page of this Agreement. This
Agreement has been duly executed and delivered by such Investor.
3.2 Purchase for Own Account. Such Investor is acquiring the
Shares solely for its own account, for investment purposes only and not with a
view to, or for resale in connection with, any distribution or public offering
of the Shares within the meaning of the Securities Act of 1933, as amended (the
"1933 ACT"). Such Investor has no present intention to sell, offer to sell,
or otherwise dispose of or distribute any of the Shares. Such Investor will hold
the entire legal and beneficial interest in and to the Shares and does not
presently intend to divide or share such interest with any other person or
entity.
3.3 Restrictions on Transfer. Such Investor understands and has
been advised by the Corporation that the Shares have not been registered under
the 1933 Act or qualified under the California Corporate Securities Law of 1968,
as amended (the "LAW"), in reliance on exemptions from the registration and/or
qualification requirements of such laws, and that consequently the Shares cannot
be offered, sold or otherwise transferred, and must be held indefinitely by the
Investor, unless and until they are registered with the U.S. Securities and
Exchange Commission (the "SEC") under the 1933 Act qualified under the Law, or
until exemptions from such registration and qualification requirements are
available.
3.4 Rule 144. Such Investor is familiar with SEC Rule 144
promulgated under the 1933 Act, which permits certain limited sales of
unregistered securities in specified circumstances, and, in any event, requires
that the Shares be held for a minimum of one year (and in some cases longer)
after they have been purchased and paid for (within the meaning of Rule 144)
before they may be resold under Rule 144.
3.5 Legends. Such Investor understands and agrees that all
certificate(s) evidencing the Investor's Shares (and any securities issued in
respect of the Shares upon any stock split, stock dividend, merger,
reorganization or recapitalization) will be imprinted with a legend that reads
substantially as set forth below, together with any other legends that, in the
opinion of legal counsel to the Corporation, are required by the 1933 Act or by
other federal or state securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
3.6 Stop Transfer Instructions. Such Investor agrees that, in
order to ensure compliance with and to enforce the restrictions on transfer
referred to in this Agreement the
2
Corporation may refuse to transfer the Shares and may issue appropriate "stop
transfer" instructions to its transfer agent, if any.
3.7 Suitability and Investment Experience. Such Investor is an
"accredited investor" as defined in SEC Rule 501 and has: (a) a pre-existing
personal and/or business relationship with the Corporation, or its officers or
directors, such that Investor is aware of the character, business acumen and
general business and financial circumstances of such persons; and/or (b) such
knowledge and experience in business and financial matters that it is capable of
evaluating the merits and risks of this investment in the Shares and is capable
of protecting its own interests in connection with this investment in the
Shares.
3.8 Access to Data. Such Investor has had an opportunity to
discuss the Corporation's business, management and financial affairs with the
Corporation's management and has received or has had full access to all the
information it considers necessary to make an informed investment decision with
respect to the Shares to be purchased. It understands that such discussions, as
well as any written information issued by the Corporation, were intended to
describe certain aspects of the Corporation's business and prospects but were
not a thorough or exhaustive description.
3.9 Brokers or Finders. The Corporation has not and will not
incur, directly or indirectly, as a result of any action taken by the Investor,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or the transactions
contemplated hereby.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE CORPORATION. As a
material inducement to the Investors to purchase the Shares, the Corporation
hereby represents and warrants to each Investor, and agrees with each Investor,
as follows:
4.1 Authorization; Enforceability. The Corporation has all
requisite power and authority to enter into this Agreement and to sell and issue
the Shares. This Agreement has been duly executed and delivered by the
Corporation.
4.2 Organization and Standing. The Corporation is a corporation
duly organized and existing under, and by virtue of, the laws of the State of
Nevada and is in good standing under such laws. The Company has requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as presently conducted.
4.3 Validity of Shares. The Shares, when issued in compliance with
the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances, other than any
liens or encumbrances created by or imposed upon the holders; provided, however,
that the Shares will be subject to restrictions on transfer under state or
federal securities laws. The issuance of the Shares is not subject to any
preemptive rights or rights of first refusal.
3
5. REGISTRATION OF SHARES. The Corporation hereby agrees to register
the Shares purchased by the Investors in the manner set forth on Exhibit A to
this Agreement. Each Investor hereby agrees to be bound by the terms and
conditions set forth on Exhibit A.
6. MISCELLANEOUS PROVISIONS.
6.1 Modification; Waiver. No modification or waiver of any
provision of this Agreement or consent to departure therefrom shall be effective
unless executed in writing by all of the parties hereto.
6.2 Successors and Assigns. Except as otherwise stated herein, all
covenants and agreements of the parties contained in this Agreement shall be
binding upon and inure to the benefit of their respective successors and
assigns.
6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, excluding that
body of law pertaining to conflict of laws or choice of law.
6.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.5 Entire Agreement. This Agreement, including Exhibit A,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes any and all prior agreements or understandings,
whether oral or written, with respect to such subject matter.
[signature follows]
4
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives effective as of the date and year first
above written.
INVESTOR: CORPORATION:
______________________________________ XENONICS HOLDINGS, INC.
a Nevada corporation
By____________________________________
Shares purchased:______________ By_____________________________________
Purchase Price: $______________
INVESTOR:
______________________________________
By____________________________________
Shares purchased:______________
Purchase Price: $______________
5
EXHIBIT A
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Common Stock
Purchase Agreement (the "Agreement") to which this Exhibit is attached. As used
in this Exhibit, the following terms shall have the following respective
meanings:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Corporation" means Xenonics Holdings, Inc., a Nevada corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Holder" means (i) each of White Rock Capital Partners, L.P. and Texrock,
Ltd., and (ii) any person holding Registrable Securities to whom the
registration rights under any of the Agreement have been validly transferred.
"Registrable Securities" means the 600,000 shares of the Corporation's
Common Stock sold pursuant to this Agreement, and any Common Stock of the
Corporation issued or issuable in respect of the foregoing shares of the
Corporation's Common Stock upon any stock split, stock dividend,
recapitalization or similar event; provided, however, that securities shall only
be treated as Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
"register," "registered" and "registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the
Corporation in complying with Section 2.1, including without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Corporation, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration.
"Securities Act" shall mean the federal Securities Act of 1933, as
amended, or any similar federal rule or statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions, or stock transfer taxes and fees applicable to the securities
registered by the Holders.
2. REGISTRATION. The Corporation agrees to use its best efforts to
prepare and file a registration statement with the Commission, and to take all
steps necessary and proper to effect a registration of the Registrable
Securities (including, without limitation, appropriate qualification under
applicable state securities laws and appropriate compliance with applicable
regulations issued
under the Securities Act and any other governmental requirements or
regulations), in order to permit or facilitate the sale and distribution by the
Holders of all of their Registrable Securities. The registration statement filed
by the Corporation hereunder shall be a registration statement, at the
Corporation's option, on Form S-1, Form SB-2 or, if available, Form S-3, or any
successor to such forms. If requested by all of the Holders, the Corporation
shall, together with all Holders, enter into an underwriting agreement in
customary form with an investment banking firm or firms selected for such
underwriting by all of the Holders, but subject to the Corporation's reasonable
approval.
2.1 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with a registration pursuant to this Section 2 shall be borne by
the Corporation; provided, however, that the Corporation shall have no
obligation to pay or otherwise bear (i) any portion of the fees or disbursements
of counsel for the Holders in connection with the registration of their
Registrable Securities, (ii) any portion of the Selling Expenses, or (iii) any
of such expenses if the payment of such expenses by the Corporation is
prohibited by the laws of a state in which such offering is qualified and only
to the extent so prohibited. Unless otherwise stated, all Selling Expenses
relating to securities registered on behalf of the Holders shall be borne by the
Holders of such securities pro rata on the basis of the number of shares so
registered or proposed to be so registered.
2.2 REGISTRATION PROCEDURES. In the case of each registration
effected by the Corporation pursuant to this Exhibit, the Corporation will keep
each Holder advised in writing as to the initiation of such registration and as
to the completion thereof. The Corporation will:
(a) Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary and cause such
registration statement to become and remain effective until (i) the second
anniversary following the date of the Closing, or (ii) all Registrable
Securities included in the registration statement have been sold, whichever
comes first, except that the Corporation shall be permitted to suspend the use
of the registration statement during certain periods as set forth below in this
Section 2.2; and
(b) Furnish to the Holders participating in such
registration and to any underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities.
Notwithstanding the foregoing, the Corporation shall notify each Holder
whose securities are included in a registration of the happening of any event
which makes any statement made in the registration statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the registration statement or prospectus so that, in the case of the
registration statement, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
prospectus, it will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. In
such event, the Corporation may suspend use of the prospectus
2
on written notice to each participating Holder, in which case each participating
Holder shall not dispose of Registrable Securities covered by the registration
statement or prospectus until copies of a supplemented or amended prospectus are
distributed to the participating Holders or until the participating Holders are
advised in writing by the Corporation that the use of the applicable prospectus
may be resumed (the period of such suspension shall be a "Blackout Period"). The
Corporation shall ensure that the use of the prospectus may be resumed as soon
as practicable. The Corporation shall, upon the occurrence of any event
contemplated by this paragraph, prepare a supplement or post-effective amendment
to the registration statement or a supplement to the related prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. In the event that the Corporation declares one or more Blackout
Periods, the two-year anniversary period set forth in Section 2.2(a) shall be
extended by the number of days that constitute any such Blackout Periods.
2.3 INDEMNIFICATION.
(a) The Corporation will indemnify each Holder, each of its
officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration has been effected pursuant to this Exhibit, against all expenses,
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or any violation by
the Corporation of the Securities Act, the Exchange Act, state securities laws
or any rule or regulation promulgated under such laws applicable to the
Corporation in connection with any such registration, and the Corporation will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Corporation will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Corporation by or on behalf of such Holder for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration is being
effected, indemnify the Corporation, each of its officers and directors, each
person who controls the Corporation within the meaning of Section 15 of the
Securities Act, each other holder of the Corporation's securities covered by
such registration statement, and each such holder's officers and directors and
each person controlling such holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue
3
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Holder of the Securities Act, the Exchange Act, state
securities laws or any rule or regulation promulgated under such laws applicable
to the Holder, and will reimburse the Corporation, such other holders, such
officers, directors, or control persons for any legal or any other expenses
reasonably incurred, as such expenses are incurred, in connection with
investigating or defending any such claim, loss, damage, liability or action,
but in the case of the Corporation or the other holders or their officers,
directors, or control persons, only to the extent that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with information furnished to the Corporation in
writing by such Holder. Notwithstanding the foregoing, the liability of each
Holder under this Section 2.3(b) shall be limited to an amount equal to the net
proceeds from the offering received by such Holder. A Holder will not be
required to enter into any agreement or undertaking in connection with any
registration under this Section 2 providing for any indemnification or
contribution on the part of such Holder greater than the Holder's obligations
under this Section 2.3(b).
(c) Each party entitled to indemnification under this
Section 2.3 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Exhibit unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
there are separate and different defenses. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
3. TRANSFER OF RIGHTS. The rights granted under Section 2 of this
Exhibit may be assigned to any transferee or assignee in connection with any
transfer or assignment by the Holder of such Holder's Registrable Securities,
provided that: (i) such transfer is otherwise effected in accordance with
applicable securities laws and the terms of this Exhibit; (ii) written notice is
promptly given to the Corporation; and (iii) such transferee or assignee agrees
in writing to be
4
bound by the provisions of this Exhibit and by any other agreement reasonably
necessary to ensure compliance with the Federal and state securities laws.
5
