EXHIBIT 10(a)
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of July
18, 2000, among FORTEL INC., a California corporation (the "COMPANY"), and the
investors signatory hereto (each such investor is a "PURCHASER" and all such
investors are, collectively, the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers and the
Purchasers, severally and not jointly, desire to purchase from the Company,
shares of the Company's common stock, no par value per share (the "COMMON
STOCK"), and certain other securities of the Company as more fully described in
this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy are hereby acknowledged, the Company and the Purchasers agree as
follows:
ARTICLE 1
PURCHASE AND SALE
THE CLOSING.
THE CLOSING.
Subject to the terms and conditions set forth in
this Agreement, the Company shall issue and
sell to the Purchasers and the Purchasers
shall, severally and not jointly, purchase
an aggregate of 2,191,781 shares of Common
Stock (the "SHARES") for an aggregate
purchase price of $5,000,000. The closing of
the purchase and sale of the Shares (the
"CLOSING") shall take place at the offices
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇"), ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, immediately following the execution
hereof or such later date as the parties
shall agree. The date of the Closing is
hereinafter referred to as the "CLOSING
DATE."
At the Closing, the parties shall deliver or
shall cause to be delivered the following:
(A) the Company shall deliver to each
Purchaser (1) a stock certificate
representing the number of Shares indicated
below such Purchaser's name on the signature
page of this Agreement, registered in the
name of such Purchaser, (2) a Common Stock
purchase warrant, in the form of EXHIBIT A,
registered in the name of such Purchaser,
pursuant to which such Purchaser shall have
the
EXHIBIT 10(A)-1.
right to acquire shares of Common Stock
upon the terms and in such number as set
forth therein (each a "WARRANT" and
collectively, the "WARRANTS"), (3) the legal
opinion of ▇▇▇▇▇▇ Godward LLP, outside
counsel to the Company, substantially in the
form of EXHIBIT D, (4) an executed
Registration Rights Agreement, dated the
date hereof, among the Company and the
Purchasers, in the form of EXHIBIT B (the
"REGISTRATION RIGHTS AGREEMENT") and (5) the
Escrow Agreement (the "ESCROW AGREEMENT") of
even date hereof, among the Company, ▇▇▇▇▇▇
Capital Group, Ltd. and Lasalle National
Bank (the "ESCROW AGENT"), and (B) each
Purchaser shall deliver to the Escrow Agent
for delivery in accordance with the Escrow
Agreement) (1) the purchase price indicated
below such Purchaser's name on the signature
page to this Agreement in United States
dollars in immediately available funds by
wire transfer as designated in the Escrow
Agreement for such purpose, and (2) an
executed Registration Rights Agreement and
Escrow Agreement.
CERTAIN DEFINED TERMS. For purposes of this Agreement, "TRADING DAY"
and "PER SHARE MARKET VALUE" shall have the meanings set forth
in EXHIBIT A and "BUSINESS DAY" shall mean any day except
Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of
New York or California are authorized or required by law or
other governmental action to close. A "PERSON" means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes
the following representations and warranties to the
Purchasers:
ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly incorporated, validly existing and in good
standing under the laws of the State of California,
with the requisite corporate power and authority to
own and use its properties and assets and to carry on
its business as currently conducted. The Company has
no subsidiaries other than as set forth in SCHEDULE
2.1(A) (collectively, the "SUBSIDIARIES"). Each of
the Subsidiaries is an entity, duly incorporated or
otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with
the requisite power and authority to own and use its
properties and assets and to carry on its business as
currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is
in good standing as a
EXHIBIT 10(A)-2.
foreign corporation or other entity in each
jurisdiction in which the nature of the business
conducted or property owned by it makes
such qualification necessary, except where the
failure to be so qualified or in good standing, as
the case may be, could not, individually or in the
aggregate, (x) adversely affect the legality,
validity or enforceability of the Securities (as
defined below) or any of this Agreement, the
Registration Rights Agreement, the Escrow Agreement
or the Warrants (collectively, the "TRANSACTION
DOCUMENTS"), (y) have or result in a material adverse
effect on the results of operations, assets,
prospects, or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole,
or (z) adversely impair the Company's ability to
perform fully on a timely basis its obligations under
any of the Transaction Documents (any of (x), (y) or
(z), a "MATERIAL ADVERSE EFFECT").
AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to
consummate the transactions contemplated by each of
the Transaction Documents and otherwise to carry out
its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the
Company and the consummation by it of the
transactions contemplated thereby have been duly
authorized by all necessary action on the part of the
Company and no further action is required by the
Company. Each of the Transaction Documents has been
duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the
valid and binding obligation of the Company
enforceable against the Company in accordance with
its terms. Neither the Company nor any Subsidiary is
in violation of any of the provisions of its
respective certificate or articles of incorporation,
by-laws or other organizational or charter documents.
CAPITALIZATION. The number of authorized, issued and
outstanding capital stock of the Company is set forth
in SCHEDULE 2.1(C). Except as disclosed in SCHEDULE
2.1(C), the Company owns all of the capital stock of
each Subsidiary. No shares of Common Stock are
entitled to preemptive or similar rights, nor is any
holder of the securities of the Company entitled to
preemptive or similar rights arising out of any
agreement or understanding with the Company or any
Subsidiary by virtue of any of the Transaction
Documents. Except as a result of the purchase and
sale of the Shares and the Warrants and except as
disclosed in SCHEDULE 2.1(C), there are no
outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which
the Company or any Subsidiary is or may become bound
to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into
shares of Common Stock. The issue and sale of the
Shares, Warrants or Underlying Shares (as hereinafter
defined) will not
EXHIBIT 10(A)-3.
obligate the Company to issue shares of Common Stock
or other securities to any Person other than the
Purchaser and will not result in a right of any
holder of Company securities to adjust the exercise
or conversion or reset price under such securities.
ISSUANCE OF THE SECURITIES. The Securities (as defined herein)
are duly authorized and, when issued and paid for in
accordance with the terms hereof and the Warrants,
shall have been duly and validly issued, fully paid
and nonassessable, free and clear of all liens,
encumbrances and rights of first refusal of any kind
(collectively, "LIENS"). The Company has reserved
5,341,126 duly authorized shares of Common Stock for
issuance hereunder and upon exercise of the Warrants
(the "INITIAL MINIMUM"). The shares of Common Stock
issuable upon exercise of the Warrants are referred
to herein as the "UNDERLYING SHARES." The Shares, the
Warrant and the Underlying Shares are collectively
referred to herein as, the "SECURITIES."
NO CONFLICTS. The execution, delivery and performance of
the Transaction Documents by the Company and the
consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict
with or violate any provision of the Company's or any
Subsidiary's certificate or articles of
incorporation, bylaws or other charter documents
(each as amended through the date hereof), or (ii)
subject to obtaining the Required Approvals (as
defined below), conflict with, or constitute a
default (or an event which with notice or lapse of
time or both would become a default) under, or give
to others any rights of termination, amendment,
acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or
other restriction of any court or govern-mental
authority to which the Company or a Subsidiary is
subject (including federal and state securities laws
and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii),
as could not, individually or in the aggregate, have
or result in a Material Adverse Effect. The business
of the Company is not being conducted in violation of
any law, ordinance or regulation of any governmental
authority, except for violations which, individually
or in the aggregate, could not have or result in a
Material Adverse Effect.
FILINGS, CONSENTS AND APPROVALS. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or
make any filing or registration with, any court or
other federal, state, local or other governmental
authority or other Person in connection with the
execution, delivery and performance by the Company
EXHIBIT 10(A)-4.
of the Transaction Documents, other than (i) the
filings required pursuant to Section 3.10,
(ii) the filing with the Securities and Exchange
Commission (the "COMMISSION") of a registration
statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale
of the Shares and the Underlying Shares by the
Purchasers (the "UNDERLYING SHARES REGISTRATION
STATEMENT"), (iii) the application(s) to the
Nasdaq Smallcap Market ("NASDAQ") for the listing
of the Underlying Shares for trading on the
NASDAQ (and with any other national securities
exchange or market on which the common Stock
is then listed) in the time and manner
required thereby; (iv) applicable Blue Sky filings,
and (v) in all other cases where the failure to
obtain such consent, waiver, authorization or order,
or to give such notice or make such filing or
registration could not have or result in,
individually or in the aggregate, a Material Adverse
Effect (collectively, the "REQUIRED APPROVALS").
LITIGATION; PROCEEDINGS. Except as specifically described in
the SEC Reports, there is no action, suit, inquiry,
notice of violation, proceeding or investigation
pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of
its Subsidiaries or any of their respective
properties before or by any court, arbitrator,
governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign)
(collectively, an "ACTION") which (i) adversely
affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an
unfavorable decision individually or in the
aggregate, have or result in a Material Adverse
Effect, (iii) neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been
the subject of any Action involving (A) a claim of
violation of or liability under federal or state
securities laws or (B) a claim of breach of fiduciary
duty; (iv) the Company does not have pending before
the Commission any request for confidential treatment
of information and the Company has no knowledge of
any expected such request that would be made prior to
the Effectiveness Date (as defined in the
Registration Rights Agreement); and (v) there has not
been, during the three years preceding the date of
this Agreement and to the best of the Company's
knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company
or any current or former director or officer of the
Company.
NO DEFAULT OR VIOLATION. Neither the Company nor any
Subsidiary (i) is in default under or in violation of
(and no event has occurred which has not been waived
which, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary
received notice of a claim that it is in default
under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or
any of its properties is bound, (ii) is in violation
of any order of any court, arbitrator or governmental
body, or (iii) is in violation of any statute, rule
or
EXHIBIT 10(A)-5.
regulation of any governmental authority, in each
case of clauses (i), (ii) or (iii) above, except as
could not individually or in the aggregate, have or
result in a Material Adverse Effect.
PRIVATE OFFERING. Assuming the accuracy of the
representations and warranties of the Purchasers set
forth in Sections 2.2(b)-(g), the offer, issuance and
sale of the Securities to the Purchasers as
contemplated hereby are exempt from the registration
requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"). Neither the Company
nor any Person acting on its behalf has taken or is,
to the knowledge of the Company, contemplating taking
any action which could subject the offering, issuance
or sale of the Securities to the registration
requirements of the Securities Act including
soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or
advertising.
SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), including pursuant to Section 13(a)
or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company
was required by law to file such material) (the
foregoing materials being collectively referred to
herein as the "SEC REPORTS" and, together with the
Schedules to this Agreement, the "DISCLOSURE
MATERIALS") on a timely basis or has received a valid
extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC
Reports complied in all material respects with the
requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports,
when filed, contained any untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary in order
to make the statements therein, in light of the
circumstances under which they were made, not
misleading. All material agreements to which the
Company is a party or to which the property or assets
of the Company are subject have been filed as
exhibits to the SEC Reports as required under the
Exchange Act. The financial statements of the Company
included in the SEC Reports comply in all material
respects with applicable accounting requirements and
the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.
Such financial statements have been prepared in
accordance with generally accepted accounting
principles applied on a consistent basis during the
periods involved ("GAAP"), except as may be otherwise
specified in such financial statements or the notes
thereto, and fairly present in all material respects
the financial position of the Company and its
consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end
audit adjustments. Since March 31, 2000, except as
specifically disclosed in the SEC Reports, (a) there
has been no event,
EXHIBIT 10(A)-6.
occurrence or development that has or that could
result in a Material Adverse Effect,
(b) the Company has not incurred any liabilities
(contingent or otherwise) other than (x) liabilities
incurred in the ordinary course of business
consistent with past practice and (y) liabilities not
required to be reflected in the Company's financial
statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (c)
the Company has not altered its method of accounting
or the identity of its auditors and (d) the Company
has not declared or made any payment or distribution
of cash or other property to its stockholders or
officers or directors (other than in compliance with
existing Company stock option plans) with respect to
its capital stock, or purchased, redeemed (or made
any agreements to purchase or redeem) any shares of
its capital stock.
INVESTMENT COMPANY. The Company is not, and is not an
Affiliate (as defined in Rule 405 under the
Securities Act) of, an "INVESTMENT COMPANY" within
the meaning of the Investment Company Act of 1940, as
amended.
CERTAIN FEES. Except for certain fees payable to ▇▇▇▇▇▇
Capital Group, Ltd., by the Company, no fees or
commissions will be payable by the Company to any
broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other
Person with respect to the transactions contemplated
by this Agreement. The Purchasers shall have no
obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that
may be due in connection with the transactions
contemplated by this Agreement. The Company shall
indemnify and hold harmless the Purchasers, their
employees, officers, directors, agents, and partners,
and their respective Affiliates, from and against all
claims, losses, damages, costs (including the costs
of preparation and attorney's fees) and expenses
suffered in respect of any such claimed or existing
fees, as such fees and expenses are incurred.
SOLICITATION MATERIALS. Neither the Company nor any Person
acting on the Company's behalf has solicited any
offer to buy or sell the Securities by means of any
form of general solicitation or advertising.
FORM S-3 ELIGIBILITY. The Company is eligible to register
its Common Stock for resale under Form S-3
promulgated under the Securities Act.
LISTING AND MAINTENANCE REQUIREMENTS. Except as set forth in
SCHEDULE 2.1(O), the SEC Reports, the Company has
not, in the two years preceding the date hereof
received notice (written or oral) from the NASDAQ any
stock exchange, market or trading facility on which
the Common Stock is or has been listed (or on which
it has been quoted) to the effect that the Company is
not in compliance with the listing or maintenance
requirements of such exchange, market or trading
facility. The Company is, and has no reason to
believe that it will not in the foreseeable future
Exhibit 10(A)-7.
continue to be, in compliance with all such listing
and maintenance requirements.
PATENTS AND TRADEMARKS. The Company and its Subsidiaries
have, or have rights to use, all patents, patent
applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and
rights which are necessary or material for use in
connection with their respective businesses as
described in the SEC Reports and which the failure to
so have would have a Material Adverse Effect
(collectively, the "INTELLECTUAL PROPERTY RIGHTS").
Neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights
used by the Company or its Subsidiaries violates or
infringes upon the rights of any Person. To the best
knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no
existing infringement by another Person of any of the
Intellectual Property Rights.
REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as set
forth on SCHEDULE 6(B) to the Registration Rights
Agreement, the Company has not granted or agreed to
grant to any Person any rights (including
"PIGGY-BACK" registration rights) to have any
securities of the Company registered with the
Commission or any other governmental authority which
has not been satisfied. Except as set forth on
SCHEDULE 6(B) to the Registration Rights Agreement,
no Person has any right of first refusal, preemptive
right, right of participation, or any similar right
to participate in the transactions contemplated by
the Transaction Documents.
REGULATORY PERMITS. The Company and its Subsidiaries possess
all certificates, authorizations and permits issued
by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their
respective businesses as described in the SEC
Reports, except where the failure to possess such
permits could not, individually or in the aggregate,
have or result in a Material Adverse Effect
("MATERIAL PERMITS"), and neither the Company nor any
such Subsidiary has received any notice of
proceedings relating to the revocation or
modification of any Material Permit.
TITLE. The Company and the Subsidiaries do not have title to
any real property. Any real property and facilities
held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and
enforceable leases of which the Company and its
Subsidiaries are in compliance and do not interfere
with the use made and proposed to be made of such
property and buildings by the Company and its
Subsidiaries.
LABOR RELATIONS. No material labor problem exists or, to
the knowledge of the Company, is imminent with
respect to any of the employees of the Company.
EXHIBIT 10(A)-8.
DISCLOSURE. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the
Purchasers or its agents or counsel with any
information that constitutes or might constitute
material non-public information. The Company
understands and confirms that the Purchasers shall be
relying on the foregoing representations in effecting
transactions in securities of the Company. All
disclosure provided to the Purchasers regarding the
Company, its business and the transactions
contemplated hereby, including the Schedules to this
Agreement, furnished by or on behalf of the Company
are true and correct and do not contain any untrue
statement of a material fact or omit to state any
material fact necessary in order to make the
statements made therein, in light of the
circumstances under which they were made, not
misleading.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser hereby
for itself and for no other Purchaser represents and warrants
to the Company as follows:
ORGANIZATION; AUTHORITY. Such Purchaser is an entity duly
organized, validly existing and in good standing
under the laws of the jurisdiction of its
organization with the requisite corporate or
partnership power and authority to enter into and to
consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such
Purchaser of the Securities hereunder has been duly
authorized by all necessary action on the part of
such Purchaser. Each of this Agreement and the
Registration Rights Agreement has been duly executed
by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in
accordance with its terms.
INVESTMENT INTENT. Such Purchaser is acquiring the Securities
as principal for its own account for investment
purposes only and not with a view to or for
distributing or reselling such Securities or any part
thereof, without prejudice, however, to such
Purchaser's right, sub-jet to the provisions of this
Agreement, the Registration Rights Agreement and the
Warrants, at all times to sell or otherwise dispose
of all or any part of such Securities pursuant to an
effective registration statement under the Securities
Act or under an exemption from such registration and
in compliance with applicable federal and state
securities laws. Nothing contained herein shall be
deemed a representation or warranty by such Purchaser
to hold Securities for any period of time. Such
Purchaser is acquiring the Securities hereunder in
the ordinary course of its business. Such Purchaser
does not have any agreement or understanding,
directly or indirectly, with any Person to distribute
the Securities.
PURCHASER STATUS. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and
at each exercise date under its respective
EXHIBIT 10(A)-9.
Warrants, it will be, an "ACCREDITED INVESTOR" as
defined in Rule 501(a) under the Securities Act.
EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone or
together with its representatives, has such
knowledge, sophistication and experience in business
and financial matters so as to be capable of
evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated
the merits and risks of such investment.
ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT. Such
Purchaser is able to bear the economic risk of an
investment in the Securities and, at the pre-sent
time, is able to afford a complete loss of such
investment.
ACCESS TO INFORMATION. Such Purchaser acknowledges that it
has reviewed the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the
terms and conditions of the offering of the
Securities and the merits and risks of investing in
the Securities; (ii) access to information about the
Company and the Company's financial condition,
results of operations, business, proper-ties,
management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to
obtain such additional information which the Company
possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed
investment decision with respect to the investment
and to verify the accuracy and completeness of the
information contained in the Disclosure Materials.
Neither such inquiries nor any other investigation
conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or
affect such Purchaser's right to rely on the truth,
accuracy and completeness of the Disclosure Materials
and the Company's representations and warranties
contained in the Transaction Documents.
GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any
advertisement, article, notice or other communication
regarding the Securities published in any newspaper,
magazine or similar media or broadcast over
television or radio or presented at any seminar or
any other general solicitation or general
advertisement.
RELIANCE.Such Purchaser understands and acknowledges that (i)
the Securities are being offered and sold to it
without registration under the Securities Act in a
private placement that is exempt from the
registration provisions of the Securities Act and
(ii) the availability of such exemption, depends in
part on, and the Company will rely upon the accuracy
and truthfulness of, the foregoing representations
and such Purchaser hereby consents to such reliance.
EXHIBIT 10(A)-10.
The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE 3
OTHER AGREEMENTS OF THE PARTIES
TRANSFER RESTRICTIONS.
Securities may only be disposed of pursuant to an effective
registration statement under the Securities Act, to
the Company or pursuant to an available exemption
from or in a transaction not subject to the
registration requirements of the Securities Act, and
in compliance with any applicable federal and state
securities laws. In connection with any transfer of
Securities other than pursuant to an effective
registration statement or to the Company, except as
otherwise set forth herein, the Company may require
the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor, the
form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of
such transferred Securities under the Securities Act.
Any such transferee shall agree in writing to be
bound by the terms of this Agreement and shall have
the rights of a Purchaser under this Agreement and
the Registration Rights Agreement.
The Purchasers agree to the imprinting, so long as is
required by this Section 3.1(b), of the following
legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
Neither the Shares nor the Underlying Shares shall contain the legend
set forth above nor any other legend while an Underlying Shares Registration
Statement is effective under the Securities Act (and the Company has received
confirmation that the Underlying Shares have been sold pursuant thereto) or the
holder is relying on Rule 144 promulgated under the Securities Act ("RULE 144")
in connection with the resale of such Underlying Shares, or in the event there
is not an effective Underlying Shares Registration Statement and Rule 144 is not
then available for resale of the Underlying Shares, at such time, as such legend
is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued
EXHIBIT 10(A)-11.
by the staff of the Commission). The Company agrees that, following the date
that an Underlying Shares Registration Statement is declared effective by the
Commission (such date, the "EFFECTIVE DATE"), it will, no later than three
(3) Trading Days following the delivery by such Purchaser to the Company of a
certificate or certificates representing Shares or Underlying Shares issued
with a restrictive legend and the Company's receipt of confirmation that a
Purchaser has sold Underlying Shares pursuant to an effective Registration
Statement, deliver to such Purchaser certificates representing such Shares
which shall be free from all restrictive and other legends. The Company may
not make any notation on its records or give instructions to any transfer
agent of the Company which enlarge the restrictions of transfer set forth in
this Section.
ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that the issuance
of Underlying Shares upon exercise of the Warrants will result
in dilution of the outstanding shares of Common Stock, which
dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue
Underlying Shares upon exercise of the Warrants is
unconditional and absolute, subject to the limitations set
forth in the Warrants regardless of the effect of any such
dilution.
FURNISHING OF INFORMATION. As long as the Purchasers own Securities,
the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date
hereof pursuant to Section 13(a) or 15(d) of the Exchange Act.
As long as the Purchasers own Securities, if the Company is
not required to file reports pursuant to such sections, it
will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) promulgated under the
Securities Act such information as is required for the
Purchasers to sell the Securities under Rule 144 promulgated
under the Securities Act. The Company further covenants that
it will take such further action as any holder of Securities
may reasonably request, all to the extent required from time
to time to enable such Person to sell Underlying Shares
without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated
under the Securities Act, including causing its attorneys to
render and deliver any legal opinion required in order to
permit a Purchaser to receive Underlying Shares free of all
restrictive legends and to subsequently sell Underlying Shares
under Rule 144 upon receipt of a notice of an intention to
sell or other form of notice having a similar effect. Upon the
request of any such Person, the Company shall deliver to such
Person a written certification of a duly authorized officer as
to whether it has complied with such requirements.
INTEGRATION. The Company shall not, and shall use its best efforts to
ensure that, no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or
sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the
Securities to the Purchasers, or that would be integrated with
the offer or sale of the Securities for the purposes of the
rules and regulations of NASDAQ.
EXHIBIT 10(A)-12.
INCREASE IN AUTHORIZED SHARES. If on any date the Company would be, if
a notice of exercise were to be delivered on such date,
precluded from issuing the sum of 175% of the number of
Underlying Shares then issuable upon exercise in full of the
Warrants (the "CURRENT REQUIRED MINIMUM") due to the
unavailability of a sufficient number of authorized but
unissued or reserved shares of Common Stock, then the Board of
Directors of the Company shall promptly (and in any case,
within 30 Business Days from such date) prepare and mail to
the stockholders of the Company proxy materials requesting
authorization to amend the Company's certificate or articles
of incorporation to increase the number of shares of Common
Stock which the Company is authorized to issue to at least
such number of shares as reasonably requested by the
Purchasers in order to provide for such number of authorized
and unissued shares of Common Stock to enable the Company to
comply with its issuance, exercise and reservation of shares
obligations as set forth in this Agreement and the Warrants
(the sum of (x) the number of shares of Common Stock then
outstanding plus all shares of Common Stock issuable upon
exercise of all outstanding options, warrants and convertible
instruments other than the Warrants and (y) the Current
Required Minimum, shall be a reasonable number). In connection
therewith, the Board of Directors shall (a) adopt proper
resolutions authorizing such increase, (b) recommend to and
otherwise use its best efforts to promptly and duly obtain
stockholder approval to carry out such resolutions (and hold a
special meeting of the stockholders no later than the earlier
to occur of the 60th day after delivery of the proxy materials
relating to such meeting and the 90th day after request by a
holder of Warrants to issue the number of Underlying Shares in
accordance with the terms hereof) and (c) within five Business
Days of obtaining such stockholder authorization, file an
appropriate amendment to the Company's certificate or articles
of incorporation to evidence such increase.
RESERVATION AND LISTING OF UNDERLYING SHARES.
The Company shall (i) in the time and manner required by
NASDAQ and such other exchange, market or quotation
system on which the Common Stock is traded, prepare
and file with NASDAQ (and such national securities
exchange, market, trading or quotation facility on
which the Common Stock is then traded) an additional
shares listing application covering a number of
shares of Common Stock which is not less than the
Initial Minimum, (ii) take all steps necessary to
cause such shares of Common Stock to be approved for
listing in the NASDAQ (as well as on any such other
national securities exchange or market or trading or
quotation facility on which the Common Stock is then
listed) as soon as possible thereafter, and (iii)
provide to the Purchasers evidence of such listing,
and the Company shall maintain the listing of its
Common Stock thereon. If the number of Underlying
Shares issuable upon exercise of the then unexercised
portion of the Warrants exceeds 85% of the number of
Underlying Shares previously listed on account
thereof with NASDAQ (and any such other required
exchanges), then the Company shall take the
EXHIBIT 10(A)-13.
necessary actions to immediately list a number of
Underlying Shares as equals no less than the then
Current Required Minimum.
The Company shall maintain a reserve of shares of Common
Stock for issuance upon exercise in full of the
Warrants in accordance with this Agreement and the
Warrants, respectively, in such amount as may be
required to fulfill its obligations in full under the
Transaction Documents, which reserve shall equal no
less than the then Current Required Minimum.
EXERCISE PROCEDURES. The Form of Election to Purchase under the
Warrants set forth the totality of the procedures with respect
to the exercise of the Warrants, including the form of legal
opinion, if necessary, that shall be rendered to the Company's
transfer agent and such other information and instructions as
may be reasonably necessary to enable the Purchasers to
exercise their Warrants.
EXERCISE OBLIGATIONS. The Company shall honor exercises of the Warrants
and shall deliver Underlying Shares in accordance with the
terms, conditions and time periods set forth in the Warrants.
RIGHT OF FIRST REFUSAL; SUBSEQUENT REGISTRATIONS.
The Company shall not, directly or indirectly, without
the prior written consent of the Purchasers, offer,
sell, grant any option to purchase, or otherwise
dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition) any of its
equity or equity-equivalent securities or securities
of any of its Affiliates that are exchangeable or
convertible (directly or indirectly) for shares of
Common Stock, including the issuance of any debt or
other instrument at any time over the life thereof
convertible into or exchangeable for Common Stock
(collectively, a "SUBSEQUENT PLACEMENT") until the
expiration of the 180th day after the Effective Date,
provided, that such 180 day period shall be extended
for the number of Trading Days during such period (A)
in which trading in the Common Stock is suspended by
any securities exchange or market or quotation system
on which the Common Stock is then listed, or (B)
during which the Underlying Shares Registration
Statement is not effective, or (C) during which the
prospectus included in the Underlying Shares
Registration Statement may not be used by the holders
thereof for the resale of Underlying Shares, unless
(A) the Company delivers to each of the Purchasers a
written notice (the "SUBSEQUENT PLACEMENT NOTICE") of
its intention to effect such Subsequent Placement,
which Subsequent Placement Notice shall describe in
reasonable detail the proposed terms of such
Subsequent Placement, the amount of proceeds intended
to be raised thereunder, the Person with whom such
Subsequent Placement shall be effected, and attached
to which shall be a term sheet or similar document
relating thereto and (B) such Purchaser shall not
have notified the Company by 6:30 p.m. (New York City
time) on the tenth Trading Day after its receipt of
the Subsequent Placement Notice of its willingness to
EXHIBIT 10(A)-14.
provide (or to cause its sole designee to provide),
subject to completion of mutually acceptable
documentation, financing to the Company on the same
terms set forth in the Subsequent Placement Notice.
If the Purchasers shall fail to notify the Company of
their intention to enter into such negotiations
within such time period, the Company may effect the
Subsequent Placement substantially upon the terms and
to the Persons (or Affiliates of such Persons) set
forth in the Subsequent Placement Notice; provided,
that the Company shall provide the Purchasers with a
second Subsequent Placement Notice, and the
Purchasers shall again have the right of first
refusal set forth above in this paragraph (a), if the
Subsequent Placement subject to the initial
Subsequent Placement Notice shall not have been
consummated for any reason on the terms set forth in
such Subsequent Placement Notice within 30 Trading
Days after the date of the initial Subsequent
Placement Notice with the Person (or an Affiliate of
such Person) identified in the Subsequent Placement
Notice. If the Purchasers shall indicate a
willingness to provide financing in excess of the
amount set forth in the Subsequent Placement Notice,
then each Purchaser shall be entitled to provide
financing pursuant to such Subsequent Placement
Notice up to an amount equal to such Purchaser's
pro-rata portion of the aggregate number of Shares
purchased by such Purchaser under this Agreement, but
the Company shall not be required to accept financing
from the Purchasers in an amount in excess of the
amount set forth in the Subsequent Placement Notice.
The right of first refusal set forth in this Section
shall not apply to (i) the granting of options or
warrants to employees, officers, consultants and
directors, and the issuance of shares upon exercise
of options and warrants granted, under any stock
option plan or employee stock purchase plan
heretofore or hereinafter duly adopted by the
Company, (ii) shares of Common Stock issuable upon
exercise of any currently outstanding warrants and
upon conversion of any currently outstanding
convertible securities of the Company, in each case
disclosed in SCHEDULE 2.1(C), but not with respect to
any amendment or modification thereto, and (iii)
shares of Common Stock issuable upon exercise of the
Warrants in accordance with their respective terms.
Except for (x) Underlying Shares, (y) other "REGISTRABLE
SECURITIES" (as such term is defined in the
Registration Rights Agreement) to be registered, and
securities of the Company permitted pursuant to
Section 6(c) of the Registration Rights Agreement to
be registered, in the Underlying Shares Registration
Statement in accordance with the Registration Rights
Agreement, and (z) Common Stock permitted to be
issued pursuant to paragraph (a)(i) - (iii) of
Section 3.9 (a), the Company shall not, for a period
of not less than 90 Trading Days after the Effective
Date, without the prior written consent of the
Purchasers (i) issue or sell any of its or any of its
Affiliates' equity or equity-equivalent securities
pursuant to Regulation S promulgated under the
Securities Act, or (ii) register any securities of
the Company. Any days after the Effective Date that a
EXHIBIT 10(A)-15.
Purchaser is unable to sell Underlying Shares under
the Underlying Shares Registration Statement shall be
added to such 90 Trading Day period.
CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The Company shall: (i)
on the Closing Date issue a press release reasonably
acceptable to the Purchasers disclosing the transactions
contemplated hereby, (ii) file with the Commission a Report on
Form 8-K disclosing the transactions contemplated hereby
within ten Business Days after the Closing Date, and (iii)
timely file with the Commission a Form D promulgated under the
Securities Act. The Company shall, no less than two Business
Days prior to the filing of any disclosure required by clauses
(ii) and (iii) above, provide a copy thereof to the Purchasers
for their review. The Company and the Purchasers shall consult
with each other in issuing any other press releases or
otherwise making public statements or filings and other
communications with the Commission or any regulatory agency or
stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public
statement, filings or other communications without the prior
written consent of the other, except if such disclosure is
required by law or stock market regulation, in which such case
the disclosing party shall promptly provide the other party
with prior notice of such public statement, filing or other
communication. Notwithstanding the foregoing, the Company
shall not publicly disclose the names of the Purchasers, or
include the names of the Purchasers in any filing with the
Commission, or any regulatory agency, trading facility or
stock market without the prior written consent of the
Purchasers, except to the extent such disclosure (but not any
disclosure as to the controlling Persons thereof) is required
by law or stock market regulations, in which case the Company
shall provide the Purchasers with prior notice of such
disclosure.
USE OF PROCEEDS. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes
and not for the satisfaction of any portion of the Company's
debt (other than payment of trade payables in the ordinary
course of the Company's business and prior practices), to
redeem any Company equity or equity-equivalent securities or
to settle any outstanding litigation.
REIMBURSEMENT. If any Purchaser becomes involved in any capacity in any
action, proceeding or investigation brought by or against any
Person, including stockholders of the Company, solely as a
result of acquiring the Securities under this Agreement and
the Warrants, the Company will reimburse such Purchaser for
its reasonable legal and other expenses (including the cost of
any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses
are incurred. The reimbursement obligations of the Company
under this paragraph shall be in addition to any liability
which the Company may otherwise have, shall extend upon the
same terms and conditions to any Affiliates of the Purchasers
who are actually named in such action, proceeding or
investigation, and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the
Purchasers and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and
EXHIBIT 10(A)-16.
personal representatives of the Company, the Purchasers and
any such Affiliate and any such Person. The Company also
agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company
solely as a result of acquiring the Securities under this
Agreement and the Warrants.
PLACEMENT AGENT. The Purchasers understand that ▇▇▇▇▇▇ Capital Group,
Ltd. (the "PLACEMENT AGENT") has been engaged by the Company
to act as placement agent on behalf of the Company in
connection with the transaction contemplated hereby and will
be compensated by the Company for acting in such capacity. The
Purchasers acknowledge that they have not obtained any advice
from the Placement Agent concerning their investment in the
Company or their participation in the transactions
contemplated by this Agreement, that to the knowledge of the
Purchasers, the information and data provided to the
Purchasers in connection with the transactions contemplated by
this Agreement have not been subjected to independent
verification by the Placement Agent, and that the Placement
Agent has made no representation or warranty to the Purchasers
with respect to the accuracy or completeness of such
information, data or other disclosure material.
CALL EVENTS. Following the occurrence of any of the following
events (each, an "EVENT"), the Purchasers may provide the
Company with a notice (an "EVENT NOTICE") requiring the
Company to reacquire all or a portion of the Shares (except
any Shares that have already been exercised pursuant to the
Repricing Warrant) which the Purchasers acquired hereunder at
a call price ("CALL PRICE") per share, equal to the sum of (i)
120% multiplied by the average of the Per Share Market Values
for the five (5) Trading Days preceding the Closing Date and
(ii) all other amounts, costs, expenses and liquidated damages
due in respect of such Shares:
upon the occurrence of any of (i) an acquisition after the
date hereof by an individual or legal entity or
"GROUP" (as described in Rule 13d-5(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) of in excess of 50% of the
voting securities of the Company with the consent or
approval of the Company, (ii) a replacement of more
than one-half of the members of the Company's board
of directors which is not approved by those
individuals who are members of the board of directors
on the date hereof in one or a series of related
transactions, (iii) the merger of the Company with or
into another entity, consolidation or sale of all or
substantially all of the assets of the Company in one
or a series of related transactions, unless following
such transaction or series of transactions, the
holders of the Company's securities prior to the
first such transaction continue to hold at least 2/3
of the securities of the surviving entity or acquirer
of such assets or (iv) the execution by the Company
of an agreement to which the Company is a party or by
which it is bound, providing for any of the events
set forth above in (i), (ii) or (iii);
EXHIBIT 10(A)-17.
immediately prior to an assignment by the Company for the
benefit of creditors or commencement of a voluntary
case under Title 11 of the United States Code, or an
entering into of an order for relief in an
involuntary case under Title 11 of the United States
Code, or adoption by the Company of a plan of
liquidation or dissolution;
five Business Days prior to the proposed consummation with
respect to the Company of a "RULE 13E-3 TRANSACTION"
as defined in Rule 13e-3 under the Exchange Act (or,
if necessary, such earlier date as the Company shall
determine in good faith to be required in order for
the Purchasers to be able to participate in such
transaction), it being agreed that the Purchasers
will receive actual notice of the 13e-3 Statement
filed with the Commission;
the Common Stock fails to be listed or quoted for trading
on the Nasdaq or a Subsequent Market for ten
consecutive Trading Days, or a total of twenty
Trading Days during any calendar year;
after the Effective Date (as defined herein), a holder of
Registrable Securities (as defined in the
Registration Rights Agreement) is not permitted to
sell Registrable Securities under the Underlying
Shares Registration Statement for any reason for ten
or more consecutive Trading Days or a total of thirty
Trading Days during any calendar year;
the Underlying Shares Registration Statement shall not be
declared effective by the Commission on or prior to
the 180th day following the Closing Date); or
the Company shall fail for any reason to deliver
certificates to a Purchaser by the fifth day in
accordance with Section 3.1(b) of this Agreement or
prior to the fifth day after a Date of Exercise (as
defined in Exhibit A) in accordance with Section 4(a)
of the Warrant; or
the Company shall fail or default in the timely
performance of any material obligation under the
Transaction Documents and such failure or default
shall continue uncured for a period of ten Business
Days after the date on which notice of such failure
or default is first given to the Company, or
if a Purchaser shall have elected to require the Company
to reacquire all or a portion of the Shares pursuant
to the terms hereof, the Company shall pay the Call
Price no later than the fifth Trading Day following
the date of the delivery of the Event Notice.
Interest shall accrue on the Call Price from the date
such amount is due until paid in full at the rate of
18% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law), to accrue
daily from the date such payment is due hereunder
through and including the date of payment.
EXHIBIT 10(A)-18.
ARTICLE 4
MISCELLANEOUS
FEES AND EXPENSES. At the Closing the Company shall reimburse the
Purchasers for their legal fees and expenses incurred in
connection with the preparation and negotiation of the
Transaction Documents by paying to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ an
additional $20,000 for the preparation and negotiation of the
Transaction Documents. The amount contemplated by the
immediately preceding sentence shall be delivered by the
Purchasers to the Escrow Agent at the Closing for disbursement
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Other than the amount contemplated
herein and except as otherwise set forth in the Registration
Rights Agreement, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if
any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp
and other taxes and duties levied in connection with the
issuance of the Securities.
ENTIRE AGREEMENT; AMENDMENTS. The Transaction Documents, together
with the Exhibits and Schedules thereto and Transfer Agent
Instructions, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have
been merged into such documents, exhibits and schedules.
NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m.
(New York City time) on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30
p.m. (New York City time) on any date and earlier than 11:59
p.m. (New York City time) on such date, (iii) the Business Day
following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall
be as follows:
EXHIBIT 10(A)-19.
If to the Company: FORTEL Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer and
Chief Executive Officer
If to a Purchaser: To the address set forth under such
Purchaser's name on the signature pages hereto
or such other address as may be designated in
writing hereafter, in the same manner, by
such Person.
AMENDMENTS; WAIVERS. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of
an amendment, by both the Company and each of the Purchasers
or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement
or any rights or obligations hereunder without the prior
written consent of the Purchasers. Except as set forth in
Section 3.1(a), the Purchasers may not assign this Agreement
or any of the rights or obligations hereunder without the
consent of the Company. This provision shall not limit any
Purchaser's right to transfer securities or transfer or assign
rights under the Registration Rights Agreement.
NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may
any provision hereof be enforced by, any other Person.
GOVERNING LAW. The corporate laws of the State of California shall
govern all issues concerning the relative rights of the
Company and its stockholders. All other questions concerning
the construction, validity, enforcement and interpretation of
this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including
with respect to the enforcement of the any of the Transaction
EXHIBIT 10(A)-20.
Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law.
SURVIVAL. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery
and exercise of the Warrants.
EXECUTION. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and
the same agreement and shall become effective when
counterparts have been signed by each party and delivered to
the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page
were an original thereof.
SEVERABILITY. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and
provisions of this Agreement shall not in any way be affecting
or impaired thereby and the parties will attempt to agree upon
a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.
▇▇▇▇▇▇▇▇.▇▇ addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each
of the Purchasers will be entitled to specific performance of
the obligations of the Company under the Transaction
Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance
of any such obligation the defense that a remedy at law would
be adequate.
INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document
is several and not joint with the obligations of any other
Purchaser and no Purchaser shall be responsible in any way for
the performance of the obligations of any other Purchaser
under any Transaction Document. Nothing contained herein or in
any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers
as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers
are
EXHIBIT 10(A)-21.
in any way acting in concert with respect to such
obligations or the transactions contemplated by the
Transaction Document. Each Purchaser shall be entitled to
independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or
out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOWS]
EXHIBIT 10(A)-22.
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
FORTEL INC.
By: S/
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: CFO
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SIGNATURE PAGE FOR PURCHASER FOLLOWS]
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT
DEEPHAVEN PRIVATE PLACEMENT TRADING LTD.
By: S/
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: CFO
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Purchase Price for Shares: $3,500,000
Number of Shares to be acquired 1,534,247
Address for Notice:
Deephaven Private Placement Ltd.
c/o Deephaven Capital Management LLC
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
HARP INVESTORS LLC
By: S/
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Name: ▇▇▇▇▇▇ ▇▇▇▇
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Title: Managing Director
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Purchase Price for Shares: $1,500,000
Number of Shares to be acquired 657,534
Address for Notice:
Harp Investors LLC
c/o WEC Asset Management LLC
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▇▇▇▇▇▇-▇▇-▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT
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SECURITIES PURCHASE AGREEMENT
AMONG
FORTEL INC.
AND
THE INVESTORS SIGNATORY HERETO
DATED AS OF JULY 18, 2000
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