EXHIBIT 1
RCM TECHNOLOGIES, INC.
0000 XxXxxxxxx Xxxxxx (Xxxxx 000)
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
January 12, 1996
Xx. Xxxxx Xxxxxxxx
c/o Acquest International, L.P.
1211 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxxx:
This letter will confirm our agreement with respect to
the issuance and sale by RCM Technologies, Inc. (the "Company"),
and the purchase by you, of shares of Common Stock, $.05 par
value, of the Company.
1. Subscription. On the terms and subject to the
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conditions set forth in this agreement, the Company hereby agrees
to sell to you, and you hereby agree to purchase from the Company,
on the "Closing Date" (as hereinafter defined) such number of
shares of Common Stock, $.05 par value (the "Shares"), of the
Company which equals the amount of $1,000,000 divided by the
purchase price per Share as determined pursuant to this Section 1.
The purchase price per Share shall equal the greater of $0.60 or
the product of (i) the average of the closing prices for the
Shares as reported by NASDAQ Stock Market for the twenty (20)
trading days immediately preceding the Closing Date (the "Average
Price") and (ii) (A) 80% if the Average Price is less than $1.00,
(b) 77.5% if the Average Price is equal to or more than $1.00 but
less than $1.25 or (C) 75% if the Average Price is $1.25 or more.
On the Closing Date, you shall pay the purchase price for the
Shares by delivering to the Company a certified or bank cashier's
check in the amount of $1,000,000 against delivery of a stock
certificate representing the Shares.
2. Representations and Warranties of the Company. The
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Company represents and warrants to you as follows:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada.
(b) The Company has all requisite legal and
corporate power to execute this Agreement. The execution,
delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby have been
authorized by all necessary corporate action on the part of the
Company.
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(c) This Agreement has been duly executed by the
Company and, assuming due and valid execution and delivery of the
same by you, constitutes the valid and legally binding obligation
of the Company enforceable in accordance with its terms.
(d) The Shares, when delivered to you, will be
duly and validly issued, fully paid and nonassessable.
3. Representations and Warranties of Subscriber. You
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hereby represent and warrant to the Company as follows:
(a) Investigation. You have made your own
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investigation of the financial condition and affairs of the
Company and the nature of its business and are fully familiar with
the same, and you have such knowledge and experience in financial
and business matters that you are capable of evaluating the risks
of your investment in the Shares.
(b) Access to Information. You have had access to
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all material and relevant information concerning the Company
necessary to enable you to make an informed investment decision
with respect to your investment in the Shares. You acknowledge
that you had the opportunity to ask questions of and receive
answers from, and to obtain additional information from, the
Company or its representatives concerning the terms and conditions
of the acquisition of the Shares and the present and proposed
business and financial condition of the Company and have had all
such questions answered to your satisfaction and have been
supplied all information requested.
(c) SEC Reports. You acknowledge that you have
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been provided with, and reviewed to your satisfaction, copies of
the reports which the Company is required to file with the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 (the "Reports") for the two-year period
preceding the date of this Agreement.
(d) Financial Matters and Sophistication. You
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have such knowledge and experience in business and financial
matters, such that you are capable of evaluating the merits and
risks of investing in the Shares. You represent that you are:
(i) an "accredited investor" as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act
of 1933 (the "1933 Act"); and
(ii) that you are capable of assuming the risk
of investing in the Shares.
(e) Investment Intent.
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(i) You are acquiring the Shares for your own
account and not on behalf of any other person (except that you may
assign your rights herein prior to Closing pursuant to Section 10
hereof);
(ii) You are acquiring the Shares for
investment and not with a view to distribution or with the intent
to divide your participation with others by reselling or otherwise
distributing the Shares (except that you may assign your rights
herein prior to Closing pursuant to Section 10 hereof); and
(iii) Neither you nor anyone acting on your
behalf has paid or will pay any commission or other remuneration
to any person in connection with the purchase of the Shares,
except as set forth herein.
(f) Understanding of Investment Risks.
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You understand that an investment in the Shares
involves a degree of risk. The Shares are a suitable investment
only if you can afford a total loss of your investment. Before
making the decision to purchase the Shares, you do hereby
acknowledge that you have considered carefully, among other
things, the speculative nature of an investment in shares of a
public company and a number of risks associated with an investment
in the Shares.
(g) Understanding of Nature of Shares. You
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understand that:
(i) The Shares have not been registered under
the 1933 Act or any state securities laws and are being issued and
sold in reliance upon certain of the exemptions contained in the
1933 Act and under applicable state securities laws;
(ii) The Shares are "restricted securities"
as that term is defined in Rule 144 promulgated under the 1933
Act;
(iii) The Shares cannot be sold or
transferred without registration under the 1933 Act and applicable
state securities laws, unless the Company receives an opinion of
counsel reasonably acceptable to it (as to both counsel and the
opinion) that such registration is not necessary;
(iv) The Shares and any certificates issued
in replacement therefor shall bear the following legend, in
addition to any other legend required by law or otherwise:
"The securities represented by this
certificate have not been registered
under the Securities Act of 1933, as
amended. The securities represented
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by this certificate have been taken
by the registered owner for
investment, and without a view to
resale or distribution thereof, and
may not be transferred or disposed
of without an opinion of counsel
satisfactory to the issuer that such
transfer or disposition does not
violate the Securities Act of 1933,
as amended, or the rules and
regulations thereunder."
(v) Only the Company can register the Shares
under the 1933 Act and applicable state securities laws;
(vi) Except as set forth in this Agreement,
no representations have been made to you that the Company will
register the Shares under the 1933 Act or any applicable state
securities laws, or with respect to compliance with any exemption
therefrom; and
(vii) The Company may, from time to time,
make stop transfer notations in its transfer records to ensure
compliance with the 1933 Act.
(h) No Other Representations. No representation,
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warranty or other statement or assertion has been made to you by
the Company or by any officer or director of the Company to induce
you to purchase the Shares, other than as set forth herein.
4. Conditions Precedent to Your Obligation. Your
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obligation to consummate the purchase of the Shares on the Closing
Date is, at your option, subject to the satisfaction of the
following conditions:
(a) Each of the representations of the Company
contained in Paragraph 2 hereof shall be true and correct when
made and in all material respects as of the Closing Date with the
same force and effect as though the same had been made on and as
of the Closing Date.
(b) You shall have obtained financing of
$1,000,000 on terms acceptable to you in your sole discretion.
(c) The Company has completed the acquisition of
all or substantially all of the assets, stock or business of The
Consortium, Inc. (the "Consortium Acquisition").
(d) You shall have received the Registration
Rights Agreement, described in Section 8 hereof, duly executed by
the Company.
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5. The Closing. The closing of the transactions
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contemplated by this Agreement (the "Closing") shall take place at
the offices of the Company, 0000 XxXxxxxxx Xxxxxx (Xxxxx 000),
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000 on a date specified by you by
written notice given at least three (3) days prior to such date.
Either party shall have the right to terminate this Agreement, but
only prior to the Company's receipt of the foregoing notice, upon
written notice to the other in the event that the Closing has not
occurred on or prior to the earlier of (i) ten (10) days after the
closing of the Consortium Acquisition or (ii) May 31, 1996. The
time and date of the Closing is referred to in this Agreement as
the "Closing Date."
6. Survival of Representations and Warranties. The
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parties hereto agree that the representations and warranties
contained in this Agreement shall survive the execution and
delivery of this Agreement, and the Closing hereunder, regardless
of any investigation made by the parties hereto. The election of
any party to proceed with the Closing shall not be construed as a
waiver of any of his rights hereunder and the waiver of any such
right shall not be deemed a waiver of any other right derived
hereunder.
7. Voting of the Shares. You hereby agree that, for
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so long as you retain any Shares, Xxxx Xxxxx is granted an
irrevocable proxy entitling him to vote the Shares owned by you,
or to execute and deliver written consents or otherwise act with
respect to such Shares as fully, to the same extent and with the
same effect as you might or could do under any applicable laws or
regulations governing the rights and powers of shareholders of a
corporation organized under the laws of the State of Nevada, in
connection with the election of directors of the Company, at any
regular or special meetings of the shareholders.
8. Registration Rights Agreement. On the Closing
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Date, the Company shall execute and deliver to you a Registration
Rights Agreement which provides that the Company will, at its sole
cost and expense, prepare and file with the Securities and
Exchange Commission a Shelf Registration Statement covering all
the Shares then owned by you by February 15, 1997 and thereafter
seek to obtain the effectiveness thereof. The Registration Rights
Agreement shall also provide that the Company shall maintain the
effectiveness of such Shelf Registration Statement until such time
as Rule 144 promulgated under the 1933 Act becomes available to
you with respect to the resale of the Shares. Notwithstanding the
foregoing, the Company shall have no obligation (i) to assist in
the offering or disposition of the Shares, (ii) to obtain a
commitment from an underwriter relative to the sale of the Shares,
or (iii) to include such Shares within an underwritten offering.
9. Notices. Any notices or other communications
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required or permitted hereunder shall be sufficiently given if in
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writing and personally delivered, sent by electronic facsimile
transmission with a copy by first class mail, sent by overnight
courier service, or sent by first class, registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows or to such other address as a party may hereafter
designate by notice given pursuant hereto:
In the case of the Company:
RCM Technologies, Inc.
0000 XxXxxxxxx Xxxxxx (Suite 350)
Pennsauken, New Jersey 08109-4613
Attn: Xxxx Xxxxx, Chief Executive Officer
Fax No.: (000) 000-0000
In the case of Xxxxx Xxxxxxxx:
Xxxxx Xxxxxxxx
c/o Acquest International, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
10. Successors and Assigns. This Agreement shall be
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binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, personal
representatives, successors and assigns. Notwithstanding the
foregoing, this Agreement and all rights and obligations hereunder
may not be assigned or transferred, without the prior written
consent of the other party, except that you may assign your rights
hereunder to any partnership of which you are a general partner or
any limited liability company of which you are a member, provided
that such partnership or limited liability company agrees in
writing to be bound by the terms hereof.
11. Entire Agreement; Amendments. This Agreement
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constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and may be amended only by a
writing executed by you and the Company.
12. Governing Law. This Agreement shall be governed
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by, and construed and enforced in accordance with, the laws of the
State of New York from time to time in effect.
13. Counterparts; Facsimile Signatures. This Agreement
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may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one
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instrument. A facsimile signature by any party on a counterpart
of this Agreement shall be binding and effective for all purposes.
Such party shall, however, subsequently deliver to the other party
an original, executed copy of this Agreement.
Very truly yours,
RCM TECHNOLOGIES, INC.
By:/s/ Xxxx Xxxxx
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Xxxx Xxxxx,
Chief Executive Officer
ACCEPTED AND AGREED TO:
/s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
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