SECURITIES PURCHASE AGREEMENT
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
XXX
Tel:
+ 0
000 000 00 00
Cell:
+
00 00 000 00 00
Fax:
+ 00
00 000 00 00
Ladies
and Gentlemen:
The
undersigned investor (the “Investor”), hereby confirms its agreement with you as
follows:
1. This
Securities Purchase Agreement, including Annex I, and the exhibits thereto
(the
“Agreement”) is made as of November 6, 2007 between Plastinum Polymer
Technologies Corp.(the “Company”) and the Investor with respect to the sale of
shares (the “Preferred Shares”) of the Company’s Series B-1 Convertible
Preferred Stock (the “Series B-1 Preferred Stock”) and warrants to purchase
shares of the Company’s Common Stock (the “Warrants”). The powers, designations,
preferences and other rights of such of Series B-1 Preferred Stock are set
forth
on Exhibit A.
2. The
Company and the Investor agree that the Investor will purchase from the Company,
and the Company will sell to the Investor, the number of Preferred Shares
set
forth opposite the Investor’s name on the signature page of this Agreement, at a
purchase price per Preferred Share of $100, pursuant to the Terms and Conditions
for Purchase of Securities attached hereto as Annex I and incorporated herein
by
reference as if fully set forth herein. Unless otherwise requested by the
Investor, certificates representing the Preferred Shares and the Warrants
will
be registered in the Investor’s name and address as set forth
below.
The
next
page is the signature page.
-1-
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing in the space provided below for that purpose.
AGREED
AND ACCEPTED:
COMPANY: PLASTINUM
POLYMER TECHNOLOGIES CORP.
By:
INVESTOR:
name
of
investor
Number
of
Preferred Shares:
By:
Signature
of investor or authorized person
Its:
Title
of
authorized person
Address:
Contact
Name:
Facsimile
Number:
Email
Address:
Name
in
which share certificates should be registered (if different):
Social
Security
or
Tax
I.D. No:
Address
where share certificates should be sent (if different):
-2-
ANNEX
I
TERMS
AND
CONDITIONS FOR PURCHASE OF SECURITIES
| 1. |
Authorization.
Subject to the terms and conditions in this Annex I, the Company
has
authorized the sale of up to 120,000 shares of Series B Convertible
Preferred Stock.
|
| 2. |
Agreement
to Sell and Purchase the Preferred Shares and Warrants; Subscription;
Date.
|
| 2.1 |
At
the Closing (as defined in Section 2), the Company will sell to
the
Investor, and the Investor will purchase from the Company, upon
the terms
and conditions hereinafter set forth, the Preferred
Shares.
|
| 2.2 |
At
the Closing, the Company shall issue to Investor a warrant (the
“Warrant”)
to purchase such number of shares of the Company’s Common Stock
(“Conversion Shares”) equal to 30% of the shares issuable upon conversion
of the Preferred Shares at the initial conversion price thereof.
The
exercise price per Warrant Share for the Warrant shall equal $0.57.
The
Warrant shall not become exercisable until the first day after
the
expiration of six months after the Closing. The form of Warrant
is
attached hereto as Exhibit B. The Warrant and the Preferred Shares
are
collectively referred to herein as the
“Securities.”
|
| 2.3 |
The
Company is entering into a substantially similar form of Securities
Purchase Agreement, including these Terms and Conditions, with
the other
investors listed along with the Investor (the “Other Investors”). (The
Investor and the Other Investors are hereinafter sometimes collectively
referred to as the “Investors,” and the Securities Purchase Agreement to
which these Terms and Conditions are attached and the securities
purchase
agreements executed by the Other Investors are hereinafter sometimes
collectively referred to as the “Purchase
Agreements.”)
|
| 3. |
Delivery
at Closing. The completion of the purchase and sale of the Securities
(the
“Closing”) shall occur no later than November 6, 2007 (the “Closing
Date”), at the offices of Xxxxxxxxx Ball Xxxxxx Xxxxxx & Xxxxxxxxxx
LLP, 000 Xxx Xxxxxxx Xxxx, Xxxxxxx, XX 00000, XXX, the Company’s counsel,
it being understood however, that additional Closings of the sale
of
Preferred Shares (“Additional Closings”) may occur from time to time
within 120 days of the initial Closing Date. At the Closing, the
Company
shall deliver to the Investor (i) one or more certificates representing,
in the aggregate, the Preferred Shares and the Warrant, each such
certificate to be registered in the name of the Investor or, if
so
indicated on the signature page of the Securities Purchase Agreement,
in
the name of a nominee designated by the Investor. If neither the
Investor
nor a representative of Investor is present at the Closing to take
physical delivery of the certificates, then delivery shall be deemed
made
at Closing by the transmission of a facsimile of the certificates
to the
Investor (or nominee designated by the Investor) followed by delivery
by a
nationally recognized overnight express
courier.
|
The
Company’s
obligation to issue the Preferred Shares and Warrants to the Investor shall
be
subject to the following conditions, any one or more of which may be waived
by
the Company:
| (a) |
receipt
by the Company, or the nominee designated by the Company, as
applicable,
of a certified or official bank check or wire transfer of funds
in the
full amount of the aggregate purchase price for the Preferred
Shares;
|
| (b) |
other
than with respect to the occurrence of any Additional Closings,
completion
of the purchases and sales under the Agreements with the Other
Investors;
and
|
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| (c) |
the
accuracy of the representations and warranties made by the Investors
and
the fulfilment of those undertakings of the Investors to be fulfilled
prior to the Closing.
|
The
Investor’s obligation to purchase the Preferred Shares shall be subject to the
following conditions, any one or more of which may be waived by the
Investor:
| (a) |
the
representations and warranties of the Company set forth herein
shall be
true and complete as of the Closing Date in all material
respects;
|
| (b) |
the
Investor shall have received such documents as the Investor shall
reasonably have requested;
|
| (c) |
the
Company shall not have experienced a Material Adverse Change (as
defined
in paragraph 4.11);
|
| (d) |
the
Company shall have delivered to the Investor a certificate of its
Chief
Executive Officer dated as of the Closing Date certifying (i) that
the
representations and warranties of the Company remain true as of
the
Closing Date, (ii) that the Company has performed all covenants
in the
Agreements to be performed by it on or prior to Closing Date, (iii)
that
the Company has not experienced a Material Adverse Change, (iv)
that the
Common Stock has not been suspended from trading on the Over-the-Counter
Bulletin Board (“OTCBB”), and (v) that the Company is not subject to a
stop order of the Securities and Exchange Commission (the “SEC”) or any
state securities agency;
|
| (e) |
together
with the sale of Preferred Shares pursuant to this Agreement, the
Company
shall have received from Investors at least $1,750,000 from the
sale of
Preferred Shares; and
|
| (f) |
the
Company shall have executed and delivered a counterpart copy of
the
Registration Rights Agreement referred to in Section
7.1.
|
At
the
Closing, if requested by a majority of the Investors as of the Closing Date,
the
Investors shall also receive a legal opinion from Xxxxxxxxx Ball Xxxxxx Xxxxxx
& Xxxxxxxxxx, LLP, counsel to the Company, in form and substance to be
provided.
| 4. |
Representations,
Warranties and Covenants of the Company. The Company hereby represents
and
warrants to, and covenants with, the Investor, as
follows:
|
| 4.1 |
Subsidiaries;
Organization. All of the subsidiaries of the Company (the “Subsidiaries”)
are set forth on Schedule 4.1(a). Each of the Company and the Subsidiaries
is duly organized and validly existing and is in good standing
under the
laws of the jurisdiction of its organization. Each of the Company
and the
Subsidiaries has full power and authority to own, operate and occupy
its
properties and to conduct its business as presently conducted and
as
described in Company’s SEC Documents (as defined in paragraph 4.4), and is
registered or qualified to do business and is in good standing
in each
jurisdiction in which the failure to be so qualified would have
a material
adverse effect upon the business, condition (financial or otherwise),
business prospects, properties or operations of the Company and
its
Subsidiaries, considered as one enterprise (“Material Adverse Effect”),
and no proceeding has been instituted in any such jurisdiction,
revoking,
limiting or curtailing, or seeking to revoke, limit or curtail,
such power
and authority or qualification.
|
| 4.2 |
Due
Authorization and Valid Issuance. The Company has all requisite
power and
authority to execute, deliver and perform its obligations under
the
Purchase Agreement, and the Registration Rights Agreement referred
to in
Section 7.1 (collectively, the “Transaction Documents”), and the
Agreements have been duly authorized and validly executed and
delivered by
the Company and constitute legal, valid and binding agreements
of the
Company enforceable against the Company in accordance
with their terms, except as enforceability may be limited by
applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium
or similar laws affecting
creditors’
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-4-
and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
| 4.3 |
Non-Contravention.
The execution and delivery of the Transaction Documents by the
Company,
the issuance and sale of the Preferred Shares and Warrants to be
sold by
the Company under the Agreements, the fulfilment of the terms of
the
Agreements by the Company and the consummation by the Company of
the
transactions contemplated hereby and thereby will not (A) conflict
with or
constitute a violation of, or default or require notice or consent
(with
the passage of time or otherwise) under (i) any material bond,
debenture,
note or other evidence of indebtedness, or under any material lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company or
any of
the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective properties are bound, (ii) the
charter,
by-laws or other organizational documents of the Company or any
of the
Subsidiaries, or (iii) any material law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration
panel
or authority applicable to the Company or any of the Subsidiaries
or their
respective properties, or (B) result in the creation or imposition
of any
lien, encumbrance, claim, security interest or restriction whatsoever
upon
any of the material properties or assets of the Company or any
of the
Subsidiaries or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any other agreement or instrument
to
which the Company or any of the Subsidiaries is a party or by which
any of
them is bound or to which any of the property or assets of the
Company or
any of the Subsidiaries is subject. No consent, approval, authorization
or
other order of, or registration, qualification or filing with,
any
regulatory body, administrative agency, or other governmental body
in the
United States is required for the execution and delivery of the
Transaction Documents by the Company and the valid issuance and
sale of
the Preferred Shares to be sold by the Company pursuant to the
Agreements,
other than such as have been made or obtained, and except for any
post-closing securities filings or notifications required to be
made under
federal or state securities laws.
|
| 4.4 |
Reporting
Status. The Company has filed in a timely manner all documents
that the
Company was required to file under the Securities Exchange Act
of 1934, as
amended (the “Exchange Act”) during the 12 months preceding the date of
this Agreement, including all certifications and statements required
by
(x) 13a-14 or 15d-14 under the Exchange Act or (y) 18 USC 1350
(Section
906 of Sarbanes Oxley Act) (such filings, including all exhibits,
supplements and amendments thereto, the “SEC Documents”). The SEC
Documents and all other materials filed with the Securities and
Exchange
Commission (the “SEC”) during such period complied in all material
respects with the SEC’s requirements as of their respective filing dates,
and the information contained therein as of the dates thereof did
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 in light of the circumstances under which they were made
not
misleading.
|
| 4.5 |
Capitalization.
The capitalization of the Company as of September 30, 2007 is as
set forth
on Schedule 4.5. All outstanding shares are duly authorized, validly
issued and are fully paid and nonassessable. None of the outstanding
shares has been offered or issued in violation of federal or state
securities laws, or in violation of or subject to any preemptive
rights or
other rights to subscribe for or purchase securities. The Company
has not
issued any capital stock since June 30, 2006 other than pursuant
to (i)
employee benefit plans disclosed in the SEC Documents, or (ii)
outstanding
warrants, options or other securities disclosed in the SEC Documents.
The
Preferred Shares to be issued on the date hereof, when issued in
compliance with the provisions of the Agreements, including without
limitation payment in full of the consideration therefor, will
be duly
authorized, and the Preferred Shares and the shares of the Common
Stock
issuable upon conversion of the Preferred Shares (the “Conversion Shares”)
when issued will be validly
issued,
|
-5-
fully
paid and nonassessable, and will not subject the holder to any liability
as a
result of being a holder. Except as set forth on Schedule 4.5 or pursuant
to the
Purchase Agreements, there are no outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any unissued shares of capital stock
or
other equity interest in the Company or the Subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind to which
the
Company is a party or of which the Company has knowledge and relating to
the
issuance or sale of any capital stock of the Company or the Subsidiaries,
any
such convertible or exchangeable securities or any such rights, warrants
or
options. Without limiting the foregoing, no preemptive right, co-sale right,
right of first refusal, registration right (except as set forth herein),
or
other similar right exists with respect to the Preferred Shares, the Warrants
or
the Company’s Common Stock to be issued and sold by the Company or the issuance
and sale thereof. No further approval or authorization of any stockholder,
the
Board of Directors of the Company or others is required for the issuance
and
sale of the Preferred Shares, the Warrants or the Company’s Common Stock by the
Company. There are no stockholders’ agreements, voting agreements or other
similar agreements with respect to the Preferred Shares, the Warrants or
the
Company’s Common Stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders. Except as set
forth on Schedule 4.5, no holder of any of the securities of the Company
has any
rights (“demand,” “piggyback” or otherwise) to have such securities registered
by reason of the intention to file, filing or effectiveness of a Registration
Statement (as defined in Section 7.1 hereof). The Company has duly reserved
sufficient shares of Common Stock for issuance upon conversion of the Preferred
Shares (the “Conversion Shares”) and the exercise of the Warrants (the “Warrant
Shares”).
| 4.6 |
Legal
Proceedings. There is no material legal or governmental proceeding
pending
or, to the knowledge of the Company, threatened to which the Company
or
any of the Subsidiaries is or may be a party or of which the business
or
property of the Company or any of the Subsidiaries is subject.
There is no
action, suit, proceeding, inquiry or investigation before or by
any court,
public board or body (including, without limitation, the SEC) pending
or,
to the knowledge of the Company, threatened against or affecting
the
Company or the Subsidiaries or any of their respective business
or
properties, wherein an unfavorable decision, ruling or finding
could
adversely affect the validity or enforceability of, or the authority
or
ability of the Company to perform its obligations under the
Agreements.
|
| 4.7 |
No
Violations. Neither the Company nor any Subsidiary is in violation
of its
charter, bylaws, or other organizational document, or in violation
of any
material law, administrative regulation, ordinance or order of
any court
or governmental agency, arbitration panel or authority applicable
to the
Company or any Subsidiary, or in default or violation (and there
exists no
condition that, with the passage of time or otherwise, would constitute
a
default or violation) in any respect in the performance of any
material
bond, debenture, note or any other evidence of indebtedness in
any
indenture, mortgage, deed of trust or any other material agreement
or
instrument to which the Company or any Subsidiary is a party or
by which
the Company or any Subsidiary is bound or by which the properties
of the
Company or any Subsidiary are bound. Without limiting the generality
of
the foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the OTCBB and has no knowledge of
any facts
or circumstances which would reasonably lead to suspension of the
Common
Stock by the OTCBB in the foreseeable
future.
|
| 4.8 |
Governmental
Permits, Etc. The Company and the Subsidiaries possess all necessary
franchises, licenses, certificates and other authorizations from
any
foreign, federal, state or local government or governmental agency,
department, or body that are currently necessary for the operation
of
their respective business as currently conducted, except where
the failure
to currently possess could not reasonably be expected to have a
Material
Adverse Effect.
|
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| 4.9 |
Intellectual
Property. The Company and the Subsidiaries own or possess sufficient
rights to use all patents, patent rights, trademarks, copyrights,
licenses, inventions, trade secrets, trade names and know-how
(collectively, “Intellectual Property”) that are necessary for the conduct
of their respective businesses as now conducted. Neither the Company
nor
any Subsidiary has received any notice of, or has any knowledge
of, any
infringement of asserted rights of a third party with respect to
any
Intellectual Property, and neither the Company nor any Subsidiary
has any
knowledge of any infringement by a third party with respect to
any
Intellectual Property of the Company or any
Subsidiary.
|
| 4.10 |
Financial
Statements. The consolidated financial statements of the Company
and the
related notes contained in the SEC Documents present fairly, in
accordance
with the rules and regulations of the SEC, the consolidated financial
position of the Company as of the dates indicated, and the results
of its
operations and cash flows for the periods therein specified. Such
financial statements (including the related notes) have been prepared
in
accordance with generally accepted accounting principles applied
on a
consistent basis throughout the periods therein specified, except
as set
forth in the financial statements (and the related
notes).
|
| 4.11 |
No
Material Adverse Change. Since January 1st,
2007 there has not been (i) any material adverse change in the
financial
condition or earnings of the Company and the Subsidiaries taken
as a
whole, nor has any material adverse event occurred with respect
to the
Company or the Subsidiaries, (ii) any obligation, direct or contingent,
that is material to the Company and the Subsidiaries taken as a
whole,
incurred by the Company or any Subsidiary, except obligations incurred
in
the ordinary course of business, (iii) any dividend or distribution
of any
kind declared, paid or made on the capital stock of the Company,
or (iv)
any loss or damage (whether or not insured) to the physical property
of
the Company or any Subsidiary which has been sustained which has
a
material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company
and
the Subsidiaries taken as a whole. Since January 1st,
2007, neither the Company nor any Subsidiary has (a) sold, assigned,
transferred, abandoned, mortgaged, pledged or subjected to lien
any of its
material properties, tangible or intangible, or rights under any
material
contract, permit, license, franchise or other agreement or (b)
waived or
cancelled any material indebtedness or other material obligations
owed to
the Company or such Subsidiary. The occurrence of any of the events
described in clauses (i) through (iv) and clauses (a) and (b) of
this
paragraph is referred to as a “Material Adverse
Change.”
|
| 4.12 |
No
Manipulation of Securities. The Company has not taken and will
not, in
violation of applicable law take, any action designed to or that
might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale
of the
Preferred Shares.
|
| 4.13 |
OCTBB
Status. The Common Stock is traded on the OTCBB. The Company has
no reason
to believe that the Common Stock will be ineligible for quotation
on the
OTCBB.
|
| 4.14 |
Insurance.
The Company and the Subsidiaries maintain and will continue to
maintain
insurance against loss or damage by fire or other casualty and
such other
insurance, including, but not limited to, product liability insurance,
in
such amounts and covering such risks as is reasonably adequate
consistent
with industry practice for the conduct of their respective businesses
and
the value of their respective
properties.
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| 4.15 |
Tax
Matters. The Company and the Subsidiaries have filed all material
federal,
state, local and foreign income and franchise and other tax returns
required to be filed by them in any jurisdiction to which they
are
subject, and have paid or accrued all taxes due in accordance therewith;
and no tax deficiency has been determined adversely to the Company
or any
Subsidiary which has had (nor does the Company or the Subsidiaries
have
any knowledge of any tax deficiency which,
if
|
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determined
adversely to the Company or any of the Subsidiaries, would reasonably be
expected to have) a Material Adverse Effect.
| 4.16 |
Investment
Company. The Company is not an “investment company” within the meaning of
such term under the Investment Company Act of 1940 and the rules
and
regulations of the SEC thereunder.
|
| 4.17 |
No
Registration. No form of general solicitation or general advertising
was
used by the Company or, to the best of its knowledge, any other
Person
acting on behalf of the Company, in respect of the Preferred Shares
or in
connection with the offer and sale of the Preferred Shares. Assuming
the
accuracy of the representations and warranties made by, and compliance
with the covenants of, (i) the Investors in Section 5 of the Terms
and
Conditions to each of the Agreements, no registration of the Preferred
Shares under the Securities Act is required in connection with
the offer
and sale of the Preferred Shares by the Company to the Investors
as
contemplated by the Agreements.
|
| 4.18 |
Internal
Accounting Controls. The Company and the Subsidiaries maintain
a system of
internal accounting controls sufficient, in the judgment of the
Company’s
board of directors, to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit
preparation of consolidated financial statements in conformity
with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets
at
reasonable intervals and appropriate action is taken with respect
to any
differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)
for
the Company and designed such disclosure controls and procedures
to ensure
that material information relating to the Company, is made known
to the
certifying officers by others within those entities, particularly
during
the period in which the Company’s Form 10-KSB or 10-QSB, as the case may
be, is being prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s controls and procedures as of the end
of the period covered by the most recently filed Form 10-KSB (such
date,
the “Evaluation Date”). The Company presented in its most recently filed
Form 10-KSB the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their
evaluations as of the Evaluation Date. Since the Evaluation Date,
there
have been no significant changes in the Company’s internal controls (as
such term is defined in Exchange Act Rules 13a-15(f) that has affected,
or
is reasonably likely to materially affect, the Company’s internal controls
over financial reporting.
|
| 4.19 |
Form
D. Subject to the continuing accuracy of the representations and
warranties made by, and compliance with the covenants of, the Investors
in
Section 5 of the Terms and Conditions to each of the Agreements
the
Company agrees to file one or more Form D with respect to the Preferred
Shares on a timely basis as required under Regulation D under the
Securities Act to claim the exemption provided by Rule 506 of Regulation
D
and to provide a copy thereof to the Investors and their counsel
promptly
after such filing.
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| 4.20 |
Integration
and Future Financings
|
| (a) |
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
Offering in a manner that would require the registration of the
issuance
of the Preferred Shares under the Securities Act, or cause the
sale of the
Preferred Shares to the Investors to be integrated with prior offerings
by
the Company.
|
| 4.21 |
Use
of Proceeds. The Company will use the net proceeds from the sale
of the
Preferred Shares for working capital and general corporate purposes
and to
acquire capital equipment for expansion of production
capacity.
|
| 5. |
Representations,
Warranties and Covenants of the
Investor.
|
| 5.1 |
The
Investor represents and warrants to, and covenants with, the Company
that:
(i) the Investor is an “accredited investor” as defined in Rule 501 of
Regulation D under the Securities Act , and the Investor is also
knowledgeable, sophisticated and experienced in making, and is
qualified
to make decisions with respect to, investments in securities presenting
an
investment decision like that involved in the purchase of the Preferred
Shares, including investments in securities issued by the Company
and
investments in comparable companies, and has requested, received,
reviewed
and considered all information it deemed relevant in making an
informed
decision to purchase the Preferred Shares; (ii) the Investor is
acquiring
the Preferred Shares in the ordinary course of its business and
for its
own account for investment only and with no present intention of
distributing any of such Preferred Shares or any arrangement or
understanding with any other persons regarding the distribution
of such
Preferred Shares; (iii) the Investor will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit
any
offers to buy, purchase or otherwise acquire or take a pledge of)
any of
the Preferred Shares except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder, except that the Investor may pledge the
Preferred
Shares in connection with a bona fide margin account or other loan
or
financing; (iv) the Investor and the Investor’s representatives, if any,
have been solely responsible for the Investor’s own “due diligence”
investigation of the Company and its management and business, for
its own
analysis of the merits and risks of this investment, and for the
Investor’s own analysis of the fairness and desirability of the terms of
the investment; and (v) the Investor has, in connection with its
decision
to purchase the Preferred Shares, relied only upon the SEC Documents
and
the representations and warranties of the Company contained herein.
The
Investor understands that its acquisition of the Preferred Shares
has not
been registered under the Securities Act or registered or qualified
under
any state securities law in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other things, the bona
fide nature
of the Investor’s investment intent as expressed herein. The Investor has
completed or caused to be completed and delivered to the Company
the
Investor Questionnaire attached to this Annex I as Exhibit A, which
completed questionnaire is true, correct and complete in all material
respects.
|
| 5.2 |
The
Investor hereby covenants with the Company not to make any sale
of the
Shares or the Conversion Shares without complying with the provisions
of
this Agreement, and the Investor acknowledges that the certificates
evidencing the Preferred Shares and the Conversion Shares will
be
imprinted with a legend that prohibits their transfer except in
accordance
therewith.
|
| 5.3 |
The
Investor further represents and warrants to, and covenants with,
the
Company that (i) the Investor has full right, power, authority
and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize
the
execution, delivery and performance of this Agreement, and (ii)
this
Agreement constitutes a valid and
binding
|
-9-
obligation
of the Investor enforceable against the Investor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law).
| 5.4 |
The
Investor understands that nothing in the SEC Documents, this Agreement
or
any other materials presented to the Investor in connection with
the
purchase and sale of the Preferred Shares constitutes legal, tax
or
investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary
or
appropriate in connection with its purchase of the Preferred
Shares.
|
| 6. |
Survival
of Representations, Warranties and Agreements. Notwithstanding
any
investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made herein by the Company
and
the Investor shall survive the execution of this Agreement, the
delivery
to the Investor of the Preferred Shares being purchased and the
payment
therefor.
|
| 7. |
Registration
of the Warrant Shares and the Conversion Shares; Compliance with
the
Securities Act.
|
| 7.1 |
Registration.
The Company shall use commercially reasonable efforts to file a
Registration Statement with the SEC registering the resale of the
maximum
number of shares of Common Stock to be issued upon conversion of
the
Preferred Stock and exercise of the Warrants within 90 days of
closing.
The Company shall use commercially reasonable efforts to have the
Registration Statement declared effective within 120 days after
the
initial filing with the SEC. The terms of such registration rights
shall be set forth in a Registration Rights Agreement substantially
in the
form of Exhibit C attached herein (the “Registration Rights Agreement”).
In the event that the Company is unable to have the Registration
Statement
declared effective as set forth herein due to limitations imposed
by the
Securities and Exchange Commission on the registration of shares
for
resale on behalf of selling security holders, such inability shall
not be
considered a breach of the Company’s obligations under the
Agreements.
|
| 7.2 |
Rule
144. The Company covenants that it will file the reports required
to be
filed by it under the Securities Act and the Exchange Act and the
rules
and regulations adopted by the SEC thereunder (or, if the Company
is not
required to file such reports, it will, upon the request of the
Investor
holding Securities purchased hereunder made after the first anniversary
of
the Closing Date, make publicly available such information as necessary
to
permit sales of the Conversion Shares pursuant to Rule 144 under
the
Securities Act), and it will take such further action as the Investor
may
reasonably request, all to the extent required from time to time
to enable
the Investor to sell the Conversion Shares purchased hereunder
without
registration under the Securities Act within the limitation of
the
exemptions provided by (a) Rule 144 under the Securities Act, as
such rule
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC.
|
| 8. |
Covenants
(post Closing).
|
| 8.1 |
Short
Selling. For a period of three years from the date hereof, Investor
shall
not enter into or affect any “short sales” (as such term is defined in
Rule 3b-3 of the Securities Exchange Act of 1934) of the Company’s
securities or hedging transactions which establishes a net short
position.
|
| 9. |
Notices.
All notices, requests, consents and other communications hereunder
shall
be in writing, shall be mailed (A) if within the United States
by
first-class registered mail, Express Mail or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or
(B) if
delivered from outside the United States, by International Federal
Express
or facsimile, and shall be deemed given (i) if delivered by first-class
registered mail, three business days after so mailed, (ii) if delivered
by
|
-10-
Express
Mail or a nationally recognized overnight carrier, one business day after
so
mailed, (iii) if delivered by International Federal Express, two business
days
after so mailed, (iv) if delivered by facsimile, upon electronic confirmation
of
receipt and shall be delivered as addressed as follows:
| (a) |
if
to the Company, to:
|
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
XXX
Tel:
+ 0
000 000 00 00
Cell:
+
00 00 000 00 00
Fax:
+ 00
0 000 00 00
with
a
copy to:
Xx.
Xxxx
X. Xxxxxx
Xxxxxxxxx
Ball Xxxxxx Xxxxxx & Xxxxxxxxxx LLP
000
Xxx
Xxxxxxx Xxxx, 0xx xxxxx
Xxxxxxx,
XX, 00000
XXX
Tel:
+1
516.622.9200 ext 410
Fax:
+ 0
000 000 0000
| (b) |
if
to the Investor, at its address on the signature page hereto, or
at such
other address or addresses as may have been furnished to the Company
in
writing
|
| 10. |
Changes.
This Agreement may not be modified or amended except pursuant to
an
instrument in writing signed by the Company and the
Investor.
|
| 11. |
Headings.
The headings of the various sections of this Agreement have been
inserted
for convenience of reference only and shall not be deemed to be
part of
this Agreement.
|
| 12. |
Severability.
In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality
and
enforceability of the remaining provisions contained herein shall
not in
any way be affected or impaired
thereby.
|
| 13. |
Governing
Law. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving
effect to
the principles of conflicts of law.
|
| 14. |
Entire
Agreement. This Agreement constitutes the entire agreement between
the
parties hereto pertaining to the subject matter hereof, and any
and all
other written or oral agreements relating to such subject matter
are
expressly cancelled.
|
| 15. |
Finders’
Fees. Neither the Company nor the Investor nor any affiliate thereof
has
incurred any obligation which will result in the obligation of
the other
party to pay any finder’s fee or commission in connection with this
transaction, except for fees payable by the Company to placement
agent in
connection with the sale of Preferred Shares
hereunder.
|
-11-
| 16. |
Counterparts.
This Agreement may be executed in two or more counterparts, each
of which
shall constitute an original, but all of which, when taken together,
shall
constitute but one instrument, and shall become effective when
one or more
counterparts have been signed by each party hereto and delivered
(including by facsimile) to the other
parties.
|
| 17. |
Confidential
Information; 8-K Filing. Investor represents to the Company that,
at all
times during the Company’s offering of the Preferred Shares, Investor has
maintained in confidence all non-public information regarding the
Company
received by Investor from the Company or its agents, has not traded
in the
Company’s securities on the basis of any non-public information and
covenants that it will continue to maintain in confidence such
information
until such information becomes generally publicly available, other
than
through a violation of this provision by Investor or its agents.
Within
four (4) business days after the Closing Date, the Company shall
file a
Form 8-K concerning the Agreements and the transactions contemplated
thereby, which Form 8-K shall attach a Form of the Securities Purchase
Agreement and the Registration Rights Agreement as exhibits to
such Form
8-K (the “8-K Filing”). From and after the 8-K Filing, the Company hereby
acknowledges that no Investor shall be in possession of any material
nonpublic information received from the Company or any of its respective
officers, directors, employees or agents, that is not disclosed
in the 8-K
Filing.
|
| 18. |
Successors
and Assigns. This Agreement shall inure to the benefit of and be
binding
upon the successors and permitted assigns of the Company and the
Investor,
including without limitation and without the need for an express
assignment, affiliates of the Investor. With respect to transfers
that are
not made pursuant to the Registration Rights Agreement, the rights
and
obligations of an Investor under this Agreement shall be automatically
assigned by the Investor to any transferee of all or any portion
of the
Investor’s Shares who is a
Permitted
|
Transferee
(as defined below); provided, however, that within two business days prior
to
the transfer, (i) the Company is provided notice of the transfer including
the
name and address of the transferee and the number of Shares transferred;
and
(ii) that such transferee agrees in writing to be bound by the terms of this
Agreement. (For purposes of this Agreement, a “Permitted Transferee” shall mean
any person who (a) is an “accredited investor,” as that term is defined in Rule
501(a) of Regulation D under the Securities Act and (b) is a transferee of
at
least 25% of the Investor’s Shares received in a transaction permitted under the
securities laws of the United States). Upon any transfer permitted by the
second
sentence of this Section 18, the Company shall be obligated to such transferee
to perform all of its covenants under this Agreement as if such transferee
were
an Investor.
| 19. |
Access
to Information. From and after the date hereof through the Closing,
on
reasonable notice to the Company, the Company shall permit access
to, and
shall make available to the Investors’ representatives and their counsel
for inspection, such information and documents as the Investors
reasonably
request, and shall make available at reasonable times and to a
reasonable
extent officers and employees of the Company (who are at the Vice
President level and above) to discuss the business and affairs
of the
Company.
|
| 20. |
Further
Assurances. The Company shall provide such further documentation
and take
such further steps as may be reasonably requested by Investors
in
connection with the issuance and sale of the Preferred Shares and
the
Company’s obligations pursuant to the Transaction
Documents.
|
-12-
Schedule
I
Investors
[Names]
-13-
Schedule
4.5
Capitalization
as of September 30, 2007
Shares
of
Common Stock outstanding: 96,409,836
Shares
of
Preferred Stock outstanding: None.
Warrants
outstanding for the purchase of 22,678,034 shares of Common Stock.
Debt
convertible into 1,000,000 shares of Common Stock.
Options
outstanding for the purchase of 3,000,000 shares of Common Stock.
-14-
EXHIBIT
A
PLASTINUM
POLYMER TECHNOLOGIES CORP. INVESTOR QUESTIONNAIRE
(ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)
This
Investor Questionnaire (“Questionnaire”) must be completed by each potential
investor in connection with the offer and sale of shares of the Company’s Series
B-1 Convertible Preferred Stock (the “Preferred Shares”) and warrants to
purchase shares of the Company’s Common Stock (collectively, the “Securities”).
The Securities are being offered and sold by Plastinum Polymer Technologies
Corp. (the “Company”) without registration under the Securities Act of 1933, as
amended (the “Act”), and the securities laws of certain states, in reliance on
the exemptions contained in Section 4(2) of the Act and on Regulation D
promulgated thereunder and in reliance on similar exemptions under applicable
state laws. The Company must determine that a potential investor meets certain
suitability requirements before offering or selling the Securities to such
investor. The purpose of this Questionnaire is to assure the Company that
each
investor will meet the applicable suitability requirements. The information
supplied by the potential investor will be used in determining whether such
investor meets such criteria, and reliance on the private offering exemption
from registration is based in part on the information supplied in this
Questionnaire.
This
Questionnaire does not constitute an offer to sell or a solicitation of an
offer
to buy any security. Except as expressly permitted herein, the potential
investor’s answers are to be kept strictly confidential.
However,
by signing this Questionnaire the potential investor will be authorizing
the
Company to provide a completed copy of this Questionnaire to such parties
as the
Company deems appropriate in order to ensure that the offer and sale of the
Securities will not result in a violation of the Act or the securities laws
of
any state, and that the potential investor otherwise satisfies the suitability
standards applicable to purchasers of the
Securities. All potential investors must answer all applicable questions
and
complete, date and sign this Questionnaire. Please print or type the responses
and attach additional sheets of paper if necessary to complete
the answers to any item.
A. BACKGROUND
INFORMATION
Name:
____________________________________________________________________________
Business
Address:
___________________________________________________________________
(Number and Street)
_________________________
_________________________ _________________________
(City)
(State)
(Zip
Code)
Telephone
Number: _____________________________________
Residence
Address:
___________________________________________________________________
(Number
and Street)
_________________________
_________________________ _________________________
(City)
(State)
(Zip
Code)
Telephone
Number: _____________________________________
-15-
If
an individual:
Age: _____
Citizenship:
_______________ Where registered to vote: : _______________
If
a
corporation, partnership, limited liability company, trust or other
entity:
Type
of
entity:____________________________________________________________
State
of
formation: __________________
Date of formation: __________________
Social
Security or Taxpayer Identification No. ____________________________________
Send
all
correspondence to (check one): ___
Residence Address ___
Business Address
B. STATUS
AS ACCREDITED INVESTOR
The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the Act, as at the time of the sale of the Preferred Shares the
undersigned falls within one or more of the following categories (Please
initial one or more, as applicable):1
_____
(1) a
bank as
defined in Section 3(a)(2) of the Act, or a savings and loan association
or
other institution as defined in Section 3(a)(5)(A) of the Act whether acting
in
its individual or fiduciary capacity; a broker or dealer registered pursuant
to
Section 15 of the Securities Exchange Act of 1934; an insurance company as
defined in Section 2(13) of the Act; an investment company registered under
the
Investment Corporation Act of 1940 or a business development company as defined
in Section 2(a)(48) of that Act; a Small Business Investment Corporation
licensed by the U.S. Small Business Administration under Section 301(c) or
(d)
of the Small Business Investment Act of 1958; a plan established and maintained
by a state, its political subdivisions, or any agency or instrumentality
of a
state or its political subdivisions for the benefit of its employees, if
such
plan has total assets in excess of $5,000,000; an employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in Section 3(21)
of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan
has
total assets in excess of $5,000,000 or, if a self-directed plan, with the
investment decisions made solely by persons that are accredited
investors;
_____
(2) a
private
business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
_____
(3) an
organization described in Section 501(c)(3) of the Internal Revenue Code
of
1986, as amended, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;
_____
(4) a
natural
person whose individual net worth, or joint net worth with that person’s spouse,
at the time of such person’s purchase of the Preferred Shares
exceeds$1,000,000;
1 As
used in this Questionnaire, the tem “net worth” means the excess of total assets
over total liabilities. In computing net worth for the purpose of subsection
(4), the principal residence of the investor must be valued at cost, including
cost of improvements, or at recently appraised value by an institutional
lender
making a secured loan, net of encumbrances. In determining income, the investor
should add to the investor’s adjusted gross income any amounts attributable to
tax exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depiction, contributions to an XXX or
XXXXX
retirement plan, alimony payments, and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross
income.
-16-
_____
(5) a
natural
person who had an individual income in excess of $200,000, or joint income
with
that person’s spouse in excess of $300,000, in 2005 and 2006 and has a
reasonable expectation of reaching the same income level in 2007;
_____
(6) a
trust,
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the Securities offered, whose purchase is directed by a
sophisticated person as described in Rule
506(b)(2)(ii)
of Regulation D; and
_____
(7) an
entity
in which all of the equity owners are accredited investors (as defined
above).
C. REPRESENTATIONS
The
undersigned hereby represents and warrants to the Company as
follows:
| 1. |
Any
purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with
a view to
any resale, fractionalization, division, or distribution
thereof.
|
| 2. |
The
information contained herein is complete and accurate and may be
relied
upon by the Company, and the undersigned will notify the Company
immediately of any material change in any of such information occurring
prior to the closing, if any, with respect to the purchase of Preferred
Shares by the undersigned or any
co-purchaser.
|
| 3. |
There
are no suits, pending litigation, or claims against the undersigned
that
could materially affect the net worth of the undersigned as reported
in
this Questionnaire.
|
| 4. |
The
undersigned is aware that, the Preferred Shares, the Warrant Shares
and
the Conversion Shares will not be subject to ready liquidation.
The
overall commitment of the undersigned to investments which are
not readily
marketable is not excessive in view of the undersigned’s net worth and
financial circumstances, and any purchase of the Preferred Shares
will not
cause such commitment to become excessive. The undersigned is able
to bear
the economic risk of an investment in the
Securities.
|
| 5. |
In
addition to reviewing the Company’s filings with the Securities and
Exchange Commission, the undersigned has carefully considered the
potential risks relating to the Corporation and a purchase of the
Preferred Shares, and fully understands that the Securities are
speculative investments which involve a high degree of risk of
loss of the
undersigned’s entire investment.
|
-17-
IN
WITNESS WHEREOF, the undersigned has executed this Questionnaire as of this
________ day of __________, 2007, and declares under oath that it is truthful
and correct.
Print
Name: _______________________________________________
By: _______________________________________________
(Signature)
Title: _______________________________________________
(required
for any purchaser that is a corporation, partnership, trust or other
entity)
-18-
