EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between AMBIENT CORPORATION,
a Delaware corporation (the "Company"), and ______________ (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration for offers and sales to accredited investors afforded,
INTER ALIA, by Rule 506 under Regulation D ("Regulation D") as promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the
1933 Act; and
WHEREAS, the Buyer wishes to purchase from the Company and the
Company desires to sell to the Buyers, upon the terms and subject to the
conditions of this Agreement, shares of the Common Stock, $.001 par value per
share, of the Company (the "Common Stock"), together with the Warrants (as
defined below) exercisable for the purchase of shares of Common Stock, and
subject to acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
AGREEMENT TO PURCHASE; PURCHASE PRICE.
PURCHASE; CERTAIN DEFINITIONS.
(i) The Buyer hereby agrees to purchase from the Company, and
the Company hereby agrees to sell to the Buyer, ___________ shares of Common
Stock (the "Purchased Shares") and the Warrants (as provided in Section 4(f)
below) for a purchase price of ______________ (the "Purchase Price"), subject in
all events to the terms of this Agreement and the other Transaction Agreements
(as that term is defined below).
(ii) The Purchase Price for the Purchased Shares shall be
payable in United States Dollars on the Closing Date (as defined below).
B. CERTAIN DEFINITIONS. As used herein, each of the following
terms has the meaning set forth below, unless the context otherwise requires:
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(i) "Affiliate" means, with respect to a specific Person
referred to in the relevant provision, another Person who or which controls or
is controlled by or is under common control with such specified Person.
(ii) "Buyer Control Person" means each director, executive
officer, promoter, and such other Persons as may be deemed in control of the
Buyer pursuant to Rule 405 under the 1933 Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "1934 Act").
(iii) "Certificates" means (x) the stock certificates
representing the Purchased Shares and (y) the Warrants, each duly executed by
the Company and issued in the name of the Buyer on the Closing Date.
(iv) "Closing Date" means the date of the closing of the
purchase and sale of the Purchased Shares and Warrants, as provided herein.
(v) "Company Control Person" means each director, executive
officer, promoter, and such other Persons as may be deemed in control of the
Company pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.
(vii) "Finder" means Advisor Associates, Inc.
(vii) "Holder" means the Person holding the relevant
Securities at the relevant time.
(viii) "Last Audited Date" means December 31, 2002.
(ix) "Material Adverse Effect" means an event or combination
of events, which individually or in the aggregate, would reasonably be expected
to (w) adversely affect the legality, validity or enforceability of the
Securities or any of the Transaction Agreements, (x) have or result in a
material adverse effect on the results of operations, assets or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole,
(y) adversely impair the Company's authority or ability to perform fully on a
timely basis its obligations under any of the Transaction Agreements or the
transactions contemplated thereby, or (z) materially and adversely affect the
value of the rights granted to the Buyer in the Transaction Agreements.
(x) "Person" means any living person or any entity, such as,
but not necessarily limited to, a corporation, partnership or trust.
(xi) "Principal Trading Market" means the Over the Counter
Bulletin Board Market.
(xii) "Securities" means (x) the Purchased Shares, (y) the
Warrants, and (z) the Warrant Shares.
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(xiii) "Shares" means the shares of Common Stock representing any
or all of the Purchased Shares and the Warrant Shares.
(xiv) "State of Incorporation" means Delaware.
(xv) "Trading Day" shall mean any day during which the
Principal Trading Market shall be open for business.
(xvi) "Transaction Agreements" means this Agreement and the
Warrants and includes all ancillary documents referred to in or contemplated by
any of those agreements.
(xvii) "Warrant Shares" means the shares of Common Stock
issuable upon exercise of the Warrants.
FORM OF PAYMENT; DELIVERY OF CERTIFICATES.
(i) The Buyer shall pay the Purchase Price for the Purchased
Shares by delivering immediately available good funds in United States Dollars
to the Company on the Closing Date.
(ii) No later than the Closing Date, the Company shall deliver
the Certificates, each duly executed on behalf of the Company and issued in the
name of the Buyer, to the Buyer or its designee.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
Without limiting Buyer's right to sell the Securities pursuant to
an effective registration statement or otherwise in compliance with the 1933
Act, the Buyer is purchasing the Securities for its own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.
The Buyer is (i) an "accredited investor" as that term is defined
in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional
advisors (who are not affiliated with or compensated in any way by the Company
or any of its Affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and to evaluate the merits and risks of an investment in the
Securities, and (iv) able to afford the entire loss of its investment in the
Securities.
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All subsequent offers and sales of the Securities by the Buyer
shall be made pursuant to registration of the relevant Securities under the 1933
Act or pursuant to an exemption from registration.
The Buyer understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Buyer to acquire the Securities.
The Buyer and its advisors, if any, have been furnished with or
have been given access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Purchased Shares and the Warrants which have been requested by the Buyer,
including those set forth on in any annex attached hereto. The Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management and have received complete and satisfactory answers
to any such inquiries. Without limiting the generality of the foregoing, the
Buyer has also had the opportunity to obtain and to review the Company's filings
on XXXXX listed on ANNEX III hereto (the documents listed on such Annex III, to
the extent available on XXXXX or otherwise provided to the Buyer as indicated on
said Annex III, collectively, the "Company's SEC Documents").
The Buyer understands that its investment in the Securities
involves a high degree of risk and has reviewed the material under the caption
"Risk Factors" contained in the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2002 listed on Annex III..
G. The Buyer hereby represents that, in connection with its
purchase of the Securities, it has not relied on any statement or representation
by the Company or the Finder or any of their respective officers, directors and
employees or any of their respective attorneys or agents or the Finder, except
as specifically set forth herein. The Finder is a third party beneficiary of
this provision.
The Buyer understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
This Agreement and the other Transaction Agreements to which the
Buyer is a party, and the transactions contemplated thereby, have been duly and
validly authorized, executed and delivered on behalf of the Buyer and are valid
and binding agreements of the Buyer enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.
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3. COMPANY REPRESENTATIONS, ETC. The Company represents and
warrants to the Buyer as of the date hereof and as of the Closing Date that,
except as otherwise provided in the ANNEX IV hereto or in the Company's SEC
Documents:
A. RIGHTS OF OTHERS AFFECTING THE TRANSACTIONS. There are no
preemptive rights of any shareholder of the Company, as such, to acquire the
Purchased Shares, the Warrants or the Shares. No party has a currently
exercisable right of first refusal which would be applicable to any or all of
the transactions contemplated by the Transaction Agreements.
B. STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Incorporation and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have or result in a Material Adverse Effect. The Company
has registered its stock and is obligated to file reports pursuant to Section 12
or Section 15(d) of the Securities and Exchange Act of 1934, as amended (the
"1934 Act"). The Common Stock is listed and quoted on the Principal Trading
Market. The Company has received no notice, either oral or written, with respect
to the continued eligibility of the Common Stock for such listing and quotation
on the Principal Trading Market, and the Company has maintained all requirements
on its part for the continuation of such listing and quotation.
C. AUTHORIZED SHARES. The authorized capital stock of the
Company consists of (i) 200,000,000 shares of Common Stock, $.001 par value per
share, of which approximately 70,765,884 are outstanding as of the date hereof,
and (ii) 5,000,000 shares of Convertible Preferred Stock, $.001 par value per
share, of which none are outstanding as of the date hereof. All issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable. The Company has sufficient authorized and
unissued shares of Common Stock as may be necessary to effect the issuance of
the Shares. The Shares have been duly authorized and, when issued on the Closing
Date or upon exercise of the Warrants in accordance with its terms, will be duly
and validly issued, fully paid and non-assessable and will not subject the
Holder thereof to personal liability by reason of being such Holder.
D. TRANSACTION AGREEMENTS AND STOCK. This Agreement and each
of the other Transaction Agreements, and the transactions contemplated thereby,
have been duly and validly authorized by the Company, this Agreement has been
duly executed and delivered by the Company and this Agreement is, and the
Warrants and each of the other Transaction Agreements, when executed and
delivered by the Company, will be, valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
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E. NON-CONTRAVENTION. The execution and delivery of this
Agreement and each of the other Transaction Agreements by the Company, the
issuance of the Securities, and the consummation by the Company of the other
transactions contemplated by this Agreement, the Warrants and the other
Transaction Agreements do not and will not conflict with or result in a breach
by the Company of any of the terms or provisions of, or constitute a default
under (i) the certificate of incorporation (or other charter document) or
by-laws of the Company, each as currently in effect, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
including any listing agreement for the Common Stock except as herein set forth,
or (iii) to its knowledge, any existing applicable law, rule, or regulation or
any applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any of its properties or assets, except such
conflict, breach or default which would not have or result in a Material Adverse
Effect.
F. APPROVALS. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the shareholders of the Company is required to be
obtained by the Company for the issuance and sale of the Securities to the Buyer
as contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
G. FILINGS. None of the Company's SEC Documents contained, at
the time they were filed, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were
made, not misleading. Since May 1, 2002, the Company has timely filed all
requisite forms, reports and exhibits thereto required to be filed by the
Company with the SEC.
H. ABSENCE OF CERTAIN CHANGES. Since the Last Audited Date,
there has been no material adverse change and no Material Adverse Effect, except
as disclosed in the Company's SEC Documents. Since the Last Audited Date, except
as provided in the Company's SEC Documents, the Company has not (i) incurred or
become subject to any material liabilities (absolute or contingent) except
liabilities incurred in the ordinary course of business consistent with past
practices; (ii) discharged or satisfied any material lien or encumbrance or paid
any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to shareholders with respect to its capital stock, or purchased or
redeemed, or made any agreements to purchase or redeem, any shares of its
capital stock; (iv) sold, assigned or transferred any other tangible assets, or
canceled any debts owed to the Company by any third party or claims of the
Company against any third party, except in the ordinary course of business
consistent with past practices; (v) suffered any substantial losses or waived
any rights of material value, whether or not in the ordinary course of business,
or suffered the loss of any material amount of existing business; (vi) made any
changes in compensation to senior employees, except in the ordinary course of
business consistent with past
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practices; or (vii) experienced any material problems with labor or management
in connection with the terms and conditions of their employment.
I. FULL DISCLOSURE. To the best of the Company's knowledge,
there is no fact known to the Company (other than general economic conditions
known to the public generally or as disclosed in the Company's SEC Documents)
that has not been disclosed in writing to the Buyer that would reasonably be
expected to have or result in a Material Adverse Effect.
J. ABSENCE OF LITIGATION. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or
body pending or, to the knowledge of the Company, threatened against or
affecting the Company before or by any governmental authority or nongovernmental
department, commission, board, bureau, agency or instrumentality or any other
person, wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations under,
any of the Transaction Agreements. The Company is not aware of any valid basis
for any such claim that (either individually or in the aggregate with all other
such events and circumstances) could reasonably be expected to have a Material
Adverse Effect. There are no outstanding or unsatisfied judgments, orders,
decrees, writs, injunctions or stipulations to which the Company is a party or
by which it or any of its properties is bound, that involve the transaction
contemplated herein or that, alone or in the aggregate, could reasonably be
expect to have a Material Adverse Effect.
K. ABSENCE OF EVENTS OF DEFAULT. Except as set forth in
Section 3(e) hereof, no Event of Default (or its equivalent term), as defined in
the respective agreement to which the Company is a party, and no event which,
with the giving of notice or the passage of time or both, would become an Event
of Default (or its equivalent term) (as so defined in such agreement), has
occurred and is continuing, which would have a Material Adverse Effect.
L. ABSENCE OF CERTAIN COMPANY CONTROL PERSON ACTIONS OR
EVENTS. Based on information provided to the Company by the Company Control
Persons, to the best of the Company's knowledge, none of the following has
occurred during the past five (5) years with respect to a Company Control
Person:
(1) A petition under the federal bankruptcy laws or any state insolvency
law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such
Company Control Person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer
at or within two years before the time of such filing;
(2) Such Company Control Person was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
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(3) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
(i) acting, as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director or
employee of any investment company, bank, savings and loan
association or insurance company, as a futures commission
merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, any other Person regulated by the
Commodity Futures Trading Commission ("CFTC") or engaging in or
continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
(4) Such Company Control Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting for more
than 60 days the right of such Company Control Person to engage in any
activity described in paragraph (3) of this item, or to be associated
with Persons engaged in any such activity; or
(5) Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended,
or vacated.
M. NO UNDISCLOSED LIABILITIES OR EVENTS. To the best of the
Company's knowledge, the Company has no liabilities or obligations other than
those disclosed in the Transaction Agreements or the Company's SEC Documents or
those incurred in the ordinary course of the Company's business since the Last
Audited Date, or which individually or in the aggregate, do not or would not
have a Material Adverse Effect. No event or circumstances has occurred or exists
with respect to the Company or its properties, business, operations, condition
(financial or otherwise), or results of operations, which, under applicable law,
rule or regulation, requires public disclosure or announcement prior to the date
hereof by the Company but which has not been so publicly announced or disclosed.
There are no proposals currently under consideration or currently anticipated to
be under consideration by the Board of Directors or the executive officers of
the Company which proposal would (x) change the certificate of incorporation or
other charter document or by-laws of the Company, each as currently in effect,
with or without shareholder approval, which change would reduce or otherwise
adversely affect
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the rights and powers of the shareholders of the Common Stock or (y) materially
or substantially change the business, assets or capital of the Company,
including its interests in subsidiaries.
N. NO DEFAULT. Neither the Company nor any of its subsidiaries
is in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material indenture, mortgage,
deed of trust or other material instrument or agreement to which it is a party
or by which it or its property is bound.
O. NO INTEGRATED OFFERING. Neither the Company nor any of its
Affiliates nor any Person acting on its or their behalf has, directly or
indirectly, at any time since May 1, 2002, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under
Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.
P. DILUTION. The issuance of the Purchased Shares and, upon
exercise of the Warrants, of the Warrant Shares may have a dilutive effect on
the ownership interests of the other shareholders (and Persons having the right
to become shareholders) of the Company. The Company's executive officers and
directors have studied and fully understand the nature of the Securities being
sold hereby and recognize that they have such a potential dilutive effect. The
board of directors of the Company has concluded, in its good faith business
judgment, that such issuance is in the best interests of the Company. The
Company specifically acknowledges that its obligation to issue the Purchased
Shares on the Closing Date and upon exercise of the Warrants is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership interests of other shareholders of the Company, and the Company will
honor such obligations, including honoring every Notice of Exercise (as
contemplated by the Warrants), unless the Company is subject to an injunction
(which injunction was not sought by the Company) prohibiting the Company from
doing so.
Q. FEES TO BROKERS, FINDERS AND OTHERS. Except for payment of
fees to the Finder, payment of which is the sole responsibility of the Company,
the Company has taken no action which would give rise to any claim by any Person
for brokerage commission, finder's fees or similar payments by Buyer relating to
this Agreement or the transactions contemplated hereby. Buyer shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each of Buyer, its 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 and when incurred.
R. CONFIRMATION. The Company confirms that all statements of
the Company contained herein shall survive acceptance of this Agreement by the
Buyer. The Company agrees that, if any events occur or circumstances exist prior
to the Closing Date or the release of the Purchase Price to the Company which
would make any of the Company's
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representations, warranties, agreements or other information set forth herein
materially untrue or materially inaccurate as of such date, the Company shall
immediately notify the Buyer (directly or through its counsel, if any) in
writing prior to such date of such fact, specifying which representation,
warranty or covenant is affected and the reasons therefor.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
A. TRANSFER RESTRICTIONS. The Buyer acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as provided herein or in the other Transaction
Agreements or otherwise included in an effective registration statement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 (as defined below) may be made only in accordance with the
terms of said Rule and further, if said Rule is not applicable, any resale of
such Securities under circumstances in which the seller, or the Person through
whom the sale is made, may be deemed to be an underwriter, as that term is used
in the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other Person is under any obligation to register the Securities
(other than as contemplated herein or in any of the other Transaction
Agreements) under the 1933 Act or to comply with the terms and conditions of any
exemption thereunder.
B. RESTRICTIVE LEGEND. The Buyer acknowledges and agrees that,
until such time as the relevant Shares have been registered under the 1933 Act,
and sold in accordance with an effective registration statement, the
certificates and other instruments representing any of the Securities shall bear
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
FILINGS. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Buyer under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Buyer promptly after such filing.
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REPORTING STATUS. So long as the Buyer beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock (including, without limitation, the
Shares) on the Principal Trading Market or a listing on the NASDAQ/Small Cap or
National Markets and, to the extent applicable to it, will comply in all
material respects with the Company's reporting, filing and other obligations
under the by-laws or rules of the Principal Trading Market and/or the National
Association of Securities Dealers, Inc., as the case may be, applicable to it at
least through the date which is sixty (60) days after the later of the date on
which all of the Warrants have been exercised or have expired.
USE OF PROCEEDS. The Company will use the proceeds received hereunder
(excluding amounts paid by the Company for finder's fees in connection with the
sale of the Securities) for general corporate purposes.
F. WARRANTS. The Company agrees to issue to the Buyer on the
Closing Date transferable warrants (the "Warrants") for the purchase of
1,250,000 shares of Common Stock. The exercise price of the Warrants will be
equal to $0.25 per share. The Warrants will expire on the last day of the
calendar month in which the second annual anniversary of the Closing Date
occurs, subject to earlier expiration as provided in the Warrants. Each of the
Warrants shall be in the form annexed hereto as ANNEX I, and shall have
piggy-back registration rights.
G. PIGGY-BACK RIGHTS; RULE 144.
(i) The Holder shall have piggy-back registration rights with
respect to the Shares (which term, for all purposes of this Section 4(g),
includes shares issuable on the subsequent exercise of the Warrants), subject to
the conditions set forth below. If the Company participates (whether voluntarily
or by reason of an obligation to a third party) in the registration of any
shares of the Company's stock (other than a registration on Form S-8 or on Form
S-4), the Company shall give written notice thereof to the Holder and the Holder
shall have the right, exercisable within ten (10) business days after receipt of
such notice, to demand inclusion of all or a portion of the Holder's Shares in
such registration statement. If the Holder exercises such election, the Shares
so designated shall be included in the registration statement (without any
holdbacks) at no cost or expense to the Buyer (other than any commissions, if
any, relating to the sale of Holder's shares). Each Holder's rights under this
Section 4(g)(i) shall expire at such time as such Holder can sell all of such
Holder's remaining Shares under Rule 144 without volume or other restrictions or
limit.
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(ii) With a view to making available to the Holder the benefits
of Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit Investor to sell securities of
the Company to the public without registration (collectively, "Rule 144"), the
Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Holder so long as such party owns Shares,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) if not available on the SEC's XXXXX system, a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Holder to sell such securities pursuant to
Rule 144 without registration; and
(d) at the request of any Holder then holding Shares, give its
transfer agent (the "Transfer Agent") instructions (supported by an opinion of
Company counsel, if required or requested by the Transfer Agent) to the effect
that, upon the Transfer Agent's receipt from such Holder of
(i) a certificate (a "Rule 144 Certificate") certifying (A) that the
Holder's holding period (as determined in accordance with the provisions
of Rule 144) for the Shares which the Holder proposes to sell (the
"Securities Being Sold") is not less than (1) year and (B) as to such
other matters as may be appropriate in accordance with Rule 144 under the
Securities Act, and
(ii) an opinion of counsel acceptable to the Company (for which purposes
it is agreed that Xxxxxxx & Prager LLP shall be deemed acceptable if not
given by Company counsel) that, based on the Rule 144 Certificate,
Securities Being Sold may be sold pursuant to the provisions of Rule 144,
even in the absence of an effective registration statement,
the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction
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results from facts other than the identity of the relevant Holder, as the seller
or transferor thereof, or the status, including any relevant legends or
restrictions, of the shares of the Securities Being Sold while held by the
Buyer). If the Transfer Agent reasonably requires any additional documentation
at the time of the transfer, the Company shall deliver or cause to be delivered
all such reasonable additional documentation as may be necessary to effectuate
the issuance of an unlegended certificate.
(iii) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the registration statement, the
Company notifies the Holder in writing of the existence of a Potential Material
Event (as defined below), the Holder shall not offer or sell any Securities
covered by such registration statement ("Registrable Securities"), or engage in
any other transaction involving or relating to the Registrable Securities, from
the time of the giving of notice with respect to a Potential Material Event
until the Holder receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer constitutes
a Potential Material Event; PROVIDED, HOWEVER, that the Company may not so
suspend such right other than during a Permitted Suspension Period. The term
"Potential Material Event" means any of the following: (i) the possession by the
Company of material information not ripe for disclosure in a registration
statement, which shall be evidenced by determinations in good faith by the Board
of Directors of the Company that disclosure of such information in the
registration statement would be detrimental to the business and affairs of the
Company; or (ii) any material engagement or activity by the Company which would,
in the good faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information. The term "Permitted
Suspension Period" means one or more suspension periods during any consecutive
12-month period which suspension periods, in the aggregate, do not exceed fifty
(50) days, provided, however, that no one such suspension period shall either
(i) be for more than twenty (20) days or (ii) begin less than ten (10) business
days after the last day of the preceding suspension (whether or not such last
day was during or after a Permitted Suspension Period).
H. AVAILABLE SHARES. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, a number of
shares (the "Minimum Available Shares") at least equal to one hundred percent
(100%) of the number of shares issuable upon exercise of all outstanding
Warrants held by the Buyer and its transferees, if any (in each case, whether
such Warrants were originally issued to the Buyer or to any other party). For
the purposes of such calculations, the Company should assume that all Warrants
were then exercisable without regard to any restrictions which might limit any
Buyer's right to exercise any of the Warrants held by any Buyer.
I. PUBLICITY, FILINGS, RELEASES, ETC. Each of the parties
agrees that it will not disseminate any information relating to the Transaction
Agreements or the transactions contemplated thereby, including issuing any press
releases, holding any press conferences or other forums, or filing any reports
(collectively, "Publicity"), without giving the other party
13
reasonable advance notice and an opportunity to comment on the contents thereof.
Neither party will include in any such Publicity any statement or statements or
other material to which the other party reasonably objects. In furtherance of
the foregoing, the Company will provide to the Buyer drafts of the applicable
text of any filing intended to be made with the SEC which refers to the
Transaction Agreements or the transactions contemplated thereby as soon as
practicable (but at least three (3) business days before such filing will be
made) and will not include in such filing any statement or statements or other
material to which the other party reasonably objects. Notwithstanding the
foregoing, each of the parties hereby consents to the inclusion of the text of
the Transaction Agreements in filings made with the SEC (but any descriptive
text accompanying or part of such filing shall be subject to the other
provisions of this paragraph.)
5. TRANSFER AGENT INSTRUCTIONS.
The Company warrants that, with respect to the Securities, other
than the stop transfer instructions to give effect to Section 4(a) hereof, it
will give the Transfer Agent no instructions inconsistent with instructions to
issue the Purchased Shares and the Warrant Shares (upon exercise of the
Warrants), bearing the restrictive legend specified in Section 4(b) of this
Agreement prior to registration of the Shares under the 1933 Act or other sale
or transfer pursuant to an applicable exemption from registration, registered in
the name of the Buyer or its nominee and in such denominations to be specified
by the Buyer in connection with each such issuance. Except as so provided, the
Shares shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and applicable law.
Nothing in this Section shall affect in any way the Buyer's obligations to
comply with all applicable securities laws upon resale of the Securities. If the
Buyer provides the Company with an opinion of counsel reasonably satisfactory to
the Company that registration of a resale by the Buyer of any of the Securities
in accordance with clause (1)(B) of Section 4(a) of this Agreement is not
required under the 1933 Act, the Company shall (except as provided in clause (2)
of Section 4(a) of this Agreement) permit the transfer of the Securities and, in
the case of the Warrant Shares, promptly instruct the Company's transfer agent
to issue one or more certificates for Common Stock without legend in such name
and in such denominations as specified by the Buyer.
The Company will authorize its transfer agent to give information
relating to the Company directly to the Buyer or the Buyer's representatives
upon the request of the Buyer or any such representative, to the extent such
information relates solely to (i) the status of shares of Common Stock issued or
claimed to be issued to the Buyer in connection with an exercise of a Warrant,
or (ii) the number of outstanding shares of Common Stock of all shareholders as
of a current or other specified date.
6. CLOSING DATE.
A. The Closing Date shall occur on the date which is the first
Trading Day after each of the conditions contemplated by Sections 7 and 8 hereof
shall have either been satisfied or been waived by the party in whose favor such
conditions run.
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The closing of the purchase and issuance of Purchased Shares shall
occur on the Closing Date at the offices of Xxxxxxx & Xxxxxx LLP, 00 Xxxxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000 and shall take place no later than 3:00 P.M., New
York time, on such day or such other time and place as is mutually agreed upon
by the Company and the Buyer.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell the
Purchased Shares and issue the Warrants to the Buyer pursuant to this Agreement
on the Closing Date is conditioned upon:
The execution and delivery of this Agreement by the Buyer;
Delivery by the Buyer to the Company of good funds as payment in
full of an amount equal to the Purchase Price for the Securities in accordance
with this Agreement;
The accuracy on such Closing Date of the representations and
warranties of the Buyer contained in this Agreement, each as if made on such
date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date; and
There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to purchase
the Purchased Shares and the Warrants on the Closing Date is conditioned upon:
The execution and delivery of this Agreement and the other
Transaction Agreements by the Company;
Delivery by the Company to Xxxxxxx & Prager LLP of the
Certificates in accordance with this Agreement;
The accuracy in all material respects on such Closing Date of the
representations and warranties of the Company contained in this Agreement, each
as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on
or before such date;
15
On such Closing Date, the Buyer shall have received an opinion of
counsel for the Company, dated the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer, substantially to the effect set forth in
ANNEX II attached hereto;
There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained; and
From and after the date hereof to and including such Closing Date,
each of the following conditions will remain in effect: (i) the trading of the
Common Stock shall not have been suspended by the SEC or on the Principal
Trading Market; (ii) trading in securities generally on the Principal Trading
Market shall not have been suspended or limited; (iii), no minimum prices shall
been established for securities traded on the Principal Trading Market; and (iv)
there shall not have been any material adverse change in any financial market
that, in the reasonable judgment of the Buyer, makes it impracticable or
inadvisable to purchase the Purchased Shares.
9. JURY TRIAL WAIVER. The Company and the Buyer hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with the Transaction Agreements.
10. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the City of Wilmington
or the state courts of the State of Delaware sitting in the City of Wilmington
in connection with any dispute arising under this Agreement or any of the other
Transaction Agreements and hereby waives, to the maximum extent permitted by
law, any objection, including any objection based on FORUM NON CONVENIENS, to
the bringing of any such proceeding in such jurisdictions. To the extent
determined by such court, the Company shall reimburse the Buyer for any
reasonable legal fees and disbursements incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.
Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
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All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.
This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.
The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.
This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.
NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of
(a) the date delivered, if delivered by personal delivery as
against written receipt therefor or by confirmed facsimile
transmission,
(b) the seventh business day after deposit, postage prepaid, in
the United States Postal Service by registered or certified mail,
or
(c) the third business day after mailing by domestic or
international express courier, with delivery costs and fees
prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):
17
COMPANY: AMBIENT CORPORATION
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telephone No.: (000) 000-0000
Telecopier No.: ( ) -
with a copy to:
Aboudi & Xxxxxxxxxx
Attn: Xxxxx Xxxxxx, Esq.
Rechov Gavish 3, POB 2432
Kfar Xxxx Xxxxxxxxxx Xxxx 00000 Xxxxxx
Telephone No.: (000-000-0) 000-0000
Telecopier No.: (000-000-0) 000-0000
BUYER: At the address set forth on the signature page of this
Agreement.
with a copy to:
----------------
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's
and the Buyer's representations and warranties herein shall survive the
execution and delivery of this Agreement and the delivery of the Certificates
and the payment of the Purchase Price, and shall inure to the benefit of the
Buyer and the Company and their respective successors and assigns.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
Buyer (if an entity, by one of its officers thereunto duly authorized) as of the
date set forth below.
SIGNATURES FOR BUYER
IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Securities Purchase
Agreement to be duly executed on its behalf this __________ day of
___________________, 2003.
Address:
[BUYER]
Attn: By: _________________________________
Telecopier No. (Signature of Authorized Person)
-------------------------------------
___ _______________ Printed Name and Title
Jurisdiction of Incorporation
or Organization
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As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.
AMBIENT CORPORATION
By: _______________________________
Title: _______________________________
Date: ______________________, 2003
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