NOTE PURCHASE AGREEMENT
THIS
NOTE
PURCHASE AGREEMENT is made as of the 18 day of May, 2007, by and among LaserLock
Technologies, Inc., a Nevada corporation (the “Corporation”),
and
the investors listed on Schedule
A
hereto
(as
the
same may be amended, modified or supplemented from time to time), and who have
executed a counterpart signature page hereto (each individually, an
“Investor”
and
collectively the “Investors”).
THE
PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase
and Sale of Notes.
1.1 Purchase
and Sale.
Subject
to the terms and conditions of this Agreement, at the Closing (as hereinafter
defined), the Investors will purchase, severally and not jointly, and the
Corporation will sell and issue to the Investors, convertible promissory notes,
each in the form attached hereto as Exhibit
A
(collectively, the “Notes”
and
each, individually, a “Note”)
in the
aggregate principal amount of $400,000.
1.2 Closings.
The
purchase and sale of the Notes (the “Closings”)
shall
take place at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, at 10:00 a.m. local time, on the
dates
set forth in Schedule
A,
or at
such other location, dates and time as may agreed upon between the Investors
and
the Corporation (each a “Closing
Date”).
At
each
Closing, the Corporation shall issue and deliver to each Investor a Note in
the
principal amount set forth opposite each Investor’s name in Schedule
A
(the
“Purchase
Amount”).
1.3 Payments.
At each
Closing, against delivery of the Note being purchased by each Investor, such
Investor shall (i) deliver to the Corporation either a bank or certified check
payable to the order of the Corporation, or (ii) transfer such sum to the
account of the Corporation by wire transfer.
1.4 Deliveries.
At each
Closing, the Corporation will issue and deliver the Notes to the Investors
against payment of the full purchase price therefor by wire transfer or bank
or
certified check payable to the order of the Corporation.
1.5 Use
of
Proceeds.
The
Corporation will use the balance of the proceeds from the sale of the Notes
for
working capital and general corporate purposes and, at the first Closing, to
repay all of the outstanding unsecured indebtedness of the Company to PFK
Development Group, Ltd in the aggregate amount outstanding as of April 30,
2007
of $152,513.89.
2. Representations,
Warranties and Covenants of the Corporation.
Subject
to the exceptions disclosed in the forms, documents and other reports required
to be filed or furnished by the Corporation with the Securities and Exchange
Commission filed or furnished prior to the date of this Agreement (the
“SEC
Documents”),
the
Corporation hereby represents and warrants to each Investor purchasing Notes
at
any Closing that as of the date of such Closing:
2.1 Organization.
The
Corporation is duly organized, validly existing and in good standing under
the
laws of the State of Nevada, and has all requisite corporate or other power
and
authority to own, lease and operate its properties and other assets and to
carry
on its business as presently conducted and as presently proposed to be conducted
and as a foreign corporation in the State of Pennsylvania, which constitute
all
the jurisdictions in which the character of the property owned or leased by
the
Corporation or the nature of the activities conducted by the Corporation makes
such qualification necessary, except where the failure to be so qualified could
not reasonably be expected to have a material adverse effect on the assets,
condition, or business as now conducted (“Material
Adverse Effect”).
2.2 Capitalization.
The
authorized capital stock of the Corporation immediately upon the consummation
of
the Closing shall consist of:
(a) 75,000,000
duly authorized shares of Preferred Stock $.001 par value per share
(“Preferred
Stock”),
all
of which have shares been designated “Series A Preferred Stock” and none of
which shares are issued and outstanding.
(b) 175,000,000
duly authorized shares of Common Stock $.001 par value per share (“Common
Stock”),
of
which, as of April 25, 2007, 73,440,506 shares are issued and outstanding,
all
of which are fully paid and nonassessable.
(c) Except
as
contemplated hereby or in the SEC Documents, there are, and immediately upon
consummation of the transactions contemplated by the Financing Documents (as
hereinafter defined), there will be, no preemptive or similar rights to purchase
or otherwise acquire capital stock of the Corporation pursuant to any provision
of law, the Charter, the Bylaws or any agreement to which the Corporation or
any
stockholder thereof is a party. There is, and immediately upon the consummation
of the transactions contemplated by the Financing Documents, there will be,
no
agreement, restriction or Encumbrance (such as a right of first refusal, right
of first offer, proxy, voting trust, voting agreement, etc.) with respect to
the
sale or voting of any capital stock of the Corporation (whether outstanding
or
issuable upon conversion or exercise of outstanding securities). Except as
contemplated hereby, there are no outstanding offers, commitments or other
rights to purchase Notes.
2.3 Authorization
of Agreement, Etc.
The
execution, delivery and performance by the Corporation of this Agreement, the
Notes and each other document or instrument contemplated hereby (collectively,
the “Financing
Documents”)
have
been duly authorized by all requisite corporate action by the Corporation;
and
this Agreement and each other Financing Document has been duly executed and
delivered by the Corporation. Each of the Financing Documents is or, in the
case
of the Notes, will be, the valid and binding obligation of the Corporation,
enforceable against the Corporation in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
2.4 No
Conflicts.
The
execution, delivery and performance by the Corporation of this Agreement or
the
other Financing Documents, the issuance, sale and delivery of the Notes, and
compliance with the provisions hereof by the Corporation, will not (a) violate
any provision of law, statute, rule or regulation (whether foreign or domestic)
applicable to the Corporation or any ruling, writ, injunction, order, judgment
or decree of any court, arbitrator, administrative agency or other governmental
body (whether foreign or domestic) applicable to the Corporation or any of
its
properties or assets or (b) conflict with or result in any breach of any of
the
terms, conditions or provisions of, or constitute (with notice or lapse of
time
or both) a default (or give rise to any right of termination, cancellation
or
acceleration) under, or result in the creation of, any encumbrance upon any
of
the properties or assets of the Corporation under, the articles of incorporation
or bylaws of the Corporation or any contract or other agreement or instrument
to
which it is a party.
-2-
2.5 Approvals.
Except
for the (a) filing of any notice subsequent to the Initial Closing which may
be
required under applicable foreign, federal or state securities law (which,
if
required, will be filed on a timely basis as may be so required) and (b)
obtaining the consent of Senior Note Holders (as hereinafter defined) under
the
instruments and other documents delivered in connection with the Senior Loan
Agreement (as hereinafter defined), no permit, authorization, consent or
approval of or by, or any notification of or filing with, any person
(governmental or private) is required in connection with the execution, delivery
or performance of the Financing Documents by the Corporation.
3. Representations,
Warranties and Covenants of the Investors.
Each
Investor, severally and not jointly, hereby represents, warrants and covenants
that:
3.1 Authorization.
This
Agreement and the other Financing Documents to which it is a party constitute
its valid and legally binding obligations, enforceable in accordance with their
respective terms.
3.2 Purchase
Entirely for Own Account.
This
Agreement is made with each Investor in reliance upon such Investor’s
representation to the Corporation, which by such Investor’s execution of this
Agreement such Investor hereby confirms, that the Notes to be received by such
Investor hereunder will be acquired for investment for such
Investor’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, each Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to
such
person or to any third person, with respect to any of the Notes. Each Investor
represents that it has full power and authority to enter into this Agreement
and
each of the other Financing Documents to which it is a party.
3.3 Disclosure
of Information.
It
believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Notes being offered, sold
and
delivered hereunder. Each Investor further represents that it has had an
opportunity to ask questions and receive answers from the Corporation regarding
the terms and conditions of the sale of the Notes.
3.4 Investment
Experience.
It is
an investor in securities of companies in the development stage and acknowledges
that it is able to fend for itself, can bear the economic risk of its investment
and has such knowledge and experience in financial or business matters that
it
is capable of evaluating the merits and risks of the investment in the Notes
being issued hereunder. If other than an individual, each Investor also
represents it has not been organized solely for the purpose of acquiring the
Notes being issued hereunder.
-3-
3.5 Restricted
Securities.
It
understands that the Notes it is purchasing pursuant hereto and the Conversion
Stock to be issued upon conversion of the Notes are characterized as “restricted
securities” under the federal securities laws in as much as such shares are
being acquired from the Corporation in a transaction not involving a public
offering and that under such laws and applicable regulations such securities
may
be resold without registration under the Act only in certain limited
circumstances, and is aware that the certificates representing such Investor’s
respective ownership of Notes and Conversion Stock, as the case may be, will
bear related restrictive legends. In this connection, each Investor represents
that it is familiar with Rule 144 promulgated under the Act, as presently in
effect, and understands the resale limitations imposed thereby and by the
Act.
3.6 Accredited
Investor.
Such
Investor is an Accredited Investor within the definition set forth in Rule
501(a) under the Act.
3.7 Finder’s
Fee.
Such
Investor is not obligated for any finder’s fee or commission in connection with
the transactions contemplated by this Agreement. Each Investor shall indemnify
and hold harmless the Corporation from any liability for any commission or
compensation in the nature of a finder’s fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Investor
or any of its officers, partners, employees, or representatives is
responsible.
4. Conditions
of Each Investor’s Obligations at the Closing.
The
obligations of each Investor under Section 1 of this Agreement are subject
to
the fulfillment on or before each Closing Date of each of the following
conditions, the waiver of which shall not be effective against any Investor
who
does not consent in writing thereto:
4.1 Representations
and Warranties.
The
representations and warranties made by the Corporation in Section 2 hereof
shall
be true and correct in all material respects on and as of such Closing Date
as
if made on and as of such date.
4.2 Proceedings
and Documents.
All
corporate and other proceedings in connection with the transactions contemplated
at such Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to such Investor, and each such Investor
shall have received all such counterpart original and certified or other copies
of such documents as the Investor may reasonably request, including but not
limited to a copy of this Agreement and each of the other Financing Documents
executed by the Corporation.
5. Conditions
of the Corporation’s Obligations at the Closing.
The
obligations of the Corporation to each Investor under this Agreement are subject
to the fulfillment on or before each Closing Date of each of the following
conditions by that Investor:
5.1 Representations
and Warranties.
The
representations and warranties of the Investor contained in Section 3 shall
be
true on and as of such Closing.
-4-
5.2 Payment
of Purchase Price.
The
Investors shall have delivered the purchase price specified in Section
1.1.
5.3 Execution.
The
Investor shall have executed and delivered a counterpart signature page to
this
Agreement and the other Financing Documents.
6. Protective
Provision.
For so
long as there are any Notes outstanding, the Corporation shall not, without
the
prior written consent of the holders of the majority of the outstanding
principal amount of the Notes then outstanding, increase or decrease the number
of authorized shares of Common Stock or Preferred Stock.
7. Miscellaneous.
7.1 Survival
of Warranties.
The
warranties, representations and covenants of the Corporation and the Investors
contained in or made pursuant to this Agreement shall survive the execution
and
delivery of this Agreement and the Closing and shall in no way be affected
by
any investigation of the subject matter thereof made by or on behalf of the
Investors or the Corporation.
7.2 Successors
and Assigns.
Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
Commonwealth of Pennsylvania (without reference to the conflicts of law
provisions thereof).
7.4 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
This
Agreement may be executed by facsimile signature.
7.5 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
7.6 Notices.
All
notices, demands and requests of any kind to be delivered to any party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered or if sent by internationally-recognized
overnight courier or by registered or certified mail, return receipt requested
and postage prepaid, addressed as follows:
(a) if
to the
Corporation, to:
Laserlock
Technologies, Inc.
000
Xxxxx
Xxxx
Xxxx
Xxxxxx, XX 00000
Telecopy:
(000) 000-0000
Attention:
Chairman and CEO
-5-
(b) if
to an
Investor, to the address of such Purchaser set forth on Schedule
A;
or
to
such other address as the party to whom notice is to be given may have furnished
to the other parties hereto in writing in accordance with the provisions of
this
Section 6.6. Any such notice or communication shall be deemed to have been
received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier,
on the next business day after the date when sent and (iii) in the case of
mailing, on the third business day following that on which the piece of mail
containing such communication is posted.
7.7 Expenses.
The
Corporation shall pay all of the expenses (legal, accounting and other expenses,
if any) incurred by the Investors in connection with the negotiation,
preparation and execution of this Agreement and the transactions contemplated
hereby.
7.8 Amendments
and Waivers.
Any
term,
covenant, agreement or condition of this Agreement may be amended, and
compliance therewith may be waived (either generally or in a particular
circumstance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the Corporation and
by
Investors holding Notes representing at least a majority of the principal amount
of all of the outstanding Notes issued pursuant to this Agreement (the
“Majority
Purchasers”).
Any
amendment or waiver effected in accordance with this Section 6.8 shall be
binding upon all of the Investors and the Corporation.
7.9 Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
7.10 Entire
Agreement.
This
Agreement and the other documents delivered pursuant hereto and thereto
constitute the full and, entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-6-
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
LASERLOCK
TECHNOLOGIES, INC.
By: /s/
XXXXXX
XXXXXXX
Name:
Xxxxxx Xxxxxxx
Title:
President and Chief Executive Officer
|
|
LASERLOCK
TECHNOLOGIES, INC.
Counterpart
Signature Page
to
Note Purchase Agreement dated as of May 18, 2007
INVESTORS:
CLYDESDALE
PARTNERS II, LLC
By
its
Manager, PFK Management Group, LLC,
a
California limited liability company
|
By:
|
/s/
XXXXX X. XXXXXX
|
|
Name:
Xxxxx X. Xxxxxx
|
|
|
Title:
Manager
|
LASERLOCK
TECHNOLOGIES, INC.
Counterpart
Signature Page
to
Note Purchase Agreement dated as of May 18, 2007
INVESTORS:
NOB
HILL
CAPITAL PARTNERS LP
By
its
General Partner, Nob Hill Capital Management, Inc.,
a
California corporation
|
By:
|
/s/
XXXXXXX XXXXXX
|
|
Name:
Xxxxxxx Xxxxxx
|
|
|
Title:
President
|
Schedule
A
|
Investor
|
Address
|
Purchase
Amount
|
Closing
Date
|
|
Clydesdale
Partners II, LLC
|
000
Xxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
|
$110,000
|
May
18, 2007
|
|
--
|
--
|
$25,000
|
August
31, 2007
|
|
--
|
--
|
$25,000
|
September
30, 2007
|
|
--
|
--
|
$25,000
|
October
31, 2007
|
|
--
|
--
|
$25,000
|
November
30, 2007
|
|
--
|
--
|
$25,000
|
December
31, 2007
|
|
--
|
--
|
$25,000
|
January
31, 2008
|
|
Nob
Hill Capital Partners LP
|
$140,000
|
May
18, 2007
|
