SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
March 1, 2001, by and among RUBBER TECHNOLOGY INTERNATIONAL INC., a Florida
corporation, with headquarters located at 0000 X. Xxxxxxxxxx Xxxx., Xxx Xxxxxxx,
XX 00000 (the "COMPANY"), and the Buyers listed on Schedule I attached hereto
(individually, a "BUYER" or collectively "BUYERS" ).
WITNESSETH:
WHEREAS, the Company and the Buyer(s) are executing and delivering
this Agreement in reliance upon an exemption from securities registration
pursuant to Section 4(2) and/or Rule 506 of Regulation D ("REGULATION D") as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase Five Hundred Thousand
Dollars ($500,000) of convertible debentures (the "Convertible Debentures"),
which shall be convertible into shares of the Company's common stock, (the
"COMMON STOCK") (as converted, the "CONVERSION SHARES"), for a total purchase
price of Five Hundred Thousand Dollars ($500,000) (the "PURCHASE PRICE") in the
respective amounts set forth opposite each Buyer(s) name on Schedule I ( the
"SUBSCRIPTION AMOUNT"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit A (the "INVESTOR
REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated there under, and applicable state securities laws; and
WHEREAS, the Convertible Debentures are being offered through The
May Xxxxx Group, Inc. (the "PLACEMENT AGENT"), as the Company's exclusive
placement agent for the offering; and
WHEREAS, the aggregate proceeds of the sale of the Convertible
Debentures contemplated hereby shall be held in escrow pursuant to the terms of
an escrow agreement substantially in the form of the Escrow Agreement attached
hereto as Exhibit B.
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:
1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
(a) PURCHASE OF CONVERTIBLE DEBENTURES. Subject to the
satisfaction (or waiver) of the terms and conditions of this
Agreement, each Buyer agrees, severally and not jointly, to purchase
at Closing (as defined herein below) and the Company agrees to sell
and issue to each Buyer, severally and not jointly, at Closing,
Convertible Debentures in amounts corresponding with the
Subscription Amount set forth opposite each Buyer's name on Schedule
I hereto. Upon execution hereof by a Buyer, the Buyer shall wire
transfer the Subscription Amount set forth opposite his name on
Schedule I in same-day funds or a check payable to "First Union
National Bank, as Escrow Agent for Rubber Technology International
Inc. / The May Xxxxx Group, Inc.", which Subscription Amount shall
be held in escrow pursuant to the terms of the Escrow Agreement (as
hereinafter defined) and disbursed in accordance therewith.
Notwithstanding the foregoing, a Buyer may withdraw his Subscription
Amount and terminate this Agreement as to such Buyer at any time
after the execution hereof and prior to Closing (as hereinafter
defined).
(b) CLOSING DATE. The closing of the purchase and sale
of the Convertible Debentures (the "CLOSING") shall take place at
10:00 a.m. Eastern Standard Time on the fifth business day ("CLOSING
DATE") following the date hereof, subject to notification of
satisfaction (or waiver) of the conditions to the Closing set forth
in Sections 6 and 7 below (or such later date as is mutually agreed
to by the Company and the Buyers). The Closing shall occur on the
Closing Date at the offices of Xxxxxx Xxxxxxxx, LLP, 0000 Xxxxxxxxxx
Xxxxxx, Xxxxx 0, Xxxxx, XX 00000 (or such other place as is mutually
agreed to by the Company and the Buyers).
(c) ESCROW ARRANGEMENTS; FORM OF PAYMENT. Upon
execution hereof by Buyer(s) and pending Closing, the aggregate
proceeds of the sale of the Convertible Debentures to Buyer(s)
pursuant hereto, plus the fees and expenses of the Placement Agent,
shall be deposited in a non-interest bearing escrow account with
First Union National Bank, as escrow agent ("ESCROW AGENT"),
pursuant to the terms of an escrow agreement between the Company,
the Placement Agent and the Escrow Agent in the form attached
hereto as Exhibit B (the "ESCROW AGREEMENT"). Subject to the
satisfaction of the terms and conditions of this Agreement, on the
Closing Date, (i) the Escrow Agent shall deliver to the Company in
accordance with the terms of the Escrow Agreement such aggregate
gross proceeds for the Convertible Debentures to be issued and sold
to such Buyer(s) at the Closing minus the fees and expenses of the
Placement Agent, by wire transfer of immediately available funds in
accordance with the Company's written wire instructions, and (ii)
the Company shall deliver to each Buyer, Convertible Debentures
which such Buyer(s) is purchasing in amounts indicated opposite
such Buyer's name on Schedule I, duly executed on behalf of the
Company.
2. BUYER'S REPRESENTATIONS AND WARRANTEES.
Each Buyer represents and warrants, severally and not
jointly, that:
2
(a) INVESTMENT PURPOSE. Each Buyer is acquiring the
Convertible Debentures and, upon conversion of Convertible
Debentures, the Buyer will acquire the Conversion Shares then
issuable, for its own account for investment only and not with a
view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act; provided, however, that by making the
representations herein, such Buyer reserves the right to dispose of
the Conversion Shares at any time in accordance with or pursuant to
an effective registration statement covering such Conversion Shares
or an available exemption under the 1933 Act.
(b) ACCREDITED INVESTOR STATUS. Each Buyer is an
"ACCREDITED INVESTOR" as that term is defined in Rule 501(a)(3) of
Regulation D.
(c) RELIANCE ON EXEMPTIONS. Each Buyer understands that
the Convertible Debentures are being offered and sold to it in
reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire such
securities.
(d) INFORMATION. Each Buyer and its advisors (and his
or, its counsel), if any, have been furnished with all materials
relating to the business, finances and operations of the Company
and information he deemed material to making an informed investment
decision regarding his purchase of the Convertible Debentures and
the Conversion Shares, which have been requested by such Buyer.
Each Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its management.
Neither such inquiries nor any other due diligence investigations
conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer's right to
rely on the Company's representations and warranties contained in
Section 3 below. Each Buyer understands that its investment in the
Convertible Debentures and the Conversion Shares involves a high
degree of risk. Each Buyer is in a position regarding the Company,
which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Buyer to obtain
information from the Company in order to evaluate the merits and
risks of this investment. Each Buyer has sought such accounting,
legal and tax advice, as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Convertible Debentures and the Conversion Shares.
(e) NO GOVERNMENTAL REVIEW. Each 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 Convertible Debentures or the Conversion Shares,
or the fairness or suitability of the investment in the Convertible
Debentures or the Conversion Shares, nor have such authorities
passed upon or endorsed the merits of the offering of the
Convertible Debentures or the Conversion Shares.
3
(f) TRANSFER OR RESALE. Each Buyer understands that
except as provided in the Registration Rights Agreement: (i) the
Convertible Debentures have not been and are not being registered
under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, or (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold,
assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration requirements; (ii)
any sale of such securities made in reliance on Rule 144 under the
1933 Act (or a successor rule thereto) ("RULE 144") may be made
only in accordance with the terms of Rule 144 and further, if Rule
144 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
defined in the 0000 Xxx) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the
SEC there under; and (iii) neither the Company nor any other person
is under any obligation to register such securities under the 1933
Act or any state securities laws or to comply with the terms and
conditions of any exemption there under. The Company reserves the
right to place stop transfer instructions against the shares and
certificates for the Conversion Shares.
(g) LEGENDS. Each Buyer understands that the
certificates or other instruments representing the Convertible
Debentures and or the Conversion Shares shall bear a restrictive
legend in substantially the following form (and a stop transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS.
The legend set forth above shall be removed and the Company shall
issue a certificate without such legend to the holder of the
Conversion Shares upon which it is stamped, if, unless otherwise
required by state securities laws, (i) in connection with a sale
transaction, provided the Conversion Shares are registered under
the 1933 Act or (ii) in connection with a sale transaction, such
holder provides the Company with an opinion of counsel, in form
4
acceptable to the Company and its counsel, to the effect that a
public sale, assignment or transfer of the Conversion Shares may be
made without registration under the 1933 Act.
(h) AUTHORIZATION, ENFORCEMENT. This Agreement has been
duly and validly authorized, executed and delivered on behalf of
such Buyer and is a valid and binding agreement of such Buyer
enforceable in accordance with its terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and
remedies.
(i) RECEIPT OF DOCUMENTS. Each Buyer and his or its
counsel has received and read in their entirety: (i) this Agreement
and each representation, warranty and covenant set forth herein,
the Investor Registration Rights Agreement, and the Escrow
Agreement; (ii) all due diligence and other information necessary
to verify the accuracy and completeness of such representations,
warranties and covenants; (iii) the Company's Form 10-KSB for the
fiscal year ended November 30, 2000; (iv) the Company's Form 10-QSB
for the fiscal quarter March 31, 2000, June 30, 2000, and September
30, 2000; and (v) answers to all questions the Buyer submitted to
the Company regarding an investment in the Company; and the Buyer
has relied on the information contained therein and has not been
furnished any other documents, literature, memorandum or
prospectus.
(j) DUE FORMATION OF CORPORATE AND OTHER BUYERS. If the
Buyer(s) is a corporation, trust, partnership or other entity that
is not an individual person, it has been formed and validly exists
and has not been organized for the specific purpose of purchasing
the Convertible Debentures and is not prohibited from doing so.
(k) DUE AUTHORIZATION OF FIDUCIARY BUYERS. If the
Buyer(s) is purchasing the Convertible Debentures in a fiduciary
capacity for another person or entity, including, without
limitation, a corporation, partnership, trust or any other entity,
the Buyer(s) has been duly authorized and empowered to execute this
Agreement and such other person fulfills all the requirements for
purchase of the Convertible Debentures and agrees to be bound by
the obligations, representations, warranties, and covenants
contained herein. Upon request of the Company, the Buyer(s) will
provide true, complete and current copies of all relevant documents
creating the Buyers, authorizing its investment in the Company
and/or evidencing the satisfaction of the foregoing.
(l) FURTHER REPRESENTATIONS BY FOREIGN BUYERS. If the
Buyer(s) is not a U.S. Person (as defined below), such Buyer hereby
represents that such Buyer(s) is satisfied as to full observance of
the laws of such Buyer's jurisdiction in connection with any
invitation to subscribe for the securities or any use of this
Agreement, including: (i) the legal requirements of such Buyer's
jurisdiction for the purchase of the securities, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, which may
be relevant to the purchase, holding, redemption, sale, or transfer
of the securities. Such Buyer's subscription and payment for, and
such Buyer's continued beneficial ownership of, the securities will
5
not violate any applicable securities or other laws of such Buyer's
jurisdiction. The term "U.S. Person" as used herein shall mean any
person who is a citizen or resident of the United States or Canada,
or any state, territory or possession thereof, including, but not
limited to, any estate of any such person, or any corporation,
partnership, trust or other entity created or existing under the
laws thereof, or any entity controlled or owned by any of the
foregoing.
(m) NO LEGAL ADVICE FROM THE COMPANY. Each Buyer
acknowledges, that it had the opportunity to review this Agreement
and the transactions contemplated by this Agreement with his or its
own legal counsel and investment and tax advisors. Each Buyer is
relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
(a) ORGANIZATION AND QUALIFICATION. The Company and its
subsidiaries are corporations duly organized and validly existing
in good standing under the laws of the jurisdiction in which they
are incorporated, and have the requisite corporate power to own
their properties and to carry on their business as now being
conducted. Each of the Company and its subsidiaries is duly
qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(b) AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER
INSTRUMENTS. (i) The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Investor
Registration Rights Agreement and any related agreements, and to
issue the Convertible Debentures and the Conversion Shares in
accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement, the Registration Rights Agreement
and any related agreements by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Convertible Debentures the
Conversion Shares and the reservation for issuance and the issuance
of the Conversion Shares issuable upon conversion or exercise
thereof, have been duly authorized by the Company's Board of
Directors and no further consent or authorization is required by
the Company, its Board of Directors or its stockholders, (iii) this
Agreement and the Investor Registration Rights Agreement and any
related agreements have been duly executed and delivered by the
Company, (iv) this Agreement, the Investor Registration Rights
Agreement and any related agreements constitute the valid and
binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may
6
be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement
of creditors' rights and remedies.
(c) CAPITALIZATION. As of the date hereof, the
authorized capital stock of the Company consists of 75,000,000
shares of Common Stock, par value $0.0001 per share, of which as of
March 20, 2001, 70,660,940 shares were issued and outstanding. All
of such outstanding shares have been validly issued and are fully
paid and nonassessable. Except as disclosed in the SEC Documents
(as defined in Section 3(f)) as amended, no shares of Common Stock
are subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company. Except
as disclosed in the SEC Documents , as of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or
may become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and
(iii) there are no agreements or arrangements under which the
Company or any of its subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except pursuant
to the Registration Rights Agreement). There are no securities or
instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Convertible Debentures as
described in this Agreement. The Company has furnished to the Buyer
true and correct copies of the Company's Certificate of
Incorporation, as amended and as in effect on the date hereof (the
"Certificate of Incorporation"), and the Company's By-laws, as in
effect on the date hereof (the "By-laws"), and the terms of all
securities convertible into or exercisable for Common Stock and the
material rights of the holders thereof in respect thereto other
than stock options issued to employees and consultants.
(d) ISSUANCE OF SECURITIES. The Convertible Debentures
are duly authorized and, upon issuance in accordance with the terms
hereof, shall be duly issued, fully paid and nonassessable, are
free from all taxes, liens and charges with respect to the issue
thereof. The Conversion Shares issuable upon conversion of the
Convertible Debentures have been duly authorized and reserved for
issuance. Upon conversion or exercise in accordance with the
Convertible Debentures the Conversion Shares will be duly issued,
fully paid and nonassessable.
(e) NO CONFLICTS. Except as disclosed in SEC Documents,
the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the
Certificate of Incorporation, any certificate of designations of
any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with or constitute a default (or an event
7
which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Nasdaq
Stock Market Inc.'s OTC Bulletin Board on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its
subsidiaries is bound or affected. Except as disclosed in the SEC
Documents, neither the Company nor its subsidiaries is in violation
of any term of or in default under its Certificate of Incorporation
or By-laws or their organizational charter or by-laws,
respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or
any statute, rule or regulation applicable to the Company or its
subsidiaries. The business of the Company and its subsidiaries is
not being conducted, and shall not be conducted in violation of any
material law, ordinance, or regulation of any governmental entity.
Except as specifically contemplated by this Agreement and as
required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by
this Agreement or the Registration Rights Agreement in accordance
with the terms hereof or thereof. Except as disclosed in the SEC
Documents, all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior
to the date hereof. The Company and its subsidiaries are unaware of
any facts or circumstance, which might give rise to any of the
foregoing.
(f) SEC DOCUMENTS: FINANCIAL STATEMENTS. Since January
1, 2000, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the
SEC under of the Securities Exchange Act of 1934, as amended (the
"1934 ACT") (all of the foregoing filed prior to the date hereof or
amended after the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as
the "SEC DOCUMENTS"). The Company has delivered to the Buyers or
their representatives, or made available through the SEC's website
at xxxx://xxx.xxx.xxx., true and complete copies of the SEC
Documents. As of their respective dates, the financial statements
of the Company disclosed in the SEC Documents (the "FINANCIAL
STATEMENTS") complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of
8
unaudited statements, to normal year-end audit adjustments). No
other information provided by or on behalf of the Company to the
Buyer which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(d) and (i)
of this Agreement, contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) 10(b)-5. The SEC Documents do not include any
untrue statements of material fact, nor do they omit to state any
material fact required to be stated therein necessary to make the
statements made, in light of the circumstances under which they
were made, not misleading.
(h) ABSENCE OF LITIGATION. Except as disclosed in the
SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government
agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company's
subsidiaries, wherein an unfavorable decision, ruling or finding
would (i) have a material adverse effect on the transactions
contemplated hereby (ii) adversely affect the validity or
enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of the
documents contemplated herein, or (iii) except as expressly
disclosed in the SEC Documents, have a material adverse effect on
the business, operations, properties, financial condition or
results of operation of the Company and its subsidiaries taken as a
whole.
(i) ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF THE
CONVERTIBLE DEBENTURES. The Company acknowledges and agrees that
the Buyer(s) is acting solely in the capacity of an arm's length
purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the
Buyer(s) is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and any advice given by
the Buyer(s) or any of their respective representatives or agents
in connection with this Agreement and the transactions contemplated
hereby is merely incidental to such Buyer's purchase of the
Convertible Debentures or the Conversion Shares. The Company
further represents to the Buyer that the Company's decision to
enter into this Agreement has been based solely on the independent
evaluation by the Company and its representatives.
(j) NO GENERAL SOLICITATION. Neither the Company, nor
any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the 0000 Xxx)
in connection with the offer or sale of the Convertible Debentures
or the Conversion Shares..
9
(k) NO INTEGRATED OFFERING. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under
circumstances that would require registration of the Convertible
Debentures or the Conversion Shares under the 1933 Act or cause
this offering of the Convertible Debentures or the Conversion
Shares to be integrated with prior offerings by the Company for
purposes of the 1933 Act.
(l) EMPLOYEE RELATIONS. Neither the Company nor any of
its subsidiaries is involved in any labor dispute nor, to the
knowledge of the Company or any of its subsidiaries, is any such
dispute threatened. None of the Company's or its subsidiaries'
employees is a member of a union and the Company and its
subsidiaries believe that their relations with their employees are
good.
(m) INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess adequate rights or licenses to use all
trademarks, trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now
conducted. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of
trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service xxxx
registrations, trade secret or other similar rights of others, and,
to the knowledge of the Company there is no claim, action or
proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its
subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service
marks, service xxxx registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of
any facts or circumstances which might give rise to any of the
foregoing.
(n) ENVIRONMENTAL LAWS. The Company and its
subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit,
license or approval.
(o) TITLE. Any real property and facilities held under
lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company
and its subsidiaries.
(p) INSURANCE. The Company and each of its subsidiaries
are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of
the Company believes to be prudent and customary in the businesses
10
in which the Company and its subsidiaries are engaged. Neither the
Company nor any such subsidiary has been refused any insurance
coverage sought or applied for and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not
materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.
(q) REGULATORY PERMITS. The Company and its
subsidiaries possess all material certificates, authorizations and
permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
(r) INTERNAL ACCOUNTING CONTROLS. The Company and each
of its subsidiaries maintain a system of internal accounting
controls sufficient 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 financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability, and (iii) the recorded amounts for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(r) NO MATERIAL ADVERSE BREACHES, ETC. Except as set
forth in the SEC Documents, neither the Company nor any of its
subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected
in the future to have a material adverse effect on the business,
properties, operations, financial condition, results of operations
or prospects of the Company or its subsidiaries. Neither the
Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers,
has or is expected to have a material adverse effect on the
business, properties, operations, financial condition, results of
operations or prospects of the Company or its subsidiaries.
(s) TAX STATUS. The Company and each of its
subsidiaries has made or filed all federal and state income and all
other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the
extent that the Company and each of its subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has
set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing
11
authority of any jurisdiction, and the officers of the Company know
of no basis for any such claim.
(t) CERTAIN TRANSACTIONS. Except as set forth in the
SEC Documents and except for arm's length transactions pursuant to
which the Company makes payments in the ordinary course of business
upon terms no less favorable than the Company could obtain from
third parties and other than the grant of stock options disclosed
in the SEC Documents, none of the officers, directors, or employees
of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer,
director, trustee or partner.
(u) FEES AND RIGHTS OF FIRST REFUSAL. The Company is
not obligated to offer the securities offered hereunder on a right
of first refusal basis or otherwise to any third parties including,
but not limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties.
4. COVENANTS.
(a) BEST EFFORTS. Each party shall use its best efforts
timely to satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.
(b) FORM D. The Company agrees to file a Form D with
respect to the Conversion Shares as required under Regulation D and
to provide a copy thereof to each Buyer promptly after such filing.
The Company shall, on or before the Closing Date, take such action
as the Company shall reasonably determine is necessary to qualify
the Conversion Shares, or obtain an exemption for the Conversion
Shares for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the
states of the United States, and shall provide evidence of any such
action so taken to the Buyers on or prior to the Closing Date.
(c) REPORTING STATUS. Until the earlier of (i) the date
as of which the Investor(s) (as that term is defined in the
Registration Rights Agreement) may sell all of the Conversion
Shares without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto), or (ii) the date on
which (A) the Buyer(s) shall have sold all the Conversion Shares
and (B) none of the Convertible Debentures are outstanding (the
"REGISTRATION Period"), the Company shall use its commercially
reasonable efforts to file in a timely manner all reports required
to be filed with the SEC pursuant to the 1934 Act and the
regulations of the SEC there under, and the Company shall not
terminate its status as an issuer required to file reports under
12
the 1934 Act even if the 1934 Act or the rules and regulations
there under would otherwise permit such termination.
(d) USE OF PROCEEDS. The Company will use the proceeds
from the sale of the Convertible Debentures for general corporate
purposes.
(e) RESERVATION OF SHARES. The Company shall take all
action reasonably necessary to at all times have authorized, and
reserved for the purpose of issuance, such number of shares of
Common Stock as shall be necessary to effect the issuance of the
Conversion Shares. If at any time the Company does not have
available such shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all of the Conversion Shares
of the Company shall call and hold a special meeting of the
shareholders within sixty (60) days of such occurrence, for the sole
purpose of increasing the number of shares authorized. The Company's
management shall recommend to the shareholders to vote in favor of
increasing the number of shares of Common Stock authorized.
Management shall also vote all of its shares in favor of increasing
the number of authorized shares of Common Stock .
(f) LISTINGS OR QUOTATION. The Company shall promptly
secure the listing or quotation of the Conversion Shares upon each
national securities exchange, automated quotation system or
Over-The-Counter Bulletin Board or other market, if any, upon which
shares of Common Stock are then listed or quoted (subject to
official notice of issuance) and shall use its best efforts to
maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Conversion Shares from time to time
issuable under the terms of this Agreement. The Company shall
maintain the Common Stock's authorization for quotation in the
over-the counter market
(g) EXPENSES. Each of the Company and the Buyer(s)
shall pay all costs and expenses incurred by such party in
connection with the negotiation, investigation, preparation,
execution and delivery of this Agreement and the Registration
Rights Agreement. The costs and expenses of the Placement Agent,
its counsel, and Xxxxxxxxxxx & Xxxxxxxx LLP shall be paid for by
the Company at Closing in accordance with the terms of the
Placement Agent Agreement between the Company and the Placement
Agent, dated March 1, 2001.
(h) CORPORATE EXISTENCE. So long as any of the
Convertible Debentures remain outstanding, the Company shall not
directly or indirectly consummate any merger, reorganization,
restructuring, consolidation, sale of all or substantially all of
the Company's assets or any similar transaction or related
transactions (each such transaction, a "Sale of the Company")
unless, prior to the consummation of a Sale of the Company, the
Company makes appropriate provision to insure that, upon the
consummation of such Sale of the Company, each of the holders of
the Convertible Debentures will thereafter have the right to
acquire and receive such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore acquirable
and receivable upon the conversion of such holder's Convertible
13
Debentures had such Sale of the Company not taken place. In any
such case, the Company will make appropriate provision with respect
to such holders' rights and interests to insure that the provisions
of this Section 4(h) will thereafter be applicable to the
Convertible Debentures.
(i) TRANSACTIONS WITH AFFILIATES. So long as any
Convertible Debentures are outstanding, the Company shall not, and
shall cause each of its subsidiaries not to, enter into, amend,
modify or supplement, or permit any subsidiary to enter into,
amend, modify or supplement any agreement, transaction, commitment,
or arrangement with any of its or any subsidiary's officers,
directors, person who were officers or directors at any time during
the previous two (2) years, stockholders who beneficially own five
percent (5%) or more of the Common Stock, or Affiliates (as defined
below) or with any individual related by blood, marriage, or
adoption to any such individual or with any entity in which any
such entity or individual owns a five percent (5%) or more
beneficial interest (each a "Related Party"), except for (a)
customary employment arrangements and benefit programs on
reasonable terms, (b) any investment in an Affiliate of the
Company, (c) any agreement, transaction, commitment, or arrangement
on an arms-length basis on terms no less favorable than terms which
would have been obtainable from a person other than such Related
Party, (d) any agreement transaction, commitment, or arrangement
which is approved by a majority of the disinterested directors of
the Company, for purposes hereof, any director who is also an
officer of the Company or any subsidiary of the Company shall not
be a disinterested director with respect to any such agreement,
transaction, commitment, or arrangement. "Affiliate" for purposes
hereof means, with respect to any person or entity, another person
or entity that, directly or indirectly, (i) has a ten percent (10%)
or more equity interest in that person or entity, (ii) has ten
percent (10%) or more common ownership with that person or entity,
(iii) controls that person or entity, or (iv) shares common control
with that person or entity. "Control" or "controls" for purposes
hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or
entity.
(j) TRANSFER AGENT. The Company covenants and agrees
that, in the event that the Company's agency relationship with the
transfer agent should be terminated for any reason prior to a date
which is two (2) years after the Closing Date, the Company shall
immediately appoint a new transfer agent and shall require that the
transfer agent execute and agree to be bound by the terms of the
Irrevocable Instructions (as defined herein) to Transfer Agent.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions in the
form attached hereto as Exhibit D to its transfer agent to issue
certificates, registered in the name of the Buyer(s) or its
respective nominee(s), for the Conversion Shares representing such
amounts of Convertible Debentures as specified from time to time by
the Buyer(s) to the Company upon conversion of the Convertible
Debentures (the "Irrevocable Transfer Agent Instructions"). Prior to
14
registration of the Conversion Shares under the 1933 Act, all such
certificates shall bear the restrictive legend specified in Section
2(g) of this Agreement. The Company warrants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5, and stop transfer instructions to give effect to
Section 2(f) hereof (in the case of the Conversion Shares prior to
registration of such shares under the 0000 Xxx) will be given by the
Company to its transfer agent and that the Conversion Shares shall
otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way the Buyer's obligations and agreement to comply
with all applicable securities laws upon resale of Conversion
Shares. If the Buyer(s) provides the Company with an opinion of
counsel, reasonably satisfactory in form, and substance to the
Company, that registration of a resale by the Buyer(s) of any of the
Conversion Shares is not required under the 1933 Act, the Company
shall permit the transfer and, promptly instruct its transfer agent
to issue one or more certificates in such name and in such
denominations as specified by the Buyer. The Company acknowledges
that a breach by it of its obligations hereunder will cause
irreparable harm to the Buyer by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of
this Section 5, that the Buyer(s) shall be entitled, in addition to
all other available remedies, to an injunction restraining any
breach and requiring immediate issuance and transfer, without the
necessity of showing economic loss and without any bond or other
security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and
sell the Convertible Debentures to the Buyer(s) at the Closing is
subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for
the Company's sole benefit and may be waived by the Company at any
time in its sole discretion:
(a) Each Buyer shall have executed this Agreement and
the Registration Rights Agreement and delivered the same to the
Company.
(b) The Buyer(s) shall have delivered to the Escrow
Agent the Purchase Price for Convertible Debentures in respective
amounts as set forth next to each Buyer as outlined on Schedule I
attached hereto and the Escrow Agent shall have delivered such
funds to the Company by wire transfer of immediately available U.S.
funds pursuant to the wire instructions provided by the Company.
(c) The representations and warranties of the Buyer(s)
shall be true and correct in all material respects as of the date
when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a
15
specific date), and the Buyer(s) shall have performed, satisfied
and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer(s) at or prior
to the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer(s) hereunder to purchase
the Convertible Debentures at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the
Buyer's sole benefit and may be waived by the Buyer(s) at any time
in its sole discretion:
(a) The Company shall have executed this Agreement and
the Registration Rights Agreement, and delivered the same to the
Buyer(s).
(b) The Common Stock shall be authorized for quotation
on The National Association of Securities Dealers, Inc. OTC
Bulletin Board, trading in the Common Stock shall not have been
suspended for any reason and all of the Conversion Shares issuable
upon conversion of the Convertible Debentures shall be approved for
listing or quotation on The National Association of Securities
Dealers, Inc. OTC Bulletin Board.
(c) The representations and warranties of the Company
shall be true and correct in all material respects (except to the
extent that any of such representations and warranties is already
qualified as to materiality in Section 3 above, in which case, such
representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate, executed by the President of the
Company, dated as of the Closing Date, to the foregoing effect and
as to such other matters as may be reasonably requested by the
Buyer including, without limitation an update as of the Closing
Date regarding the representation contained in Section 3(c) above.
(e) The Company shall have executed and delivered to
the Buyer(s) the Convertible Debentures in the respective amounts
set forth opposite each Buyer(s) name on Schedule I attached
hereto.
(f) As of the Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for
the purpose of effecting the conversion of the Convertible
Debentures , shares of Common Stock to effect the conversion of all
of the Conversion then outstanding and the Company shall have
deposited with Xxxxxx Xxxxxxxx LLP 1,487,500 free trading shares of
the Company's Common Stock in order to honor conversions in the
16
event that the Company's registration statement registering for
resale the shares of Common Stock issuable upon conversion of the
Debentures has not been filed or declared effective by the SEC.
(g) The Irrevocable Transfer Agent Instructions, in
form and substance satisfactory to the Buyer, shall have been
delivered to and acknowledged in writing by the Company's transfer
agent.
8. INDEMNIFICATION.
(a) In consideration of the Buyer's execution and
delivery of this Agreement and acquiring the Convertible Debentures
and the Conversion Shares hereunder, and in addition to all of the
Company's other obligations under this Agreement, the Company shall
defend, protect, indemnify and hold harmless the Buyer(s) and each
other holder of the Convertible Debentures and the Conversion
Shares, and all of their officers, directors, employees and agents
(including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the
" Buyer Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Buyer Indemnitee is a party to the
action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Buyer Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made
by the Company in this Agreement, the Convertible Debentures or the
Registration Rights Agreement or any other certificate, instrument
or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this
Agreement, or the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby,
or (c) any cause of action, suit or claim brought or made against
such Indemnitee and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of
the Indemnities, any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the
issuance of the Convertible Debentures or the status of the Buyer or
holder of the Convertible Debentures the Conversion Shares, as a
Buyer of Convertible Debentures in the Company. To the extent that
the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities,
which is permissible under applicable law.
(b) In consideration of the Company's execution and
delivery of this Agreement, and in addition to all of the Buyer's
other obligations under this Agreement, the Buyer shall defend,
protect, indemnify and hold harmless the Company and all of it's
officers, directors, employees and agents (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the Company
17
Indemnitees") from and against any and all Indemnified Liabilities
incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by the Buyer(s) in this
Agreement, , instrument or document contemplated hereby or thereby
executed by the Buyer, (b) any breach of any covenant, agreement or
obligation of the Buyer(s) contained in this Agreement, the Investor
Registration Rights Agreement or any other certificate, instrument
or document contemplated hereby or thereby executed by the Buyer, or
(c) any cause of action, suit or claim brought or made against such
Company Indemnitee based on material misrepresentations or due to a
material breach and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement, the Investor
Registration Rights Agreement or any other instrument, document or
agreement executed pursuant hereto by any of the Company
Indemnities. To the extent that the foregoing undertaking by each
Buyer may be unenforceable for any reason, each Buyer shall make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of New
York without regard to the principles of conflict of laws. The
parties further agree that any action between them shall be heard
in New York City, New York, and expressly consent to the
jurisdiction and venue of the Supreme Court of New York and the
United States District Court for the Southern District of New York
for the adjudication of any civil action asserted pursuant to this
Paragraph.
(b) COUNTERPARTS. This Agreement may be executed in two
or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the
other party. In the event any signature page is delivered by
facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages
to be physically delivered to the other party within five (5) days
of the execution and delivery hereof
(c) HEADINGS. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) SEVERABILITY. 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 in that
jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction.
18
(e) ENTIRE AGREEMENT, AMENDMENTS. This Agreement
supersedes all other prior oral or written agreements between the
Buyer(s), the Company, their affiliates and persons acting on their
behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party
to be charged with enforcement.
(f) NOTICES. Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been
delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile, ; (iii) three (3)
days after being sent by U.S. certified mail, return receipt
requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company, to: Rubber Technology International Inc.
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxx. - Xxxxx 0000
Xxxxx, Xx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Transfer Agent, to: Securities Transfer Corporation
X.X. Xxx 000000
Xxxxxx, XX 00000
Attention:
If to the Investor: At the address listed on Schedule A.
19
If to the Buyer(s), to its address and facsimile number
on Schedule I, with copies to the Buyer's counsel as set forth on
Schedule I. Each party shall provide five (5) days' prior written
notice to the other party of any change in address or facsimile
number.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective successors and assigns. Neither the Company nor any
Buyer shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other party
hereto.
(h) NO THIRD PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of,
nor may any provision hereof be enforced by, any other person.
(i) SURVIVAL. Unless this Agreement is terminated under
Section 9(l), the representations and warranties of the Company and
the Buyers contained in Sections 2 and 3, the agreements and
covenants set forth in Sections 4, 5 and 9, and the indemnification
provisions set forth in Section 8, shall survive the Closing for a
period of one (1) year following the date on which the Convertible
Debentures are converted in full. The Buyer(s) shall be responsible
only for its own representations, warranties, agreements and
covenants hereunder.
(j) PUBLICITY. The Company and the Buyer(s) shall have
the right to approve, before issuance any press release or any
other public statement with respect to the transactions
contemplated hereby made by any party; provided, however, that the
Company shall be entitled, without the prior approval of the
Buyer(s), to issue any press release or other public disclosure
with respect to such transactions required under applicable
securities or other laws or regulations (the Company shall use its
best efforts to consult the Buyer(s) in connection with any such
press release or other public disclosure prior to its release and
Buyer(s) shall be provided with a copy thereof upon release
thereof).
(k) FURTHER ASSURANCES. Each party shall do and
perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
(1) TERMINATION. In the event that the Closing shall
not have occurred with respect to the Buyers on or before five (5)
business days from the date hereof due to the Company's or the
Buyer's failure to satisfy the conditions set forth in Sections 6
and 7 above (and the non-breaching party's failure to waive such
unsatisfied condition(s)), the non-breaching party shall have the
option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of
20
any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 9(l), the Company
shall remain obligated to reimburse the Buyer(s) for the expenses
described in Section 4(g) above.
(m) FINDER. The Company acknowledges that it has
engaged The May Xxxxx Group, Inc., as the placement agent in
connection with the sale of the Convertible Debentures. The Company
shall be responsible for the payment of any placement agent fees
(which includes cash) relating to or arising out of the
transactions contemplated hereby and from the proceeds thereof.
(n) NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction
will be applied against any party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
RUBBER TECHNOLOGY INTERNATIONAL
INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
By:
---------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
22
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
FORM OF ESCROW AGREEMENT
EXHIBIT C
FORM OF WARRANT
EXHIBIT D
TRANSFER AGENT INSTRUCTIONS
SCHEDULE I
SCHEDULE OF BUYERS
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
AMOUNT OF SUBSCRIPTION
NAME ADDRESS/FACSIMILE NUMBER OF BUYER
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
