SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of February 9, 2015, by and among ROOT9B TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and __________________________________ (the “Purchaser”).
WHEREAS, the Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.
WHEREAS, the Purchaser wishes to purchase, and the Company wishes to sell, at one or more closings, upon the terms and conditions stated in this Agreement, up to an aggregate of 6,685,230 shares of Common Stock and one or more warrants to purchase up to an aggregate of 6,145,008 shares of Common Stock which shall be exercisable pursuant to the terms set forth in a separate Warrant Agreement by and between the Company and the Purchaser substantially in the form attached hereto as Exhibit A (the “Warrant Agreement”).
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:
ARTICLE I.
“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.
“Additional Securities” means any shares of Common Stock, Common Stock Equivalents or other shares of capital stock of the Company issued after the date hereof, provided, however, that none of the following shall be considered Additional Securities: (i) currently outstanding shares of Common Stock Equivalents which are issued prior to the Initial Closing Date; (ii) shares of Common Stock issued to the stockholders of IPSA in connection with the IPSA Acquisition; (iii) options for shares of Common Stock that are granted to the employees of IPSA or the Company on or prior to the Subsequent Closing Date; or (iv) options for shares of Common Stock that are
granted pursuant to the Company Stock Option Plans granted at or above the fair market value for such shares at the time of grant as determined by the Company’s Board of Directors.
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to the Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Purchaser will be deemed to be an Affiliate of the Purchaser.
“Aggregate Initial Purchase Price” has the meaning set forth in Section 2.1(a)
“Aggregate Subsequent Purchase Price” has the meaning set forth in Section 2.1(b)
“Agreement” shall have the meaning ascribed to such term in the Preamble.
“Business Day” means a day, other than a Saturday, Sunday or a day on which commercial banking institutions in New York, New York are authorized or required by law or executive order to be closed.
“Buy-In” has the meaning set forth in Section 4.1(d).
“Buy-In Price” has the meaning set forth in Section 4.1(d).
“Closing Bid Price” means, for any security as of any date, the last closing price for such security on the Principal Trading Market, as reported by Bloomberg, or, if the Principal Trading Market begins to operate on an extended hours basis and does not designate the closing bid price then the last bid price of such security prior to 4:00 p.m., New York City Time, as reported by Bloomberg, or, if the Principal Trading Market is not the principal securities exchange or trading market for such security, the last closing price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the “pink sheets” on OTC Pink. If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Purchaser. If the Company and the Purchaser are unable to agree upon the fair market value of such security, then the Company shall, within two Business Days submit via facsimile (a) the disputed determination to an independent, reputable investment bank selected by the Purchaser and approved by the Company or (b) the disputed arithmetic calculation to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent manifest error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
“Commission” has the meaning set forth in the Recitals.
“Common Stock” means shares of the Common Stock, $0.001 par value per share of the Company and also includes any securities into which the Common Stock may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or any Subsidiary which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.
“Company” has the meaning set forth in the Recitals.
“Company Counsel” means Ruskin Moscou Faltischek, P.C.
“Company Deliverables” has the meaning set forth in Section 2.3(a).
“Company’s Knowledge” means with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement after reasonable investigation.
“Company Stock Option Plans” means root9B Technologies, Inc. 2008 Stock Incentive Plan, as amended, and any other future equity incentive plans of the Company with similar objectives which shall be duly authorized and adopted by the Board of Directors and the shareholders of the Company.
“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Deadline Date” has the meaning set forth in Section 4.1(d).
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
“DTC” has the meaning set forth in Section 4.1(c).
“Environmental Laws” has the meaning set forth in Section 3.1(l).
“ERISA” has the meaning set forth in Section 3.1(kk).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“GAAP” means U.S. generally accepted accounting principles, as applied by the Company.
“Indemnified Person” has the meaning set forth in Section 4.8(b).
“Initial Closing” means the initial closing of the purchase and sale of the Initial Shares and the Initial Warrant pursuant to this Agreement.
“Initial Closing Date” means the third Trading Day following the date upon which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1(a), 2.1(c), 2.1(d)(i), 2.2, 5.1 and 5.2 hereof (in each case with respect to the Initial Closing) are satisfied, or such other date as the parties may agree.
“Initial Company Deliverables” has the meaning set forth in Section 2.2(a).
“Initial Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
“Initial Shares” has the meaning set forth in Section 2.1(a).
“Initial Warrants” has the meaning set forth in Section 2.1(a).
“Initial Warrant Shares” has the meaning set forth in Section 2.1(a).
“Intellectual Property” has the meaning set forth in Section 3.1(r).
“IPSA” means IPSA International, Inc.
“IPSA Acquisition” means the Company’s acquisition of IPSA pursuant to that certain Agreement and Plan of Merger, dated as of February 6, 2015, by and among, the Company, IPSA and IPSA International Services, Inc..
“Legend Removal Date” has the meaning set forth in Section 4.1(c).
“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.
“Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document , (ii) a material and adverse effect on the results of operations, assets, properties, business, condition (financial or otherwise) or prospects of the Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
“Material Contract” means any contract of the Company that was filed as an exhibit to the SEC Reports pursuant to Item 601 of Regulation S-K.
“Material Permits” has the meaning set forth in Section 3.1(p).
“Money Laundering Laws” has the meaning set forth in Section 3.1(ii).
“OFAC” has the meaning set forth in Section 3.1(hh).
“Outside Date” means the tenth day following the date of this Agreement; provided that if such day is not a Business Day, the first day following such day that is a Business Day.
“Outstanding Shares of Common Stock” means, as of any particular measurement time, the sum of (i) the total number of outstanding shares of Common Stock as of such time, and (ii) the total number of shares of Common Stock which the Purchaser has the right to acquire beneficial ownership of within sixty days of such measurement time (to the extent not included in (i)), including but not limited to any right to acquire shares of Common Stock through the exercise or conversion of any Common Stock Equivalents (including any Warrants issued pursuant to the Warrant Agreement after taking into account the exercise limitation contained in Section 3(h) of such Warrants).
“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.
“Press Release” has the meaning set forth in Section 4.6.
“Principal Trading Market” means the Trading Market, if any, on which the Common Stock is primarily listed on and quoted for trading, which, as of the Initial Closing Date, shall be the over the counter market as reported on the OTC Bulletin Board.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Purchase Price” means $1.10 per Share, provided however, that if the Company issues Additional Securities after the date hereof and prior to the Subsequent Closing Date, and the purchase price for such Additional Securities is less than $1.10 per share, then the Purchase Price shall be adjusted to match the purchase price for the Additional Securities.
“Purchased Shares” has the meaning set forth in Section 2.1(b).
“Purchaser” has the meaning set forth in the Recitals.
“Purchaser Deliverables” has the meaning set forth in Section 2.3(b).
“Purchaser Party” has the meaning set forth in Section 4.8(a).
“Regulation D” has the meaning set forth in the Recitals.
“Required Approvals” has the meaning set forth in Section 3.1(e).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“SEC Reports” has the meaning set forth in Section 3.1(h).
“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(vi).
“Securities” means collectively, the Warrants, the Purchased Shares and the Warrant Shares.
“Securities Act” has the meaning set forth in the Recitals.
“Subsequent Closing” means the closing held after the Initial Closing relating to the purchase and sale of the Subsequent Shares and the Subsequent Warrant pursuant to this Agreement.
“Subsequent Closing Date” means the third Trading Day following the date upon which all of the conditions set forth in Sections 2.1(b), 2.1(c), 2.1(d)(ii), 2.3, 5.1 and 5.2 hereof (in each case with respect to the Subsequent Closing) are satisfied, or such other date as the parties may agree.
“Subsequent Company Deliverables” has the meaning set forth in Section 2.3(a).
“Subsequent Purchaser Deliverables” has the meaning set forth in Section 2.3(b).
“Subsequent Shares” has the meaning set forth in Section 2.1(b).
“Subsequent Warrants” has the meaning set forth in Section 2.1(b).
“Subsequent Warrant Shares” has the meaning set forth in Section 2.1(b).
“Subsidiary” means any entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company.
“Trading Day” means (i) if the Company’s Principal Trading Market is the over the counter market as reported on the OTC Bulletin Board, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, (ii) if the Company’s Principal Trading Market is a Trading Market other than the over the counter market as reported on the OTC Bulletin Board, a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink OTC Markets Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) or (iii) hereof, then Trading Day shall mean a Business Day.
“Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.
“Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the Warrant Agreement and the schedules and exhibits attached thereto, including without limitation the Warrant and the schedules and exhibits attached thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder or thereunder.
“Transfer Agent” means Continental Stock Transfer and Trust, or any successor transfer agent for the Company.
“Warrants” has the meaning set forth in Section 2.1(b).
“Warrant Agreement” has the meaning set forth in the Recitals.
“Warrant Shares” has the meaning set forth in Section 2.1(b).
ARTICLE II.
Common Stock that when added to the number of shares of Common Stock subject to the Initial Warrant and the number of Purchased Shares shall be equal to 19.0% of the Outstanding Shares of Common Stock as of immediately following the consummation of the IPSA Acquisition (the “Subsequent Warrant” and the number of shares of Common Stock subject to the Subsequent Warrant, the “Subsequent Warrant Shares” and the Subsequent Warrant together with the Initial Warrant, the “Warrants” and the Subsequent Warrant Shares and the Initial Warrant Shares, together the “Warrant Shares”) for an aggregate Purchase Price equal to the product of (i) the number of Subsequent Shares, and (ii) the Purchase Price (the “Aggregate Subsequent Purchase Price”).
(i) Unless otherwise agreed to by the Company and the Purchaser, on the Initial Closing Date, (1) the Company shall deliver to the Purchaser one or more stock certificates evidencing the Initial Shares and a fully executed copy of the Warrant Agreement and the Initial Warrant and (2) upon receipt thereof, the Purchaser shall wire the Aggregate Initial Purchase Price, in United States dollars and in immediately available funds, in accordance with the Company’s written wire transfer instructions.
(ii) Unless otherwise agreed to by the Company and the Purchaser, on the Subsequent Closing Date, if any, (1) the Company shall deliver to the Purchaser one or more stock certificates evidencing the Subsequent Shares and a fully executed copy of the Subsequent Warrant and (2) upon receipt thereof, the Purchaser shall wire the Aggregate Subsequent Purchase Price, in United States dollars and in immediately available funds, in accordance with the Company’s written wire transfer instructions.
(a) On or prior to the Initial Closing Date, the Company shall issue, deliver or cause to be delivered to the Purchaser the following (the “Initial Company Deliverables”):
(i)
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this Agreement, duly executed by the Company;
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(ii)
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one or more stock certificates, evidencing the Initial Shares subscribed for by the Purchaser hereunder, registered in the name of the Purchaser or as otherwise set forth on the Accredited Investor Questionnaire included as Exhibit B hereto;
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(iii)
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a legal opinion of Company Counsel, dated as of the Initial Closing Date which shall include the opinions set forth in Exhibit C hereto, executed by such counsel and addressed to the Purchaser;
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(iv) the Warrant Agreement and the Initial Warrant, duly executed by the Company;
(v) a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Initial Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving
the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the certificate of incorporation, as amended, and by-laws, as amended, of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company, in the form attached hereto as Exhibit D; and
(vii)
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the Compliance Certificate referred to in Section 5.1(g).
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(b) On or prior to the Initial Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following (the “Initial Purchaser Deliverables”):
(i)
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this Agreement, duly executed by the Purchaser;
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(ii) the Aggregate Initial Purchase Price, in U.S. dollars and in immediately available funds, by wire transfer in accordance with the Company’s written instructions;
(iii)
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the Warrant Agreement, duly executed by the Purchaser; and
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(iv)
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a fully completed Accredited Investor Questionnaire in the form attached hereto as Exhibit B.
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(a) On or prior to the Subsequent Closing Date, if any, the Company shall issue, deliver or cause to be delivered to the Purchaser the following (the “Subsequent Company Deliverables” and together with the Initial Company Deliverables, the “Company Deliverables”):
(i)
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one or more stock certificates, evidencing the Subsequent Shares subscribed for by the Purchaser hereunder, registered in the name of the Purchaser or as otherwise set forth on the Accredited Investor Questionnaire included as Exhibit B hereto;
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(ii)
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the Subsequent Warrant, duly executed by the Company;
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(iii)
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a Secretary’s Certificate, dated as of the Subsequent Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the certificate of incorporation, as amended, and by-laws, as amended, of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company, in the form attached hereto as Exhibit D; and
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(iv)
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the Compliance Certificate referred to in Section 5.1(g).
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(b) On or prior to the Subsequent Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following (the “Subsequent Purchaser Deliverables” and together with the Initial Purchaser Deliverables, the “Purchaser Deliverables”):
(i)
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the Aggregate Subsequent Purchase Price, in U.S. dollars and in immediately available funds, by wire transfer in accordance with the Company’s written instructions; and
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(ii)
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a fully completed Accredited Investor Questionnaire in the form attached hereto as Exhibit B with respect to the Subsequent Shares if there are to be any
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changes with respect to the Subsequent Shares from the Accredited Investor Questionnaire delivered as of the Initial Closing Date.
ARTICLE III.
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. Except for Material Contracts, there are no stockholder agreements, voting agreements, or other similar arrangements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.
(d) No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of the Securities) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchaser herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(g) Capitalization. The capitalization of the Company as of the date hereof and as of the Initial Closing Date is as set forth on Schedule 3.1(g). The pro forma capitalization of the Company as of immediately following the consummation of the IPSA Acquisition is also set forth on Schedule 3.1(g). All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company. Except as specified on Schedule 3.1(g): (i) no shares of the Company’s outstanding capital stock are subject to preemptive rights or any other similar rights; (ii) 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, or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, that are either not included as exhibits to the SEC Reports or that a form of which is not included as an exhibit to the SEC Reports; (iii) there are no material outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or by which the Company is bound; (iv) except as set forth on Schedule 3.1(g)(iv), there are no agreements or arrangements under which the Company is obligated to register the sale of any of their securities under the Securities Act; (v) there are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (vi) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (vii) the Company has no liabilities or obligations other than those disclosed in the SEC Reports or those which, individually or in the aggregate, will not have or could not reasonably be expected to have a Material Adverse Effect. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.
financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the balance sheet of the Company and its consolidated subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments, which would not be material, either individually or in the aggregate.
liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead to such a claim.
(n) Employment Matters. No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to have a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Subsidiary believes that its relationship with its employees is good. To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
conducted and as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”), and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of proceedings relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material Permits.
(r) Intellectual Property. The Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service xxxx registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted in the SEC Reports except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except as set forth in the SEC Reports and except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property; (b) there is no infringement by third parties of any such Intellectual Property; (c) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property; (d) there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; and (e) there is no pending or threatened action, suit, proceeding or claim by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others.
transaction with the Company or to a presently contemplated transaction (other than for services as employees, officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.
(x) Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser under the Transaction Documents. The issuance and sale of the Securities does not contravene the rules and regulations of the Principal Trading Market.
(z) No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated.
believe that it will not in the foreseeable future continue to be, in compliance in all material respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal Trading Market.
(ee) Disclosure. The Company confirms that neither it nor any of its officers or directors nor any other Person acting on its or their behalf has provided the Purchaser or its respective agents or counsel with any information that it believes constitutes or could reasonably be expected to constitute material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information, all of which will be disclosed by the Company in the Press Release(s) as contemplated by Section 4.6 hereof. The Company understands and confirms that the Purchaser will rely on the foregoing representations in effecting transactions in securities of the Company. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed, except for the announcement of this Agreement and related transactions and as may be disclosed on the Form 8-K filed pursuant to Section 4.6.
Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.
partnership, limited liability company or other applicable like action, on the part of the Purchaser. Each of this Agreement and the Warrant Agreement has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
(c) Investment Intent. The Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to, or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, the Purchaser does not agree to hold any of the Securities for any minimum period of time and reserves the right, subject to the provisions of this Agreement and the Warrant Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. The Purchaser is acquiring the Securities hereunder in the ordinary course of its business. The Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Securities (or any securities which are derivatives thereof) to or through any person or entity.
published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.
The Company and the Purchaser acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.
ARTICLE IV.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OR TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
adviser of the Purchaser, or include the name of the Purchaser or any Affiliate or investment adviser of the Purchaser in any press release or filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except (i) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (ii) to the extent such disclosure is required by law, at the request of the Staff of the Commission or Trading Market regulations, in which case the Company shall provide the Purchaser with prior written notice of such disclosure permitted under this subclause (ii). From and after the issuance of the Press Release(s), the Purchaser shall not be in possession of any material, non-public information received from the Company, any Subsidiary or any of their respective officers, directors or employees, that is not disclosed in the Press Release(s). The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in this Section 4.6, the Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
respect of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially and adversely prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not affect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.
ARTICLE V.
Closing Date, with respect to the Initial Closing and as of the Subsequent Closing Date, with respect to the Subsequent Closing, as though made on and as of such date, except for such representations and warranties that speak as of a specific date.
5.2 Conditions Precedent to the Obligations of the Company to sell the Purchased Shares and the Warrants. The Company’s obligation to sell and issue the Initial Shares and the Initial Warrants on the Initial Closing Date and to sell and issue the Subsequent Shares and the Subsequent Warrant on the Subsequent Closing Date is subject to the fulfillment to the satisfaction of the Company of each of the following conditions, any of which may be waived by the Company:
ARTICLE VI.
(i) if to the Company,
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(ii) if to the Purchaser, at the address shown on the signature page hereto,
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or to such other address as the party to whom notice is to be given may have furnished to the other in writing in accordance with the provisions of this Section 6.3. Any such notice or communication will be deemed to have been received: (A) in the case of telecopy or personal delivery, on the date of such delivery; (B) in the case of nationally-recognized overnight courier, on the next business day after the date sent; and (C) if by registered or certified mail, on the third business day following the date postmarked.
6.6 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of the Purchaser. The Purchaser may assign its rights hereunder in whole or in part to any Person to whom the Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchaser”.
6.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the Delaware Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Delaware Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
6.12 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.
to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. Upon a termination in accordance with this Section, the Company and the Purchaser shall not have any further obligation or liability (including arising from such termination) to the other.
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
ROOT9B TECHNOLOGIES, INC.
By:_______________________________________
Name:
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOR PURCHASER FOLLOWS]
EXHIBITS
A: Form of Warrant Agreement
B: Accredited Investor Questionnaire
C: Form of Opinion of Company Counsel
D: Form of Secretary’s Certificate
E: Form of Officer’s Certificate
SCHEDULES
3.1(a) Subsidiaries
3.1(g) Capitalization
3.1(g)(iv) Registration Rights