EXHIBIT 10(D) 506 SUBSCRIPTION AGREEMENT
TECHSCENCE INDUSTRIES, INC
ACCREDITED INVESTOR SUBSCRIPTION AGREEMENT (the "Agreement") dated
February 8, 1999 between Techscience Industries, Inc., a Delaware corporation
with principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the
"Company") and the person or persons executing this Agreement on the last page
(the "Subscriber").
1. DESCRIPTION OF THE OFFERING. This Agreement sets forth the terms
under which the Subscriber will invest in the Company. This subscription is one
of two subscriptions for $12,400 principal amount of 30 day convertible
promissory notes bearing interest at
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9.6% per annum (the "Notes"). The Notes, a form of which are annexed to this
Agreement as Exhibit "A" and hereby incorporated herein by reference, are
convertible into an aggregate of 200,000 authorized but unissued shares of the
Company's common stock, $.01 par value per share at $.062 per share (the
"Shares"). The Shares will be "restricted securities" as that term is defined
under Rule 144 under the Securities Act of 1933, as amended (the "Act") and
ineligible for public sale for a period of 12 months from the date of issuance.
In addition, each Subscriber hereby agrees and consents to an additional 18
month voluntary lock up of the Shares so that the Shares will be ineligible for
public sale for a period of 30 months from the date of issuance. The Notes are
being offered under and pursuant to Rule 506 of Regulation D (the "Rule") under
the Act for a period of five business days from February 8, 1999. This offering
is being conducted solely to "Accredited Investors" as that term is defined in
Rule 501(a) of Regulation D under the Act for the purpose of securing the 'seed
money' necessary to put the Company in the position to implement the Company's
proposed business combination with XxxXxxxxx.xxx, Inc., a non-affiliated
California corporation ("PPI") wherein the Company will acquire all of the
issued and outstanding shares of PPI's common stock, $.01 par value per share,
solely in exchange for the issuance of an aggregate of 7,325,000 shares of the
Company (the "Reorganization").
2. TERMS OF THE OFFERING. The Company is offering the Notes on a
strictly best efforts basis with no minimum principal amount of Notes that must
be purchased. As provided in the escrow agreement annexed to this Agreement as
Exhibit "B" and hereby incorporated herein by reference (the "Escrow
Agreement"), the Shares issuable upon the Subscriber's conversion of the Notes
shall be held in escrow by Xxxxxx Xxxxxxxxxxx, Esq., securities counsel to the
Company until the closing of the Reorganization. In the event the Reorganization
does not close on or before April 1, 1999, and unless extended by the written
agreement of the Company and PPI, the Company will: (i) repay the Subscriber the
full amount of his investment in the Notes upon the Subscriber's tender of his
original executed Note to the Company; and (ii) restore the Shares to authorized
but unissued status. The Execution of this Agreement shall constitute an offer
by the Subscriber to subscribe to the Shares in the amount and on the terms
specified herein. The Company reserves the right, in its sole discretion, to
reject in whole or in part, any subscription offer. If the Subscriber's offer is
accepted, the Company will execute a copy of this Agreement and return it to
Subscriber along with a duly executed Note. Upon execution of this Agreement,
the Company will instruct its transfer agent to cause the original issuance of
certificates representing the Shares and the delivery thereof to Xxxxxx
Xxxxxxxxxxx, Esq., the Escrowee under the Escrow Agreement.
3. SUBSCRIPTION PAYMENT. Subscription to each Note requires a minimum
total cash investment of $12,400. The Company has agreed, however, to accept
subscriptions for $4,133.33 and $6,200 principal amount of Notes so long as the
total number of Subscribers does not exceed five. The subscription price will be
payable in cash in full on subscription.
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4. IMMEDIATE USE OF SUBSCRIPTIONS BY THE COMPANY. The Company is
conducting the offering on a strictly best efforts basis without a minimum.
Accordingly, all funds forwarded directly to the Company by Subscribers upon the
execution of this Agreement will immediately be deposited in an operating
account maintained by the Company at First Union National Bank and thereafter
utilized for the purpose of : (i) bringing the Company current in its periodic
reporting obligations under the Securities Exchange Act of 1934 (the "34 Act");
(ii) settling outstanding obligations to creditors; (iii) reinstating its
charter in the State of Delaware; (iv) paying legal and accounting fees; (v)
registering the Company's common stock with Standard & Poors Corporate records;
and (vi) defraying the costs of the Reorganization.
5. THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants as follows:
(a) The Company will be, prior to the closing of the
Reorganization, a corporation duly formed and in good standing under the laws of
the State of Delaware with full power and authority to conduct its business as
contemplated;
(b) The Company has the corporate power to execute, deliver
and perform this Agreement, the Notes and the Escrow Agreement in the time and
manner contemplated; and
(c) The Shares issuable to Subscribers upon their conversion
of the Notes have been reserved for issuance and when issued, will be duly and
validly issued, fully paid and non-assessable with no personal liability
attaching to the ownership thereof.
6. SUBSCRIBER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Subscriber hereby represents, warrants and covenants as follows:
(a) The Subscriber is an "Accredited Investor" as defined in
Rule 501(a) of Regulation D under the Act. This representation is based on the
fact that the Subscriber is an accredited individual who, together with the
Subscriber's spouse, have a net worth of at least $1,000,000 OR the Subscriber,
individually, has had net income of not less than $200,000 during the last two
years, and reasonably anticipates that the Subscriber will have an income of at
least $200,000 during the present year and the next year;
(b) If the Subscriber is a corporation, it either has assets
of $5,000,000 or is comprised of stockholders that are individually accredited
and: (i) the person executing this Subscription Agreement does so with full
right, power and authority to make this investment; (ii) that such entity was
not formed for the specific purpose of making an investment in the Company; and
(iii) that all further representations and warranties made herein are true and
correct with respect to such corporation;
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(c) The address set forth below is the Subscriber's true and
correct residence, and the Subscriber has no present intention of becoming a
resident of any state or jurisdiction;
(d) The Subscriber has received and read or reviewed, is
familiar with and fully understands the due diligence material furnished by the
Company, annexed to this Agreement and comprising, inter alia: (i) draft copies
of the Company's Form 10-KSB Annual Reports, Form 8-K Current report and Form 10
SB; (ii) audited financial statements for the five fiscal years ended October
31, 1995; (iii) draft audited financial statements for the six fiscal years
ended October 31, 1996; (iv) the Company's February 199 Letter of Intent with
PPI; and (v) a copy of PPI's Business Plan including three year cash flow
projections and assumptions. The Subscriber also fully understands this
Agreement and the risks associated with this offering, and confirms that all
documents, records and books pertaining to the Subscriber's investment in the
Notes and requested by the Subscriber have been made available or delivered to
the Subscriber by the Company;
(e) The Subscriber hereby specifically acknowledges and
accepts that the Subscriber is fully aware of the following HIGH RISK FACTORS:
(i) The Company is a "shell corporation" with no
operations since 1991;
(ii) The Company has been disenfranchised by the
State of Delaware for non-payment of franchise taxes. Although the Company is in
the process of reinstating its charter and reinstatement will be retroactive, as
of the date hereof the Company has not yet effectuated this reinstatement;
(iii) The Shares will not be deemed duly and validly
issued until and unless the Company is reinstated in the State of Delaware and
as a result the Subscriber's 144 holding period will not commence until such
date;
(iv) The Company is presently delinquent in its
reporting obligations under the 34 Act and has been so delinquent since 1991;
(v) Unless the Company becomes current under the
34 Act, the Subscriber will not be able to take advantage of Rule 144 under the
Act, as a means of selling the Shares;
(vi) Even if the Company is successful in becoming
current in its reporting obligations under the 34 Act, the Subscriber will be
unable to take advantage of Rule 144 under the Act, as a means of selling the
Shares until and unless the Subscriber has held the Shares for 30 months;
(vii) There is currently no market for the Company's
common stock and there can be absolutely no assurance whatsoever that a market
will ever develop. In addition, no market will develop until and unless the
Company is successful in reinstating
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its charter, bringing its 34 Act reports current and consummating the
Reorganization with PPI, of which there can be absolutely no assurance
whatsoever;
(viii) There can be no assurance whatsoever that PPI
will be successful without the infusion of additional capital usually attendant
upon an Internet company;
(ix) Although the Company intends to consummate the
Reorganization with PPI as soon as practicable, the can be absolutely no
assurance whatsoever as to the timing of the Reorganization. Accordingly, and
until the Reorganization is consummated, the Subscriber will own shares in a
"shell" with no operations, no material amount of assets and no prospect for
recoupment of the Subscriber's investment until and unless the Reorganization or
another similar transaction closes. In the event the Company is unsuccessful in
consummating the Reorganization, the Subscribers' investment in the Notes may
never be recouped;
(ix) For all of the reasons set forth above, the
Subscriber should be prepared to lose his entire investment in the Notes.
(f) The Subscriber has had an opportunity to ask questions of
and receive answers from the Company or a person or persons acting on its
behalf, concerning the terms and conditions of this investment and confirms that
all documents, records and books pertaining to the investment in the Notes and
requested by the Subscriber has been made available or delivered to the
Subscriber;
(g) In the event the Subscriber exercises the conversion
privileges of the Notes, he will be acquiring the Shares solely for the
Subscriber's own account, for investment and are not with a view to or for the
resale, distribution, subdivision or fractionalization thereof; and the
Subscriber has no present plans to enter into any such contract, undertaking,
agreement or arrangement;
(h) The funds tendered to the Company in payment of the Notes
subscribed for hereby belong to the Subscriber, and no other individual or
entity has any interest in such funds. Furthermore, and regardless of the nature
of such funds (i.e., whether in cash, personal, cashiers, bank or certified
check) the same represent legal income of the Subscriber;
(i) The Subscriber understands that the Shares issuable upon
conversion of the Notes have not and will not be registered under the Act, and
must be held for a minimum of 30 months prior to any public sale thereof;
(j) The Subscriber understands that the Company is under no
obligation to register the Shares issuable upon conversion of the Notes under
the Act or to comply with the requirements for any exemption which might
otherwise be available, or to supply the Subscriber with any information
necessary to enable the Subscriber to make routine sales
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of the Shares issuable upon conversion of the Notes under Rule 144 or any other
rule of the Rules and Regulations of the Securities and Exchange Commission
adopted under the Act;
(k) The Subscriber's compliance with the terms and conditions
of this Agreement will not conflict with any instrument or agreement pertaining
to the Notes or the Shares or the transactions contemplated herein; and will not
conflict in, result in a breach of, or constitute a default under any instrument
to which the Subscriber is a party or the Notes or the Shares is the subject;
(l) The Subscriber will seek his own legal and tax advice
concerning tax implications attendant upon the purchase of the Notes and
understands and accepts that the Company is relying upon this representation
insofar as disclosure of tax matters is concerned;
(m) The Subscriber hereby acknowledges and represents that the
Subscriber is aware of the following:
(i) The Notes are speculative investments which
involve a high degree of risk; and
(iii) The closing of the Reorganization is
specifically conditioned upon the Company satisfying all of the conditions
precedent set forth in the Letter of Intent with PPI. One of those conditions
precedent is the successful consummation by the Company of a second private
placement of 250,000 shares of its common stock at $4.00 per share under Rule
506. There can be absolutely no assurance whatsoever that this financing can or
will be successfully consummated by the Company. The risk of failure of this
financing will fall predominately on the purchaser of the Notes offered hereby.
The foregoing representations and warranties are true and accurate as
of the date hereof and shall be true and accurate as of the date of delivery of
the subscription to the Company and shall survive such delivery. If, in any
respect, such representations and warranties shall not be true and accurate, the
Subscriber shall give written notice of such fact to the Company, specifying
which representations and warranties are not true and accurate and the reasons
therefor.
7. RESPONSIBILITY. The Company or its officers and directors shall not
be liable, responsible or accountable in damages or otherwise to Subscriber for
any act or omission performed or omitted by them in good faith and in a manner
reasonably believed by them to be within the scope of the authority granted to
them by this Agreement and in the best interests of the Company provided they
were not guilty of gross negligence, willful or wanton misconduct, fraud, bad
faith or any other breach of fiduciary duty with respect to such acts or
omissions.
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8. MISCELLANEOUS.
(a) This Agreement shall be deemed to have been made in and
shall be governed by and interpreted under and construed in all respects in
accordance with the laws of the State of New Jersey, irrespective of the place
of domicile or residence of any party. In the event of a controversy arising out
of the interpretation, construction, performance or breach of this Agreement,
the Company and the Subscriber hereby agree and consent to the jurisdiction and
venue of the Superior Court of the State of New Jersey, Xxxxxx County and/or the
United States District Court for the District of New Jersey; and further agree
and consent that personal service or process in any such action or proceeding
outside of the State of New Jersey and Xxxxxx County shall be tantamount to
service in person within the State of New Jersey and Xxxxxx County and shall
confer personal jurisdiction and venue upon either of the said courts.
(b) The Company and the Subscriber hereby covenant that this
Agreement is intended to and does contain and embody herein all of the
understandings and Agreements, both written or oral, of the Company and the
Subscriber with respect to the subject matter of this Agreement, and that there
exists no oral agreement or understanding, express or implied liability, whereby
the absolute, final and unconditional character and nature of this Agreement
shall be in any way invalidated, empowered or affected. There are no
representations, warranties or covenants other than those set forth herein.
(c) The headings of this Agreement are for convenient
reference only and they shall not limit or otherwise affect the interpretation
or effect of any terms or provisions hereof.
(d) This Agreement shall not be changed or terminated orally
except as set forth herein. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by and
against the successors and assigns of the Company and the heirs, executors,
administrators and assigns of the Subscriber.
(e) A modification or waiver of any of the provisions of this
Agreement shall be effective only if made in writing and executed with the same
formality as this Agreement. The failure of either the Company or the Subscriber
to insist upon strict performance of any of the provisions of this Agreement
shall not be construed as a waiver of any subsequent default of the same or
similar nature, or of any other nature or kind.
9. BLUE SKY STATEMENTS.
(a) FOR NEW YORK RESIDENTS ONLY. The Subscriber agrees that
this Unit (or Notes) is being purchased for my own account for investment, and
not for distribution or resale to others. The Subscriber represents that the
Subscriber has adequate means of providing for the Subscriber's current needs
and possible personal contingencies, and that the Subscriber has no need for
liquidity of this investment.
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It is understood that all documents, records and books
pertaining to this investment have been made available for inspection by the
Subscriber and/or any representative thereof, and that the books and records of
the Company will be available upon reasonable notice, for inspection by
Subscriber during reasonable business hours at the Company's principal place of
business. The Attorney General of the State of New York does not pass upon or
endorse the merits of this or any private offering. Any representation to the
contrary is unlawful.
(b) FOR NEW JERSEY RESIDENTS ONLY. The Subscriber hereby
acknowledges to the New Jersey Bureau of Securities (the "Bureau") that the
Subscriber intends to purchase the Notes in the Company on or before the
Termination Date. The Subscriber further acknowledges that the Subscriber is
aware that the Notes are not registered with the Bureau and that the Bureau has
not passed upon or endorsed the merits of this offering.
The Subscriber warrants to the Bureau that the Subscriber
shall not promote, offer for sale, sell or otherwise transfer the securities at
any time unless they are registered with or expressly exempt from registration
by the Bureau.
THE SUBSCRIBER HEREBY REPRESENTS, WARRANTS, AGREES AND
ACKNOWLEDGES THAT THE SUBSCRIBER HAS RECEIVED, READ, UNDERSTOOD AND IS FAMILIAR
WITH THE RISKS ASSOCIATED WITH THE SUBSCRIBER'S INVESTMENT IN THE COMPANY AS SET
FORTH IN THIS AGREEMENT AND THE OFFERING PURSUANT TO WHICH THIS SUBSCRIPTION IS
BEING MADE. THE SUBSCRIBER FURTHER ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN
THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE TO THE
SUBSCRIBER, OR TO THE SUBSCRIBER'S ADVISORS, BY THE COMPANY, OR BY ANY PERSON
ACTING ON BEHALF OF THE COMPANY, WITH RESPECT TO THE NOTES, THE PROPOSED
BUSINESS OF THE COMPANY, THE DEDUCTIBILITY OF ANY ITEM FOR TAX PURPOSES, AND/OR
THE ECONOMIC, TAX, OR ANY OTHER ASPECTS OR CONSEQUENCES OF A PURCHASE OF THE
NOTES, AND THAT THE SUBSCRIBER HAS NOT RELIED UPON ANY INFORMATION CONCERNING
THE OFFERING, WRITTEN OR ORAL, OTHER THAN THAT CONTAINED IN THIS AGREEMENT.
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10. APPLICATION FOR INDIVIDUAL SUBSCRIBERS. Subscriber hereby offers to
purchase and subscribe to ________ principal amount of Notes and encloses
payment of $________________.
SIGNATURE PAGE
For Individuals
----------------------------------------
Signature of Individual Subscriber
----------------------------------------
Name of Individual Subscriber
----------------------------------------
Xxxxxx Xxxxxxx - Xxxxxxxxx
----------------------------------------
Xxxx, Xxxxx and Zip Code
Social Security Number:
----------------------------------------
AGREED TO AND ACCEPTED:
As of February 8, 1999
TECHSCIENCE INDUSTRIES, INC.
BY: /s/ XXXXX X. XXXX
-------------------------------------
Xxxxx X. Xxxx, President
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10. APPLICATION FOR CORPORATE SUBSCRIBERS. Subscriber hereby
offers to purchase and subscribe to ________ principal amount of Notes and
encloses payment of $________________.
SIGNATURE PAGE
For Corporations
----------------------------------------
Name of Corporation
BY:
----------------------------------------
Signature of Executive Officer
----------------------------------------
Name and Title of Authorized
Signatory (please print)
----------------------------------------
Business Address
----------------------------------------
City, State and Zip Code
Tax Identification Number:
----------------------------------------
AGREED TO AND ACCEPTED:
As of February 8, 1999
TECHSCIENCE INDUSTRIES, INC.
BY: /s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx,
President
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EXHIBIT "A"
9.6% CONVERTIBLE PROMISSORY NOTE
February 8, 1999 $6,200
FOR VALUE RECEIVED, Techscience Industries, Inc., a Delaware
corporation with principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as the "Maker") promises to pay to the order of
the individual, firm or entity indicated on the last page of this Note
(hereinafter referred to as the "Holder") in lawful money of the United States
of America, the principal sum of Six Thousand Two Hundred and 00/100 ($6,200)
Dollars with interest at a rate of nine and six tents (9.6%) percent per annum.
1. PAYMENTS.
(a) INTEREST. Unless sooner converted as hereinafter
enumerated, an interest payment of Fifty and 00/100 ($50) Dollars shall be
payable on the 30th business day following the date of this Note (the "Due
Date"). In the event that the required interest payment shall not be paid when
due, and shall remain unpaid for a period of five business (5) days or more,
then a late charge of two (2%) percent shall be due and owing for each month or
any portion thereof that such payment shall remain unpaid.
(b) PRINCIPAL. Unless sooner converted as hereinafter
enumerated, payment of the full principal amount due under this Note shall be
made on the Due Date. In the event that the principal shall not be paid on the
Due Date, and shall remain unpaid for a period of five business (5) days or
more, then a late charge of two (2%) percent shall be due and owing for each
month or any portion thereof that such payment shall remain unpaid.
2. CONVERSION.
At any time and from time to time prior to the Due Date but not
thereafter, the Holder shall have the right to convert the entire unpaid
principal balance and all unpaid interest but not less into theretofore
authorized but unissued, fully paid and non-assessable but unregistered (i.e.
restricted) shares of the Maker's Common stock, $.01 par value per share (
hereinafter referred to as the "Shares").
(a) CONVERSION PRICE. The price the Maker utilized in
determining how many Shares the Note Holder is to receive is $.0625 per Share
which price, although arbitrarily determined, is nonetheless hereby acknowledged
and accepted by the Maker and Holder as fair and equitable for a seed money
investment in shares of an inactive, disenfranchised shell corporation that are
restricted for 30 months. Accordingly, this Note shall be convertible into an
aggregate of 100,000 Shares.
(b) MANNER OF CONVERSION. On the Holder's presentation to
the Maker of a duly executed Notice of Conversion in the form annexed to this
Note together with the
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original executed copy of this Note, the Holder shall be entitled, subject to
the limitations herein contained, to receive in exchange therefor a certificate
or certificates for fully paid and non-assessable Shares, on the basis
enumerated herein. This Note shall be deemed to have been converted and the
person converting the same to have become the holder of record of Shares, for
the purpose of receiving dividends and for all other purposes whatsoever as of
the date when the Notice of Conversion and this Note are surrendered to the
Maker as aforesaid.
(c) NO FRACTIONAL SHARES. No fractional Shares shall be
issuable upon any conversion, it being intended and agreed that the number of
Shares to be received by a Holder upon conversion of this Note be rounded out to
the nearest whole share.
(d) RESERVATION OF SHARES. So long as any portion of the
principal amount of this Note shall remain unpaid, the Maker shall reserve and
keep available out of its authorized and unissued common share capitalization,
solely for the purpose of effecting the conversion of this Note, such number of
Shares as shall from time to time be sufficient to effect the conversion of the
unpaid principal balance and accrued interest of this Note. The Maker shall from
time to time increase its authorized common share capitalization and take such
other action as may be necessary to permit the issuance from time to time of the
Shares as fully paid and non-assessable securities upon the conversion of this
Note.
(e) PAYMENT OF TAXES. The Maker shall pay any and all taxes
which may be imposed upon it with respect to the issuance and delivery of the
Shares upon the conversion of this Note as herein provided. However, the Maker
shall not be required in any event, to pay any transfer or other taxes by reason
of the issuance of such Shares in names other than that of the Holder and no
such conversion or issuance of Shares shall be made unless and until the person
requesting such issuance has paid to the Holder the amount of any such tax, or
has established to the satisfaction of the Maker, and its transfer agent, if
any, that no such tax is payable or has been paid.
(f) DIVIDENDS. Upon any conversion of this Note, as herein
provided, no adjustment or allowance shall be made for accumulated dividends on
the Shares. All rights of the Holder to receive dividends, if any, shall
commence as of the date of conversion of this Note. Any dividends issuable on
the Shares shall be paid to the Escrowee (as that term is defined in an Escrow
Agreement to which the Maker and the Holder are a party and which is attached as
an exhibit to the Accredited Investor Subscription Agreement to which this Note
is attached as an exhibit).
(g) INVESTMENT REPRESENTATIONS. The Holder has been advised,
and by the acceptance of this Note, agrees and acknowledges that none of the
Shares issuable upon conversion of this Note shall have been registered under
the Securities Act of 1933, as amended (the "Act") or under any state securities
law; and that in including the conversion option in this Note, the Maker is
relying upon an exemption from registration based upon the Holder's investment
representations. In this regard, the Holder hereby represents and warrants to
the Maker that: (i) in the event the Holder avails him, her or itself of the
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conversion feature of this Note, the Holder will acquire the Shares for
investment purposes and without a view to the transfer or resale thereof;
(ii) in the event the Holder avails him, her or itself of the conversion feature
of this Note, the Holder will hold the Shares for 30 months; (iii) any sale of
the Shares will be accomplished only in accordance with the Act and the rules
and regulations of the Securities and Exchange Act adopted thereunder; and (iv)
the Holder hereby consents to the issuance by the Maker of a 30 month stop
transfer order against any and all certificates representing the Shares on the
books and records of the Maker and its transfer agent; and consents to the Maker
placing a 30 month investment legend on any and all certificates representing
the Shares.
(h) ADJUSTMENT OF CONVERSION RATE. The conversion rate
provided herein shall be subject to adjustment from time to time only in the
event that prior to the Holder's conversion of this Note any of the following
events (other than in connection with the consummation of the Maker's proposed
business combination with XxxXxxxxx.xxx, Inc, and the four for twenty-five
reverse split contemplated thereby) occurs: (i) a reorganization,
recapitalization or stock split the outstanding Shares of Common stock of the
Maker are increased or decreased, or changed into or exchanged for a different
number or kind of shares of stock or securities of the Maker, or of another
corporation, or changed into or exchanged for cash; (ii) if all or substantially
all of the Maker's properties and assets are distributed to the holders of the
Maker's Common stock; or (iii) if there is a distribution upon the Shares by way
of a spin-off of any shares of capital stock or other securities of any
subsidiary or other corporation or entity. Then, upon any conversion hereof
after the record date for determination of the holders of the Shares entitled to
participate in any such event, the Holder hereof shall be entitled to receive
such kind and number of shares of stock or securities or other property or cash
as such Holder would have been entitled to receive had such Holder owned the
Shares issuable upon conversion at the time of that record date. If the event
involves another corporation or another entity, then the Maker shall, as part of
the transaction, make adequate provision for the Holder hereof thereafter to
receive the securities, property or cash to which such Holder is entitled under
this Section 2.
(i) RESTRICTIONS ON RESALE. The Shares received upon
conversion of the Note, shall be ineligible for public sale for a period of 30
months from the date of conversion. In addition, the Shares are subject to the
terms and conditions set forth in an Escrow Agreement to which the Maker and the
Holder are a party and which is attached as an exhibit to the Accredited
Investor Subscription Agreement to which this Note is attached as an exhibit.
3. EVENTS OF DEFAULT. The Maker shall be in default hereunder if: (a)
The Maker shall fail to pay interest on this Note when due and the failure shall
continue for a period of 30 days after notice of such default has been received
from the Holder; or; (b) default in the performance of any obligation to the
Holder hereof.
4. WAIVER OF PRESENTMENT, ETC. The Maker of this Note hereby waives
presentment for payment, demand, notice of non-payment and dishonor, protest and
notice
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of protest; and waives trial by jury in any action or proceeding arising on, out
of, under or by reason of this Note.
The rights and remedies of the Holder hereof under this Note shall be
deemed cumulative, and the exercise of any right or remedy shall not be regarded
as barring any other remedy or remedies. The institution of any action to
recovery any portion of the indebtedness evidenced by this Note shall not be
deemed a waiver of any other right of the Holder hereof.
5. STATUS OF REGISTERED HOLDER. The Maker may treat the registered
holder of this Note as the absolute owner of this Note for the purpose of making
payments of interest and for all other purposes and shall not be affected by any
notice to the contrary.
6. RESTRICTIVE LEGEND. The Holder agrees that a legend reading
substantially as follows may be placed on any and every certificate representing
all or any portion of the Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended.
These shares have been acquired for investment and not
for distribution or resale for 30 months. They may not be
publicly sold mortgaged, pledged, hypothecated or
otherwise transferred without an effective registration
statement for such shares under the Securities Act of
1933, as amended or an opinion of counsel satisfactory to
the Company that registration is not required under such
Act."
7. NOTICES. Any notice required or contemplated by this Note shall be
deemed sufficiently given if sent by registered or certified mail or via
overnight courier to the Maker at its principal office or to the Holder at the
Holder's address shown on the books of the Maker or at such other address as the
Holder may delegate in a notice for that purpose and shall be deemed to have
been sent on the date of mailing or the airbill.
8. HEADINGS. The headings in this Note are solely for convenience of
reference and shall not affect its interpretation.
9. ASSIGNMENTS. This Note is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, representatives and/or successors and assigns. Notwithstanding
the foregoing, neither the Maker nor the Holder shall assign or transfer any
rights or obligations hereunder, except that the Maker may assign or transfer
this Note to a successor corporation in the event of a merger, consolidation or
transfer or sale of all or substantially all of the assets of the Maker,
provided that no such further assignment shall relieve the Maker from liability
for the obligations assumed by it hereunder.
10. LAWS OF THE STATE OF NEW JERSEY. This Note shall be deemed to be
made, executed and delivered in, governed by and interpreted under and construed
in all respects
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in accordance with the laws of the State of New Jersey, irrespective of the
place of domicile or residence of any Holder. In the event of a controversy
arising out of the interpretation, construction, performance or breach of this
Agreement, the Maker and the Holder hereby agree and consent to the jurisdiction
and venue of the Superior Court of the State of New Jersey, Xxxxxx County and/or
the United States District Court for the District of New Jersey; and further
agree and consent that personal service or process in any such action or
proceeding outside of the State of New Jersey and Xxxxxx County shall be
tantamount to service in person within the State of New Jersey and Xxxxxx County
and shall confer personal jurisdiction and venue upon either of the said courts.
11. ENTIRE DOCUMENT. Each of the parties hereby covenants that this
Note is intended to and does contain and embody herein all of the understandings
and agreements, both written or oral, of the parties hereto with respect to the
subject matter of this Note, and that there exists no oral agreement or
understanding, express or implied, whereby the absolute, final and unconditional
character and nature of the Note shall be in any way invalidated, impaired or
affected. There are no provisions affecting or interpreting this Note other than
those set forth herein.
The acceptance of any installments or payments by the Holder hereof
after the due date herein, or the waiver of any other or subsequent breach or
default may prevent the Holder hereof from immediately pursuing any or all of
his remedies.
Techscience Industries, Inc.
BY: /s/ XXXXX X. XXXX
-------------------------------------
Xxxxx X. Xxxx, President
ACCEPTED:
----------------------------------------
(Print) Name of Holder
----------------------------------------
(Print) Town, State and Zip Code
----------------------------------------
(Print) Street Address of Holder
----------------------------------------
Signature of Holder
27
----------------------------------------
Title of Corporate or Partnership Signer
----------------------------------------
Holder's Social Security Number
----------------------------------------
Holder's Taxpayer ID Number
28
NOTICE OF CONVERSION
(To be signed only upon conversion of the Note.)
To Techscience Industries, Inc. (the "Company"):
The undersigned, the holder of this Note, hereby irrevocably elects to
exercise the conversion rights represented by this Note for, and to acquire
thereunder, pursuant to and in accordance with the terms of this Note, an
aggregate of ___________ shares of Common stock, $.001 par value per share (the
"Shares") of the Company at a conversion price of $.0625 per Share, and requests
that one certificate for such Shares be issued in the name of and be delivered
to the undersigned at the address appearing on the signature page of the
Accredited Investor Subscription Agreement dated February 8, 1999 between the
undersigned and the Company. This form shall represent the undersigned's
conversion of the entire unpaid amount of principal and accrued interest due to
the undersigned under the Note.
Dated:_____________________________ ___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Note)
AGREED TO AND ACCEPTED:
Techscience Industries, Inc.
BY:/s/ XXXX X. XXXX
-----------------------------
Xxxx X. Xxxx, Treasurer
29
EXHIBIT "B"
ESCROW AGREEMENT (the "Agreement") made this 8th day of
February 1999 among Techscience Industries, Inc., a Delaware corporation with
principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
referred to as the "Company"), the individual, firm or entity indicated on the
last page of this Agreement (the "Investor") and Xxxxxx Xxxxxxxxxxx, Esq., with
office at 0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the "Escrowee").
The Company, the Investor and the Escrowee are sometimes collectively referred
to as the "Parties".
W I T N E S S E T H :
WHEREAS, the Company and the Investor are party to an
Accredited Investor Subscription Agreement (the "Subscription Agreement") and
Convertible Promissory Note (the "Note") each dated February 8, 1999
(hereinafter collectively referred to as the "Agreements"), true copies of which
are attached hereto and incorporated herein by reference; and
WHEREAS, the Agreements provide for an aggregate of 400,000
shares of the Company's Common Stock, $.01 par value per share (the "Shares"),
to be delivered into escrow in the event the Investor exercises the conversion
privileges of the Note; and
WHEREAS, Paragraph 2 of the Subscription Agreement set forth
the condition precedent to the obligation of the Company to deliver the Shares
to the Investor; and
WHEREAS, the capitalized terms in this Agreement shall have
the meaning ascribed thereto in the Agreements; and
WHEREAS, the Parties desire to set forth the terms and
conditions governing the delivery of the Shares to the Investor.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter set forth, the Parties hereby incorporate the foregoing
recitals into this Agreement and agree as follows:
1. CREATION OF ESCROW. By virtue of the execution of
this Agreement and the delivery of a certificate or certificates representing
the Shares to the Escrowee, the Company and the Investor hereby create the
escrow made the subject of this Agreement and hereby authorize the Escrowee to
deliver the Shares as hereinafter provided.
2. TERMS OF ESCROW. The following terms shall apply:
(a). DUTIES OF THE ESCROWEE UNDER THE NOTE
AND SUBSCRIPTION AGREEMENT. The Parties hereby agree that the Escrowee shall
accept delivery of and hold the Shares until either April 1, 1999
(the"Expiration Date") or the closing date of the Reorganization, whichever
sooner occurs. In the event the Reorganization shall not have closed on or
before 5:00pm Eastern Standard Time on the Expiration Date, and unless extended
by the written agreement of the Company and PPI, the Escrowee shall return the
Shares to the Company and furnish the Investor with written notice if such
return. Thereafter this Agreement shall automatically terminate and the Escrowee
shall be discharged without further action on behalf of any Party and without
further notice to the Company or the Investor. In the event the Reorganization
shall have closed on or before 5:00pm Eastern Standard Time on the Expiration
Date, the Escrowee shall deliver the Shares and any and all dividends paid or
accrued thereon to the Investor and furnish the Company with written notice if
such return. Thereafter this
30
Agreement shall automatically terminate and the Escrowee shall be discharged
without further action on behalf of any Party and without further notice to the
Company or the Investor.
(b). CONDITION PRECEDENT TO THE ESCROWEE'S
OBLIGATION TO DELIVER THE SHARES TO THE INVESTOR. Notwithstanding the closing of
the Reorganization on or before the Expiration Date, the Escrowee shall have no
duty or obligation to deliver the Shares to the Investor until and unless the
Investor shall have first exercised the conversion privileges of the Note and
furnished the Escrowee with acceptable written notice to such effect. For the
purposes of this Agreement, the only acceptable evidence of due conversion of
the Note into Shares shall be a Notice of Conversion in the form annexed to the
Note duly executed by the Investor and accepted thereon by the Company.
(c) COMPENSATION. The Escrowee shall
receive a flat fee and the reimbursement for disbursements in connection with
his time and expense incurred in fulfilling his obligation pursuant to this
Agreement in an amount to be agreed upon between the Escrowee and the Company.
The Company agrees to pay the agreed upon fee and disbursements to the Escrowee.
(d) NOTICE OF DEFAULT OR DISPUTE. If the
Escrowee shall received written notice that a dispute has occurred between the
Parties, the Escrowee may, at his sole discretion, notify the Parties and cease
his activities as Escrowee and deposit the Shares being held pursuant to this
Agreement with the American Arbitration Association, with offices at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 in New York City. Upon such deposit or the
delivery of the Shares pursuant to this Paragraph 2(d), the Escrowee shall
automatically be relieved and fully discharged of all further obligations and
responsibilities hereunder. The Parties acknowledge that the Escrowee is acting
solely in his capacity as Escrowee at their request and for their convenience,
that the Escrowee shall not be deemed to be the agent of either of the Parties
nor shall he be liable for any act or omission on his part unless taken or
suffered in bad faith, in willful disregard of this Agreement or involving gross
negligence. The Company and the Investor hereby agree to jointly and severally
indemnify and hold the Escrowee harmless from and against all costs, claims and
expenses, including reasonable attorney's fees, incurred in connection with the
performance of the Escrowee' duties hereunder, except with respect to actions or
omissions taken or suffered by the Escrowee in bad faith, in willful disregard
of this Agreement or involving gross negligence on the part of the Escrowee. The
Parties hereby further agree that the arbitration provisions of the Agreement
shall supersede and control the jurisdiction and venue provisions of the
Agreements;
(e) RELIANCE. The Escrowee shall be
protected in acting upon any written notice, request, consent, certificate,
receipt, authorization or other paper or document which the Escrowee believes to
be genuine and what it purports to be;
(f) COUNSEL. The Escrowee may confer with
legal counsel in the event of any dispute or question as to the construction of
any of the provisions hereof, or his duties hereunder, and he shall incur no
liability and he shall be fully protected in acting in accordance with the
opinions and instructions of such counsel. Any and all expenses and legal fees
in this regard are payable from the Shares unless paid by the Parties.
31
(g) REMEDIES OF ESCROWEE. The Escrowee is
hereby authorized in the event of any doubt as to the course of action he should
take under this Agreement, to petition the American Arbitration Association in
New York City only, for instructions or to interplead the Shares. The Parties
agree to the jurisdiction of the American Arbitration Association over their
persons as well as the Shares held by the Escrowee, waive personal service of
process, and agree that service of process by certified mail, return receipt
requested, to the address set forth herein shall constitute adequate notice of
service hereunder and shall confer personal jurisdiction on the American
Arbitration Association in New York City. The Parties hereby agree to indemnify
and hold the Escrowee harmless from any liability or losses occasioned thereby
and to pay any and all of his cost, expense and attorneys' fees incurred in any
such action and agree that on such petition or interpleader action that the
Escrowee or his employees will be relieved of further liability. The Escrowee is
hereby given a lien upon, and security interest in the Shares deposited pursuant
to this Agreement to secure the Escrowee's rights to payment or reimbursement.
(h) RESIGNATION. The Escrowee may resign
for any reason, upon thirty (30) days written notice to the Parties to the
Escrow Agreement. Upon the expiration of such thirty (30) day period, the
Escrowee may deliver the Shares in his possession under this Escrow Agreement to
any successor Escrowee appointed by the other Parties hereto, or if no successor
Escrowee has been appointed, to the American Arbitration Association in New York
City. Upon either such delivery, the Escrowee shall automatically be released
from any and all liability under this Agreement. Termination under this
Paragraph shall in no way change the terms of this Agreement concerning
reimbursement of expenses, indemnity and fees of the Escrowee.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Investor and the Escrowee that all of the
representations, warranties and covenants contained in the Agreements are true
and correct and the same are hereby incorporated herein by this reference.
4. REPRESENTATIONS, WARRANTS AND COVENANTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company and the Escrowee that
all of the representations, warranties and covenants contained in the Agreements
are true and correct and the same are hereby incorporated herein by this
reference.
5. EXPENSES. The Investor hereby agrees to pay and be solely
responsible for the Investor's own legal fees incurred by the Investor in
connection with the transaction contemplated in this Agreement.
6. DIVIDENDS. So long as the Shares remain in escrow, all
dividends upon the Shares shall belong to the Company. However, the Escrowee
shall hold any and all dividends in escrow for disbursement in accordance with
the terms of Paragraph 2. of this Agreement.
7. VOTING. So long as the Shares remain in escrow, the
Company shall vote the Shares.
32
8. ASSIGNMENTS AND SUCCESSORS. This Agreement shall not be
assigned by the Company or the Investor without the prior written consent of the
other. All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by and against the heirs,
executors, administrators, successors and assigns of the Parties hereto.
9. ADDITIONAL INSTRUMENTS. Each of the Parties shall from
time to time, at the request of the others, execute, acknowledge and deliver to
the other any and all further instruments that may be reasonably required to
give full effect and force to the provisions of this Agreement.
10. ENTIRE AGREEMENT. Each of the Parties hereby covenants
that this Agreement is intended to and does contain and embody herein all of the
understandings and agreements, both written or oral, of the parties hereby with
respect to the subject matter of this Agreement, and that there exists no oral
agreement or understanding, express or implied liability, whereby the absolute,
final and unconditional character and nature of this Agreement shall be in any
way invalidated, empowered or affected. There are no representations, warranties
or covenants other than those set forth herein.
11. LAWS OF THE STATE OF NEW JERSEY. This Agreement shall be
governed by and interpreted under and construed in all respects in accordance
with the laws of the State of New Jersey, irrespective of the place of domicile
or residence of the Parties.
12. ORIGINALS. This Agreement may be executed in counterparts
each of which so executed shall be deemed an original and constitute one and the
same agreement.
13. ADDRESS OF PARTIES. Each Party shall at all times keep
informed of its principal place of residence or business if different from that
stated herein, and shall promptly notify the other of any change, giving the
address of the new principal place of business or residence.
14. NOTICES. All notices that are required to be or may be
sent pursuant to the provision of this Agreement shall be sent by certified
mail, return receipt requested, or via overnight courier, to each of the Parties
at the address appearing herein, and shall count from the date of mailing or the
airbill.
15. MODIFICATION AND WAIVER. A modification or waiver of any
of the provisions of this Agreement shall be effective only if made in writing
and executed with the same formality as this Agreement. The failure of any Party
to insist upon strict performance of any of the provisions of this Agreement
shall not be construed as a waiver of any subsequent default of the same or
similar nature or of any other nature or kind.
33
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
Techscience Industries, Inc.
BY: /s/ XXXX X. XXXX
--------------------------------------------
Xxxx X. Xxxx, Treasurer
--------------------------------------------
Xxxxxx Xxxxxxxxxxx, Esq., As Escrowee Only
FOR INDIVIDUAL INVESTORS:
--------------------------------------------
Signature
--------------------------------------------
Print name
--------------------------------------------
Print Street Address
--------------------------------------------
Print City, State and Zip Code
FOR CORPORATE INVESTORS:
--------------------------------------------
Name of Corporation
BY:_________________________________________
Signature of Executive Officer or Manager
--------------------------------------------
Print Name and Title of Authorized Signatory
--------------------------------------------
Print Business Address
--------------------------------------------
Print City, State and Zip Code
34
ESCROW AGREEMENT (the "Agreement") made this 8th day of February 1999 among
Techscience Industries, Inc., a Delaware corporation with principal offices at 0
Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as the
"Company"), the individual, firm or entity indicated on the last page of this
Agreement (the "Investor") and Xxxxxx Xxxxxxxxxxx, Esq., with office at 0000
Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the "Escrowee"). The Company, the
Investor and the Escrowee are sometimes collectively referred to as the
"Parties".
W I T N E S S E T H :
WHEREAS, the Company and the Investor are party to an
Accredited Investor Subscription Agreement (the "Subscription Agreement") and
Convertible Promissory Note (the "Note") each dated February 8, 1999
(hereinafter collectively referred to as the "Agreements"), true copies of which
are attached hereto and incorporated herein by reference; and
WHEREAS, the Agreements provide for an aggregate of 400,000
shares of the Company's Common Stock, $.01 par value per share (the "Shares"),
to be delivered into escrow in the event the Investor exercises the conversion
privileges of the Note; and
WHEREAS, Paragraph 2 of the Subscription Agreement set forth
the condition precedent to the obligation of the Company to deliver the Shares
to the Investor; and
WHEREAS, the capitalized terms in this Agreement shall have
the meaning ascribed thereto in the Agreements; and
WHEREAS, the Parties desire to set forth the terms and
conditions governing the delivery of the Shares to the Investor.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter set forth, the Parties hereby incorporate the foregoing
recitals into this Agreement and agree as follows:
1. CREATION OF ESCROW. By virtue of the execution of this
Agreement and the delivery of a certificate or certificates representing the
Shares to the Escrowee, the Company and the Investor hereby create the escrow
made the subject of this Agreement and hereby authorize the Escrowee to deliver
the Shares as hereinafter provided.
2. TERMS OF ESCROW. The following terms shall apply:
(a) DUTIES OF THE ESCROWEE UNDER THE NOTE AND
SUBSCRIPTION AGREEMENT. The Parties hereby agree that the Escrowee shall accept
delivery of and hold the Shares until either April 1, 1999 (the"Expiration
Date") or the closing date of the Reorganization, whichever sooner occurs. In
the event the Reorganization shall not have closed on or before 5:00pm Eastern
Standard Time on the Expiration Date, and unless extended by the written
agreement of the Company and PPI, the Escrowee shall return
35
the Shares to the Company and furnish the Investor with written notice if such
return. Thereafter this Agreement shall automatically terminate and the Escrowee
shall be discharged without further action on behalf of any Party and without
further notice to the Company or the Investor. In the event the Reorganization
shall have closed on or before 5:00pm Eastern Standard Time on the Expiration
Date, the Escrowee shall deliver the Shares and any and all dividends paid or
accrued thereon to the Investor and furnish the Company with written notice if
such return. Thereafter this Agreement shall automatically terminate and the
Escrowee shall be discharged without further action on behalf of any Party and
without further notice to the Company or the Investor.
(b) CONDITION PRECEDENT TO THE ESCROWEE'S OBLIGATION
TO DELIVER THE SHARES TO THE INVESTOR. Notwithstanding the closing of the
Reorganization on or before the Expiration Date, the Escrowee shall have no duty
or obligation to deliver the Shares to the Investor until and unless the
Investor shall have first exercised the conversion privileges of the Note and
furnished the Escrowee with acceptable written notice to such effect. For the
purposes of this Agreement, the only acceptable evidence of due conversion of
the Note into Shares shall be a Notice of Conversion in the form annexed to the
Note duly executed by the Investor and accepted thereon by the Company.
(c) COMPENSATION. The Escrowee shall receive a flat
fee and the reimbursement for disbursements in connection with his time and
expense incurred in fulfilling his obligation pursuant to this Agreement in an
amount to be agreed upon between the Escrowee and the Company. The Company
agrees to pay the agreed upon fee and disbursements to the Escrowee.
(d) NOTICE OF DEFAULT OR DISPUTE. If the Escrowee
shall received written notice that a dispute has occurred between the Parties,
the Escrowee may, at his sole discretion, notify the Parties and cease his
activities as Escrowee and deposit the Shares being held pursuant to this
Agreement with the American Arbitration Association, with offices at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 in New York City. Upon such deposit or the
delivery of the Shares pursuant to this Paragraph 2(d), the Escrowee shall
automatically be relieved and fully discharged of all further obligations and
responsibilities hereunder. The Parties acknowledge that the Escrowee is acting
solely in his capacity as Escrowee at their request and for their convenience,
that the Escrowee shall not be deemed to be the agent of either of the Parties
nor shall he be liable for any act or omission on his part unless taken or
suffered in bad faith, in willful disregard of this Agreement or involving gross
negligence. The Company and the Investor hereby agree to jointly and severally
indemnify and hold the Escrowee harmless from and against all costs, claims and
expenses, including reasonable attorney's fees, incurred in connection with the
performance of the Escrowee' duties hereunder, except with respect to actions or
omissions taken or suffered by the Escrowee in bad faith, in willful disregard
of this Agreement or involving gross negligence on the part of the Escrowee. The
Parties hereby
36
further agree that the arbitration provisions of the Agreement shall supersede
and control the jurisdiction and venue provisions of the Agreements;
(e) RELIANCE. The Escrowee shall be protected in
acting upon any written notice, request, consent, certificate, receipt,
authorization or other paper or document which the Escrowee believes to be
genuine and what it purports to be;
(f) COUNSEL. The Escrowee may confer with legal
counsel in the event of any dispute or question as to the construction of any of
the provisions hereof, or his duties hereunder, and he shall incur no liability
and he shall be fully protected in acting in accordance with the opinions and
instructions of such counsel. Any and all expenses and legal fees in this regard
are payable from the Shares unless paid by the Parties.
(g) REMEDIES OF ESCROWEE. The Escrowee is hereby
authorized in the event of any doubt as to the course of action he should take
under this Agreement, to petition the American Arbitration Association in New
York City only, for instructions or to interplead the Shares. The Parties agree
to the jurisdiction of the American Arbitration Association over their persons
as well as the Shares held by the Escrowee, waive personal service of process,
and agree that service of process by certified mail, return receipt requested,
to the address set forth herein shall constitute adequate notice of service
hereunder and shall confer personal jurisdiction on the American Arbitration
Association in New York City. The Parties hereby agree to indemnify and hold the
Escrowee harmless from any liability or losses occasioned thereby and to pay any
and all of his cost, expense and attorneys' fees incurred in any such action and
agree that on such petition or interpleader action that the Escrowee or his
employees will be relieved of further liability. The Escrowee is hereby given a
lien upon, and security interest in the Shares deposited pursuant to this
Agreement to secure the Escrowee's rights to payment or reimbursement.
(h) RESIGNATION. The Escrowee may resign for any
reason, upon thirty (30) days written notice to the Parties to the Escrow
Agreement. Upon the expiration of such thirty (30) day period, the Escrowee may
deliver the Shares in his possession under this Escrow Agreement to any
successor Escrowee appointed by the other Parties hereto, or if no successor
Escrowee has been appointed, to the American Arbitration Association in New York
City. Upon either such delivery, the Escrowee shall automatically be released
from any and all liability under this Agreement. Termination under this
Paragraph shall in no way change the terms of this Agreement concerning
reimbursement of expenses, indemnity and fees of the Escrowee.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Investor and the Escrowee that all of the
37
representations, warranties and covenants contained in the Agreements are true
and correct and the same are hereby incorporated herein by this reference.
4. REPRESENTATIONS, WARRANTS AND COVENANTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company and the Escrowee that
all of the representations, warranties and covenants contained in the Agreements
are true and correct and the same are hereby incorporated herein by this
reference.
5. EXPENSES. The Investor hereby agrees to pay and be solely
responsible for the Investor's own legal fees incurred by the Investor in
connection with the transaction contemplated in this Agreement.
6. DIVIDENDS. So long as the Shares remain in escrow, all
dividends upon the Shares shall belong to the Company. However, the Escrowee
shall hold any and all dividends in escrow for disbursement in accordance with
the terms of Paragraph 2. of this Agreement.
7. VOTING. So long as the Shares remain in escrow, the
Company shall vote the Shares.
8. ASSIGNMENTS AND SUCCESSORS. This Agreement shall not be
assigned by the Company or the Investor without the prior written consent of the
other. All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by and against the heirs,
executors, administrators, successors and assigns of the Parties hereto.
9. ADDITIONAL INSTRUMENTS. Each of the Parties shall from
time to time, at the request of the others, execute, acknowledge and deliver to
the other any and all further instruments that may be reasonably required to
give full effect and force to the provisions of this Agreement.
10. ENTIRE AGREEMENT. Each of the Parties hereby covenants
that this Agreement is intended to and does contain and embody herein all of the
understandings and agreements, both written or oral, of the parties hereby with
respect to the subject matter of this Agreement, and that there exists no oral
agreement or understanding, express or implied liability, whereby the absolute,
final and unconditional character and nature of this Agreement shall be in any
way invalidated, empowered or affected. There are no representations, warranties
or covenants other than those set forth herein.
11. LAWS OF THE STATE OF NEW JERSEY. This Agreement shall be
governed by and interpreted under and construed in all respects in accordance
with the laws of the State of New Jersey, irrespective of the place of domicile
or residence of the Parties.
38
12. ORIGINALS. This Agreement may be executed in counterparts
each of which so executed shall be deemed an original and constitute one and the
same agreement.
13. ADDRESS OF PARTIES. Each Party shall at all times keep
informed of its principal place of residence or business if different from that
stated herein, and shall promptly notify the other of any change, giving the
address of the new principal place of business or residence.
14. NOTICES. All notices that are required to be or may be
sent pursuant to the provision of this Agreement shall be sent by certified
mail, return receipt requested, or via overnight courier, to each of the Parties
at the address appearing herein, and shall count from the date of mailing or the
airbill.
15. MODIFICATION AND WAIVER. A modification or waiver of any
of the provisions of this Agreement shall be effective only if made in writing
and executed with the same formality as this Agreement. The failure of any Party
to insist upon strict performance of any of the provisions of this Agreement
shall not be construed as a waiver of any subsequent default of the same or
similar nature or of any other nature or kind.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
Techscience Industries, Inc.
BY: /s/ XXXXX X. XXXX
-------------------------------------------
Xxxxx X. Xxxx, President
-------------------------------------------
Xxxxxx Xxxxxxxxxxx, Esq., As Escrowee Only
FOR INDIVIDUAL INVESTORS:
-------------------------------------------
-------------------------------------------
-------------------------------------------
39
EXHIBIT 10(e) ACCREDITED INVESTOR BRIDGE LOAN SUBSCRIPTION AGREEMENT
40
TECHSCIENCE INDUSTRIES, INC.
ACCREDITED INVESTOR BRIDGE LOAN SUBSCRIPTION AGREEMENT (the
"Agreement") dated February 19, 1999 between Techscience Industries, Inc., a
Delaware corporation with principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (the "Company") and the person or persons executing this Agreement
on the last page (the "Subscriber").
1. DESCRIPTION OF THE OFFERING. This Agreement sets forth the terms
under which the Subscriber will invest in the Company. This subscription is for
six units comprised of $25,000 principal amount of a 10% promissory note in the
from annexed hereto as Exhibit 8 (the "Note") and 16,666 shares of the Company's
Common Stock, $.01 par value per share. The Notes are due and payable on the
closing date of the Reorganization with PPI, currently scheduled for April 1,
1999 but subject to extension by mutual consent of the Company and PPI (the
"Closing"). The full principal amount of the Note and all accrued interest will
be repaid at the Closing. The shares, which are being included in the Units In
consideration for the risk assumed by each Subscriber, will be issued to the
Subscribers at the Closing. The shares will be "restricted securities" as that
term is defined under Rule 144 under the Act and ineligible for public sale for
a period of 12 months from the date of issuance. This subscription is one of six
subscriptions for six Units or an aggregate of $150,000 if all offered Units are
sold. The Units are being offered under and pursuant to Rule 506 of Regulation D
(the "Rule") under the Securities Act of 1933, as amended (the "Act") for a
period of 30 days, subject to a single extension of 5 days. This offering is
being conducted solely to "Accredited Investors" as that term is defined in Rule
501(a) of Regulation D under the Act for the purpose of providing XxxXxxxxx.xxx,
Inc., a non-affiliated California corporation ("PPI") with the funds to
accelerate the implementation of its business plan, a copy of which is annexed
hereto as Exhibit 5. The implementation of the PPI business plan is the rational
behind the Company's proposed business combination with PPI wherein the Company
will acquire all of the issued and outstanding shares of PPI's common stock,
$.01 par value per share, solely in exchange for the issuance of an aggregate of
7,325,000 Shares of the Company (the "Reorganization").
In furtherance of the reorganization, and on February 10, 1999, the Company
entered into the LOI PPI. The LOI provides that the Company and PPI will enter
into a written Agreement and Plan of Reorganization (the "Reorganization
Agreement") by March 1, 1999. After the Reorganization, the PPI stockholders
will own approximately 76.5% of the 9,575,000 shares of the Company that will
then be issued and outstanding. At the closing of the Reorganization, each
executive officer and director of The Company will resign, and be replaced by
directors nominated by PPI's stockholders.
2. TERMS OF THE OFFERING. The Units are being offered by the Company
on a best-efforts-four-Unit-or-none basis. In the event that a minimum of four
Units are not sold and paid for within 35 days from the date of this Memorandum,
or the Offering is abandoned, all funds received from subscribers will be
returned without interest thereon or deduction therefrom. Pending the sale of a
minimum of four Units, all checks representing an investment in the Units will
held by the Company and not deposited in any checking or other account. In the
event the four Units are
41
not sold within 35 days from February 19, 1999, all checks representing an
investment in the Units will be promptly returned to Subscribers without
interest thereon or deduction therefrom. In the event a minimum of four Units
are sold within 35 days from the date of this Memorandum, the Company may
continue to sell the remaining Units until the expiration of the aforesaid 35
day Offering period.
The Units are being offered by the officers and directors of the Company without
compensation. The Units may also be offered on a best-efforts basis by
registered broker dealers that are members of the National Association of
Securities Dealers, Inc. ("Selling Agents"). In the event that the services of
Selling Agents are used, the Company will enter into a written Selected Dealer
Agreement with such Selling Agent and thereafter pay a 10% commission on all
such sales, and non-accountable selling expenses up to 3%.
The Execution of this Agreement shall constitute an offer by the Subscriber to
subscribe to the Units in the amount and on the terms specified herein. The
Company reserves the right, in its sole discretion, to reject in whole or in
part, any subscription offer. If the Subscriber's offer is accepted, the Company
will execute a copy of this Agreement and return it to Subscriber together with
a duly executed Note in the form annexed hereto as Exhibit 8. Upon execution of
this Agreement, the Company will instruct its transfer agent to cause the
original issuance of certificates representing the Shares and the delivery
thereof to the Subscriber at such address as she shall designate.
3. SUBSCRIPTION PAYMENT. Subscription to each Unit requires a minimum
total cash investment of $25,000. The subscription price will be payable in cash
in full on subscription.
4. THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants as follows:
(a) At the Closing, the Company will be a corporation duly
formed and in good standing under the laws of the State of Delaware with full
power and authority to conduct its business as presently contemplated;
(b) The Company has the corporate power to execute, deliver
and perform this Agreement, the LOI in the time and manner contemplated; and
(c) The Shares issuable to Subscribers have been reserved for
issuance and when issued, will be duly and validly issued, fully paid and
non-assessable with no personal liability attaching to the ownership thereof.
5. SUBSCRIBER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Subscriber hereby represents, warrants and covenants as follows:
(a) The Subscriber is an entity, and is an "Accredited
Investor" as defined in Rule 501(a) of Regulation D under the Act. This
representation is based on the fact that the Subscriber is an accredited
individual who, together with the Subscriber's spouse, have a net worth of at
least $1,000,000 OR the Subscriber, individually, has had net income of not less
than
42
$200,000 during the last two years, and reasonably anticipates that the
Subscriber will have an income of at least $200,000 during the present year and
the next year;
(b) If the Subscriber is a corporation, partnership, trust or
any unincorporated association: (i) the person executing this Subscription
Agreement does so with full right, power and authority to make this investment;
(ii) that such entity was not formed for the specific purpose of making an
investment in the Company; and (iii) that all further representations and
warranties made herein are true and correct with respect to such corporation,
partnership, trust and unincorporated association;
(c) The address set forth below is the Subscriber's true and
correct residence, and the Subscriber has no present intention of becoming a
resident of any state or jurisdiction;
(d) The Subscriber has received and read or reviewed, is
familiar with and fully understands the due diligence material furnished by the
Company, annexed to this Agreement and comprising, inter alia: (i) a draft copy
of the Company's Form 10-KSB Annual Report for the eight fiscal years ended
October 31, 1998; (ii) audited financial statements for the five fiscal years
ended October 31, 1995; (iii) draft audited financial statements for the six
fiscal years ended October 31, 1996; (iv) the LOI; and (v) a copy of PPI's
Business Plan including three year cash flow projections and assumptions. The
Subscriber also fully understands this Agreement and the risks associated with
this offering, the Company's complete lack of operating history since 1990, and
confirms that all documents, records and books pertaining to the Subscriber's
investment in the Units and requested by the Subscriber have been made available
or delivered to the Subscriber by the Company;
(e) The Subscriber hereby specifically acknowledges and
accepts that the Subscriber is fully aware of the following HIGH RISK FACTORS:
(i) The Company is a "shell corporation" with no
operations since 1990;
(ii) The Company is presently delinquent in its
reporting obligations under the 34 Act and has been so delinquent since 1991;
(iii) Unless the Company becomes current under the 34
Act, the Subscriber will not be able to take advantage of Rule 144 under the
Act, as a means of selling the Shares;
(iv) Even if the Company is successful in becoming
current in its reporting obligations under the 34 Act, the Subscriber will be
unable to take advantage of Rule 144 under the Act, as a means of selling the
Shares until and unless the Subscriber has held the Shares for 12 months;
(v) There is currently no market for the Shares.
Although the Company intends to initiate a trading market in the Shares of the
Company's common stock following the closing of the Reorganization, there can be
absolutely no assurance thereof;
(vi) There can be no assurance whatsoever that the
Company will be successful in consummating the Reorganization with PPI or that
even if the Reorganization is
43
completed, that PPI will be successful in implementing its proposed Internet
based business plan;
(vii) Even if the Reorganization is completed, there
can be no assurance that PPI, a development stage company without income from
operations, will be successful in implementing its proposed Internet business
plan without the need for additional capital to satisfy its projected working
capital needs through the next 12 months. The failure of PPI to raise the
requisite capital may have a material adverse effect upon the value of the
Shares and its ability to remain in business.
(viii) As of the closing of the Reorganization and
the Company's acquisition of PPI, the Company will succeed to the business of
PPI. PPI must be considered as a start up company. A purchaser of the Shares
should be aware of the difficulties, delays and expenses normally encountered by
a start up operation. Furthermore, there can be no assurance that PPI's proposed
Internet business plans as described in the exhibits annexed hereto will either
materialize or prove successful. Accordingly, there can be no assurance that PPI
will ever operate profitably.
(ix) For all of the reasons set forth above, the
Subscriber should be prepared to lose his entire investment in the Units.
(f) The Subscriber has had an opportunity to ask questions of
and receive answers from the Company or a person or persons acting on its
behalf, concerning the terms and conditions of this investment and confirms that
all documents, records and books pertaining to the investment in the Units and
requested by the Subscriber has been made available or delivered to the
Subscriber;
(g) The Subscriber will be acquiring the Shares solely for the
Subscriber's own account, for investment and are not with a view to or for the
resale, distribution, subdivision or fractionalization thereof; and the
Subscriber has no present plans to enter into any such contract, undertaking,
agreement or arrangement;
(h) The funds tendered to the Company in payment of the Units
subscribed for hereby belong to the Subscriber, and no other individual or
entity has any interest in such funds. Furthermore, and regardless of the nature
of such funds (i.e., whether in cash, personal, cashiers, bank or certified
check) the same represent legal income of the Subscriber;
(i) The Subscriber understands that the Shares must be held
for a minimum of 12 months prior to any public sale thereof;
(j) The Subscriber understands that the Company is under no
obligation to register the Shares under the Act or to comply with the
requirements for any exemption which might otherwise be available, or to supply
the Subscriber with any information necessary to enable the Subscriber to make
routine sales of the Shares under Rule 144 or any other rule of the Rules and
Regulations of the Securities and Exchange Commission adopted under the Act;
44
(k) The Subscriber's compliance with the terms and conditions
of this Agreement will not conflict with any instrument or agreement pertaining
to the Shares or the Units or the transactions contemplated herein; and will not
conflict in, result in a breach of, or constitute a default under any instrument
to which the Subscriber is a party or the Shares or the Shares is the subject;
(l) The Subscriber will seek his own legal and tax advice
concerning tax implications attendant upon the purchase of the Units and
understands and accepts that the Company is relying upon this representation
insofar as disclosure of tax matters is concerned;
(m) The Subscriber hereby acknowledges and represents that the
Subscriber is aware of the following:
(i) The Units are speculative investments which
involve a high degree of risk; and
(ii) The closing of the Reorganization is
specifically conditioned upon the Company satisfying all of the conditions
precedent set forth in the LOI including the preparation of audited financial
statement, the filing of all delinquent 34 Act filings, and the sale of all of
the 250,000 privately offered shares at $4.00 per share by April 1, 1999. There
can be no assurance that the Company will be able to satisfy the conditions
precedent by April 1, 1999.
The foregoing representations and warranties are true and accurate as
of the date hereof and shall be true and accurate as of the date of delivery of
the subscription to the Company and shall survive such delivery. If, in any
respect, such representations and warranties shall not be true and accurate, the
Subscriber shall give written notice of such fact to the Company, specifying
which representations and warranties are not true and accurate and the reasons
therefor.
6. RESPONSIBILITY. The Company or its officers and directors shall not
be liable, responsible or accountable in damages or otherwise to Subscriber for
any act or omission performed or omitted by them in good faith and in a manner
reasonably believed by them to be within the scope of the authority granted to
them by this Agreement and in the best interests of the Company provided they
were not guilty of gross negligence, willful or wanton misconduct, fraud, bad
faith or any other breach of fiduciary duty with respect to such acts or
omissions.
7. MISCELLANEOUS.
(a) This Agreement shall be deemed to have been made in and
shall be governed by and interpreted under and construed in all respects in
accordance with the laws of the State of New Jersey, irrespective of the place
of domicile or residence of any party. In the event of a controversy arising out
of the interpretation, construction, performance or breach of this Agreement,
the Company and the Subscriber hereby agree and consent to the jurisdiction and
venue of the Superior Court of the State of New Jersey, Xxxxxx County and/or the
United States District Court for the District of New Jersey; and further agree
and consent that personal service or process in any such action or proceeding
outside of the State of New Jersey and Xxxxxx County shall be tantamount to
service in person within the State of New Jersey and Xxxxxx
45
County and shall confer personal jurisdiction and venue upon either of the said
courts.
(b) The Company and the Subscriber hereby covenant that this
Agreement is intended to and does contain and embody herein all of the
understandings and Agreements, both written or oral, of the Company and the
Subscriber with respect to the subject matter of this Agreement, and that there
exists no oral agreement or understanding, express or implied liability, whereby
the absolute, final and unconditional character and nature of this Agreement
shall be in any way invalidated, empowered or affected. There are no
representations, warranties or covenants other than those set forth herein.
(c) The headings of this Agreement are for convenient
reference only and they shall not limit or otherwise affect the interpretation
or effect of any terms or provisions hereof.
(d) This Agreement shall not be changed or terminated orally
except as set forth herein. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by and
against the successors and assigns of the Company and the heirs, executors,
administrators and assigns of the Subscriber.
(e) In addition to the investment representations made by the
Subscriber in Paragraph 5 of this Agreement, the Subscriber hereby agrees that
simultaneously with the execution of this Agreement, he will execute and deliver
to the Company the form of Investment Letter attached hereto. The Subscriber
hereby consents to the issuance by the Company of a stop transfer order against
any and all certificates representing the Shares on the books and records of the
Company and/or its transfer agent.
(f) A modification or waiver of any of the provisions of this
Agreement shall be effective only if made in writing and executed with the same
formality as this Agreement. The failure of either the Company or the Subscriber
to insist upon strict performance of any of the provisions of this Agreement
shall not be construed as a waiver of any subsequent default of the same or
similar nature, or of any other nature or kind.
8. BLUE SKY STATEMENTS.
(a) FOR NEW YORK RESIDENTS ONLY. The Subscriber agrees that
this Unit (or Units) is being purchased for my own account for investment, and
not for distribution or resale to others. The Subscriber represents that the
Subscriber has adequate means of providing for the Subscriber's current needs
and possible personal contingencies, and that the Subscriber has no need for
liquidity of this investment.
It is understood that all documents, records and books pertaining to
this investment have been made available for inspection by the Subscriber and/or
any representative thereof, and that the books and records of the Company will
be available upon reasonable notice, for inspection by Subscriber during
reasonable business hours at the Company's principal place of business. The
Attorney General of the State of New York does not pass upon or endorse the
merits of this or any private offering. Any representation to the contrary is
unlawful.
46
(b) FOR NEW JERSEY RESIDENTS ONLY. The Subscriber hereby
acknowledges to the New Jersey Bureau of Securities (the "Bureau") that the
Subscriber intends to purchase the Units in the Company on or before the
Termination Date. The Subscriber further acknowledges that the Subscriber is
aware that the Units are not registered with the Bureau and that the Bureau has
not passed upon or endorsed the merits of this offering.
The Subscriber warrants to the Bureau that the Subscriber shall not
promote, offer for sale, sell or otherwise transfer the securities at any time
unless they are registered with or expressly exempt from registration by the
Bureau.
THE SUBSCRIBER HEREBY REPRESENTS, WARRANTS, AGREES AND ACKNOWLEDGES
THAT THE SUBSCRIBER HAS RECEIVED, READ, UNDERSTOOD AND IS FAMILIAR WITH THE
RISKS ASSOCIATED WITH THE SUBSCRIBER'S INVESTMENT IN THE COMPANY AS SET FORTH IN
THIS AGREEMENT AND THE OFFERING PURSUANT TO WHICH THIS SUBSCRIPTION IS BEING
MADE. THE SUBSCRIBER FURTHER ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS
AGREEMENT, NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE TO IT, OR TO ITS
ADVISORS, BY THE COMPANY, OR BY ANY PERSON ACTING ON BEHALF OF THE COMPANY, WITH
RESPECT TO THE UNITS, THE PROPOSED BUSINESS OF THE COMPANY, THE DEDUCTIBILITY OF
ANY ITEM FOR TAX PURPOSES, AND/OR THE ECONOMIC, TAX, OR ANY OTHER ASPECTS OR
CONSEQUENCES OF A PURCHASE OF A UNIT AND/OR ANY INVESTMENT IN THE COMPANY, AND
THAT IT HAS NOT RELIED UPON ANY INFORMATION CONCERNING THE OFFERING, WRITTEN OR
ORAL, OTHER THAN THAT CONTAINED IN THIS AGREEMENT.
9. APPLICATION FOR INDIVIDUAL SUBSCRIBERS. The Subscriber hereby offers
to purchase and subscribe to three Units and encloses payment of $25,000 per
Unit or an aggregate investment of $75,000.
-----------------------------
AGREED TO AND ACCEPTED:
As of February , 1999
TECHSCIENCE INDUSTRIES, INC.
BY: /s/ XXXXX X. XXXX
-------------------------------
Xxxxx X. Xxxx, President
47
INVESTMENT LETTER
Board of Directors
Techscience Industries, Inc
0 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
In connection with the purchase by the undersigned as of February ,1999
for one or more of the Units being offered by Techscience Industries, Inc., a
Delaware corporation (the "Company") and delivery to the undersigned of shares
of the Company's common stock,$.01 par value per share(the "Shares"), the
undersigned for himself/itself, and his/its heirs, representatives, executors,
administrators, successors and assigns, represents, warrants and agrees with the
Company as follows with respect to the Shares:
1. The undersigned will be acquiring the Shares comprising the Shares
for investment and not with a view to the distribution thereof and is familiar
with the meaning of such representation and covenants and understands the
restrictions which are imposed thereby. More specifically, but without
limitation, the undersigned understands that in the view of the Securities and
Exchange Commission, one who acquires securities for investment is not exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), if he merely acquires such securities for resale upon the
occurrence or non-occurrence of some predetermined event or for holding for a
fixed or determinable period in the future.
2. The undersigned will be acquiring the Shares comprising the Shares
solely for the undersigned's own account and no other person or entity has any
direct or indirect beneficial ownership or interest therein.
3. The Undersigned hereby represents and warrants that he has a net
worth substantially in excess of the cost of the Shares to the undersigned and
in the event the undersigned shall incur a loss in the Shares, it would not
materially affect the undersigned's financial condition.
4. The undersigned has been advised that in reliance on the
representations, warranties and agreements herein made by the undersigned, the
issuance, and delivery of the Shares comprising the Shares to the undersigned
will not be registered under the Act on the ground that the issuance thereof is
exempt from registration by virtue of Sections 4(2) and/or 3(b) thereof.
5. The undersigned represents to the Company that the undersigned has
such knowledge and experience in financial and business matters that the
undersigned is capable of evaluating and understanding the merits and risks
attendant upon the investment in the Company represented by the acquisition of
the Shares.
48
6. The undersigned represents and warrants to the Company that the
investment in the Company represented by the purchase of the Shares came about
as a result of direct communications between the Company and the undersigned,
and did not result from any form of general advertising or general solicitation
including but not limited to, advertisements or other communications in
newspapers, magazines, or other media; broadcasts on radio or television,
seminars or promotional meetings or any letter, circular or other written
communication.
7. The undersigned will hold the Shares comprising the Shares for 12
months before any sale thereof under Rule 144.
Very truly yours,
---------------------------------------
---------------------------------------
49
EXHIBIT "B"
10% PROMISSORY NOTE
February 19, 1999 $75,000
FOR VALUE RECEIVED, Techscience Industries, Inc., a Delaware
corporation with principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as the "Maker") promises to pay to the order of
Xxxxx X. Xxxxxx with offices at Xxxx Xxxxxx Xxx 000, Xxxxxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as the "Holder") in lawful money of the United
States of America, the principal sum of Seventy Five Thousand and 00/100
($75,000) Dollars with interest at a rate of ten (10%) percent per annum.
1. PAYMENTS.
(a) INTEREST. An interest payment of Two Hundred Ten and
00/100 ($210) Dollars shall be payable on the 30th business day following the
date of this Note (the "Due Date"). In the event that the required interest
payment shall not be paid when due, and shall remain unpaid for a period of five
business (5) days or more, then a late charge of two (2%) percent shall be due
and owing for each month or any portion thereof that such payment shall remain
unpaid.
(b) PRINCIPAL. Payment of the full principal amount due under
this Note shall be made on the Due Date. In the event that the principal shall
not be paid on the Due Date, and shall remain unpaid for a period of five
business (5) days or more, then a late charge of two (2%) percent shall be due
and owing for each month or any portion thereof that such payment shall remain
unpaid.
2. EVENTS OF DEFAULT. The Maker shall be in default hereunder if: (a)
The Maker shall fail to pay interest on this Note when due and the failure shall
continue for a period of 30 days after notice of such default has been received
from the Holder; or; (b) default in the performance of any obligation to the
Holder hereof.
3. WAIVER OF PRESENTMENT, ETC. The Maker of this Note hereby waives
presentment for payment, demand, notice of non-payment and dishonor, protest and
notice of protest; and waives trial by jury in any action or proceeding arising
on, out of, under or by reason of this Note.
The rights and remedies of the Holder hereof under this Note shall be
deemed cumulative, and the exercise of any right or remedy shall not be regarded
as barring any other remedy or remedies. The institution of any action to
recovery any portion of the
50
indebtedness evidenced by this Note shall not be deemed a waiver of any other
right of the Holder hereof.
4. STATUS OF REGISTERED HOLDER. The Maker may treat the registered
holder of this Note as the absolute owner of this Note for the purpose of making
payments of interest and for all other purposes and shall not be affected by any
notice to the contrary.
5. NOTICES. Any notice required or contemplated by this Note shall be
deemed sufficiently given if sent by registered or certified mail or via
overnight courier to the Maker at its principal office or to the Holder at the
Holder's address shown on the books of the Maker or at such other address as the
Holder may delegate in a notice for that purpose and shall be deemed to have
been sent on the date of mailing or the airbill.
6. HEADINGS. The headings in this Note are solely for convenience of
reference and shall not affect its interpretation.
7. ASSIGNMENTS. This Note is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, representatives and/or successors and assigns. Notwithstanding
the foregoing, neither the Maker nor the Holder shall assign or transfer any
rights or obligations hereunder, except that the Maker may assign or transfer
this Note to a successor corporation in the event of a merger, consolidation or
transfer or sale of all or substantially all of the assets of the Maker,
provided that no such further assignment shall relieve the Maker from liability
for the obligations assumed by it hereunder.
8. LAWS OF THE STATE OF NEW JERSEY. This Note shall be deemed to be
made, executed and delivered in, governed by and interpreted under and construed
in all respects in accordance with the laws of the State of New Jersey,
irrespective of the place of domicile or residence of any Holder. In the event
of a controversy arising out of the interpretation, construction, performance or
breach of this Agreement, the Maker and the Holder hereby agree and consent to
the jurisdiction and venue of the Superior Court of the State of New Jersey,
Xxxxxx County and/or the United States District Court for the District of New
Jersey; and further agree and consent that personal service or process in any
such action or proceeding outside of the State of New Jersey and Xxxxxx County
shall be tantamount to service in person within the State of New Jersey and
Xxxxxx County and shall confer personal jurisdiction and venue upon either of
the said courts.
9. ENTIRE DOCUMENT. Each of the parties hereby covenants that this
Note is intended to and does contain and embody herein all of the understandings
and agreements, both written or oral, of the parties hereto with respect to the
subject matter of this Note, and that there exists no oral agreement or
understanding, express or implied, whereby the absolute, final and unconditional
character and nature of the Note shall be in any way
51
invalidated, impaired or affected. There are no provisions affecting or
interpreting this Note other than those set forth herein.
The acceptance of any installments or payments by the Holder hereof
after the due date herein, or the waiver of any other or subsequent breach or
default may prevent the Holder hereof from immediately pursuing any or all of
his remedies.
Techscience Industries, Inc.
BY: /s/ XXXXX X. XXXX
-------------------------------------
Xxxxx X. Xxxx, President
ACCEPTED:
/s/ XXXXX X. XXXXXX
--------------------------------
Xxxxx X. Xxxxxx
00
XXXXXXX "X"
10% PROMISSORY NOTE
February 19, 1999 $75,000
FOR VALUE RECEIVED, Techscience Industries, Inc., a Delaware
corporation with principal offices at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as the "Maker") promises to pay to the order of
R. Xxxxx Xxxxxx with offices at Xxxx Xxxxxx Xxx 000, Xxxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as the "Holder") in lawful money of the United
States of America, the principal sum of Seventy Five Thousand and 00/100
($75,000) Dollars with interest at a rate of ten (10%) percent per annum.
1. PAYMENTS.
(a) INTEREST. An interest payment of Two Hundred Ten and
00/100 ($210) Dollars shall be payable on the 30th business day following the
date of this Note (the "Due Date"). In the event that the required interest
payment shall not be paid when due, and shall remain unpaid for a period of five
business (5) days or more, then a late charge of two (2%) percent shall be due
and owing for each month or any portion thereof that such payment shall remain
unpaid.
(b) PRINCIPAL. Payment of the full principal amount due under
this Note shall be made on the Due Date. In the event that the principal shall
not be paid on the Due Date, and shall remain unpaid for a period of five
business (5) days or more, then a late charge of two (2%) percent shall be due
and owing for each month or any portion thereof that such payment shall remain
unpaid.
2. EVENTS OF DEFAULT. The Maker shall be in default hereunder if: (a)
The Maker shall fail to pay interest on this Note when due and the failure shall
continue for a period of 30 days after notice of such default has been received
from the Holder; or; (b) default in the performance of any obligation to the
Holder hereof.
3. WAIVER OF PRESENTMENT, ETC. The Maker of this Note hereby waives
presentment for payment, demand, notice of non-payment and dishonor, protest and
notice of protest; and waives trial by jury in any action or proceeding arising
on, out of, under or by reason of this Note.
The rights and remedies of the Holder hereof under this Note shall be
deemed cumulative, and the exercise of any right or remedy shall not be regarded
as barring any other remedy or remedies. The institution of any action to
recovery any portion of the
53
indebtedness evidenced by this Note shall not be deemed a waiver of any other
right of the Holder hereof.
4. STATUS OF REGISTERED HOLDER. The Maker may treat the registered
holder of this Note as the absolute owner of this Note for the purpose of making
payments of interest and for all other purposes and shall not be affected by any
notice to the contrary.
5. NOTICES. Any notice required or contemplated by this Note shall be
deemed sufficiently given if sent by registered or certified mail or via
overnight courier to the Maker at its principal office or to the Holder at the
Holder's address shown on the books of the Maker or at such other address as the
Holder may delegate in a notice for that purpose and shall be deemed to have
been sent on the date of mailing or the airbill.
6. HEADINGS. The headings in this Note are solely for convenience of
reference and shall not affect its interpretation.
7. ASSIGNMENTS. This Note is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, representatives and/or successors and assigns. Notwithstanding
the foregoing, neither the Maker nor the Holder shall assign or transfer any
rights or obligations hereunder, except that the Maker may assign or transfer
this Note to a successor corporation in the event of a merger, consolidation or
transfer or sale of all or substantially all of the assets of the Maker,
provided that no such further assignment shall relieve the Maker from liability
for the obligations assumed by it hereunder.
8. LAWS OF THE STATE OF NEW JERSEY. This Note shall be deemed to be
made, executed and delivered in, governed by and interpreted under and construed
in all respects in accordance with the laws of the State of New Jersey,
irrespective of the place of domicile or residence of any Holder. In the event
of a controversy arising out of the interpretation, construction, performance or
breach of this Agreement, the Maker and the Holder hereby agree and consent to
the jurisdiction and venue of the Superior Court of the State of New Jersey,
Xxxxxx County and/or the United States District Court for the District of New
Jersey; and further agree and consent that personal service or process in any
such action or proceeding outside of the State of New Jersey and Xxxxxx County
shall be tantamount to service in person within the State of New Jersey and
Xxxxxx County and shall confer personal jurisdiction and venue upon either of
the said courts.
9. ENTIRE DOCUMENT. Each of the parties hereby covenants that this
Note is intended to and does contain and embody herein all of the understandings
and agreements, both written or oral, of the parties hereto with respect to the
subject matter of this Note, and that there exists no oral agreement or
understanding, express or implied, whereby the absolute, final and unconditional
character and nature of the Note shall be in
54
any way invalidated, impaired or affected. There are no provisions affecting or
interpreting this Note other than those set forth herein.
The acceptance of any installments or payments by the Holder hereof
after the due date herein, or the waiver of any other or subsequent breach or
default may prevent the Holder hereof from immediately pursuing any or all of
his remedies.
Techscience Industries, Inc.
BY: /s/ XXXXX X. XXXX
------------------------------------
Xxxxx X. Xxxx, President
ACCEPTED:
/s/ R. XXXXX XXXXXX
--------------------------------
R. Xxxxx Xxxxxx
55
