Exhibit 10.2
SECURITIES EXCHANGE AGREEMENT
SECURITIES EXCHANGE AGREEMENT (this "AGREEMENT"), dated as of April 26,
2001, among Global Technologies, Ltd., a Delaware corporation ("GLOBAL"),
Advantage Fund II, Ltd. ("ADVANTAGE") and Xxxx Investment Group, Ltd. ("XXXX"
and together with Advantage, the "PLAINTIFFS").
RECITALS
A. The parties hereto are executing and delivering this Agreement in
reliance upon the exemptions from securities registration afforded by Rule 506
of Regulation D ("REGULATION D"), as promulgated by the United States Securities
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and by Section 3(a)(9) under the Securities Act;
B. The parties hereto entered into an Agreement (the "SETTLEMENT
AGREEMENT") dated as of January 31, 2001. The parties hereto thereafter entered
into an amendment (the "AMENDMENT") to the Settlement Agreement dated as of
April 26, 2001 which contemplated that the parties hereto would simultaneously
enter into this Agreement and consummate the transactions contemplated hereby.
Capitalized terms used in this Agreement and not otherwise defined in this
Agreement are defined as defined in the Settlement Agreement.
C. Subject to the terms and conditions set forth herein, Global and the
Plaintiffs desire to exchange their shares of Series C 5% Convertible Preferred
Stock, par value $.01 per share (the "PREFERRED Stock"), for newly issued shares
of Global's Series D Convertible Preferred Stock, par value $.01 per share (the
"SERIES D PREFERRED SHARES"), the designations rights, preferences and
limitations of which are set forth in the Certificate of Designations, Rights,
Preferences and Limitations, attached hereto as Exhibit A (the "SERIES D
CERTIFICATE OF DESIGNATIONS");
D. The parties hereto have determined that consummating the exchange
contemplated hereby is the most efficient and least costly means to permit
Global to issue shares of its capital stock to the Plaintiffs having the rights
and remedies contemplated by the amendments to the Preferred Stock described in
Section 4(i) and (ii) of the Settlement Agreement. As a result, the parties
believe the relevant investment decisions and commitments were made at the time
of the execution of the Settlement Agreement.;
NOW, THEREFORE, the parties do hereby agree as follows:
1. EXCHANGE OF SECURITIES
a. Exchange of Preferred Stock for Series D Preferred Shares. On the date
hereof, Global shall issue and deliver to each Plaintiff duly executed
certificates representing that number of Series D Preferred Shares equal to the
number of shares of Preferred Stock held by such Plaintiff and each Plaintiff
shall deliver to Global the certificates representing all of the shares of
Preferred Stock held by such Plaintiff.
b. Closing. The issuance and delivery of the Series D Preferred Shares in
exchange for the Preferred Stock pursuant to this Agreement (the "CLOSING")
shall be upon the execution of this Agreement.
2. PLAINTIFF'S REPRESENTATIONS AND WARRANTIES
Each Plaintiff severally represents and warrants to Global as follows:
a. Organization; Power and Authority. Such Plaintiff is validly existing
and in good standing under the laws of the jurisdiction of its formation and has
the requisite power and authority to execute and deliver the Amendment and this
Agreement, and to carry out and perform its obligations thereunder. The
Amendment and this Agreement have each been duly and validly authorized,
executed and delivered by such Plaintiff and constitutes such Plaintiff's legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
b. No Conflict. The execution and delivery by such Plaintiff of this
Agreement and the Amendment and the consummation by such Plaintiff of the
transactions contemplated hereby and thereby, do not and will not (i) conflict
with, result in a breach of, or constitute a default under or violation of, (ii)
result in the creation of any Encumbrance upon (1) such Plaintiff's formation
documents (each as amended through the date hereof), (2) any law, statute, rule,
regulation or decree of any governmental authority to which such Plaintiff is
subject or (3) any contract, agreement, understanding or instrument to which
such Plaintiff is a party or bound (4) any order, decree or judgment of any
court, administrative body, arbitrator or governmental authority binding upon
such Plaintiff or its assets.
c. Investment Intent. Such Plaintiff has or is acquiring the Series D
Preferred Shares and upon conversion thereof, the Series D Underlying Shares
(defined below) under this Agreement as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling
such securities or any part thereof, without prejudice, however, to such
Plaintiff's right at all times to sell or otherwise dispose of such securities
in compliance with applicable securities laws. Nothing contained herein shall be
deemed a representation or warranty by such Plaintiff to hold any securities for
any period of time. Such Plaintiff has or is acquiring the securities to be
acquired by it as described hereunder in the ordinary course of its business and
does not have any agreement or understanding with any person or entity with
respect to the distribution of such securities.
d. Status. Such Plaintiff is an "accredited investor" as defined in Rule
501(a) under the Securities Act.
e. No Remuneration. To the knowledge of such Plaintiff, no commission or
other remuneration has been or will be paid or given directly or indirectly for
soliciting the exchange contemplated by this Agreement.
f. Preferred Stock. Advantage represents that it currently holds 550 shares
of Preferred Stock. Xxxx represents that it currently holds 250 shares of
Preferred Stock.
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3. REPRESENTATIONS AND WARRANTIES OF GLOBAL.
Global hereby represents and warrants to the Plaintiffs as follows:
a. Organization and Qualification. Global is a Delaware corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, with the requisite corporate power and authority to carry on its
business as it is now being conducted and to own, use and operate its properties
and assets as currently conducted. Global is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of its property requires
such qualification, except where the failure to be so qualified, individually or
in the aggregate, does not and would not have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
Global or on the ability of Global to perform its obligations hereunder.
b. Power And Authority. Global has the requisite power and authority to
enter into and deliver or file (as the case may be) the Amendment, this
Agreement and the Series D Certificate of Designations and to carry out and
perform its obligations thereunder and hereunder. Each of the Amendment, this
Agreement and the Series D Certificate of Designations executed or filed by
Global, when executed, delivered or filed, will have been duly and validly
authorized, executed, delivered and filed by Global and constitutes the legal,
valid and binding obligation of Global, enforceable against Global in accordance
with its terms.
c. No Conflict. The execution and delivery by Global of this Agreement, the
Amendment and the Series D Certificate of Designations and the consummation by
Global of the transactions contemplated hereby and thereby, do not and will not
(i) conflict with, result in a breach of, or constitute a default under or
violation of, (1) Global's Certificate of Incorporation or Bylaws (each as
amended through the date hereof), (2) any law, statute, rule, regulation or
decree of any governmental authority to which Global is subject, (3) any
contract, agreement, understanding or instrument to which Global is a party or
is bound, or (4) any order, decree or judgment of any court, administrative
body, arbitrator or governmental authority binding upon Global or its assets.
d. Consents. No consent, approval or authorization of, or exemption from,
or filing with, any governmental authority or any third party is required to be
obtained by or made by Global in connection with the execution, delivery and
performance by Global of this Agreement, the Amendment and the Series D
Certificate of Designations, except (i) as have been obtained, (ii) the filing
of the Supplement with the SEC, (iii) the filing of a new Registration Statement
with the SEC in accordance with Section 6(c) of the Settlement Agreement, (iv)
the filing with the SEC of a Report on Form 8-K disclosing the transactions
contemplated hereby, and (v) the filing with the SEC of a Form D promulgated
under the Securities Act as required under Regulation D.
e. Issuance of the Series D Preferred Shares. The Series D Preferred Shares
are duly authorized and, when issued and exchanged for in accordance with the
terms hereof, will be duly and validly issued, fully paid and nonassessable,
free and clear of all liens, encumbrances and rights of first refusal of any
kind (collectively, "LIENS"). Global has on the date hereof and will, at all
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times while the Series D Preferred Shares are outstanding, maintain an adequate
reserve of duly authorized shares of its Class A Common Stock, par value $.01
per share (the "COMMON STOCK"), reserved for issuance to the holders of the
Series D Preferred Shares, to enable it to perform its conversion and other
obligations under this Agreement and the Series D Certificate of Designations.
All such authorized shares of Common Stock shall be duly reserved for issuance
to the holders of the Series D Preferred Shares. The shares of Common Stock
issuable upon conversion of the Series D Preferred Shares are referred to herein
as the "SERIES D UNDERLYING SHARES." When issued in accordance with the
Certificate of Designation, the Series D Underlying Shares will be duly
authorized, validly issued, fully paid and nonassessable, free and clear of all
Liens against Global
f. No Remuneration. To the knowledge of Global, no commission or other
remuneration has been or will be paid or given directly or indirectly for
soliciting the exchange contemplated by this Agreement and the exchange
contemplated hereby shall be exempt from securities registration pursuant to
Section 3(a)(9) under the Securities Act.
g. No Shareholder Approval Required. Assuming the Series D Certificate of
Designations is not hereafter amended or otherwise modified, no shareholder
approval shall be required by NASD Rule 4350(i)(1)(D) (as in effect on the date
hereof) in connection with the issuance of any Series D Underlying Shares upon
the conversion of any Series D Preferred Shares.
4. COVENANTS. The parties hereto agree that to the extent covenants,
agreements and obligations in the February Purchase Agreement, Registration
Rights Agreement and the Settlement Agreement would be enforceable with respect
to the Preferred Stock or the Common Stock issuable upon the conversion thereof,
they shall be enforceable with respect to the Series D Preferred Shares or the
Series D Underlying Shares.
5. FURTHER ASSURANCES. Each of the parties hereto agrees to execute and
deliver or cause to be executed and delivered all such instruments and to take
all such action as the other party may reasonably request or as may become
necessary in order to effectuate the intent and purposes of and to carry out the
terms of this Agreement.
6. GOVERNING LAW; JURISDICTION.
a. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of law principles thereof.
b. Jurisdiction. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Supreme Court of New York, sitting in New York County, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
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certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Each party hereto hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
court referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its' attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
7. FEES AND EXPENSES. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, the Amendment, the Series D
Certificate of Designations and the documents contemplated hereby and thereby.
8. ENTIRE AGREEMENT. The Settlement Agreement, the Amendment, the New Notes,
this Agreement and the Series D Certificate of Designations contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters. However, the parties acknowledge and agree that to the extent
the February Purchase Agreement, the Registration Rights Agreement, the
Warrants, the October Purchase Agreement and all documents executed in
connection therewith are not specifically required to be amended by the terms of
the Settlement Agreement, such Certificates, Agreements and documents (including
the instruments and agreements entered into or filed in connection therewith)
shall remain in full force and effect, unimpaired by this Agreement.
9. NOTICES. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile and the party giving such
notice has a confirmation of transmission setting forth the date and time of
transmission, which was produced by the facsimile machine at the facsimile
telephone number specified in this Section prior to 5:30 p.m. (New York City
time) on any day except Saturday, Sunday and any day which shall be a federal
legal holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other governmental action to close (a
"BUSINESS DAY "), (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile and the party giving such
notice has a confirmation of transmission setting forth the date and time of
transmission, which was produced by the facsimile machine at the facsimile
telephone number specified in this Agreement later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
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(iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to Global: Global Technologies, Ltd.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer/General Counsel
With copies to: Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to Advantage: Advantage Fund II Ltd.
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Facsimile: 011-599-9732-2008
Attention: X.X. Xxxxx
If to Xxxx: Xxxx Investment Group Ltd.
00 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
With copies to
(for both Advantage
and Xxxx): Genesee International Inc.
00000 XX 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
-and-
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
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or such other address as may be designated in writing hereafter, in the same
manner, by such person or entity.
10. AMENDMENTS; WAIVERS. No provision of this agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by each
party hereto or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
11. HEADINGS; THIRD PARTY BENEFICIARIES. The headings herein are for convenience
only, are not a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. No
Plaintiff may assign any of its rights or obligations hereunder without the
prior approval of Global. Global may not assign any of its rights or obligations
hereunder without the prior approval of the Plaintiffs.
13. SURVIVAL. The representations, warranties, agreements and covenants
contained herein shall survive the consummation of the transactions contemplated
herein, including the conversion of the Series D Preferred Stock.
14. EXECUTION. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. Any signature that is delivered by facsimile
transmission shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature page were an original thereof.
15. SEVERABILITY. If any one or more of the provisions of this Agreement shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining provisions of this Agreement shall not in any way be affecting or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Securities
Exchange Agreement to be executed on its behalf as of the date first above
written.
GLOBAL TECHNOLOGIES, LTD.
By: /s/ X. Xxxxx Silver
-------------------------------------
Name: X. Xxxxx Silver
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Title: Vice President and General Counsel
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ADVANTAGE FUND II LTD.
By: Genesee International Inc.
as General Manager
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Title: President
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XXXX INVESTMENT GROUP LTD.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
-----------------------------------
Title: Vice President
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