EXHIBIT 2.3
PREFERRED STOCK PURCHASE AGREEMENT
This PREFERRED STOCK PURCHASE AGREEMENT (together with the schedules and
exhibits hereto, this "Agreement"), dated as of July 11, 2005, is made by and
among iCurie, Inc., a Nevada corporation (the "Company"), and each of the
Persons (as defined below) who has executed a signature page to this Agreement
(each a "Purchaser," and together, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Company, shares of the Company's Series A
Preferred Stock, par value $0.001 per share (the "Series A Preferred" or "Series
A Preferred Stock") as set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound, the parties hereto hereby agree as follows:
1. Offer and Sale of Securities.
1.1 The Purchasers; The Offering.
(a) The Purchasers. Each of the HG Noteholders, the iCurie
Noteholders and Xx. Xxx Noteholders (each as defined below and
collectively the "Noteholders") acquired the HG Notes, the iCurie UK Notes
and the Xx. Xxx Notes, respectively, in separate transactions described
below (the HG Notes, iCurie UK Notes and Xx. Xxx Notes shall be
collectively referred to herein as the "Notes") and desire to transfer
such Notes to the Company, and the Company desires to accept such
transfer, in consideration for shares of Series A Preferred Stock pursuant
to the terms set forth in paragraph (b) below.
(i) THE XXXXXX XXXX NOTES. On December 2, 2004, Xxxxxx Xxxx &
Company, Inc., a Nevada corporation ("Xxxxxx Xxxx") issued secured
convertible promissory notes (the "HG Notes") in the aggregate principal
amount of $2,500,000 to the purchasers (the "HG Noteholders") and in such
amounts as set forth on Appendix A hereto. Upon consummation of the
Offering (as defined below), the HG Notes will be exchanged in
consideration for and for the purchase of (i) 3,787,878 shares of the
Company's Series A Preferred Stock, in such amounts as set forth on
Appendix A hereto, which, based on the aggregate principal amount of the
HG Notes, represents a per share price of approximately $0.66,
representing a 25% discount from the Offering cash price per share of the
Series A Preferred Stock, (ii) warrants to purchase an aggregate of
710,220 shares of the Company's common stock, par value $0.001 per share
("Common Stock"), in such amounts as set forth in Appendix A hereto, at an
exercise price of $0.88 per share of Common Stock (the "HG Warrants"),
(iii) Cash Offering Warrants (as defined in Section 1.1(b)) in the amounts
and with the exercise prices set forth in Section
1.1(b) and (iv) the payment in cash of accrued but unpaid interest payable
pursuant to the HG Notes.
(ii) THE ICURIE UK NOTES. On each of March 17 and April 25,
2005, iCurie Lab Holdings Limited ("iCurie UK") issued secured convertible
promissory notes (the "iCurie UK Notes") in the principal amount of
$500,000 to the purchasers (the "iCurie UK Noteholders") and in such
amounts as set forth on Appendix A hereto for an aggregate combined
issuance of $1,000,000. Upon consummation of this Offering, the iCurie UK
Notes will be exchanged in consideration for and for the purchase of (i)
approximately 1,355,661 shares of Series A Preferred Stock in such amounts
as set forth on Appendix A hereto, (ii) warrants to purchase an aggregate
of 482,953 shares of Common Stock, in such amounts as set forth in
Appendix A hereto, at an exercise price of $0.88 per share of Common Stock
(the "Bridge Warrants" and, together with the HG Warrants, the "Warrants")
and (iii) Cash Offering Warrants in the amounts and with the exercise
prices set forth in Section 1.1(b).
(iii) THE XX. XXX NOTES. Xx. Xxxxx Xxxx Xxx, Ph.D. ("Xx. Xxx")
issued a secured promissory note (the "Xx. Xxx Note") in the principal
amount of $1,100,000 to iCurie Bridge Funding, LLC ("ICBF"). Upon
consummation of this Offering, the Xx. Xxx Note will be exchanged by ICBF
for (i) 1,666,666 shares of Series A Preferred Stock and (ii) Cash
Offering Warrants in the amounts and with the exercise prices set forth in
Section 1.1(b).
(iv) ADDITIONAL NOTEHOLDER AGREEMENTS. Each Noteholder agrees
and acknowledges that by exchanging its Notes for Series A Preferred Stock
and Warrants as provided herein, Noteholder is transferring to the Company
all right, title and interest to (A) such Notes, (B) any security interest
relating to such Notes, including, without limitation, all rights of
Noteholder under the Security Agreement (or, in the case of the Xx. Xxx
Note, a Pledge Agreement) entered into by the issuer of such Note in
connection with the issuance thereof (collectively, the "Security
Agreements") and (iii) the Securities Purchase Agreement entered into by
the Noteholder and the issuer of the Notes in connection with the issuance
thereof (collectively, the "Note Purchase Agreements").
(v) RELATED AGREEMENTS. Each of (A) the Placement Agents (as
defined below), as Agents under certain of the Security Agreements, and
(B) Xxxxxx Xxxx, iCurie UK and Xx. Xxx, as issuers of the Notes and
parties to certain of the Security Agreements and Note Purchase
Agreements, have executed a joinder to this Agreement in order to (Z) in
the case of the Placement Agents, transfer all of their rights, title and
interest as Agents under the relevant Security Agreements to the Company
and (Y) in the case of Xxxxxx Xxxx, iCurie UK and Xx. Xxx, to consent to
the transactions contemplated by this Agreement.
(vi) TRANSFER TO ICBF MEMBERS. The parties hereto hereby
acknowledge and agree that the shares of Series A Preferred Stock,
Warrants and Cash Offering Warrants otherwise issuable to ICBF as both a
iCurie UK Noteholder and holder of the Xx. Xxx Note shall instead by
issued to the members of ICBF (the "ICBF Members"), as set forth on
Appendix A hereto. The parties hereto acknowledge and
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agree that: (i) the issuance of the Series A Preferred Stock, Warrants and
Cash Offering Warrants to the ICBF Members as set forth on Appendix A is
being effectuated at the request of ICBF to avoid the issuance of the
Series A Preferred Stock, Warrants and Cash Offering Warrants to ICBF
followed immediately thereafter by the transfer of such securities from
ICBF to the ICBF Members, and (ii) each ICBF Member shall execute a
signature page to this Agreement or similar documentation satisfactory to
the Company solely for the purpose of making the representations set forth
in Section 5 hereof.
(b) The Offering. As described in the Confidential Private Placement
Memorandum relating to the Company dated May, 2005, as supplemented by
that certain Supplement to Confidential Private Placement Memorandum dated
June 23, 2005 (collectively, the "PPM"), concurrently with the
transactions contemplated hereby, the Company is also selling between
6,136,364 and 17,500,000 shares of Series A Preferred for $0.88 per share
(the "Cash Offering, and, together with the transactions contemplated
hereby, the "Offering"); provided, however, that Indigo Securities, LLC
and Axiom Capital Management Inc. (the "Placement Agents"), may direct the
Company to increase the Cash Offering by up to 2,272,727 shares of Series
A Preferred. Each share of Series A Preferred is initially convertible
into 1 share of Common Stock. Each purchaser of Series A Preferred in the
Cash Offering and each Noteholder shall also receive warrants to purchase
the number of shares of Common Stock equal to twenty-five percent (25%) of
the number of shares of Series A Preferred purchased by such Purchaser,
with exercise prices of $1.10 with respect to fifty percent (50%) of such
shares of Common Stock and $1.32 with respect to the remaining fifty
percent (50%) of such shares of Common Stock (the "Cash Offering
Warrants"). The Series A Preferred Stock and Warrants offered hereby are
sometimes referred to herein as the "Securities". The Series A Preferred
Stock offered in the Cash Offering and Cash Offering Warrants are referred
to as the "Cash Securities." The shares of Common Stock into which the
Series A Preferred Stock is convertible or for which the Warrants are
exercisable is sometimes hereafter referred to as the "Conversion Shares."
The Series A Preferred shall have the powers, designations,
preferences, rights, qualifications, limitations and restrictions
contained in the Amended and Restated Articles of Incorporation of the
Company in substantially the form of Exhibit A hereto (the "Amended
Articles"). In connection with the transactions contemplated hereby, the
holders of the Series A Preferred Stock, together with the Company and
certain additional security holders of the Company, shall be required to
enter into a Registration Rights Agreement substantially in the form of
Exhibit B hereto (the "Registration Rights Agreement").
1.2 INTENTIONALLY BLANK.
1.3 Share Exchange. Purchasers hereby acknowledge and agree that one
of the conditions to the consummation of the sale of Series A Preferred
Stock and Warrants pursuant to the Offering is the consummation
immediately prior to Closing of the transactions contemplated pursuant to
that certain Share Exchange Agreement, to be dated as of the date hereof
and in substantially the form attached as Exhibit C (the "Share Exchange
Agreement"), pursuant to which the shareholders of iCurie UK will exchange
all of the outstanding capital shares of iCurie UK for shares of Common
Stock (the
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"Share Exchange"). As a result of the Share Exchange, the Company, which
prior to the Share Exchange had no material operations, shall succeed to
the business of iCurie UK. Although the Share Exchange is a condition to,
and must be consummated prior to the Closing, all payments made and
documents received pursuant to this Agreement and the Cash Offering will
be held in escrow pursuant to the Escrow Agreement (defined below) prior
to the consummation of the Share Exchange, and the Share Exchange will not
be consummated until all conditions to the closing of the Offering and
Share Exchange have been satisfied or waived.
2. Closing. The closing to consummate the sales of the Securities offered
hereby (the "Closing") will occur on July 11 (such date, the "Closing Date");
provided, however, that the Closing will not take place until all the conditions
set forth in this Agreement shall have been satisfied or waived.
2.1 Escrow. All documents delivered and Notes delivered pursuant to
this Agreement with regard to the Closing shall be delivered to an escrow
agent (the "Escrow Agent") in accordance with the terms of an Escrow
Agreement in the form attached hereto as Exhibit D (the "Escrow
Agreement"). BY EXECUTION OF THIS AGREEMENT, THE PURCHASER HEREBY
AUTHORIZES EACH OF THE PLACEMENT AGENTS, AND EITHER OF THEM ACTING ALONE,
AS SUCH PURCHASER'S ATTORNEY-IN-FACT, TO TAKE SUCH ACTION AS IS
CONTEMPLATED UNDER AND PURSUANT TO THE TERMS OF THE ESCROW AGREEMENT, TO
RELEASE THE DOCUMENTS AND FUNDS FROM ESCROW AND CONSUMMATE THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT IN ACCORDANCE WITH THE TERMS
HEREOF; PROVIDED, HOWEVER, THAT NO CONDITION TO THIS AGREEMENT SHALL BE
WAIVED WITH RESPECT TO ANY PURCHASER WITHOUT THE PRIOR CONSENT OF SUCH
PURCHASER.
2.2 RETURN OF NOTES. Each Purchaser hereby authorizes and directs
both the Company and the Escrow Agent, jointly and severally, to return or
direct the return of the Notes held by the Escrow Agent to the extent that
the Offering is not consummated.
3. Conditions to the Obligations of each Purchaser at Closing. The
obligation of each Purchaser to purchase and pay for the Securities to be
purchased by such Purchaser at the Closing is subject to the satisfaction on or
prior to the Closing Date, of the following conditions, each of which may be
waived by the applicable Purchaser:
3.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement which are qualified
as to materiality must be true and correct in all respects, and the
representations and warranties of the Company contained in this Agreement
which are not qualified as to materiality must be true and correct in all
material respects, in each case as of the Closing Date except to the
extent that the representations and warranties relate to a different date
in which case the representations and warranties must be true and correct
as written or true and correct in all material respects, as the case may
be, as of the different date.
3.2 Performance of Covenants. The Company shall have performed or
complied with in all material respects all covenants and agreements
required to be performed by it on or prior to the applicable Closing
pursuant to this Agreement,
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including, without limitation, the delivery of certificates evidencing the
Series A Preferred Stock issued to the Purchasers at the Closing.
3.3 No Injunctions; etc. No court or governmental injunction, order
or decree prohibiting the purchase and sale of the Securities or the
Conversion Shares will be in effect. There will not be in effect any law,
rule or regulation prohibiting or restricting the sale or requiring any
consent or approval of any Person that has not been obtained to issue and
sell the Securities or Conversion Shares to the Purchasers except as
contemplated by this Agreement.
3.4 Closing Documents. At each Closing, the Company shall have
delivered to the Escrow Agent the following:
(a) a certificate of the President of the Company certifying
that the conditions in Sections 3.1 and 3.2 have been satisfied;
(b) a certificate of the Secretary of the Company, dated as of
the Closing Date, certifying (i) the Amended Articles and By-laws of
the Company, (ii) the resolutions of the Board of Directors of the
Company (the "Board") authorizing the execution, delivery and
performance of this Agreement and the issuance of the Securities
(including, but not limited to, for purposes of Nevada corporations
law) and (iii) the incumbency of the officers duly authorized to
execute this Agreement and the other documents contemplated by this
Agreement;
(c) a good standing certificate of the Secretary of State of
Nevada, dated as of a recent date to the effect that the Company is
in good standing in the State of Nevada;
(d) a copy of the Amended Articles, as filed with the
Secretary of State of the State of Nevada;
(e) a Registration Rights Agreement duly executed by the
Company.
(f) an opinion of counsel.
3.5 Waivers and Consents. The Company will have obtained all
consents and waivers necessary to execute and deliver this Agreement and
all related documents and agreements and to issue and deliver the
Securities, and all consents and waivers will be in full force and effect.
3.6 Share Exchange. The Share Exchange shall have been consummated
in accordance with the terms of the Share Exchange Agreement.
3.7 Cash Offering. The Cash Offering shall have been consummated.
4. Conditions to the Obligations of the Company at Closing. The obligation
of the Company to issue and sell the Securities to any Purchaser is subject to
the satisfaction on or prior
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to each Closing Date of the following conditions, each of which may be waived by
the Company:
4.1 Receipt of Notes. The Company shall have received the original
copy of the Purchaser's Note (or an Affidavit of Lost Note in the form
attached hereto as Exhibit E), together with such instrument of transfer
of the Note and related Security Agreement reasonably requested by the
Company.
4.2 Representations and Warranties. The representations and
warranties of each applicable Purchaser contained in this Agreement which
are qualified as to materiality must be true and correct in all respects,
and the representations and warranties of each applicable Purchaser
contained in this Agreement which are not qualified as to materiality must
be true and correct in all material respects, in each case as of the
Closing Date except to the extent that the representations and warranties
relate to a different date in which case the representations and
warranties must be true and correct as of the different date.
4.3 Performance of Covenants. The Purchasers will have performed or
complied with in all material respects all covenants and agreements
required to be performed by the Purchasers on or prior to the Closing
pursuant to this Agreement.
4.4 No Injunctions. No court or governmental injunction, order or
decree prohibiting the purchase or sale of the Securities or Conversion
Shares will be in effect.
4.5 Closing Document. The Purchasers will have delivered to the
Company a Registration Rights Agreement and duly executed by the
Purchasers.
4.6 Share Exchange. The Share Exchange shall have been consummated
in accordance with the terms of the Share Exchange Agreement.
4.7 Cash Offering. The Cash Offering shall have been consummated.
5. Representations and Warranties of each Purchaser. Each Purchaser, in
order to induce the Company to perform this Agreement, hereby represents and
warrants, severally and not jointly, as follows:
5.1 Due Authorization. Each Purchaser represents for such Purchaser
to the Company that such Purchaser has full power and authority and has
taken all action necessary to authorize such Purchaser to execute, deliver
and perform such Purchaser's obligations under this Agreement and the
other agreements to be executed and delivered by such Purchaser in
connection herewith. This Agreement, and each other such agreement, is the
legal, valid and binding obligation of such Purchaser in accordance with
its terms.
5.2 Accredited Investor. Each Purchaser represents that such
Purchaser is an Accredited Investor as that term is defined in Regulation
D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). All information contained in the questionnaire or other
documentation provided by Purchaser, and all representations
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made by such Purchaser in connection with such Purchaser's original
purchase of the Notes regarding accredited investor status remains true
and correct as of the date hereof and as of the Closing Date.
5.3 No Investment Advice. The Company has not made any other
representations or warranties to such Purchaser other than as set forth
herein or incorporated herein by reference with respect to the Company or
rendered any investment advice.
5.4 Investment Experience. Each Purchaser represents that such
Purchaser has not authorized any Person to act as such Purchaser's
Purchaser Representative (as that term is defined in Regulation D of the
General Rules and Regulations under the Securities Act) in connection with
this transaction. Such Purchaser has such knowledge and experience in
financial, investment and business matters that such Purchaser is capable
of evaluating the merits and risks of the prospective investment in the
securities of the Company. Such Purchaser has consulted with such
independent legal counsel or other advisers as such Purchaser has deemed
appropriate to assist such Purchaser in evaluating the proposed investment
in the Company.
5.5 Adequate Means. Each Purchaser represents as to such Purchaser
that such Purchaser (i) has adequate means of providing for such
Purchaser's current financial needs and possible contingencies; and (ii)
can afford (a) to hold unregistered securities for an indefinite period of
time as required; and (b) sustain a complete loss of the entire amount of
the subscription.
5.6 Access to Information. Each Purchaser represents that such
Purchaser has received and read the PPM and has read all Commission
Documents (as defined herein). Each Purchaser represents that such
Purchaser has been afforded the opportunity to ask questions of, and
receive answers from the officers and/or directors of the Company acting
on its behalf concerning the terms and conditions of this transaction and
to obtain any additional information, to the extent that the Company
possesses such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information furnished;
and has had such opportunity to the extent such Purchaser considers
appropriate in order to permit such Purchaser to evaluate the merits and
risks of an investment in the Company. It is understood that all
documents, records and books pertaining to this investment have been made
available for inspection, and that the books and records of the Company
will be available upon reasonable notice for inspection by investors
during reasonable business hours at its principal place of business. The
foregoing shall in no way be deemed to limit the ability of each Purchaser
to rely on the representations and warranties set forth herein or
incorporated herein by reference.
5.7 No Endorsement. Each Purchaser further acknowledges that the
offer and sale of the Securities and Conversion Shares has not been passed
upon or the merits thereof endorsed or approved by any state or federal
authorities.
5.8 Non-Registered Securities. Each Purchaser acknowledges that
neither the offer and sale of the Securities at the Closing, or the sale
of the Conversion Shares, has
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been registered under the Securities Act or any state securities laws and
the Securities and the Conversion Shares may be resold only if registered
pursuant to the provisions thereunder or if an exemption from registration
is available and such resale is otherwise permitted by law and contract.
Each Purchaser understands that the offer and sale of the Securities at
the Closing, and the sale of the Conversion Shares, is intended to be
exempt from registration under the Securities Act, based, in part, upon
the representations, warranties and agreements of such Purchaser contained
in this Agreement.
5.9 No Resale. Each Purchaser represents that the Securities being
subscribed for hereby, and the securities underlying the subscription, are
being acquired solely for the account of such Purchaser for such
Purchaser's investment and not with a view to, or for resale in connection
with, any distribution in any jurisdiction where such sale or distribution
would be precluded. By such representation, such Purchaser means that,
other than as disclosed on both the signature page of this Agreement, no
other Person has a beneficial interest in the Securities or the securities
underlying the subscription, and that no other Person has furnished or
will furnish directly or indirectly, any part of or guarantee the payment
of any part of the consideration to be paid by such Purchaser to the
Company in connection therewith. Such Purchaser does not intend to dispose
of all or any part of the Securities or the securities underlying the
subscription except in compliance with the provisions of the Securities
Act and applicable state securities laws, and understands that the
Securities and the securities underlying the subscription are being
offered pursuant to a specific exemption under the provisions of the
Securities Act, which exemption(s) depends, among other things, upon the
compliance with the provisions of the Securities Act.
5.10 Legend. Each Purchaser hereby acknowledges and agrees that
until either (i) a registration statement covering the resale of the
Securities and the Conversion Shares is effective under the Securities Act
and such Securities have been disposed of thereunder, (ii) such Securities
and the Conversion Shares are disposed of under Rule 144 and are no longer
required to be legended under Rule 144, or (iii) such Securities and
Conversion Shares are eligible for sale under Rule 144(k) promulgated
under the Securities Act, and, in either case, the holder properly
requests that the legend be removed in accordance therewith, the Company
may insert the following or similar legend on the face of the certificates
evidencing the Securities and the Conversion Shares, as the case may be,
if the Company deems the same to be necessary or appropriate in order to
ensure compliance with the Securities Act or state securities laws:
"These securities have not been registered under the Securities Act
of 1933, as amended (the "SECURITIES ACT"), or any state securities
laws and may not be sold or otherwise transferred or disposed of
except pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or an
opinion of counsel satisfactory to counsel to the issuer that an
exemption from registration under the Securities Act and any
applicable state securities laws is available."
5.11 Broker's or Finder's Commissions. Other than the Placement
Agents (as placement agents on behalf of the Company) no finder, broker,
agent, financial person or
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other intermediary has acted on behalf of any Purchaser in connection with
the sale of the Securities by the Company or the consummation of this
Agreement or any of the transactions contemplated hereby.
5.12 Authorization. The Purchaser: (i) if a natural person,
represents that the Purchaser has reached the age of 21 and has full power
and authority to execute and deliver this Agreement and all other related
agreements or certificates and to carry out the provisions hereof and
thereof; or (ii) if a corporation, partnership, or limited liability
company or partnership, or association, joint stock company, trust,
unincorporated organization or other entity, represents that such entity
was not formed for the specific purpose of acquiring the Series A
Preferred Stock or Warrants, such entity is duly organized, validly
existing and in good standing under the laws of the state of its
organization, the consummation of the transactions contemplated hereby is
authorized by, and will not result in a violation of applicable state law
or its charter or other organizational documents, such entity has full
power and authority to execute and deliver this Agreement and all other
related agreements or certificates and to carry out the provisions hereof
and thereof and to purchase and hold the Securities, the execution and
delivery of this Agreement has been duly authorized by all necessary
action, this Agreement has been duly executed and delivered on behalf of
such entity and is a legal, valid and binding obligation of such entity.
The execution and delivery of this Agreement will not violate or be in
conflict with any order, judgment, injunction, agreement or controlling
document to which the Purchaser is a party or by which it is bound.
5.13 Information. No oral or written representations have been made,
or oral or written information furnished, to the Purchaser or its
advisors, if any, in connection with the Offering which are in any way
inconsistent with the information contained in the PPM.
5.14 Interest in Notes. The Purchaser is the sole legal and
beneficial owner of the Notes originally issued in the name of Purchaser,
and owns such Notes free and clear of any liens, pledges or other
encumbrances.
Each Purchaser certifies that each of the foregoing representations and
warranties by such Purchaser set forth in this Section 5 are true as of the date
hereof and shall survive such date.
6. Representations and Warranties of the Company. The Company hereby
agrees and acknowledges that, consistent with the terms of the Notes, the
Purchasers are entitled to rely on the representations and warranties made by
the Company in the Subscription Agreements entered into by the Company in
connection with the Cash Offering, a form of which is included in the PPM. In
addition, the Company represents and warrants to the Purchasers as follows as of
the Closing, each such representation and warranty being made subject to such
disclosures as are made pursuant to this Agreement or any schedule or exhibit
delivered in connection herewith at the Closing:
6.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the
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State of Nevada. The Company has full corporate power and authority to own
and hold its properties and to conduct its business.
6.2 Corporate Power, Authorization; Enforceability. The Company has
full corporate power and authority to execute, deliver and enter into this
Agreement, the warrants to be issued to the Placement Agents granting the
Placement Agents the right to purchase ten percent (10%) of the shares of
Series A Preferred sold by such Placement Agents to investors introduced
by such Placement Agents (the "Placement Agent Warrants"), the
documentation effectuating the issuance of the Cash Securities, the
Amended Articles, the Registration Rights Agreement (collectively, the
"Transaction Documents") and to consummate the transactions contemplated
hereby and thereby. All action on the part of the Company, its directors
or stockholders necessary for (i) the authorization, execution, delivery
and performance of the Transaction Documents by the Company, (ii) the
authorization, sale, issuance and delivery of the Securities as
contemplated hereby, (iii) the reservation of the Conversion Securities,
and (iv) the performance of the Company's obligations hereunder and
thereunder has been taken. The Securities to be purchased on the Closing
Date and the related Placement Agent Warrants, the underlying Conversion
Shares, and the Cash Securities have been duly authorized and, when issued
in accordance with this Agreement or other applicable Transaction
Document, as the case may be, will be validly issued, fully paid and
nonassessable and will be free and clear of any mortgage, deed of trust,
pledge, hypothecation, assignment, encumbrance, lien (statutory or other)
or preference, priority, right or other security interest or preferential
arrangement of any kind or nature whatsoever (collectively, "Liens")
imposed by or through the Company other than restrictions imposed by the
Transaction Documents. No preemptive or other rights to subscribe for or
purchase equity securities of the Company exists with respect to the
issuance and sale of the Securities, the Conversion Shares or the Cash
Securities. The Transaction Documents have been duly executed and
delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
7. Indemnification.
7.1 (a) The Company agrees to indemnify and hold harmless the
Purchasers, their affiliates and each of their respective directors,
officers, general and limited partners, principals, members, agents and
attorneys (individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all losses, claims,
damages, liabilities, costs (including reasonable attorneys' fees) and
expenses (collectively, "Losses") to which any Indemnified Party may
become subject, insofar as such Losses arise out of, in any way relate to,
or result from (i) any breach of any representation or warranty made by
the Company contained in or made pursuant to Article 6 of this Agreement,
or (ii) the failure of the Company to fulfill any agreement or covenant
contained in or made pursuant to this Agreement. In no event,
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however, shall the Company be liable for indirect, incidental or
consequential or special damages of any kind. All of the representations
and warranties of the Company made herein shall survive the execution and
delivery of this Agreement until the date that is three (3) years after
the date of this Agreement, except for Section 6.1 (Organization, Good
Standing and Qualification) and Section 6.2 (Corporate Power,
Authorization; Enforceability), which representations and warranties shall
survive until the lapse of the applicable statute of limitations. Except
as set forth herein, all of the covenants, agreements and obligations of
the Company shall survive the Closing indefinitely (or if indefinite
survival is not permitted by law, then for the maximum period permitted by
applicable law). Notwithstanding anything to the contrary contained
herein, in no event shall the Company be required to make indemnification
pursuant to this Section in excess of the aggregate principal amount of
the Notes.
(a) Each Purchaser severally, and not jointly, agrees to indemnify
and hold harmless the Company, its affiliates and each of their respective
directors, officers, general and limited partners, principals, agents and
attorneys from and against any and all Losses to which any such Person may
become subject, insofar as such Losses arise out of, in any way relate to,
or result from (i) any breach of any representation or warranty made by
such Purchaser contained in or made pursuant to Article 5 of this
Agreement, or (ii) the failure of such Person to fulfill any agreement or
covenant contained in or made pursuant to this Agreement. In no event,
however, shall any Purchaser be liable for indirect, incidental or
consequential or special damages of any kind. All of the representations
and warranties of each Purchaser made herein shall survive the execution
and delivery of this Agreement for the maximum period permitted by
applicable law with respect to the statute of limitations applicable to
survival of contractual claims for indemnification. Except as set forth
herein, all of the covenants, agreements and obligations of the Purchasers
shall survive the Closing for the maximum period permitted by applicable
law with respect to the statute of limitations applicable to survival of
contractual claims for indemnification. Furthermore, in no event shall any
Purchaser be required to make indemnification pursuant to this Section in
excess of the gross purchase price of the Securities acquired by such
Purchaser in the Offering (based on the principal amount of the Notes
exchanged therefor).
7.2 Promptly after receipt by any Person entitled to seek
indemnification under Section 7.1 of this Agreement (individually, an
"INDEMNIFIED PARTY" and collectively, the "Indemnified Parties") of notice
of any claim as to which indemnity may be sought, including, without
limitation, the commencement of any action or proceeding, the Indemnified
Party will, if a claim in respect thereof may be made against a Person
required to provide indemnification under Section 7.1 of this Agreement
(individually, an "Indemnifying Party" and collectively, the "Indemnifying
Parties"), promptly notify the Indemnifying Party in writing of the
commencement thereof; provided that the failure of the Indemnified Party
to so notify the Indemnifying Party will not relieve the Indemnifying
Party from its obligations under this Section unless, and only to the
extent that, such omission results in the Indemnifying Party's forfeiture
of substantive rights or defenses or being materially prejudiced by the
Indemnified Person's failure to give such notice. In case any action or
proceeding is brought against any Indemnified Party, and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying Party
11
shall be entitled to assume the defense thereof at its own expense, with
counsel reasonably satisfactory to such Indemnified Party, which approval
will not be unreasonably withheld or delayed unreasonably; provided,
however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense at its own expense. After
notice from the Indemnifying Party to the Indemnified Party of its
election to so assume the defense thereof, the Indemnifying Party will not
be liable to the Indemnified Party under that Section 7 for any legal or
any other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof (other than reasonable costs of
investigation) unless incurred at the written request of the Indemnifying
Party. Notwithstanding the above, the Indemnified Party will have the
right to employ counsel of its own choice in any action or proceeding (and
be reimbursed by the Indemnifying Party for the reasonable fees and
expenses of the counsel and other reasonable costs of the defense) if, in
the written opinion of such Indemnified Party's counsel, representation of
the Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests or
conflicts between the Indemnified Party and any other party represented by
the counsel in the action; provided, however, that the Indemnifying Party
will not in connection with any one action or proceeding or separate but
substantially similar actions or proceedings arising out of the same
general allegations, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties, except to the extent that local counsel, in addition to regular
counsel, is required in order to effectively defend against the action or
proceeding. An Indemnifying Party will not be liable to any Indemnified
Party for any settlement or entry of judgment concerning any action or
proceeding effected without the consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. The Indemnifying Party agrees
that it will not, without the prior written consent of the Indemnified
Party, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim relating to the matters contemplated hereby
(if any Indemnified Party is a party thereto or has been actually
threatened to be made a party thereto) unless such settlement, compromise
or consent includes an unconditional release of each Indemnified Party
from all liability arising or that may arise out of such claim. The rights
accorded to an Indemnified Party hereunder shall be in addition to any
rights that any Indemnified Party may have at common law, by separate
agreement or otherwise; provided, however, that notwithstanding the
foregoing or anything to the contrary contained in this Agreement, (a)
nothing in this Section 7 shall restrict or limit any rights that any
Indemnified Party may have to seek equitable relief and (b) this Section 7
shall be the sole remedy for any breach of the Company's representations
and warranties contained in this Agreement and for any breach of any
Purchaser's representations and warranties contained in this Agreement
except, in either case, with respect to claims arising out of fraud or
willful misconduct.
8. Covenants.
8.1 Conduct of the Company's Business. Except as contemplated by
this Agreement, during the period from the date hereof to the Closing
Date, the Company will conduct its business and operations solely in the
ordinary course of business consistent with past practice and use
reasonable commercial efforts to keep available the services of
12
its officers and employees and preserve its current relationships with
customers, suppliers, licensors, creditors and others having business
dealings with it, except as would not be reasonably expected to have a
Material Adverse Effect.
8.2 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws
and regulations to consummate the transactions contemplated by this
Agreement at the earliest practicable date.
9. FOR RESIDENTS OF ALL STATES. NEITHER THE SECURITIES OFFERED HEREBY OR
THE CONVERSION SHARES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
10. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the Purchasers, the Purchasers do
not thereby or in any manner waive any rights granted to the Purchasers under
federal or state securities laws.
11. Miscellaneous.
11.1 Notices. Any notice or other communication given hereunder by
any party hereto to any other party hereto shall be in writing and
delivered personally or by facsimile transmission or sent by registered or
certified mail or by any express mail or overnight courier service,
postage or fees prepaid:
If to the Company:
iCurie, Inc.
Espirito Santa Plaza
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
13
With a copy to:
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
000 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to the Purchasers:
To each Purchaser at such Purchaser's name and address set
forth on the signature page to this Agreement.
Any notice that is delivered personally or by facsimile transmission in
the manner provided herein shall be deemed to have been duly given to the
party to whom it is directed upon actual receipt by such party or its
agent. Any notice that is addressed and mailed, postage prepaid for most
rapid method of delivery, or sent by courier in the manner herein provided
shall be conclusively presumed to have been duly given to the party to
which it is addressed at the close of business, local time of the
recipient, on the fourth business day after the day it is so placed in the
mail or, if earlier, the date and time of actual receipt.
11.2 Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and to their respective heirs,
legal representatives, successors and assigns, provided, that no party may
assign this Agreement without the prior written consent of the other
party, such consent not to be unreasonably withheld; provided that any
transfer of Securities or securities underlying such Securities must be in
compliance with the Transaction Documents and all applicable law.
11.3 Entire Agreement. This Agreement sets forth the entire
agreement and understanding among the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them; provided that any
confidentiality agreement between the Company and any Purchaser shall
remain in effect. This Agreement may be amended only by mutual written
agreement of the Company and a majority in interest of the Purchasers, and
the Company may take any action herein prohibited or omit to take any
action herein required to be performed by it, and any breach of any
covenant, agreement, warranty or representation may be waived, only if the
Company has obtained the written consent or waiver of the Purchasers
purchasing a majority of the Securities offered hereby.
11.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York with
respect to contracts made and to be fully performed therein, without
regard to the conflicts of laws principles thereof. The parties hereto
hereby agree that any suit or proceeding arising under this Agreement, or
in connection with the consummation of the transactions contemplated
hereby, shall be brought solely in a federal or state court located in the
County of New York and State of New York. By its execution hereof, both
the Company and the Purchasers hereby consent and irrevocably submit to
the in personam jurisdiction of the federal and state
14
courts located in the County of New York and State of New York and agree
that any process in any suit or proceeding commenced in such courts under
this Agreement may be served upon it personally or by certified or
registered mail, return receipt requested, or by Federal Express or other
courier service, with the same force and effect as if personally served
upon the applicable party in New York and in the city or county in which
such other court is located. The parties hereto each waive any claim that
any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense of lack of in personam jurisdiction with
respect thereto.
11.5 Severability. The holding of any provision of this Agreement to
be invalid or unenforceable by a court of competent jurisdiction will not
affect any other provision of this Agreement, which will remain in full
force and effect. If any provision of this Agreement is declared by a
court of competent jurisdiction to be invalid, illegal or incapable of
being enforced in whole or in part, the provision will be interpreted so
as to remain enforceable to the maximum extent permissible consistent with
applicable law and the remaining conditions and provisions or portions
thereof will nevertheless remain in full force and effect and enforceable
to the extent they are valid, legal and enforceable, and no provisions
will be deemed dependent upon any other covenant or provision unless so
expressed herein.
11.6 No Waiver. A waiver by either party of a breach of any
provision of this Agreement will not operate, or be construed, as a waiver
of any subsequent breach by that same party.
11.7 Further Assurances. The parties agree to execute and deliver
all further documents, agreements and instruments and take further action
as may be necessary or appropriate to carry out the purposes and intent of
this Agreement, including, without limitation to further evidence the
matters set forth in Sections 1.1(a)(iv) and 1.1(a)(v).
11.8 Counterparts. This Agreement may be executed in two or more
counterparts (including, without limitation, facsimile counterparts), each
of which will be deemed an original, but all of which will together
constitute the same instrument.
11.9 No Third Party Beneficiaries. Nothing in this Agreement creates
in any Person not a party to this Agreement any legal or equitable right,
remedy or claim under this Agreement, and this Agreement is for the
exclusive benefit of the parties hereto. The parties expressly recognize
that this Agreement is not intended to create a partnership, joint venture
or other similar arrangement between any of the parties or their
respective affiliates.
11.10 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.
11.11 Securities Laws Disclosure; Publicity Restrictions. The
Company shall issue a press release following Closing, and file a Current
Report on Form 8-K disclosing the consummation of the transactions
consummated on the Closing by the fourth business
15
day following the Closing. Except as may be required by applicable
Requirements of Law, none of the parties hereto shall issue a publicity
release or public announcement or otherwise make any disclosure concerning
this Agreement, the transactions contemplated hereby without prior
approval by the other party hereto, and no Purchaser may be named in any
such press release without such investor's specific consent. If any
announcement is required by applicable law or the rules of any securities
exchange or market on which such shares of Common Stock are traded to be
made by any party hereto, prior to making such announcement such party
will deliver a draft of such announcement to the other parties and shall
give the other parties reasonable opportunity to comment thereon.
11.12 Certification. Each Purchaser certifies that such Purchaser
has read this entire Agreement and that every statement on such
Purchaser's part made and set forth herein is true and complete.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this Preferred Stock
Purchase Agreement on the date his signature has been subscribed and sworn to
below.
*
_________________________________________
ICURIE, INC. Print Name of Investor
By: /s/ Xxxxx Xxxxxxxx ______Shares of Series A Preferred Stock
------------------------------
Name: Xxxxx Xxxxxxxx Aggregate principal amount of Notes
Title: Chief Executive Officer exchanged therefor:
$ ________ (principal amount of Notes
tendered by Purchaser)
_________________________________________
Print Name of Joint Investor
(if applicable)
_________________________________________
Signature of Investor
_________________________________________
Signature of Joint Investor
_________________________________________
(with a copy to:)
_________________________________________
Address of Investor
* EXECUTED/COMPLETED BY EACH PURCHASER
JOINDER TO PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Preferred Stock Purchase Agreement as of the date first written above solely for
the purpose of acknowledging and agreeing to be bound by the terms of Sections
1.1(a)(iv), 1.1(a)(v) and 11.7 thereof.
XXXXXX XXXX & COMPANY, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Its: President
ICURIE LAB HOLDINGS LIMITED
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Its: Chief Executive Officer
INDIGO SECURITIES, LLC
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxx
Its: Managing Partner
AXIOM CAPITAL MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Its: President
XX. XXXXX XXXX XXX, PH.D
/s/ Jeong-Xxxx Xxx, Ph.D.
-------------------------------------
Name: Xx. Xxxxx-Xxxx Xxx, Ph.D.
