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EXHIBIT 10.22
AXCESS INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
incuVest, LLC March 29, 2000
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Series 2000 Preferred Stock Purchase Agreement
Ladies and Gentlemen:
incuVest, LLC, a Delaware limited liability company (the "Purchaser"),
has committed to provide up to $5,000,000 of equity financing to AXCESS Inc., a
Delaware corporation (the "Company"), in connection with the Company's 2000 plan
of operations and to maintain the Company's compliance with the net tangible
asset requirement of the Nasdaq listing requirements (the "Commitment"). This
Agreement sets forth the terms and conditions on which the Company will issue
and sell to the Purchaser shares of Series 2000 Non-Voting Preferred Stock of
the Company, par value $0.01 per share ("Series 2000 Preferred Stock"), for an
aggregate purchase price of up to $5,000,000, payable as provided herein.
1. Advances; Purchase Price; Effectiveness. The Purchaser hereby agrees
to subscribe for and purchase from the Company, and the Company hereby agrees to
issue and sell to the Purchaser, up to $5,000,000 of Series 2000 Preferred
Stock. The purchase price for each share of Series 2000 Preferred Stock shall be
$10,000, payable in cash. The purchase and sale of the Series 2000 Preferred
Stock hereunder shall be effective as of the date the Company receives the
purchase price for each share of Series 2000 Preferred Stock from the Purchaser
(the "Effective Date").
2. Purchase and Delivery of Shares. Upon its receipt of the purchase
price for each share of Series 2000 Preferred Stock, the Company shall issue and
sell to the Purchaser the number of shares of Series 2000 Preferred Stock (the
"Shares"), the stated value of which shall be $10,000 per share (the "Original
Series 2000 Issue Price"). On and as of the Effective Date, the Company shall
execute and deliver to the Purchaser a stock certificate in proper form
representing the Shares.
3. Conversion of Series 2000 Preferred Stock to Non-Voting Common
Stock. The Purchaser hereby agrees that it shall not, without the prior written
consent of the Company, convert any Shares to shares of the Company's non-voting
common stock, $0.01 par value per share (the "Non-Voting Common Stock") issuable
to the Purchaser upon its conversion of any Shares until the Company receives
stockholder approval to issue more than twenty percent (20%) of the Company's
outstanding voting or non-voting common stock, as the case may be, at a per
share price potentially less than the per share market price of the Company's
voting common stock on the date of issuance to holders of the Shares. The
Company hereby agrees to submit such a proposal to its stockholders for approval
at the Company's 2000 annual meeting of stockholders. The Board of Directors of
the Company will recommend that the Company's stockholders vote in favor of such
proposal and the Company will otherwise use its best efforts to obtain
stockholder approval of such proposal. The Company's 2000 annual meeting of
stockholders will be held not later than June 30, 2000.
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AXCESS Inc.
March 29, 2000
Page 2
4. Securities Act Legend; Registration Rights.
4.1 The Shares will not be registered under the Securities Act
of 1933, as amended (the "Securities Act"). Certificates representing the Shares
shall bear a restrictive legend substantially to the effect of the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS, OR THE
SECURITIES LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THOSE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM. ADDITIONAL
RESTRICTIONS REGARDING THE TERMS UNDER WHICH THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY BE CONVERTED INTO NON-VOTING COMMON STOCK OF THE
COMPANY ARE SET FORTH IN THE CERTIFICATE OF DESIGNATIONS, PREFERENCES,
POWERS AND RIGHTS OF THE SERIES 2000 NON-VOTING PREFERRED STOCK.
5. Representations and Warranties by the Company. The Company hereby
represents and warrants to the Purchaser as follows:
5.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to execute and deliver this Agreement, to
issue the Shares on the basis described herein and otherwise to perform its
obligations under this Agreement.
5.2 The execution and delivery by the Company of this
Agreement, the issuance of the Shares, and the performance by the Company of its
obligations hereunder, have been duly authorized by all requisite corporate
action on the part of the Company and will not (i) violate any provision of law,
statute, rule or regulation or any order of any court or other agency of
government, (ii) conflict with or violate the Certificate of Incorporation
(after amendment to authorize the additional shares of non-voting common stock)
or By-Laws of the Company, in each case as amended, or (iii) violate, conflict
with or constitute (with due notice or lapse of time or both) a default under
any indenture, mortgage, lease, license, agreement or other contract or
instrument or result in the creation or imposition of any lien, charge or
encumbrance of any nature upon the properties or assets of the Company or any of
its subsidiaries, in each case if such violation, conflict, default, lien,
charge or encumbrance would have a material adverse effect on the Company.
5.3 This Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except to the extent the
enforceability hereof may be limited by applicable bankruptcy, moratorium or
similar laws affecting the rights of creditors generally.
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AXCESS Inc.
March 29, 2000
Page 3
5.4 Based in part upon the representations and warranties of
the Purchaser contained in this Agreement, no registration or filing with, or
consent or approval of, or other action by, any federal, state or other
governmental department, commission, board, bureau, agency or instrumentality or
any third party is or will be necessary for the execution and delivery of this
Agreement by the Company and the issuance of the Shares hereunder, other than
the filing of a notice of sale on Form D with the Securities and Exchange
Commission and any other required jurisdictions in accordance with the rules and
regulations thereof under the Securities Act and applicable state law.
5.5 The Shares are duly authorized, validly issued, fully paid
and non-assessable shares of Series 2000 Preferred Stock, and are not subject to
any preemptive rights.
5.6 Attached hereto as Exhibit A is a true copy of the
Certificate of Designations, Preferences, Powers and Rights of Series 2000
Non-Voting Preferred Stock, as filed with the Secretary of State of the State of
Delaware on December 29, 1999 (the "Series 2000 Certificate of Designations").
The Board of Directors of the Company approved and adopted resolutions creating
the Series 2000 Preferred Stock and directing the proper officers of the Company
to file the same with the office of the Secretary of State of the State of
Delaware, in accordance with the applicable provisions of the Delaware General
Corporation Law.
6. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
6.1 The Purchaser is acquiring the Shares for its own account,
for investment and not with a view to the distribution thereof within the
meaning of the Securities Act.
6.2 The Purchaser understands that the Shares have not been
registered under the Securities Act, by reason of their issuance by the Company
in transactions exempt from the registration requirements of the Securities Act,
and that the Shares must be held by the Purchaser indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration.
6.3 The Purchaser further understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depends on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts, after compliance with the holding periods and other
provisions thereof.
6.4 The Purchaser understands that its investment hereunder
involves substantial risks and represents and warrants that it has made such
independent examinations and investigations of the Company as it has deemed
necessary in making its investment decision, and the Purchaser further
represents and warrants that it has had sufficient access to the officers,
directors, books and records of the Company as it has deemed necessary to
conduct such examination and investigation and make such investment decision.
6.5 The Purchaser is able to bear the economic risk of the
investment contemplated by this Agreement and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the investment contemplated by this Agreement.
7. Reaffirmation of Representations and Warranties. The date Shares are
purchased shall constitute a reaffirmation of each and every one of the
representations and warranties of the Company set forth in Section 5 of this
Agreement and those of the Purchaser set forth in Section 6 of this Agreement as
if made as of each
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AXCESS Inc.
March 29, 2000
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Effective Date, unless otherwise restated or corrected by either the Purchaser
or the Company, as the case may be.
8. Miscellaneous.
8.1 This Agreement constitutes our entire agreement with
respect to the subject matter hereof. This Agreement may not be modified or
amended or any provision hereof waived except by an instrument in writing signed
by the Company and the Purchaser.
8.2 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The rights of the Purchaser hereunder shall be assignable to any holder
of the Shares. Except as provided in the immediately preceding sentence, this
Agreement and the rights of the Purchaser hereunder shall not be assignable, and
any purported assignment hereof or thereof shall be void.
8.3 This Agreement may be executed in any number of
counterparts and on separate counterparts, each of which shall be an original
instrument, but all of which together shall constitute a single agreement. One
or more signature pages from any counterpart of this Agreement may be attached
to any other counterpart of this Agreement without in any way changing the
effect thereof. This Agreement shall be effective when executed and delivered by
the Company and the Purchaser.
8.4 All notices, requests, demands, consents, waivers, or
other communications made hereunder to any party or holder of Shares shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by nationally-recognized overnight courier, facsimile or by first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below:
if to the Company, to:
AXCESS Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx.; and
if to the Purchaser, to the Purchaser at its address
first set forth above,
or to such other address as the party to whom such communication is to be given
may have furnished to the other party in writing in accordance herewith. All
such notices, requests, demands, consents, waivers or other communications shall
be deemed to have been delivered (i) in the case of personal delivery, on the
date of delivery, (ii) if sent by facsimile, on the date sender receives a
confirmation confirming receipt, (iii) if sent by overnight
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AXCESS Inc.
March 29, 2000
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courier, on the next business day following the date sent and (iv) in the case
of mailing, on the third business day following such mailing.
8.5 All representations, warranties and agreements contained
herein shall survive the execution and delivery of this Agreement and the sale
of the Shares hereunder.
8.6 This Agreement, and all rights, obligations and
liabilities hereunder, shall be construed according to the laws of the State of
New York applicable to contracts made and to be performed wholly therein. Any
judicial proceeding brought against the Company to enforce, or otherwise in
connection with, this Agreement may be brought in any court of competent
jurisdiction in the City of New York, and, by execution and delivery of this
Agreement, the Company (i) accepts, generally and unconditionally, the
nonexclusive jurisdiction of such courts and any related appellate court and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement and (ii) irrevocably waives any objection it may
now or hereafter have as to the venue of any such proceeding brought in such a
court or that such a court is an inconvenient forum.
8.7 For purposes of Section 4.(c)(ii) of the Series 2000
Certificate of Designations, the Purchaser is deemed to be an affiliate of
Amphion Ventures L.P.
8.8 For so long as the Purchaser owns at least 500 shares of
Series 2000 Preferred Stock (or an equivalent amount of any other securities of
the Company into which the Series 2000 Preferred Stock has been converted), the
Company agrees to include Purchaser's nominee in management's slate of nominees
for the Company's Board of Directors and to solicit proxies in favor of the
election of Purchaser's nominee in connection with any annual or special meeting
of the Company's stockholders (commencing with the election of the Purchaser's
nominee at the Company's 2000 annual meeting of stockholders). The Company will
not support the removal of the Purchaser's nominee to the Board of Directors of
the Company, other than in the event of bad faith or willful misconduct or
unless such removal is requested by the Purchaser's nominee.
8.9 The Purchaser shall be entitled to the same registration
rights with respect to the Shares as Amphion Ventures L.P. is entitled in that
certain Registration Rights Agreement, dated September 30, 1999, by and between
the Company and Amphion Ventures L.P.
*Intentionally Left Blank*
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AXCESS Inc.
March 29, 2000
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If the foregoing correctly sets forth your understanding of our
agreement, please so indicate by signing and returning to the Company the
enclosed counterpart of this Agreement.
Very truly yours,
AXCESS INC.
By: /s/ XXXXX X. XXXXX
-------------------
Xxxxx X. Xxxxx, Chief Financial Officer and Secretary
The undersigned agrees with and
accepts the foregoing terms and provisions
as of the date first above written.
INCUVEST, LLC
By: /s/ XXXXXXX X.X. XXXXXX
-----------------------
Xxxxxxx X.X. Xxxxxx
Chief Executive Officer
