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CONVERTIBLE SECURED NOTE PURCHASE AGREEMENT
Among
GLOBAL TECHNOLOGIES, LTD.
and
THE INVESTORS SIGNATORY HERETO
Dated as of October 3, 2000
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CONVERTIBLE SECURED NOTE PURCHASE AGREEMENT
(this "AGREEMENT"), dated as of October 3, 2000, among Global Technologies,
Ltd., a Delaware corporation (the "COMPANY"), and the investors signatory hereto
(each such investor is a "PURCHASER" and all such investors are, collectively,
the "PURCHASERS").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, and pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), the Company desires to issue and sell to the
Purchasers and the Purchasers, severally and not jointly, desire to purchase
from the Company, an aggregate principal amount of $7,000,000 of the Company's
8% Convertible Notes, due one hundred and fifty (150) days from issuance, which
shall be in the form of EXHIBIT A (the "NOTES"), and which are convertible into
shares of the Company's common stock, $ .01 par value per share (the "COMMON
STOCK").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
ARTICLE I
PURCHASE AND SALE
1.1 THE CLOSING
(a) (i) THE CLOSING. Subject to the terms and conditions set forth in
this Agreement the Company shall issue and sell to the Purchasers and the
Purchasers shall, severally, and not jointly, purchase from the Company the
Notes for an aggregate purchase price of $7,000,000; each Purchaser agreeing to
purchase that amount of Notes so indicated on the respective signature page
attached hereto. The closing of the purchase and sale of the Notes (the
"CLOSING") shall take place at the offices of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx
& Xxxxxx LLP ("XXXXXXXX XXXXXXXXX"), 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, immediately following the execution hereof or such later date as the
parties shall mutually agree, but in any event, no later than October 3, 2000 .
The date of the Closing is hereinafter referred to as the "CLOSING DATE."
(ii) At the Closing, the parties shall deliver or shall cause to
be delivered the following: (A) the Company shall deliver to each Purchaser: (1)
Notes registered in the name of such Purchaser in the aggregate principal amount
indicated below such Purchaser's name on the signature page to this Agreement,
(2) the legal opinion of Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP, outside counsel to
the Company, in the form of EXHIBIT C, (3) an executed Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers, in the
form of EXHIBIT B (the "REGISTRATION RIGHTS AGREEMENT"), (4) Transfer Agent
Instructions, in the form of EXHIBIT E, delivered to and acknowledged by the
Company's transfer agent (the "TRANSFER AGENT INSTRUCTIONS"), and (5) an
executed Stock Pledge Agreement, dated the date hereof, among the Company and
the Purchasers in the form of EXHIBIT D (the "PLEDGE AGREEMENT"); and (B) each
Purchaser will deliver to the Company: (1) the purchase price indicated below
such Purchaser's name on the signature page to this Agreement in United States
dollars in immediately available funds by wire transfer to an account designated
in writing by the Company for such purpose, and (2) an executed copy of the
Registration Rights Agreement and the Pledge Agreement.
1.2 CERTAIN DEFINED TERMS. For purposes of this Agreement, "CONVERSION
PRICE," "ORIGINAL ISSUE DATE," "TRADING DAY" and "PER SHARE MARKET VALUE" shall
have the meanings set forth in the Notes; "BUSINESS DAY" shall mean any day
except Saturday, Sunday and any day which shall be a federal legal holiday in
the United States or a day on which banking institutions in the State of New
York or the Commonwealth of Pennsylvania are authorized or required by law or
other governmental action to close; A "PERSON" means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes
the following representations and warranties to the Purchasers:
(a) ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company has no subsidiaries other than as set forth in SCHEDULE 2.1(a)
(collectively the "SUBSIDIARIES"). Each of the Subsidiaries is an entity, duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of the Securities (as
defined below) or any of this Agreement, the Registration Rights Agreement, the
Transfer Agent Instructions, the Notes or the Pledge Agreement (collectively,
the "TRANSACTION DOCUMENTS"), (y) have or result in a material adverse effect on
the results of operations, assets, prospects, or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (z)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Documents (any of (x), (y) or (z), a
"MATERIAL ADVERSE EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
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contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company. Each of
the Transaction Documents has been duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its respective certificate or articles of incorporation,
by-laws or other organizational or charter documents.
(c) CAPITALIZATION. The number of authorized, issued and outstanding
capital stock of the Company is set forth in SCHEDULE 2.1(C). Except as
disclosed in SCHEDULE 2.1(C), the Company owns all of the capital stock of each
Subsidiary. No shares of Common Stock are entitled to preemptive or similar
rights, nor is any holder of the securities of the Company entitled to
preemptive or similar rights arising out of any agreement or understanding with
the Company by virtue of any of the Transaction Documents. Except as a result of
the purchase and sale of the Notes and except as disclosed in SCHEDULE 2.1(C),
there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
Except as disclosed in SCHEDULE 2.1(C), the issue and sale of the Underlying
Shares (as hereinafter defined) will not obligate the Company to issue shares of
Common Stock or other securities to any Person other than the Purchaser and will
not result in a right of any holder of Company securities to adjust the exercise
or conversion or reset price under such securities.
(d) ISSUANCE OF THE NOTES. The Company will have (and will, at all
times while Notes are outstanding, maintain) an adequate reserve of duly
authorized shares of Common Stock, reserved for issuance to the holders of such
Notes, to enable it to perform its conversion and other obligations under this
Agreement. Such number of reserved and available shares of Common Stock shall
not be less than 200% of the number of shares of Common Stock which would be
issuable upon conversion in full of the Notes assuming such conversion occurred
on the Original Issue Date, the Notes remain outstanding for one hundred and
fifty (150) days and all interest is paid in shares of Common Stock. All such
authorized shares of Common Stock shall be duly reserved for issuance to the
holders of the Notes. The shares of Common Stock issuable upon conversion of the
Notes are collectively referred to herein as the "UNDERLYING SHARES." The Notes
and the Underlying Shares are collectively referred to herein as, the
"SECURITIES." When issued in accordance with the Notes, the Underlying Shares
will be duly authorized, validly issued, fully paid and nonassessable.
(e) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other charter documents (each as amended
through the date hereof), or (ii) subject to obtaining the Required Approvals
(as defined below), conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility,
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debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), as could not, individually or in the aggregate, have or
result in a Material Adverse Effect. The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any governmental
authority, except for violations which, individually or in the aggregate, could
not have or result in a Material Adverse Effect.
(f) FILINGS, CONSENTS AND APPROVALS. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filings required pursuant to Section
3.10, (ii) the filing with the Securities and Exchange Commission (the
"Commission") of a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale of the Underlying
Shares by the Purchasers (the "UNDERLYING SHARES REGISTRATION STATEMENT"), (iii)
the application(s) to the Nasdaq National Market ("NASDAQ") for the listing of
the Underlying Shares for trading on the NASDAQ (and with any other national
securities exchange or market on which the Common Stock is then listed) in the
time and manner required thereby, (iv) applicable Blue Sky filings, and (v) in
all other cases where the failure to obtain such consent, waiver, authorization
or order, or to give such notice or make such filing or registration could not
have or result in, individually or in the aggregate, a Material Adverse Effect
(collectively, the "REQUIRED APPROVALS").
(g) LITIGATION; PROCEEDINGS. Except as disclosed in SCHEDULE 2.1(G),
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an "ACTION") which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, individually or
in the aggregate, have or result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been
the subject of any Action involving (A) a claim of violation of or liability
under federal or state securities laws or (B) a claim of breach of fiduciary
duty; (iii) the Company does not have pending before the Commission any request
for confidential treatment of information and the Company has no knowledge of
any expected such request that would be made prior to the Effectiveness Date (as
defined in the Registration Rights Agreement); and (iv) there has not been, and
to the best of the Company's knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.
(h) NO DEFAULT OR VIOLATION. Except as disclosed in SCHEDULE 2.1(H),
neither the Company nor any Subsidiary (i) is in default under or in violation
of (and no event has occurred which has not been waived which, with notice or
lapse of time or both, would result in a default by the Company or any
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Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound, (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is in
violation of any statute, rule or regulation of any governmental authority, in
each case of clauses (i), (ii) or (iii) above, except as could not individually
or in the aggregate, have or result in a Material Adverse Effect.
(i) PRIVATE OFFERING. Assuming the accuracy of the representations and
warranties of the Purchasers set forth in Sections 2.2(b)-(g), the offer,
issuance and sale of the Securities to the Purchasers as contemplated hereby are
exempt from the registration requirements of the Securities Act. Neither the
Company nor any Person acting on its behalf has taken or is, to the knowledge of
the Company, contemplating taking any action which could subject the offering,
issuance or sale of the Securities to the Purchasers to the registration
requirements of the Securities Act including soliciting any offer to buy or sell
the Securities by means of any form of general solicitation or advertising.
(j) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed by it under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), including, without limitation, all filings
required pursuant to Sections 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC REPORTS" and, together with the Schedules to this
Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. All material
agreements to which the Company is a party or to which the property or assets of
the Company are subject have been filed as exhibits to the SEC Reports as
required under the Exchange Act. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved ("GAAP"), except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. Since October 28, 1999, except as specifically disclosed in the SEC
Reports, (a) there has been no event, occurrence or development that has
resulted or that could reasonably be expected to result in a Material Adverse
Effect, (b) the Company has not incurred any liabilities (contingent or
otherwise) other than (x) liabilities incurred in the ordinary course of
business consistent with past practice and (y) liabilities not required to be
reflected in the Company's financial statements pursuant to GAAP or otherwise
required to be disclosed in filings made with the Commission, (c) the Company
has not altered its method of accounting or the identity of its auditors and (d)
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the Company has not declared or made any payment or distribution of cash or
other property to its stockholders or officers or directors (other than in
compliance with existing Company stock option plans) with respect to its capital
stock, or purchased, redeemed (or made any agreements to purchase or redeem) any
shares of its capital stock.
(k) INVESTMENT COMPANY. The Company is not, and is not an Affiliate (as
defined in Rule 405 under the Securities Act) of, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(l) CERTAIN FEES. No fees or commissions will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement. The Company
shall indemnify and hold harmless the Purchasers, their employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered in respect of any such claimed or
existing fees, as such fees and expenses are incurred.
(m) SOLICITATION MATERIALS. Neither the Company nor any Person acting
on the Company's behalf has solicited any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.
(n) FORM S-3 ELIGIBILITY. The Company is eligible to register
securities for resale under Form S-3 promulgated under the Securities Act.
(o) SENIORITY. No indebtedness of the Company is senior to the Notes in
right of payment, whether with respect to interest or upon liquidation or
dissolution, or otherwise.
(p) LISTING AND MAINTENANCE REQUIREMENTS. Except as set forth in the
SEC Reports, the Company has not, in the two years preceding the date hereof,
received notice (written or oral) from the NASDAQ, any stock exchange, market or
trading facility on which the Common Stock is or has been listed (or on which it
has been quoted) to the effect that the Company is not in compliance with the
listing or maintenance requirements of such exchange, market or trading
facility. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
(q) PATENTS AND TRADEMARKS. The Company and its Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and rights which
are necessary or material for use in connection with their respective businesses
as described in the SEC Reports and which the failure to so have would have a
Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS").
Neither the Company nor any Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or its Subsidiaries violates or
infringes upon the rights of any Person. To the best knowledge of the Company,
all such Intellectual Property Rights are enforceable to the best knowledge of
the Company and there is no existing infringement by another Person of any of
the Intellectual Property Rights.
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(r) REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as set forth
on SCHEDULE 6(B) to the Registration Rights Agreement, the Company has not
granted or agreed to grant to any Person any rights (including "piggy-back"
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority which have not been satisfied.
Except as set forth on SCHEDULE 6(B) to the Registration Rights Agreement, no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.
(s) REGULATORY PERMITS. The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the failure to possess
such permits could not, individually or in the aggregate, have or result in a
Material Adverse Effect ("MATERIAL PERMITS"), and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(t) TITLE. Except as disclosed in SCHEDULE 2.1(T), the Company and the
Subsidiaries have good and marketable title in fee simple to all real property
owned by them which is material to the business of the Company and its
Subsidiaries and good and marketable title in all personal property owned by
them which is material to the business of the Company and its Subsidiaries, in
each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries. Any
real property and facilities held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable leases of
which the Company and its Subsidiaries are in compliance and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.
(u) LABOR RELATIONS. No material labor problem exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
(v) DISCLOSURE. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Purchasers or its agents or
counsel with any information that constitutes or might constitute material
non-public information. The Company understands and confirms that the Purchasers
shall be relying on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the Company are
true and correct and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
2.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser hereby
for itself and for no other Purchaser represents and warrants to the Company as
follows:
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(a) ORGANIZATION; AUTHORITY. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (which is set forth below such Purchaser's name
on the signature page to this Agreement) with the requisite corporate or
partnership power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser at the address for notice set forth below such
Purchaser's name on the signature page to this Agreement, and when delivered by
such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms.
(b) INVESTMENT INTENT. Such Purchaser is acquiring the Securities 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 Purchaser's right, subject to the provisions of this
Agreement and the Registration Rights Agreement at all times to sell or
otherwise dispose of all or any part of such Securities pursuant to an effective
registration statement under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities
laws. While it is the intention of such Purchaser to hold the Securities,
nothing contained herein shall be deemed a representation or warranty by such
Purchaser to hold Securities for any period of time. Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business. Such Purchaser
does not have any agreement or understanding, directly or indirectly, with any
Person to distribute the Securities.
(c) PURCHASER STATUS. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Such Purchaser has not been
formed solely for the purpose of acquiring the Securities.
(d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.
(e) ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT. Such
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
(f) ACCESS TO INFORMATION. Such Purchaser acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
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can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or on
behalf of such Purchaser or its representatives or counsel shall modify, amend
or affect such Purchaser's right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(g) GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(h) RELIANCE. Such Purchaser understands and acknowledges that (i) the
Securities are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption,
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and such Purchaser hereby consents to such
reliance.
The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 TRANSFER RESTRICTIONS. (a) Securities may only be disposed of pursuant
to an effective registration statement under the Securities Act, to the Company
or pursuant to an available exemption from or in a transaction not subject to
the registration requirements of the Securities Act, and in compliance with any
applicable federal and state securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or to the
Company, except as otherwise set forth herein, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act. Any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of a Purchaser under this Agreement and the Registration
Rights Agreement. Each Purchaser shall indicate its intention to sell Underlying
Shares under Rule 144 promulgated under the Securities Act by checking the
appropriate box in the conversion notice.
(b) The Purchasers agree to the imprinting, so long as is required by
this Section 3.1(b), of the following legend on the Securities:
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NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
The Underlying Shares shall not contain the legend set forth above nor
any other legend if the conversion of Notes, occurs at any time while an
Underlying Shares Registration Statement is effective under the Securities Act,
or in the event there is not an effective Underlying Shares Registration
Statement, if, in the opinion of counsel to the Company, at such time as such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission). The Company shall cause its counsel to issue the legal opinion
included in the Transfer Agent Instructions to the Company's transfer agent on
the date that an Underlying Shares Registration Statement is declared effective
by the Commission (such date, the "EFFECTIVE DATE"). The Company agrees that
following the Effective Date, it will, no later than three (3) Trading Days
following the delivery by a Purchaser to the Company of a certificate or
certificates representing Underlying Shares issued with a restrictive legend,
deliver to such Purchaser certificates representing such shares which shall be
free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company which enlarge the restrictions of transfer set forth in this Section.
3.2 ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that the issuance
of Underlying Shares upon the conversion of the Notes will result in dilution of
the outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions. The Company further acknowledges that its obligation
to issue Underlying Shares upon conversion of the Notes is unconditional and
absolute, subject to the limitations set forth in the Notes, regardless of the
effect of any such dilution.
3.3 FURNISHING OF INFORMATION. As long as the Purchasers own Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act. As long as the Purchasers own Securities, if the Company is not
required to file reports pursuant to such sections, it will prepare and furnish
to the Purchasers and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act such information as is required for the
Purchasers to sell the Securities under Rule 144 promulgated under the
Securities Act. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell Underlying Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
causing its attorneys to render and deliver any legal opinion required in order
10
to permit a Purchaser to receive Underlying Shares free of all restrictive
legends and to subsequently sell Underlying Shares under Rule 144 upon receipt
of a notice of an intention to sell or other form of notice having a similar
effect. Upon the request of any such Person, the Company shall deliver to such
Person a written certification of a duly authorized officer as to whether it has
complied with such requirements.
3.4 INTEGRATION. The Company shall not, and shall use its best efforts to
ensure that, no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers, or that would be
integrated with the offer or sale of the Securities for the purposes of the
rules and regulations of NASDAQ.
3.5 INCREASE IN AUTHORIZED SHARES. If on any date the Company would be, if
a notice of conversion was to be delivered on such date, precluded from issuing
200% of the number of Underlying Shares as would then be issuable upon a
conversion in full of the Notes (the "CURRENT REQUIRED MINIMUM") due to the
unavailability of a sufficient number of authorized but unissued or reserved
shares of Common Stock, then the Board of Directors of the Company shall use its
best efforts to promptly prepare and mail to the stockholders of the Company
proxy materials requesting authorization to amend the Company's certificate or
articles of incorporation to increase the number of shares of Common Stock which
the Company is authorized to issue to at least such number of shares as
reasonably requested by the Purchasers in order to provide for such number of
authorized and unissued shares of Common Stock to enable the Company to comply
with its issuance, conversion, exercise and reservation of shares obligations as
set forth in this Agreement and the Notes (the sum of (x) the number of shares
of Common Stock then outstanding plus all shares of Common Stock issuable upon
exercise of all outstanding options, warrants and convertible instruments and
(y) the Current Required Minimum, shall be a reasonable number). In connection
therewith, the Board of Directors shall (a) adopt proper resolutions authorizing
such increase, (b) recommend to and otherwise use its best efforts to promptly
and duly obtain stockholder approval to carry out such resolutions (and hold a
special meeting of the stockholders no later than the earlier to occur of the
60th day after delivery of the proxy materials relating to such meeting and the
90th day after request by a holder of Securities to issue the number of
Underlying Shares in accordance with the terms hereof) and (c) within five (5)
Business Days of obtaining such stockholder authorization, file an appropriate
amendment to the Company's certificate or articles of incorporation to evidence
such increase.
3.6 RESERVATION AND LISTING OF UNDERLYING SHARES. (a) The Company shall (i)
in the time and manner required by NASDAQ and such other exchange, market or
quotation facility on which the Common Stock is traded, prepare and file with
NASDAQ (and such national securities exchange, market, trading or quotation
facility on which the Common Stock is then traded) an additional shares listing
application covering a number of shares of Common Stock which is not less than
Initial Minimum, (ii) take all steps necessary to cause such shares of Common
Stock to be approved for listing on the NASDAQ (as well as on any such other
national securities exchange or market or trading or quotation facility on which
the Common Stock is then listed) as soon as possible thereafter, and (iii)
provide to the Purchasers evidence of such listing, and the Company shall
11
maintain the listing of its Common Stock thereon. If the number of Underlying
Shares issuable upon conversion in full of the then outstanding Notes exceeds
eighty-five percent (85%) of the number of Underlying Shares previously listed
on account thereof with NASDAQ (and such national securities exchange, market,
trading or quotation facility on which the Common Stock is then traded), then
the Company shall take the necessary actions to immediately list a number of
Underlying Shares as equals no less than the then Current Required Minimum.
(b) The Company shall maintain a reserve of shares of Common Stock for
issuance upon conversion of the Notes in full in accordance with this Agreement,
in such amount as may be required to fulfill its obligations in full under the
Transaction Documents.
3.7 CONVERSION PROCEDURES. The Transfer Agent Instructions and the
Conversion Notice (as defined in the Notes) set forth the totality of the
procedures with respect to the conversion of the Notes, including the form of
legal opinion, if necessary, that shall be rendered to the Company's transfer
agent and such other information and instructions as may be reasonably necessary
to enable the Purchasers to convert their Notes.
3.8 CONVERSION OBLIGATIONS OF THE COMPANY. The Company shall honor
conversions of the Notes and shall deliver Underlying Shares in accordance with
the respective terms, conditions and time periods set forth in the Notes.
3.9 SUBSEQUENT FINANCING; LIMITATION ON REGISTRATIONS. (a) From the date of
this Agreement through the 180th day following the Closing Date, other than to
the Purchasers pursuant to this Agreement, the Company will not offer, sell,
grant any option to purchase or any right to reprice securities, or otherwise
dispose of (or announce any offer, sale, grant or any option to purchase or
other disposition) any Common Stock or equity or equity equivalent securities
(including the issuance of any debt or other instrument that is at any time over
the life thereof convertible into or exchangeable for Common Stock), and the
Company will cause its Subsidiaries not to offer, sell or issue during such
period any of such Subsidiary's securities which provide the holder thereof the
right to receive any Common Stock (collectively, "COMMON STOCK EQUIVALENTS").
(b) From the date of this Agreement through the 180th day following the
Effective Date, other than to the Purchaser pursuant to this Agreement, the
Company will not offer, sell, grant any option to purchase or any right to
reprice securities, or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition) any Common Stock or Common Stock
Equivalents (collectively, a "SUBSEQUENT PLACEMENT"), unless (A) the Company
delivers to the Purchaser a written notice (the "SUBSEQUENT PLACEMENT NOTICE")
of its intention to effect such Subsequent Placement, which Subsequent Placement
Notice shall describe in reasonable detail the proposed terms of such Subsequent
Placement, the amount of proceeds intended to be raised thereunder, the Person
with whom such Subsequent Placement shall be effected, and attached to which
shall be a term sheet or similar document relating thereto and (B) no Purchaser
notifies the Company by 6:30 p.m. (New York City time) on the tenth Trading Day
after its receipt of the Subsequent Placement Notice of its willingness to
provide (or to cause its sole designee to provide), subject to completion of
mutually acceptable documentation, financing to the Company on the same terms
set forth in the Subsequent Placement Notice. If no Purchaser notifies the
Company of its intention to enter into such negotiations within such time
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period, then the Company may effect the Subsequent Placement substantially upon
the terms and to the Persons (or Affiliates of such Persons) set forth in the
Subsequent Placement Notice; PROVIDED, that the Company shall provide the
Purchaser with a second Subsequent Placement Notice, and the Purchaser shall
again have the right of first refusal set forth above in this paragraph (b), if
the Subsequent Placement subject to the initial Subsequent Placement Notice
shall not have been consummated for any reason on the terms set forth in such
Subsequent Placement Notice within 60 days after the date of the initial
Subsequent Placement Notice with the Person (or an Affiliate of such Person)
identified in the Subsequent Placement Notice.
(c) Except for (x) Registrable Securities, (y) securities of the
Company permitted pursuant to Section 6(c) of the Registration Rights Agreement
to be registered in the Registration Statement, and (z) Common Stock permitted
to be issued pursuant to Section 3.9(e), the Company may not until the 90th day
after the Effective Date (i) issue or sell any of its or any of its respective
Affiliates' equity or equity-equivalent securities pursuant to Regulation S
promulgated under the Securities Act, or (ii) file a registration statement to
register any of its securities.
(d) With respect to Section 3.9(a), (b) and (c), restrictive periods
shall be extended for the number of Trading Days during such period (A) in which
trading in the Common Stock is suspended by any securities exchange or market or
quotation system on which the Common Stock is then listed, or (B) that the
Registration Statement is not effective following the Effective Date, or (C)
that the prospectus included in the Registration Statement may not be used by
the holders thereof for the resale of Registrable Securities following the
Effective Date.
(e) The restrictions contained in Section 3.9(a), (b) and (c) shall not
apply to (i) the granting of options or warrants to employees, officers and
directors of the Company, and the issuance of Common Stock upon exercise of such
options or warrants granted under any stock option plan heretofore or
hereinafter duly adopted by the Company, (ii) shares of Common Stock issuable
upon exercise of any currently outstanding warrants and other outstanding
convertible securities of the Company, in each case as and to the extent
disclosed in SCHEDULE 2.1(C) (but not as to any amendments or modifications of
the terms of such securities after the date of this Agreement, including
"back-dated" agreements), (iii) shares of Common Stock issuable upon conversion
of the Notes, (iv) issuances of securities as consideration in a merger,
consolidation or acquisition of assets, or in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise
equity capital), or as consideration for the acquisition of a business, product
or license by the Company, and (v) the issuance of securities pursuant to an
underwritten public offering (which shall not include equity lines of credit or
similar financing structures).
3.10 CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The Company shall: (i)
on the Closing Date, issue a press release reasonably acceptable to the
Purchasers disclosing the transactions contemplated hereby, (ii) file with the
Commission a Report on Form 8-K disclosing the transactions contemplated hereby
within ten Business Days after the Closing Date, and (iii) timely file with the
Commission a Form D promulgated under the Securities Act. The Company shall, no
less than two Business Days prior to the filing of any disclosure required by
clauses (ii) and (iii) above, provide a copy thereof to the Purchasers for their
review. The Company and the Purchasers shall consult with each other in issuing
13
any other press releases or otherwise making public statements or filings and
other communications with the Commission or any regulatory agency or stock
market or trading facility with respect to the transactions contemplated hereby
and neither party shall issue any such press release or otherwise make any such
public statement, filings or other communications without the prior written
consent of the other, which consent shall not be unreasonably withheld or
delayed, except that if such disclosure is required by law or stock market
regulations, in which such case the disclosing party shall promptly provide the
other party with prior notice of such public statement, filing or other
communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the names of the Purchasers, or include the names of the Purchasers in
any filing with the Commission, or any regulatory agency, trading facility or
stock market without the prior written consent of the Purchasers, except to the
extent such disclosure (but not any disclosure as to the controlling Persons
thereof) is required by law or stock market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure.
3.11 TRANSFER OF INTELLECTUAL PROPERTY RIGHTS. Except in connection with
the sale of all or substantially all of the assets of the Company or licensing
arrangements in the ordinary course of the Company's business, the Company shall
not transfer, sell or otherwise dispose of any Intellectual Property Rights, or
allow any of the Intellectual Property Rights to become subject to any Liens, or
fail to renew such Intellectual Property Rights (if renewable and it would
otherwise lapse if not renewed), without the prior written consent of the
Purchasers.
3.12 USE OF PROCEEDS. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables in the ordinary course of the Company's business and prior practices
and payment of principal or interest pursuant to a Secured Convertible Note
transaction dated June 8, 2000 ), to redeem any Company equity or
equity-equivalent securities or to settle any outstanding litigation.
3.13 REIMBURSEMENT. If any Purchaser, other than by reason of its gross
negligence or willful misconduct as determined by a court of competent
jurisdiction, becomes involved in any capacity in any action, proceeding or
investigation brought by or against any Person, including stockholders of the
Company, solely as a result of acquiring the Securities under this Agreement,
the Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of the Company under this paragraph
shall be in addition to any liability which the Company may otherwise have,
shall extend upon the same terms and conditions to any Affiliates of the
Purchasers who are actually named in such action, proceeding or investigation,
and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of the Purchasers and any such Affiliate, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person. The Company also agrees that neither the Purchasers nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement.
14
3.14 SHAREHOLDER RIGHTS PLAN. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities or shares of Common Stock under the Transaction Documents.
3.15 DISCLOSURE OF MATERIAL NON-PUBLIC INFORMATION. The Company shall not
and shall cause each of its Affiliates and other Persons acting on behalf of the
Company not to divulge to any Purchaser any information that it believes to be
material non-public information unless such Purchaser has agreed in writing to
receive such information. The Company agrees to comply with newly adopted
Regulation FD, promulgated under the Exchange Act.
3.16 CONVERSION INTO U.S. WIRELESS COMMON STOCK. In the event that (i) the
Company does not pay the outstanding principal balance on the Notes within one
hundred and fifty days after issuance, or (ii) an Event of Default (as defined
in the Convertible Secured Note) occurs, then each Purchaser, at its option,
shall be entitled to convert its Notes from time to time thereafter at its sole
option into shares of common stock of U.S. Wireless Corporation at a price per
share equal to 80% of the average of the closing bid prices of U.S. Wireless
common stock for the five Trading Days immediately preceding each Conversion
Date (as defined in the Convertible Secured Note). Under this Section, a
Purchaser shall effect a conversion of its Note in accordance with the terms of
Section 4(a) (i) of the Convertible Secured Note. In connection herewith, and as
provided in the Stock Pledge Agreement of even date, the Company shall also
pledge to the Purchasers, a number of shares of common stock of U.S. Wireless
Corporation which is equal to 200% of the outstanding principal balance of the
Notes and as necessary, additional shares of U.S. Wireless Corporation under
circumstances described in the Stock Pledge Agreement.
3.17 CERTAIN TRADING RESTRICTIONS. Each Purchaser agrees that for the ten
Trading Days preceding a Conversion Date (as defined in the Convertible Secured
Note) such Purchaser will not enter into any Short Sales (as defined herein).
For purposes hereof, a "Short Sale" by a Purchaser shall mean a sale of Common
Stock by such Purchaser that is marked as a short sale and that is made at a
time when there is no equivalent offsetting long position in the Common Stock
held by such Purchaser. For purposes of determining whether there is an
equivalent offsetting long position in the Common Stock held by a Purchaser,
Underlying Shares issuable upon conversions of the Note (including interest
thereon) shall be deemed to be held long by such Purchaser.
3.18 STABILIZATION TRANSACTION. Each Purchaser agrees that, regarding the
securities of the Company, it will not engage in any stabilization transaction,
as defined and prohibited by the rules and regulations promulgated under the
Exchange Act.
15
ARTICLE IV
MISCELLANEOUS
4.1 FEES AND EXPENSES. At the Closing, the Company shall reimburse the
Purchasers for their legal fees and expenses incurred in connection with the
preparation and negotiation of the Transaction Documents by paying to Xxxxxxxx
Xxxxxxxxx $25,000 for the preparation and negotiation of the Transaction
Documents. The amount contemplated by the immediately preceding sentence shall
be retained by the Purchasers and shall not be delivered to the Company at the
Closing. Other than the amount contemplated in the immediately preceding
sentence, and except as otherwise set forth in the Registration Rights
Agreement, 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 Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities.
4.2 ENTIRE AGREEMENT; AMENDMENTS. The Transaction Documents, together with
the Exhibits and Schedules thereto, 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,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
4.3 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 6:30 p.m. (New York City
time) on 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 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by U.S. 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 the Company: 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
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
If to a Purchaser: To the address set forth under such Purchaser's
name on the signature pages hereto.
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
16
4.4 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
both the Company and each of the Purchasers 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.
4.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers. Except as set forth in
Section 3.1(a), the Purchasers may not assign this Agreement or any of the
rights or obligations hereunder without the consent of the Company. This
provision shall not limit any Purchaser's right to transfer securities or
transfer or assign rights under the Registration Rights Agreement in accordance
with the terms thereof.
4.7 NO THIRD-PARTY BENEFICIARIES. 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.
4.8 GOVERNING LAW. The corporate law of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party hereby irrevocably submits to
the jurisdiction of the state and federal courts sitting in the City of New
York, borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of the Transaction
Documents), 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 certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.
4.9 SURVIVAL. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery and conversion of
the Notes.
17
4.10 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. In the event that any signature is delivered by
facsimile transmission, such signature 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.
4.11 SEVERABILITY. In case 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 terms and 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.
4.12 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers will be entitled to specific performance of the obligations of the
Company under the Transaction Documents. The parties hereto agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of its obligations described in the foregoing sentence and hereby agrees
to waive in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
4.13 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document is several and not
joint with the obligations of any other Purchaser and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or
the transactions contemplated by the Transaction Document. Each Purchaser shall
be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
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SIGNATURE PAGES FOLLOWS]
18
IN WITNESS WHEREOF, the parties hereto have caused this Convertible Note
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
GLOBAL TECHNOLOGIES, LTD.
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
19
ADVANTAGE FUND II LTD.
By:
----------------------------------------
Name:
Title:
Purchase Price for Notes: $4,000,000
Address for Notice:
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx, Antilles
Facsimile No.: 011-599-9732-2008
Attention: X.X. Xxxxx
Jurisdiction of organization:
British Virgin Islands
With copies to:
Genesee International Inc.
00000 XX 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx Xxxxxxx
With copies to: 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.
20
XXXX INVESTMENT GROUP LTD.
By:_____________________________________
Name:
Title:
Purchase Price for Shares to be
acquired at Closing $3,000,000
Address for Notice:
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
21
