SECURITIES PURCHASE AGREEMENT
Exhibit 10.34
THIS SECURITIES PURCHASE AGREEMENT, dated as of [_________], [__] (this “Agreement”), is entered into by and among SQL Technologies Corp., a Florida corporation (the “Company”), and the undersigned investor (the “Investor”). The Company and the Investor are each a “Party” and collectively, the “Parties”.
WHEREAS, On the terms and subject to the conditions set forth herein and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Investor is willing to purchase from the Company, and the Company is willing to sell to the Investor, a 3-Year Subordinated Convertible Balloon Promissory Note in the principal face amount of [__________] Dollars ($[___]). Interest shall accrue at the rate of six percent (6%) per annum and payable in cash or Common Stock of the Company, in the sole and absolute discretion of the Investor, quarterly in arrears. For a period of three (3) years from the first date appearing on this Agreement (the “Conversion Period”), the Investor may, in its sole and absolute discretion, convert the Note into shares of the Company’s common stock (the “Common Stock”) at $15.00 per share; and
WHEREAS, Capitalized terms not otherwise defined herein shall have the meaning set forth in the form of Note (as defined below) attached hereto as Exhibit A.
AGREEMENT
NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agree as follows:
1. The Note.
Issuance of the Note. Subject to all of the terms and conditions hereof, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase, a three (3) year Subordinated Convertible Balloon Promissory Note in the principal face amount of [_________] ($[__]) (the “Note”). The Note shall be convertible in the sole and absolute discretion of the Investor into shares of Common Stock at $15.00 per share, shall bear interest at the rate of six percent (6%) per annum and interest shall be payable annually in arrears in cash or Common Stock of the Company, in the sole and absolute discretion of the Investor, with deemed value of $15.00 per share. The Note and shares of Common Stock of the Company issuable upon conversion thereof, as the case may be, are referred to collectively as the “Securities”.
(a) Closing. The sale and purchase of the Note shall take place at a closing (the “Closing”) to be held on or before [_____] ([ ]) business days from the date of this Agreement and at such place as the Company and the Investor may determine (the “Closing Date”). At the Closing, the Company will deliver to the Investor the Note to be purchased by the Investor, against receipt by the Company of the corresponding principal amount (the “Purchase Price”). The Note will be registered in the Investor’s name in the Company’s records. This Agreement and the Note shall hereinafter be the “Transaction Documents”. In the event the Company provides photocopies of the Transaction Documents, it will provide the original documents within five (5) business days of the Closing.
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a. this Agreement duly executed by the Company; and
b. the Note, or a photocopy thereof, with a principal amount equal to the Investor’s Purchase Price, registered in the name of the Investor.
In the event photocopies are provided in lieu of original Note, the Company will cause to be delivered the original document within five (5) business days of the Closing.
a. this Agreement duly executed by the Investor;
b. a copy of the Note provided by the Company per Section (b)(i)(b) above; and
c. such Investor’s Purchase Price payable by wire transfer to SQL Technologies Corp. pursuant to the following wire instructions:
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Uses of Proceeds. The proceeds of the sale and issuance of the Notes shall be used for general corporate purposes.
2. Representations and Warranties of the Company. The Company represents and warrants to Investor that:
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(i) No “Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with applicable law and Securities and Exchange Commission rules and guidance, to determine whether any Covered Person (as hereinafter defined) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(l)(i) to (viii) under the Securities Act (“Disqualification Events”). To the Company’s knowledge, no Covered Person is subject to a Disqualification Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Notes; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Notes (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor.
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3. Representations and Warranties of Investor. The Investor represents and warrants to the Company upon the acquisition of a Note as follows:
(i) The Investor acknowledges that the Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, 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. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of an Investor under this Agreement.
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(ii) The Investor agrees to the imprinting of a legend on any of the Securities in the following form:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS |NOT] 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(g) Access to Information, The Investor acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) 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 its 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 that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Notwithstanding this Section 3(g), for so long as the Note remains outstanding, but in no event longer than three (3) years from the Closing Date, the Company’s Chief Executive Officer and/or executive management team shall conduct regular (frequency to be determined) telephone calls with Investor or Investor’s representatives.
4. Conditions to Closing of the Investor. The Investor’s obligations at the Closing are subject to the fulfillment, on or prior to the Closing Date, of all of the following conditions, any of which may be waived in whole or in part by all of the Investor:
5. Conditions to Obligations of the Company. The Company’s obligation to issue and sell the Note at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived in whole or in part by the Company:
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(b) Governing Law. This Agreement and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions of the State of Florida or of any other state.
(i) if to Investor:
____________________________
____________________________
____________________________
or
(ii) if to the Company:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, CEO
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All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by email or facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.
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The parties have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the date first written above.
COMPANY | INVESTOR | |||
SQL TECHNOLOGIES CORP. | By: | |||
Name: | ||||
Title: | ||||
Address: | ||||
Name: | ||||
Title: |
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EXHIBIT “A”
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD TIME.
SUBORDINATED CONVERTIBLE BALLOON PROMISSORY NOTE
Dated as of: [______ ], [__]
FOR VALUE RECEIVED, SQL TECHNOLOGIES CORP. (the “Company”), a Florida corporation, hereby promises to pay to the order of the undersigned, or permitted assigns of the undersigned, (“Holder”) of this Subordinated Convertible Balloon Promissory Note (the “Note”), in lawful money of the United States at the address of Holder set forth below, the principal amount of [ ] ($[ ]) (the “Principal Amount”) plus interest thereon in the manner and at the rate provided herein.
3. Conversion.
(a) This Note shall be convertible into shares of the Company’s common stock (“Common Stock”) in the sole and absolute discretion of the Holder prior to or on the Maturity Date and shall convert into that number of Common Stock as shall equal (i) the principal amount of the Note plus accrued and unpaid interest as of the conversion date divided by (ii) $15.00 per share of Common Stock.
(b) Upon conversion of the Note, the outstanding principal and accrued interest shall be converted without any further action by the Holder and whether or not the Note is surrendered to the Company or its transfer agent. The Company shall not be obligated to issue certificates evidencing the shares of the securities issuable upon such conversion unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such Note. The Company shall, as soon as practicable, but in any event within ten (10) days after such delivery, or such agreement and indemnification, issue and deliver at such office to such Holder of such Note, a certificate or certificates for the securities to which the Holder shall be entitled and any cash amounts payable as the result of a conversion into fractional shares of the securities. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of closing of the transaction causing conversion. The person or persons entitled to receive securities issuable upon such conversion shall be treated for all purposes as the record Holder or Holders of such securities on such date.
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(c) If at any time the number of shares of equity securities issuable upon conversion of this Note shall not be sufficient to effect the conversion of this Note, the Company will use all commercially reasonable efforts to effect such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of equity securities issuable upon conversion of this Note as shall be sufficient for such purpose.
(d) Consolidation; Merger; Reclassification:
(i) In case of any consolidation with or merger of the Company with or into another corporation (other than a merger or consolidation in which the Company is the surviving or continuing corporation), or in case of any sale, lease, or conveyance to another corporation of substantially all of the property and assets of any nature of the Company, such successor, leasing, or purchasing corporation, as the case may be, shall (i) execute with Holder an agreement providing that Holder shall have the right thereafter to receive upon conversion of this Note solely the kind and amount of Common Shares of stock and other securities, property, cash, or any combination thereof receivable upon such consolidation, merger, sale, lease, or conveyance by a holder of the number of shares of Common Stock into which this Note might have been converted immediately prior to such consolidation, merger, sale, lease, or conveyance and (ii) make effective provision in its certificate of incorporation or otherwise, if necessary, to effect such agreement.
(ii) In case of any reclassification or change of the shares of Common Stock issuable upon conversion of this Note in accordance with this Section 3 hereof (other than a change in par value or from no par value to a specified par value), or in case of any consolidation or merger of another corporation into the Company in which the Company is the continuing corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock issuable upon the conversion of this Note in accordance with this Section 3 hereof (other than a change in par value, or from no par value to a specified par value), Holder shall have the right thereafter to receive upon conversion of this Note solely the kind and amount of shares of stock and other securities, property, cash, or any combination thereof receivable upon such reclassification, change, consolidation, or merger by a holder of the number of shares of Common Stock into which this Note might have been converted immediately prior to such reclassification, change, consolidation, or merger.
(iii) The above provisions of this Section 3 shall similarly apply to successive reclassifications and changes of shares of Common Stock and to successive consolidations, mergers, sales, leases, or conveyances.
(a) This Note shall, at the option of the Holder, become immediately due and payable, and until paid in full, shall bear interest on the outstanding balance of principal at the annual rate of twelve percent (12%) (computed on the basis of a 360-day year), upon written notice from the Holder to the Company upon the occurrence and during the continuance of any of the following events:
(i) failure to make any payment of principal or interest when due which failure has continued for a period of ten (10) business days after written notice thereof shall have been received by the Company from the Holder hereof;
(ii) default in the payment or performance of any material obligation, agreement, representation, warranty or covenant of the Company contained in this Note, and such default shall continue for a period of ten (10) days after written notice of such default shall have been received by the Company from the Holder hereof;
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(iv) if the Company shall make a general assignment for the benefit of creditors or shall admit in writing its inability to pay its debts as they become due;
(iv) if the Company shall file a voluntary petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any reorganization arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the present or any future federal bankruptcy code or other applicable federal, state or similar statute, law or regulation, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the Company or of all or any substantial part of its properties; or
(v) if within sixty (60) days after the commencement of any proceedings against the Company seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy code or other applicable federal, state or similar statute, law or regulation, such proceeding shall not have been dismissed or if, within sixty (60) days after the appointment, without the consent or acquiescence of the Company, of any trustee, receiver or liquidator of the Company or of all or any substantial part of its properties, such appointment shall not have been vacated.
8. Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard to the conflicts of laws provisions thereof.
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(i) If to the Company to:
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000 Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Chief Executive Office
(ii) If to the Holder, to:
____________________________
____________________________
____________________________
EXECUTED as of the date first set forth above. | ||
COMPANY: SQL TECHNOLOGIES CORP. | ||
By: | ||
Name: | ||
Title |
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