1
Exhibit 10.4
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement") dated as of the 1st
day of May, 2001 between Student Advantage, Inc., a Delaware corporation (the
"Company"), and Xxxxxxxx Associates LLC as subadviser for The Prudential
Insurance Company of America Variable Contract Account - 6 (the "Purchaser").
In consideration of the mutual promises hereinafter set forth and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
1. Purchase and Sale of the Shares.
(a) The Company agrees to issue and sell to the Purchaser, and the
Purchaser agrees to purchase from the Company:
(i) 750,000 shares (the "Shares") of Common Stock, $.01 par
value per share ("Common Stock"), of the Company for an aggregate purchase price
of $1,500,000; and
(ii) warrant (the "Warrant"), in the form attached hereto as
Exhibit A to acquire 375,000 shares of Common Stock at any time prior to May 1,
2005, at a purchase price of $3.00 per share.
(b) At the closing of the transactions contemplated hereby (the
"Closing"), which shall be held on the date hereof, the following events shall
occur:
(i) each of the Company and Purchaser shall execute and
deliver to the other party the Registration Rights Agreement in the form
attached hereto as Exhibit B (the "Registration Rights Agreement");
(ii) the Purchaser shall pay the Company the amount of
$1,500,000 by wire transfer or other form of payment acceptable to the Company;
and
(iii) the Company shall issue and deliver to the Purchaser an
original stock certificate representing the Shares and the Warrant.
2. Representations and Warranties of the Company. The Company represents
and warrants as follows:
2
(a) Organization and Good Standing. The Company has been duly
incorporated and organized, and is validly existing in good standing, under the
laws of the State of Delaware. The Company has the corporate power and authority
to enter into and perform this Agreement and the Registration Rights Agreement
(collectively, the "Agreements"), to own and operate its properties and assets
and to carry on its business as currently conducted and as presently proposed to
be conducted.
(b) Authorization and Binding Nature. The execution, delivery and
performance by the Company of the Agreements and the issuance and delivery of
the Shares, the Warrant and the shares of Common Stock issuable upon exercise of
the Warrant (the "Warrant Shares") has been duly authorized by all requisite
corporate action on the part of the Company and the Agreements constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms.
(c) Non-Contravention. The execution, delivery and performance by the
Company of the Agreements will not, with or without the giving of notice or the
passage of time or both, (i) violate the provisions of the certificate of
incorporation or bylaws of the Company, (ii) violate any judgment, decree, order
or award of any court, governmental body or arbitrator applicable to the
Company, or (iii) conflict with or violate any material agreement to which the
Company is a party or by which it is bound.
(d) Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of the
Company in order to enable the Company to execute, deliver and perform its
obligations under the Agreements except for such qualifications or filings under
applicable securities laws as may be required in connection with the
transactions contemplated by this Agreement. All such qualifications and filings
will, in the case of qualifications, be effective on the Closing and will, in
the case of filings, be made within the time prescribed by law.
(e) Capitalization. The authorized capital stock of the Company
consists of (i) 150,000,000 shares of Common Stock, of which, as of April 21,
2001, 39,674,915 shares are issued and outstanding, and (ii) 5,000,000 shares of
Preferred Stock, $.01 par value per share, of which no shares are issued or
outstanding. As of April 21, 2001, there were 7,943,325 shares of Common Stock
reserved for issuance upon the exercise or conversion of outstanding options,
warrants and convertible securities of the Company. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable. When issued, sold and delivered against
payment therefor in accordance with the provisions of this Agreement, the
Shares, the Warrant and the Warrant Shares will be duly and validly issued,
fully paid and nonassessable and will be free of restrictions on transfer other
than restrictions under this Agreement, the Registration Rights Agreement and
applicable state and federal securities laws.
(f) SEC Reports. The Company has previously furnished or made available
to the Purchaser complete and accurate copies, as amended or supplemented, of
its (i) Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
as filed with the Securities and Exchange Commission (the "SEC"), and (ii) all
other reports filed by the Company under
2
3
Section 13 or subsections (a) and (c) of Section 14 of the Securities Exchange
Act of 1934 (as amended the "Exchange Act") with the SEC since April 1, 2001
(such reports are collectively referred to herein as the "Reports"). The Reports
constitute all of the documents required to be filed by the Company under
Section 13 or subsections (a) and (c) of Section 14 of the Exchange Act with the
SEC from April 1, 2001 through the date of this Agreement. The Reports complied
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder when filed. As of their respective dates, the Company
Reports did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements and unaudited interim financial
statements of the Company included in the Company Reports (i) complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto when filed, (ii)
were prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby (except as may be indicated therein or in the notes
thereto, and in the case of quarterly financial statements, as permitted by Form
10-Q under the Exchange Act), (iii) fairly present the consolidated financial
condition, results of operations and cash flows of the Company as of the
respective dates thereof and for the periods referred to therein, and (iv) are
consistent with the books and records of the Company.
3. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants as follows:
(a) Investment. The Purchaser is acquiring the Shares, the Warrant and
any shares acquired upon exercise of the Warrant (collectively, the
"Securities") for its own account for investment, not for resale to any other
person and not with a view to or in connection with any resale or distribution.
The Purchaser understands that, except as provided in the Registration Rights
Agreement, the Securities have not been registered under the securities laws of
the United States or any other jurisdiction and cannot be transferred or resold
except as permitted pursuant to a valid registration statement or an applicable
exemption from registration. The Purchaser acknowledges that the Company has not
made any representations with respect to registration of the Securities under
applicable securities laws, that there can be no assurance that there will be
any market for the Common Stock in the foreseeable future and that, as a result,
the Purchaser must be prepared to bear the economic risk of its investment for
an indefinite period of time. The Purchaser understands that the certificate
representing the Securities shall bear a legend substantially in the following
form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of unless and until such securities are
registered under such Act or an opinion of counsel
satisfactory to the issuer is obtained to the effect that such
registration is not required."
The foregoing legend shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required
3
4
by state securities laws, (i) the sale of such Security is registered under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii) the
Securities become eligible for resale pursuant to Rule 144(k) of the Securities
Act.
(b) Authorization and Binding Nature. The execution, delivery and
performance by the Purchaser of this Agreement has been duly authorized by all
requisite corporate action on the part of the Purchaser and this Agreement
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(c) Non-Contravention. The execution, delivery and performance by the
Purchaser of this Agreement will not, with or without the giving of notice or
the passage of time or both, (i) violate the provisions of the charter documents
of the Purchaser, (ii) violate any judgment, decree, order or award of any
court, governmental body or arbitrator applicable to the Purchaser, or (iii)
conflict with or violate any material agreement to which the Purchaser is a
party or by which it is bound.
(d) Access to Information. The Purchaser has substantial knowledge and
experience in making investment decisions of this type and is capable of
evaluating the merits and risks of its investment in the Company. The Company
has made available to the Purchaser all documents and other information
necessary for the Purchaser to evaluate the merits and risks of its investment
in the Company. The Company has made available to the Purchaser all documents
requested and has provided answers to all of its questions relating to an
investment in the Company. In evaluating the suitability of an investment in the
Company, the Purchaser has not relied upon any representations (whether oral or
written) other than as set forth herein. The Purchaser has had an opportunity to
discuss this investment with representatives of the Company and to ask questions
of them. The Purchaser understands that an investment in the Company involves
significant risks. The Purchaser is an "accredited investor," as defined in Rule
501 under the Securities Act.
4. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
telecopy or via a reputable express courier, with charges prepaid, to the
address set forth below or to such other address of which the parties may have
given notice. Unless otherwise specified herein, such notices or other
communications shall be deemed received one business day after personal delivery
or delivery by telecopy, or three business days after being sent, if sent by
reputable express courier.
If to the Company:
Student Advantage, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxx and Xxxx LLP
4
5
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Purchaser:
Xxxxx Xxxxx, Esq.
Xxxxxxxx Associates LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
6. Successors and Assigns. No party may assign its rights or obligations
hereunder without the prior written consent of the other party. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Any assignment in
contravention of this provision shall be void.
7. Survival of Warranties. The representations, warranties and covenants
of the Company and the Purchaser contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the Purchaser, its counsel or the Company, as the case
may be.
8. Entire Agreement. This Agreement, including the exhibits attached
hereto, represents the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
and written and all contemporaneous oral negotiations, commitments and
understandings between such parties. The parties may amend or modify this
Agreement, in such manner as may be agreed upon, only by a written instrument
executed by the parties hereto.
9. Expenses. Each party shall pay its own expenses in connection with this
Agreement and the transactions contemplated hereby.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware in the United States, without
reference to conflict of laws principles, and the parties hereby consent to the
jurisdiction of the courts of the State of Delaware.
11. Section Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
12. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
[remainder of page intentionally omitted]
5
6
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of and on the date first above written.
STUDENT ADVANTAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------------------
Title: President
XXXXXXXX ASSOCIATES LLC, as subadviser
for The Prudential Insurance Company of
America Variable Contract Account - 6
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx
Title: Senior Vice President
6
