Exhibit 10.1
[Execution Counterpart]
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"),
dated as of April 16, 1998, between AUTONOMOUS TECHNOLOGIES CORPORATION, a
Florida corporation (the "Company") and OZ MASTER FUND, LTD., a Cayman Islands
exempt company (the "Purchaser").
WHEREAS: Subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to acquire, shares of the Company's Convertible Preferred
Stock, Series I, par value $.01 per share (the "Preferred Stock", and shares
thereof issued and sold in accordance with this Agreement, the "Shares") and the
Purchaser desires to acquire the right to purchase additional Shares;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the Company and the Purchaser agree as follows:
ARTICLE 1
PURCHASE AND SALE OF PREFERRED SHARES
1.1 Initial Purchase and Sale. (a) Subject to the terms and
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conditions set forth herein, the Company shall issue, sell, and grant to the
Purchaser, and the Purchaser shall purchase from the Company, five hundred (500)
Shares (the "Initial Shares") and the Option (as defined in Section 13), as
provided below.
(b) The Preferred Stock shall have the respective rights, preferences
and privileges set forth in Exhibit A attached hereto, which shall be
incorporated into a Certificate of Designation to be filed on or prior to the
Initial Closing (as defined below) by the Company with the Secretary of State of
Florida (the "Certificate of Designation").
For purposes of this Agreement, "Conversion Price," "Original Issue
Date," "Conversion Date" "Trading Day" and "Per Share Market Value" shall have
the meanings set forth in the Certificate of Designation. The Shares, the
Warrant (as defined in Section 316) and the Underlying Shares (as defined in
Section 21) are sometimes referred to herein as the "Securities."
1.2 Purchase Price. The aggregate purchase price for the Initial
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Shares and the Option to be issued hereunder is Five Million Dollars
($5,000,000).
1.3 The Option. The Company hereby grants to the Purchaser the right
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(the "Option") to purchase four hundred (400) shares of Series I Convertible
Preferred Stock (the "Option Shares") and the Warrant, on the following terms
and conditions:
(i) The Option must be exercised by the Purchaser on an all-or-none
basis;
(ii) The exercise price of the Option is $4,000,000, payable in cash
at the Option Closing;
(iii) The Option must be exercised, if at all, within 56 days after
the Initial Closing Date; and
(iv) The Initial Closing shall have occurred or, if it has failed to
occurred, has not failed to occur due to the breach of this Agreement by the
Purchaser.
In order to exercise the Option, the Purchaser shall provide written
notice to the Company of its election to exercise the Option prior to the
expiration of the Option. The Option Closing shall occur within three business
days after receipt of such notice.
1.4 The Closings.
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(a) Initial Closing. (i) Subject to the terms and conditions set
forth herein, the Company shall sell and issue to the Purchaser, and the
Purchaser shall purchase from the Company, at the initial closing (the "Initial
Closing") the Initial Shares and the Option, for an aggregate purchase price of
$5,000,000, as soon as practicable following the effective date of the
Underlying Shares Registration Statement. The Initial Closing shall take place
at the offices of Xxxxxxx X.X. Xxxx, Esq., 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000, or such other place as the parties may agree. The date of
the Initial Closing is hereinafter referred to as the "Initial Closing Date".
(ii) At the Initial Closing, (a) the Company shall deliver to the
Purchaser (1) one or more stock certificates representing five hundred (500)
Shares, registered in the name of the Purchaser, (2) the legal opinion of Gray,
Harris & Xxxxxxxx, P.A., and (3) all other documents, instruments and writings
required to have been delivered at or prior to the Initial Closing by the
Company to the Purchaser pursuant to this Agreement; and (b) the Purchaser shall
deliver to the Company (1) the purchase price for the Shares to be purchased at
the Initial Closing and the Option, in United States dollars in immediately
available funds, by wire transfer to an account designated in writing by the
Company for such purpose prior to the Initial Closing Date, and (2) all
documents, instruments and writings required to have been delivered at or prior
to the Initial Closing by the Purchaser pursuant to this Agreement.
(b) The Option Closing. The Option Closing shall take place at the
offices of Xxxxxxx X.X. Xxxx, Esq., 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000, or such other place as the parties may agree. The date of the
Option Closing is hereinafter referred to as the "Option Closing Date". At the
Option Closing, (a) the Company shall deliver to the Purchaser (1) one or more
stock certificates representing four hundred (400) Shares and the Warrant (as
defined in Section 316), each registered in the name of the Purchaser, (2) the
legal opinion of Gray, Harris & Xxxxxxxx, P.A., and (3) all other documents,
instruments and writings required to have been delivered at or prior to the
Option Closing by the Company to the Purchaser pursuant to this Agreement; and
(b) the Purchaser shall deliver to the Company
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(1) the exercise price of the Option in United States dollars in immediately
available funds by wire transfer to an account designated in writing by the
Company for such purpose prior to the Option Closing Date, and (2) all
documents, instruments and writings required to have been delivered at or prior
to the Option Closing by the Purchaser pursuant to this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1. Representations, Warranties and Agreements of the Company. The
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Company hereby makes the following representations and warranties to the
Purchaser:
(a) Organization and Qualification. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of Florida, 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. The Company is duly qualified to
do business and is in good standing as a foreign corporation or company 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, reasonably be expected to: (x) adversely affect the legality,
validity or enforceability of any of the Transaction Documents (as defined
below) in any material respect, (y) have or result in a material adverse effect
on the results of operations, assets, or financial condition of the Company,
taken as a whole, or (z) adversely impair the Company's ability to perform fully
on a timely basis its obligations under the Transaction Documents (any one of
(x), (y) and (z), being 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 hereby and by the Warrant, the Certificate of Designation, the
Registration Rights Agreement, and otherwise to carry out its obligations
hereunder and thereunder. This Agreement, the Certificate of Designation, the
Registration Rights Agreement and the Warrant are collectively referred to as
the "Transaction Documents". The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby has 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, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
The Company is not in violation of any of the provisions of its certificate of
incorporation, articles, by-laws or other charter documents.
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(c) Capitalization. The authorized, issued and outstanding capital
stock of the Company is set forth in Schedule 2.1(c). Except as set forth in
Schedule 2.1(c), no shares of Common Stock are entitled to preemptive or similar
rights, nor is any holder of the Common Stock entitled to preemptive or similar
rights, or any rights to receive Common Stock at a price which is less than the
current market price thereof, arising out of any agreement or understanding with
the Company by virtue of any of the Transaction Documents. 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,
except as a result of the purchase and sale of the Shares and the Warrant
hereunder, 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 is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares of Common
Stock. To the knowledge of the Company, except as specifically disclosed in the
SEC Documents (as defined below) or Schedule 2.1(c), no Person beneficially owns
(as determined pursuant to Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or has the right to acquire by
agreement with or by obligation binding upon the Company beneficial ownership of
more than 5% of the Common Stock. 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.
(d) Issuance of Shares and Warrant. The Shares, the Option and the
Warrant are duly authorized, and when issued and paid for in accordance with the
terms hereof, shall be validly issued, fully paid and nonassessable. The
Company, as at the Initial Closing Date and Option Closing Date as the case may
be, will have, and at all times while the Shares, the Option and the Warrant are
outstanding, will maintain an adequate reserve of duly authorized shares of
Preferred Stock and Common Stock to enable it to perform its obligations under
this Agreement (including the Option), the Warrant and the Certificate of
Designation with respect to the number of Shares and the Warrant issued and
outstanding at such Closing Date. The shares of Common Stock issuable upon
conversion of the Shares (including the Shares underlying the Option) or
exercise of the Warrant are collectively referred to herein as the "Underlying
Shares". Upon issuance in accordance with the Certificate of Designation and
the Warrant, the Underlying Shares will be duly authorized, validly issued,
fully paid and nonassessable, free and clear of all liens, claims, encumbrances
or defects of any kind.
(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 its Certificate of Incorporation or bylaws (each as
amended through the date hereof) or (ii) 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 of, any agreement, indenture or instrument to which the Company is
a party, or (iii) to the knowledge of the Company, result in a violation of any
law, rule, regulation, order,
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judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including Federal and state
securities laws and regulations), or by which any material property or asset of
the Company is bound or affected, except in the case of each of clauses (ii) and
(iii), such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as could not reasonably be expected to,
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 to which the Company is
subject, except for violations which, individually or in the aggregate, do not
have a Material Adverse Effect.
(f) Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, 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, except for (i) the filings of the
Certificate of Designation with respect to the Shares with the Secretary of
State of Florida, which filings shall be effected prior to the Initial Closing
Date and the Option Closing Date, as appropriate, (ii) the filing of the
Underlying Shares Registration Statement(s) with the Securities and Exchange
Commission (the "Commission"), which shall be filed in the time periods set
forth in the Registration Rights Agreement, (iii) the application(s) or any
letter(s) acceptable to the Nasdaq National Market for the listing of the
Underlying Shares with the Nasdaq National Market (and with any other national
securities exchange or market on which the Common Stock is then listed), (iv)
any filings, notices or registrations under applicable state securities laws,
and other than, in all other cases, where the failure to obtain such consent,
waiver, authorization or order, or to give or make such notice or filing, would
not materially impair or delay the ability of the Company to effect the Initial
Closing or the Option Closing and to deliver to the Purchaser the Shares and the
Warrant (and, upon conversion of the Shares and exercise of the Warrant, the
Underlying Shares) in the manner contemplated hereby and by the Registration
Rights Agreement free and clear of all liens and encumbrances of any nature
whatsoever (the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed in the
Disclosure Materials (as hereinafter defined) there is no action, suit, notice
of violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or its properties before or
by any court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which could reasonably be expected
to, individually or in the aggregate, have or result in a Material Adverse
Effect.
(h) No Default or Violation. The Company (i) is not in default under
or 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) in violation of any order
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of any court, arbitrator or governmental body applicable to its property or
assets, or (iii) in violation of any statute, rule or regulation of any
governmental authority to which it is subject, except as could not reasonably be
expected to, in any such case (individually or in the aggregate), have or result
in a Material Adverse Effect.
(i) Schedules. The Schedules to this Agreement 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.
(j) Private Offering. Neither the Company nor any Person acting on
its behalf has taken or will take any action which might subject the offering,
issuance or sale of the Securities to the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act").
(k) SEC Documents. The Company has filed all reports required to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the three years preceding the date hereof (the foregoing materials
being collectively referred to herein as the "SEC Documents" and, together with
the Schedules to this Agreement furnished by or on behalf of the Company, the
"Disclosure Materials") on a timely basis, or has received a valid extension of
such time of filing and has filed any such SEC Documents prior to the expiration
of any such extension. As of their respective dates, the SEC Documents 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 Documents, 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 by which the property or assets of
the Company is subject have been filed as exhibits to the SEC Documents as
required; the Company is not in breach of any such agreement where such breach
may have or result in a Material Adverse Effect. The financial statements of
the Company included in the SEC Documents comply in all material respects with
applicable accounting requirements and the published 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 as in effect at the time of filing applied on a consistent
basis during the periods involved, except as may be otherwise indicated in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company 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 year-end audit
adjustments. Since the date of the financial statements included in the
Company's last filed Quarterly Report on Form 10-Q, there has been no event,
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occurrence or development that has had a Material Adverse Effect which has not
been specifically disclosed in writing to the Purchaser by the Company. The
Company last filed audited financial statements with the Commission on March 31,
1998, and has not received any comments from the Commission in respect thereof.
(l) Seniority. No class of equity securities of the Company is senior
to the Shares in right of payment, whether upon liquidation, dissolution or
otherwise.
(m) Investment Company. The Company is not, and is not controlled by
or under common control with an affiliate of, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(n) Certain Fees. Other than fees and expenses due and payable to
Everen Securities, Inc. by the Company, no fees or commissions will be payable
by the Company to any broker, financial advisor, finder, investment banker, or
bank with respect to the transactions contemplated by this Agreement. The
Purchaser 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 each of the
Purchaser, its employees, officers, directors, agents, and partners, and their
respective affiliates (as such term is defined under Rule 405 promulgated under
the Securities Act, an "Affiliate"), 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.
(o) Solicitation Materials. The Company has not (i) distributed any
offering materials in connection with the offering and sale of the Shares, the
Option, the Warrant or the Underlying Shares other than the Disclosure Materials
or (ii) solicited any offer to buy or sell the Shares, the Warrant or the
Underlying Shares by means of any form of general solicitation or advertising.
None of the Disclosure Materials or any other information provided to the
Purchaser by or on behalf of the Company contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(p) Form S-3 Eligibility. The Company is, and at each Closing Date
will be, eligible to register securities for resale with the Commission under
Form S-3 promulgated under the Securities Act.
(q) Listing and Maintenance Requirements Compliance. The Company has
not in the two years preceding the date hereof received notice (written or oral)
from any stock exchange or market 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 or
market.
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(r) Patents and Trademarks. To the Company's knowledge, except as
otherwise specifically disclosed in the Disclosure Materials, (i) the Company
has, or has rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights and licenses
(collectively, the "Intellectual Property Rights") which are necessary for use
in connection with its business as presently conducted and which the failure to
do so would have a Material Adverse Effect and (ii) there is no existing
infringement by another Person of any of the Intellectual Property Rights which
are necessary for use in connection with the Company's business as presently
conducted, which infringement would have a Material Adverse Effect.
(s) Registration Rights; Rights of Participation. Except as described
on Schedule 2.1(s) hereto, (A) 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 has not been satisfied and (B) no Person,
including, but not limited to, current or former shareholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or any other Transaction Document
which has not been waived.
(t) Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Underlying Shares upon (i) conversion of the Shares in
accordance with the Certificate of Designation and (ii) exercise of the Warrant
may result in dilution of the outstanding shares of Common Stock. The Company
further acknowledges that its obligation to issue Underlying Shares upon (x)
conversion of the Shares in accordance with the Certificate of Designation and
(y) upon exercise of the Warrant is unconditional and absolute, subject to such
limitations set forth herein, in the Certificate of Designation or pursuant to
the Warrant, regardless of the effect of any such dilution.
2.2 Representations and Warranties of the Purchaser. The Purchaser
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hereby represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a company duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation with the requisite corporate power and authority to enter into and
to consummate the transactions contemplated hereby and by the Registration
Rights Agreement and otherwise to carry out its obligations hereunder and
thereunder. The purchase by the Purchaser of the Shares and the Warrant
hereunder has been duly authorized by all necessary action on the part of the
Purchaser. Each of this Agreement and the Registration Rights Agreement has been
duly executed and delivered by the Purchaser and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser,
in accordance with its terms, subject to
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bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity.
(b) Investment Intent. The Purchaser is acquiring the Shares, the
Warrant and the Underlying Shares for its own account for investment purposes
only and not with a view to or for distributing or reselling such Shares, the
Warrant or Underlying Shares or any part thereof or interest therein, without
prejudice, however, to the 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 Shares, Underlying Shares or the
Warrant pursuant to an effective registration statement under the Securities Act
and in compliance with applicable state securities laws or under an exemption
from such registration.
(c) Purchaser Status. At the time the Purchaser was offered the
Shares and the Warrant, it was, and at the date hereof, it is, and at each
Closing Date and each exercise date under the Warrant, it will be, an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (4) under the
Securities Act.
(d) Experience of Purchaser. The 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 Shares, the Warrant and the
Underlying Shares, and has so evaluated the merits and risks of such investment.
(e) Ability of Purchaser to Bear Risk of Investment. The Purchaser is
able to bear the economic risk of an investment in the Shares, the Warrant and
the Underlying Shares and, at the present time, is able to afford a complete
loss of such investment.
(f) Access to Information. The Purchaser acknowledges receipt of the
Disclosure Materials and further acknowledges that it 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 Shares and the Warrant, and the merits and risks of
investing in the Shares and the Warrant; (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 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.
(g) Reliance. The Purchaser understands and acknowledges that (i) the
Shares and the Warrant are being offered and sold to the Purchaser without
registration under the
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Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act under Section 4(2) of the Securities Act or
Regulation D promulgated thereunder 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 the Purchaser hereby consents to such
reliance. The Company acknowledges and agrees that the Purchaser make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 22.
ARTICLE 3
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) If the Purchaser should decide to
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dispose of Shares or any portion of the Warrant (and upon conversion or exercise
thereof, as the case may be, any of the Underlying Shares) held by it, the
Purchaser understands and agrees that it may do so only pursuant to an effective
registration statement under the Securities Act, to the Company, to an
Affiliate, pursuant to Rule 144 under the Securities Act ("Rule 144"), or
pursuant to an available exemption from the registration requirements of the
Securities Act. In connection with any transfer of Shares, Warrant or any
Underlying Shares other than pursuant to an effective registration statement, to
the Company, to an Affiliate of the Purchaser or pursuant to Rule 144, the
Company may require the transferor thereof to provide to the Company a written
opinion of counsel experienced in the area of United States securities laws
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. Notwithstanding anything to the contrary contained herein, any transfer
hereunder shall be for a minimum of 50 Shares or the Warrant to purchase at
least 50,000 shares of Common Stock.
(b) The Purchaser agrees to the imprinting, so long as is required by
this Section 31, of the following legend on the Shares, the Warrant and the
Underlying Shares:
[NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]] [[THE SECURITIES REPRESENTED HEREBY]
HAVE [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
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SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
[FOR SHARES ONLY] THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND CONVERSION SET FORTH IN A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, DATED AS OF APRIL 16, 1998,
EXECUTED BY THE ORIGINAL HOLDER HEREOF. A COPY OF THAT AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICE OF AUTONOMOUS TECHNOLOGIES CORPORATION.
The Underlying Shares issuable upon conversion of Shares or exercise
of the Warrant, as the case may be, shall not contain the legend set forth above
if the conversion of such Shares or exercise of the Warrant, as the case may be,
occurs at any time while the Underlying Shares Registration Statement is
effective under the Securities Act or in the event there is not an effective
Underlying Shares Registration Statement at such time, if the Underlying Shares
are eligible for resale under, or have been sold pursuant to, Rule 144, or if in
the written opinion of counsel to the Company experienced in the area of United
States securities laws 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 agrees that it will provide
the Purchaser, upon request, with a certificate or certificates representing
Underlying Shares, free from such legend at such time as such legend is no
longer required hereunder.
3.2 Stop Transfer Instruction. The Company may not make any notation
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on its records or give instructions to any transfer agent of the Company which
expand the scope of the restrictions on transfer set forth in Section 31.
3.3 Furnishing of Information. As long as the Purchaser owns Shares,
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Underlying Shares or the Warrant, 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 and, upon the request of
the Purchaser, to promptly furnish the Purchaser with true and complete copies
of all such filings. If the Company is not at the time required to file reports
pursuant to such sections, it will prepare and furnish to the Purchaser and make
publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act.
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3.4 Copies and Use of Disclosure Materials. The Company consents to
--------------------------------------
the use of the SEC Documents, and any amendments and supplements thereto, by the
Purchaser in connection with resales of the Shares, the Warrant or the
Underlying Shares other than pursuant to an effective registration statement.
3.5 Blue Sky Laws. In accordance with the Registration Rights
-------------
Agreement, the Company shall qualify the Underlying Shares under the securities
or Blue Sky laws of such jurisdictions as the Purchaser may request and shall
continue such qualification at all times through the third anniversary of the
last Closing Date; provided, that the Company shall not be required in
connection therewith to qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject the Company to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any material tax in any such jurisdiction where it is not
then so subject.
3.6 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 Shares, the Warrant or the Underlying Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares, the Warrant or the Underlying Shares to the Purchaser.
3.7 Purchaser Ownership of Common Stock. The Purchaser may not use
-----------------------------------
its ability to convert Shares hereunder or under the terms of the Certificate of
Designation or use its ability to acquire shares of Common Stock upon exercise
of the Warrant, to the extent that such conversion or exercise would result in
the Purchaser beneficially owning (for purposes of Rule 13d-3 under the Exchange
Act) more than 9.99% of the outstanding shares of the Common Stock; provided,
that if ten days shall have elapsed since the Purchaser has declared a default
by the Company under any Transaction Document, such default shall cause the
Purchaser to exceed such 9.99% limit and such default shall not have been cured
to the Purchaser's satisfaction prior to the expiration of such ten-day period,
the provisions of this Section 37 shall be null and void ab initio as to the
Purchaser. Notwithstanding anything to the contrary contained herein, the
provisions of this Section 37 shall have no effect on the Company's obligation
to issue shares of Common Stock to the Purchaser upon receipt or delivery of any
conversion or exercise notice. The terms and conditions of this Section shall
not apply to any conversion of Shares at the option of the Company pursuant to
Section 5(a)(ii) of the Certificate of Designation.
3.8 Listing and Reservation of Underlying Shares. (a) The Company
--------------------------------------------
shall (i) not later than the fifth Trading Day following the applicable Closing
Date prepare and file with the Nasdaq National Market (as well as any other
national securities exchange or market on which the Common Stock is then listed)
an additional shares listing application or a letter acceptable to the Nasdaq
Market System covering and listing all Underlying Shares of Common Stock, (ii)
take all reasonable steps necessary to cause the Underlying Shares to be
approved for listing in the Nasdaq Market System (as well as on any other
national securities exchange or
12
market on which the Common Stock is then listed) as soon as possible thereafter,
and (iii) provide to the Purchaser evidence of such listing, and the Company
shall take all steps reasonably necessary to maintain the listing of its Common
Stock on such exchange.
(b) The Company shall reserve for issuance upon conversion of the
Shares and upon exercise of the Warrant in accordance with their terms the
number of shares to be listed on the Nasdaq National Market (and such other
national securities exchange or market on which the Common Stock is then listed
or traded) as set forth in Section 38. In the event that the Company shall fail
to comply with this Section 38, then the Company shall redeem all Shares and
Underlying Shares, in cash, then held by the Purchaser, as set forth in Section
310 below.
3.9 Conversion Procedures. Exhibit C attached hereto sets forth the
---------------------
procedures with respect to the conversion of the Preferred Stock, including the
forms of conversion notice to be provided upon conversion, instructions as to
the procedures for conversion, the form of legal opinion, if necessary, that
shall be rendered by the Company to the Company's transfer agent and such other
information and instructions as may be reasonably necessary to enable the
Purchaser to exercise its right of conversion smoothly and expeditiously.
3.10 Purchaser's Rights if Trading in Common Stock is Suspended or
-------------------------------------------------------------
Delisted. If at any time while the Purchaser (or any assignee thereof) owns any
--------
Shares, the Warrant or Underlying Shares, trading in the shares of the Common
Stock is suspended on or delisted from the Nasdaq National Market or any other
principal market or exchange for such shares (other than as a result of the
suspension of trading in securities on such market or exchange generally or
temporary suspensions pending the release of material information) for more than
five Trading Days in the aggregate, at the option of the Purchaser exercisable
by written notice to the Company delivered after such suspension or delisting,
the Company shall redeem all Shares and Underlying Shares, in cash, then held by
the Purchaser, at an aggregate purchase price equal to the sum of (I) the number
of Shares then held by the Purchaser multiplied by the product of (1) the
average Per Share Market Value for the five (5) Trading Days immediately
preceding (a) the day of such notice or (b) the date of payment in full of the
redemption price calculated under this Section, whichever is greater and (2) the
Conversion Ratio on the date of the repurchase notice, and (II) the number of
Underlying Shares then held by the Purchaser multiplied by the average Per Share
Market Value for the five (5) Trading Days immediately preceding (A) the date of
the notice or (B) the date of payment in full by the Company of the redemption
price calculated under this Section, whichever is greater, provided, that the
Company shall only be required to redeem Underlying Shares pursuant to this
clause (II) if there is not an effective Underlying Shares Registration
Statement covering such Underlying Shares or if the Company has failed to tender
certificates for shares of Common Stock after a Conversion Notice and an
original certificate representing the Shares to be converted has been delivered,
and (IV) interest on the amounts set forth in (I) - - (II) above accruing from
the 5th Trading Day after such notice until the repurchase price under this
Section is paid in full at the rate of 15% per annum. The Company shall provide
written notice of any redemption demand made pursuant to this Section to each
other holder of Securities within 24 hours of its receipt thereof.
13
3.11 No Violation of Applicable Law. Notwithstanding any provision of
------------------------------
this Agreement to the contrary, if the redemption of Shares or Underlying Shares
otherwise required under this Agreement or the Registration Rights Agreement
would be prohibited by the relevant provisions of Florida corporation law, such
redemption shall be effected as soon as it is permitted under such law;
provided, that interest payable by the Company with respect to any such
redemption shall continue to accrue in accordance with Section 310.
3.12 Sale Restrictions. For so long as the Purchaser holds Shares or
-----------------
Underlying Shares, the Purchaser agrees that it shall not (i) offer for public
sale any Underlying Shares at a price below the then-quoted bid market price
therefor, or (ii sell short Underlying Shares unless such sale is at a price
higher than the bid market price at the time of such short sale or unless such
sale is for more than 25,000 shares to a single buyer (or group of affiliated
buyers) other than a market maker.
3.13 Notice of Breaches. Each of the Company and the Purchaser shall
------------------
give prompt written notice to the other of any breach of any representation,
warranty or other agreement contained in this Agreement or in the Registration
Rights Agreement, as well as any events or occurrences arising after the date
hereof and prior to either Closing Date which would reasonably be likely to
cause any representation or warranty or other agreement of such party, as the
case may be, contained herein to be incorrect or breached as of such Closing
Date. However, no disclosure or failure to make such disclosure by any party
pursuant to this Section 313 shall be deemed to cure any breach of any
representation, warranty or other agreement contained herein or in the
Registration Rights Agreement.
3.14 Conversion Obligations of the Company. The Company covenants to
-------------------------------------
convert Shares and to deliver Shares and Underlying Shares in accordance with
the terms and conditions and time period set forth in the respective Certificate
of Designation, and to deliver Shares and the Warrant upon exercise of the
Option and Underlying Shares upon exercise of Warrant in accordance with the
terms and conditions and time periods set forth in the Option and the Warrant.
3.15 Subsequent Registrations and Issues of Company Securities; Right
----------------------------------------------------------------
of First Refusal. (a) Other than Underlying Shares and other "Registrable
----------------
Securities" (as defined in the Registration Rights Agreement) to be registered
in accordance with the Registration Rights Agreement, the Company shall not, for
a period of not less than 60 Trading Days after the Initial Closing Date,
without the prior written consent of Purchaser, register for resale any
securities of the Company. Any days that the Purchaser (or its successors,
permitted assigns or other successors in interest) is unable to sell Underlying
Shares under an Underlying Shares Registration Statement due to circumstances
within the Company's control, which may include among other things, suspension
of the effectiveness of the Underlying Shares Registration Statement by the
Commission or a suspension imposed by the Company's board of directors pending
any release of material non-public information, shall be added to such 60
Trading Day period for the foregoing purposes.
14
(b) So long as the Purchaser owns at least 25% of the Shares purchased
by the Purchaser or until 300 days after the Initial Closing, whichever occurs
first, if the Company proposes to issue any equity or equity-related securities
in a transaction which is not a firm underwritten public offering, it shall give
the Purchaser written notice of its intention, describing the securities, the
price and the substantive terms and conditions upon which the Company proposes
to issue the same. The Purchaser shall have five (5) business days from the
giving of such notice to agree to purchase (but need not actually consummate
such purchase within such 5-day period) all of such securities for the price and
upon the terms and conditions specified by giving written notice to the Company.
In the event the Purchaser is restricted in its right to convert Shares, or to
sell shares of Underlying Shares, due to the filing of a registration statement
by the Company as provided for in the Registration Rights Agreement, the 300-day
period set forth in this Section 315(b) shall be extended by the period(s) of
such restriction.
3.16 The Warrant. At the Option Closing, the Company shall issue and
-----------
deliver to the Purchaser a Common Stock purchase warrant (the "Warrant"),
substantially in the form of Exhibit B, entitling the Purchaser to purchase, on
the terms and conditions set forth therein, 300,000 shares of Common Stock at a
price per share equal to the Warrant Exercise Price (as defined below). The
"Warrant Exercise Price" shall be equal to 125% of the Per Share Market Value
for the Common Stock on the Initial Closing Date.
3.17 Use of Proceeds. The Company shall use all of the net proceeds
---------------
from the placement of the Shares and the Warrant for working capital purposes
and not for the satisfaction of any portion of Company debt, to redeem Company
equity or equity-equivalent securities or to pay down trade accounts, other than
in the ordinary course of business, consistent with past practices. Pending
application of the proceeds of this placement in the manner permitted hereby,
the Company will invest such proceeds in interest bearing accounts and short-
term, investment grade, interest bearing securities.
3.18 Press Release. The Company shall make timely disclosure of the
-------------
Initial Closing Date and the Option Closing Date, relating to the issue and sale
of the Shares, the Option and the Warrant to the Purchaser, which such press
release shall be approved by the Purchaser's Special Counsel.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Conditions Precedent to Initial Closing. The obligation of the
---------------------------------------
Purchaser to acquire and pay for the Shares to be issued at the Initial Closing
is subject to the satisfaction or waiver by the Purchaser of each of the
following conditions:
(a) Accuracy of the Company's Representations and Warranties. The
Company shall have delivered to the Purchaser a certificate or certificates,
dated the Initial
15
Closing Date, of the Chief Financial Officer of the Company, certifying that the
representations and warranties of the Company contained herein and in the
Registration Rights Agreement are true and correct in all material respects as
of such date, as though made on and as of such date.
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Initial Closing Date;
(c) Underlying Shares Registration Statement. The Underlying Shares
Registration Statement with respect to the Underlying Shares issuable on
conversion of the Shares and the Warrant to be sold hereunder shall have been
declared effective under the Securities Act by the Commission within seventy
(70) days of the date hereof (unless such period is extended by either the
Company or the Purchaser for up to 45 days, provided the party requesting the
extension is using its best efforts to cause the Registration Statement to be
declared effective), and shall not be subject to any stop order and no stop
order shall be pending or threatened as at the Initial Closing Date;
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement relating to the issuance or
conversion of any of the Shares or exercise of the Warrant;
(e) No Suspensions of Trading in Common Stock. The trading in the
Common Stock shall not have been suspended by the Commission or on the Nasdaq
Market System (except for any suspension of trading of securities on such market
generally or of limited duration solely to permit dissemination of material
information regarding the Company);
(f) Listing of Common Stock. The Common Stock on the Initial Closing
Date shall be listed for trading on the Nasdaq Market System;
(g) Change of Control. No Change of Control in the Company shall have
occurred. "Change of Control" means the occurrence of any of (i) an acquisition
after the date hereof by an individual or legal entity of in excess of 45% of
the voting securities of the Company, (ii) a replacement of more than one-half
of the members of the Company's board of directors which is not approved by
those individuals who are members of the board of directors on the date hereof
in one or a series of related transactions, (iii) the merger of the Company with
or into another entity (provided, that in the event that a majority of the
Company's Board of Directors will constitute a majority of the board of
directors of the surviving entity and more than 65% of the capital stock of the
surviving entity will be held by the same shareholders of the Company, such
transaction shall not be considered a Change of Control with respect to this
Section 4142(h)), consolidation or sale of all or substantially all of the
assets of the Company in one or a series of related transactions or (iv) the
execution by the Company of an agreement
16
to which the Company is a party or by which it is bound, providing for any of
the events set forth above in (i), (ii) or (iii);
(h) Legal Opinion. The Company shall have delivered to the Purchaser
an opinion of legal counsel to the Company, covering the matters set forth in
Exhibit D hereto, dated the Initial Closing Date;
(i) Required Approvals. All Required Approvals shall have been
obtained;
(j) Shares of Common Stock. On or prior to the Initial Closing Date,
the Company shall have reserved for issuance to the Purchaser an adequate number
of Underlying Shares which would be issuable upon conversion in full of the
Shares to be purchased on the Initial Closing Date, assuming such conversion
occurred on the Original Issue Date for such Shares;
(k) Delivery of Stock Certificates. The Company shall have delivered
to the Purchaser or the Purchaser' designee the stock certificate(s)
representing the Shares being purchased at the Initial Closing, registered in
the name of the Purchaser, each in form satisfactory to the Purchaser;
(l) Management. Each of (i) the Chief Executive Officer and (ii)
either (A) the Chief Operating Officer or (B) the Chief Financial Officer, shall
have at all times retained such position with the Company and shall not have
suffered a voluntary or involuntary material lessening of their respective
responsibilities.
4.2 Conditions Precedent to Option Closing. The obligation of the
--------------------------------------
Purchaser to acquire and pay for the Shares and the Warrant to be purchased at
the Option Closing is subject to the satisfaction or waiver by the Purchaser, at
or before the Option Closing, of each of the conditions applicable to the
Initial Closing but as of the date of such Option Closing.
ARTICLE 5
MISCELLANEOUS
5.1 Fees and Expenses. 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; provided, that whether or
not the Initial Closing is effected, the Company shall pay the reasonable fees
and expenses of legal counsel to the Purchaser incurred in connection with the
negotiation, documentation and closing of the financing pursuant to this
Agreement, up to an aggregate of $20,000, which fees shall be payable on
presentation of invoices therefor.
17
5.2 Entire Agreement; Amendments. This Agreement, together with the
----------------------------
Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificate of Designation and the Warrant 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.
5.3 Notices. Any notice or other communication required or permitted
-------
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telecopy
or facsimile (with transmission confirmation report) at the address or number
designated below (if delivered on a Trading Day during normal business hours
where such notice is to be received), or the first Trading Day following such
delivery (if delivered on a Trading Day after normal business hours where such
notice is to be received) or (b) upon receipt of mailing by express courier
service, fully prepaid, addressed to such address. The addresses for such
communications shall be:
If to the Company:
Autonomous Technologies Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, CFO
Facsimile: 000-000-0000
with a copy to:
Gray, Harris & Xxxxxxxx, P.A.
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
If to the Purchaser:
OZ Management, L.L.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx, CFO
Facsimile: 000-000-0000
18
with a copy to:
Xxxxxxx X.X. Xxxx, Esq.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-246-5454
If to or such other address as may be designated in writing hereafter, in the
same manner, by such person.
5.4 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 the Purchaser; 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.
5.5. 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.
5.6 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 Purchaser. The Purchaser may not
assign this Agreement (other than to an Affiliate of the Purchaser) or any
rights or obligations hereunder without the prior written consent of the
Company, except that the Purchaser may assign its rights hereunder and under the
Transaction Documents without the consent of the Company as long as such
assignee demonstrates to the reasonable satisfaction of the Company its
satisfaction of the representations and warranties set forth in Section 22 and
the conditions set forth in Section 31. This provision shall not limit the
Purchaser's right to transfer securities or transfer or assign rights hereunder
or under the Registration Rights Agreement.
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
----------------------------
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.8 Governing Law. 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 non-exclusive 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, and hereby irrevocably
waives,
19
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, or 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 receiving a copy thereof sent 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.
5.9 Survival. The agreements and covenants contained in Article 3
--------
shall survive the delivery and conversion of the Shares pursuant to this
Agreement and the representations and warranties of the Company and the
Purchasers contained in Article 2 shall survive each Closing hereunder and any
conversion of Shares and exercise of the Warrant.
5.10 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.
5.11 Publicity. The Company and the Purchaser shall consult with each
---------
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law in which such case the disclosing party shall
provide the other party with prior notice of such public statement. The Company
shall not publicly or otherwise disclose the names of any of the Purchasers
without the Purchaser's prior written consent.
5.12 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 affected 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.
5.13 Remedies. In addition to being entitled to exercise all rights
--------
provided herein or granted by law, including recovery of damages, the Purchasers
will be entitled to specific performance of the obligations of the Company under
the Transaction Documents. Each of the Company and the Purchaser agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the
20
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.
5.14 Termination. This Agreement may be terminated prior to the
-----------
Initial Closing or the Option Closing by: (a) either party upon notice to the
other party of a material breach of this Agreement by such other party which is
not cured within 20 days of the receipt of such notice, or (b) both parties,
upon mutual written agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOLLOWS]
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized persons as of the date first
indicated above.
AUTONOMOUS TECHNOLOGIES CORPORATION
By: /s/ Xxxxx X. Xxxx
__________________________
Name: Xxxxx X. Xxxx
________________________
Title: Chairman & CEO
_______________________
OZ MASTER FUND, LTD.
By: OZ MANAGEMENT, L.L.C.
as Investment Advisor
By: /s/ Xxxxxx X. Och
__________________________
Name: Xxxxxx X. Och
Title: Managing Member
22
Schedule 2.1(c)
AUTONOMOUS TECHNOLOGIES CORPORATION
CAPITALIZATION TABLE
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, 1998
------------------------------------------------------------------------------------ --------------
CURRENT LIABILITIES:
Accounts payable $ 608,082
Accrued expenses 1,346,314
Current portion of obligations under capital leases 100,640
------------
Total current liabilities 2,055,036
OBLIGATIONS UNDER CAPITAL LEASES, less current portion 156,821
OBLIGATION UNDER STRATEGIC ALLIANCE AGREEMENT -
------------
Total liabilities 2,211,857
------------
STOCKHOLDERS' EQUITY (Note 1):
Undesignated series, $.01 par value; 1,000,000 shares authorized at March 31,
1998; 0 shares issued and outstanding -
Common stock, $.01 par value; 25,000,000 shares authorized, 10,540,056 shares
issued and outstanding at March 31, 1998 105,400
Additional paid-in capital 39,761,325
Deficit accumulated during the development stage (32,712,436)
------------
Total stockholders' equity 7,154,289
------------
Total capitalization $ 9,366,146
============
Note 1: Does not include, as of March 31, 1998, (i) 1,213,000 shares of Common
Stock that may be issued upon the exercise of outstanding stock options at a
weighted average exercise price of $3.97 per share, (ii) 1,088,850 shares of
Common Stock that may be issued upon the exercise of outstanding warrants at a
weighted average exercise price of $3.92 per share, and (iii) 171,713 shares of
Common Stock that may be issued to CIBA on May 15, 1999. Options with respect
to 160,900 of the above 1,213,000 shares are currently exercisable at a weighted
average exercise price of $2.81 per share and the remaining balance will become
exercisable at various dates through March 2, 2008. All of the warrants are
currently exercisable and expire at various dates through June 30, 2002.
23
Schedule 2.1(c) (continued)
Computation of Principal Stockholders
As of 4/16/98
Beneficial Owner Total %
------------------ --------- ------
Xxxxxx 1,702,371 15.80%
CIBA 1,695,371 15.73%
Dawson Samberg 1,000,000 9.28%
Xxxx 665,250 6.17%
Heartland 615,000 5.71%
Capozza 132,259 1,23%
Xxxxxxx 70,150 *
Ruffett 36,850 *
Keates 35,950 *
Xxxxx 20,416 *
Xxxxxx 20,000 *
XxXxxxxx 5,000 *
Xxxxxx - *
2,688,246 24.95%
Includes vested options and warrants, where applicable
24
Schedule 2.1(s)
Registration Rights
The Company granted CIBA Vision Management, Inc. certain demand and piggy back
registration rights with respect to all shares of Common Stock held by CIBA. A
copy of the registration rights agreement has been filed with the SEC. There is
currently in effect a Form S-3 resale registration statement which includes the
shares held by CIBA. So long as this registration statement is in effect, the
obligations of the Company to CIBA under the registration rights agreement are
satisfied. The Company intends to keep the Form S-3 registration statement
containing the CIBA shares effective.
25
Exhibit C
CONVERSION PROCEDURES
This sets forth the procedures for conversion of the shares of Series
I Preferred Stock of the Company (the "Shares"), including the forms of
conversion notice to be provided upon conversion (except as set forth herein or
in the Certificate of Designation), instructions as to the procedures for
conversion, the form of legal opinion, if necessary, that shall be rendered by
the Company to the Company's transfer agent.
6 Notices. Holders of Shares may convert their Shares by
-------
delivering to the Company or its agent a written Notice of Conversion, duly
signed by or on behalf of the holder, stating the number of Shares to be
converted, in the form of Exhibit C-1 attached.
Such notices may be delivered to the Company or its agent by telephone
line facsimile, and shall be delivered prior to 6 p.m., New York time, on the
day prior to the date of requested conversion. The Company will (i) confirm its
receipt of the Notice of Conversion, and (ii) confirm the calculations therein
or indicate alternative calculations, by return facsimile by 9:30 a.m., New York
time, on the following Trading Day. Failure of the Company to send such return
facsimile shall evidence its acceptance of the calculations in the Notice of
Conversion.
No less than ten Shares (or such lesser number of Shares then held by
the holder) may be converted in any particular conversion, unless the Company
consents to conversion of a smaller number of Shares in any particular instance.
7 Delivery of Certificates. A holder of Shares will not be
------------------------
required physically to surrender the certificate(s) representing its converted
Shares to the Company or its agent, unless and until all of the Shares
represented by a given certificate of the holder are so converted. Each holder
of Shares and the Company will maintain records showing the number of Shares so
converted by such holder and the dates of such conversions, or will use such
other method, satisfactory to such holder and the Company, so as not to require
physical surrender of such certificates on each such conversion.
8 Issuance of Common Stock. On receipt by the Company from a
------------------------
holder of Shares of a Notice of Conversion by telephone line facsimile
transmission, meeting the requirements for conversion as in the Certificate of
Designations and this Exhibit C, the Company will issue and deliver, or cause to
be issued and delivered, to or as directed by such holder certificates for the
Common Stock issuable on such conversion, within three Trading Days after such
receipt, and the person converting will be deemed to be the holder of record of
the Common Stock issuable on such conversion, and all rights with respect to the
Shares being converted will forthwith terminate except the right to receive the
Common Stock or other securities or assets as herein provided on the Conversion
Date.
26
Exhibit C-1
FORM OF NOTICE OF CONVERSION
___________, 199__
BY FACSIMILE: 000-000-0000 or 407-________ (alternate)
Autonomous Technologies Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, CFO
cc: [ Name of Transfer Agent ]
Re: Series I Convertible Preferred Stock
------------------------------------
The undersigned hereby elects to convert the number of shares of
Series I Convertible Preferred Stock indicated below (being not less than ten
(10) Shares), into shares of Common Stock, par value $.01 per share of the
Company, as of the following date:
Date to Effect Conversion:
Number of shares of
Series I Preferred Stock being Converted:
Conversion Price (calculated as follows):
Low
Date Trading Price
---- -------------
1
2
3
4
5
-------------
Average =
Average x 0.9=_____________
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The number of shares of Common Stock to be received on conversion of __________
Shares of Series I Preferred Stock is ___________ shares.
Delivery Instructions:
---------------------
Certificates to be
issued in the name of:
Certificates to be
delivered to:
Date: ___________ _______________________________________________
Authorized Signature of Registered Holder
CONFIRMATION OF RECEIPT
OF NOTICE OF CONVERSION
AND CONVERSION CALCULATION:
Acknowledged:
AUTONOMOUS TECHNOLOGIES CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
28
Exhibit D
FORM OF LEGAL OPINION
(1) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Florida.
(2) The Shares are duly authorized, have been validly issued and are
fully paid and nonassessable. [The granting of the Option as provided in the
Purchase Agreement is duly authorized, and constitutes the valid and legally
binding obligations of the Company.] [The Warrant is duly authorized, has been
duly executed, validly issued and delivered by the Company, and constitutes the
valid and legally binding obligations of the Company.] The shares of Common
Stock issuable upon conversion of the Shares [and exercise of the Warrant] are
duly authorized and have been validly reserved for issuance and, upon issuance
in accordance with the terms of the Purchase Agreement, will be validly issued,
fully paid and nonassessable.
(3) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
obligations of the Company enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(4) It is not necessary in connection with the offer and sale of the
Shares, the Option and the Warrant in the manner contemplated by the Purchase
Agreement to register the offer or sale of the Shares or the Warrant under the
Securities Act of 1933.
29
