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Exhibit 99.1
SECURITIES PURCHASE AGREEMENT
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This SECURITIES PURCHASE AGREEMENT ("AGREEMENT") is entered into as of
September 5, 1997, by and between Molten Metal Technology, Inc., a Delaware
corporation (the "Company"), with headquarters located at 000-0 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000 and the purchasers (each a "Purchaser" and together the
"PURCHASERS") set forth on the execution pages hereof, with regard to the
following:
RECITALS
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A. The Company and Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
B. Purchasers desire to purchase, upon the terms and conditions
stated in this Agreement, Series A Convertible Participating Preferred Stock of
the Company set forth in the Certificate of Designations, Preferences and Rights
(the "CERTIFICATE OF DESIGNATION") attached hereto as EXHIBIT A (the "PREFERRED
STOCK" or the "CONVERTIBLE SECURITIES"), which shall be convertible into shares
of the Company's Common Stock, par value $.01 per share (the "COMMON STOCK").
The shares of Common Stock issuable upon conversion of or otherwise pursuant to
the Preferred Stock are referred to herein as the "CONVERSION SHARES". The
Preferred Stock and the Conversion Shares are collectively referred to herein as
the "SECURITIES." In connection herewith, the Company is also issuing to GEM
Ventures Ltd. warrants to purchase 566,000 shares of Common Stock in the form of
Exhibit A-1 hereto, pursuant to the Warrant Agreement, dated as of the date
hereof, between GEM Ventures Ltd. and the Company (the "Warrant Agreement").
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
in the form attached hereto as EXHIBIT B (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act, the rules and regulations promulgated thereunder and
applicable state securities laws.
AGREEMENTS
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NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Purchasers hereby agree as
follows:
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ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1 PURCHASE OF PREFERRED STOCK. Subject to the terms and conditions
of this Agreement, the Company shall issue and sell, and each Purchaser shall
purchase, the Preferred Stock as further contemplated hereby. The purchase price
(the "PURCHASE PRICE") per share of Preferred Stock shall be equal to $25,500.
Each Purchaser shall purchase the number of shares of Preferred Stock having the
total gross purchase price set forth on the signature page executed by such
Purchaser.
1.2 FORM OF PAYMENT. Each Purchaser shall pay the aggregate Purchase
Price for the Preferred Stock being purchased by such Purchaser by wire transfer
to, or for the benefit of, the Company, in accordance with the Company's written
wiring instructions, against delivery of duly executed stock certificates for
the same, and the Company shall deliver such Preferred Stock against delivery of
such aggregate Purchase Price. The obligations in this Agreement of each
Purchaser shall be separate from the obligations of each other Purchaser and
shall relate solely to the number of shares to be purchased by such Purchaser.
The obligations of the Company with respect to each Purchaser shall be separate
from the obligations of each other Purchaser and shall not be conditioned as to
any Purchaser upon the performance of obligations of any other Purchaser.
1.3 CLOSING DATE. Subject to the satisfaction (or waiver) of the
conditions set forth in Articles VI and VII below, the closing (the "Closing")
of the issuance, sale and purchase of the Securities pursuant to this Agreement
shall occur at 10:00 a.m. Chicago time, on September 8, 1997 (the "Closing
Date"), at the offices of Altheimer & Xxxx, 00 X. Xxxxxx Xxxxx, Xxxxxxx, XX
00000.
ARTICLE II
PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser represents and warrants, solely with respect to itself and
its purchase hereunder and not with respect to any other Purchaser or the
purchase hereunder by any other Purchaser (and no Purchaser shall be deemed to
make or have any liability for any representation or warranty made by any other
Purchaser), to the Company as set forth in this Article II. No Purchaser makes
any other representations or warranties, express or implied, to the Company in
connection with the transactions contemplated hereby and any and all prior
representations and warranties, if any, which may have been made by a Purchaser
to the Company in connection with the transactions contemplated hereby shall be
deemed to have been merged in this Agreement and any such prior representations
and warranties, if any, shall not survive the execution and delivery of this
Agreement.
2.1 INVESTMENT PURPOSE. Purchaser is purchasing the Convertible
Securities for Purchaser's own account for investment only and not with a view
toward or in connection with the public sale or distribution thereof. Purchaser
will not resell the Convertible Securities or any
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securities which may be issued upon conversion thereof except pursuant to sales
that are exempt from the registration requirements of the Securities Act and/or
sales registered under the Securities Act and any state securities laws, to the
extent applicable. Purchaser understands that Purchaser must bear the economic
risk of this investment indefinitely, unless the Securities are registered
pursuant to the Securities Act and any applicable state securities laws or an
exemption from such registration is available, and that the Company has no
present intention of registering any such Securities other than as contemplated
by the Registration Rights Agreement. By making the representations in this
Section 2.1, the Purchaser does not agree to hold the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at
any time in accordance with or pursuant to a registration statement or an
exemption from registration under the Securities Act and any state securities
laws, to the extent applicable.
2.2 ACCREDITED INVESTOR STATUS. Purchaser is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D.
2.3 RELIANCE ON EXEMPTIONS. Purchaser understands that the Convertible
Securities are being offered and sold to Purchaser in reliance upon specific
exemptions from the registration requirements of the United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of
Purchaser to acquire the Convertible Securities.
2.4 INFORMATION. Purchaser and its counsel have been furnished all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Convertible Securities which
have been specifically requested by Purchaser. Purchaser has been afforded the
opportunity to ask questions of the Company and has received what Purchaser
believes to be complete and satisfactory answers to any such inquiries. Neither
such inquiries nor any other due diligence investigation conducted by Purchaser
or any of its representatives shall modify, amend or affect Purchaser's right to
rely on the Company's representations and warranties contained in Article III.
Purchaser understands that Purchaser's investment in the Securities involves a
high degree of risk.
2.5 GOVERNMENTAL REVIEW. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities or an
investment therein.
2.6 TRANSFER OR RESALE. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless subsequently registered thereunder or an
exemption from such registration is available (which exemption the Company
expressly agrees may be established as contemplated in clauses (b) and (c) of
Section 5.1 hereof); (ii) any sale of such Securities made in reliance on Rule
144 under the Securities Act (or a successor rule) ("RULE 144") may be made only
in accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities without registration under
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the Securities Act under circumstances in which the seller may be deemed to be
an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder (in each case, other than pursuant to this Agreement or
the Registration Rights Agreement).
2.7 LEGENDS. Purchaser understands that, subject to Article V hereof,
the certificates for the Convertible Securities, and until such time as the
re-sale of the Conversion Shares has been registered under the Securities Act as
contemplated by the Registration Rights Agreement or otherwise may be sold by
Purchaser pursuant to Rule 144 as contemplated by Section 5.1, the certificates
for the Conversion Shares will bear a restrictive legend (the "LEGEND") in the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT
TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THOSE LAWS.
2.8 AUTHORIZATION; ENFORCEMENT. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable against Purchaser in accordance with their terms.
2.9 RESIDENCY. Purchaser is a resident of the jurisdiction set forth
under Purchaser's name on the signature page hereto executed by Purchaser.
2.10 XXXX-XXXXX-XXXXXX. Purchaser is not currently affiliated with
another Purchaser hereunder such that acquisitions by Purchaser would be
aggregated with acquisitions by such other purchaser for purposes of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended ("H-S-R"). In
the event that a filing under H-S-R is ever required as a result of the issuance
to Purchaser of Conversion Shares upon conversion of the Preferred Stock held by
such Purchaser, such Purchaser will comply with the requirements of H-S-R.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Purchaser that:
3.1 ORGANIZATION AND QUALIFICATION. The Company and each of its
subsidiaries is a corporation or limited partnership duly organized, validity
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, and has the requisite corporate power and authority
to own its properties and to carry on its business as now being conducted. The
Company and each of its subsidiaries is duly qualified as a foreign corporation
or limited partnership to do business and is in good standing in every
jurisdiction where the failure to so qualify would have a Material Adverse
Effect. "MATERIAL ADVERSE EFFECT" means any material adverse effect on either
(i) the business, operations, properties, financial condition, operating results
or prospects of the Company and its subsidiaries, taken as a whole on a
consolidated basis or (ii) the transactions contemplated hereby.
3.2 AUTHORIZATION; ENFORCEMENT. (a) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, and to issue and sell, perform its obligations
with respect to, the Convertible Securities in accordance with the terms hereof
and to issue the Conversion Shares in accordance with the terms and conditions
of the Certificate of Designation; (b) the execution, delivery and performance
of this Agreement and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including without limitation the issuance of the Convertible Securities and the
reservation for issuance and issuance of the Conversion Shares) have been duly
authorized by all necessary corporate action and, except as set forth on
SCHEDULE 3.2 hereof, no further consent or authorization of the Company, its
board of directors, or its stockholders or any other person, body or agency is
required with respect to any of the transactions contemplated hereby or thereby
(whether under rules of the Nasdaq National Market System ("NASDAQ"), the
National Association of Securities Dealers or otherwise); (c) this Agreement,
the Registration Rights Agreement and the Convertible Securities have been duly
executed and delivered by the Company; and (d) this Agreement, the Registration
Rights Agreement and the Convertible Securities constitute legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms.
3.3 CAPITALIZATION. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares reserved for issuance pursuant to the
Company's stock option plans, the number of shares reserved for issuance
pursuant to securities (other than the Convertible Securities) exercisable for,
or convertible into or exchangeable for any shares of Common Stock and the
number of shares to be initially reserved for issuance upon conversion of the
Convertible Securities is set forth on SCHEDULE 3.3. All of such outstanding
shares of capital stock have been, or upon issuance will be, validly issued,
fully paid and nonassessable. No shares of capital stock of the Company
(including the Preferred Stock and the Conversion Shares) are subject to
preemptive rights or any other similar rights of the stockholders of the
Company. Except as disclosed in SCHEDULE 3.3, as of the date of this Agreement,
(i) there are no outstanding options, warrants,
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scrip, rights to subscribe for, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries,
and (ii) there are no agreements or arrangements under which the Company or any
of its subsidiaries is obligated to register the sale of any of its or their
securities under the Securities Act (except the Registration Rights Agreement).
The Company has furnished to Purchaser true and correct copies of the Company's
Certificate of Incorporation as currently in effect ("CERTIFICATE OF
INCORPORATION"), and the Company's By-laws as currently in effect (the
"BY-LAWS"). The Company has set forth on SCHEDULE 3.3 all instruments and
agreements (other than the Certificate of Incorporation and By-laws) governing
securities convertible into or exercisable or exchangeable for Common Stock of
the Company (and the Company shall provide to Purchaser copies thereof upon the
request of Purchaser). The Company shall provide Purchaser with a written update
of this representation signed by the Company's Chief Executive Officer or Chief
Financial Officer on behalf of the Company as of the date of the Closing.
3.4 ISSUANCE OF SHARES. The Conversion Shares are duly authorized and
reserved for issuance, and, upon conversion of the Convertible Securities in
accordance with the terms thereof, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances and will
not be subject to preemptive rights or other similar rights of stockholders of
the Company. The Convertible Securities are duly authorized and reserved for
issuance, and, when issued and paid for in accordance with Article I of this
Agreement, will be validly issued, fully paid and nonassessable, and free from
all taxes, liens, claims and encumbrances (other than restrictions on transfer
imposed by federal and state securities laws and this Agreement and the
Registration Rights Agreement) and are not and will not be subject to preemptive
rights or other similar rights of stockholders of the Company. The Board of
Directors of the Company has unanimously approved the issuance of shares of
Common Stock upon conversion of shares of Preferred Stock pursuant to the terms
hereof in the aggregate in excess of twenty (20) percent of the outstanding
shares of Common Stock (the "RULE 4460(i) AUTHORIZATION") and has unanimously
recommended to the stockholders of the Company the approval of the Rule 4460(i)
Authorization. Accordingly, no further corporate authorization or approval
(other than the Shareholder Approval (as defined in Section 4.9)) is required
under the rules of the Nasdaq with respect to the transactions contemplated by
this Agreement, including, without limitation, the issuance of the Conversion
Shares and the inclusion thereof on the Nasdaq.
3.5 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for issuance, as
applicable, of the Convertible Securities and Conversion Shares) will not (a)
result in a violation of the Certificate of Incorporation or By-laws, (b) except
as set forth on SCHEDULE 3.5, 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
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Company or any of its subsidiaries is a party (except for such conflicts,
defaults, terminations, amendments, accelerations, and cancellations as would
not, individually or in the aggregate, have a Material Adverse Effect), or (c)
assuming the accuracy of the Purchasers' representations in Article II and their
compliance with their agreements in Article II and assuming the accuracy of
GEM's representations in of the Warrant Agreement and the compliance by GEM with
its agreements in the Warrant Agreement, result in a violation of any law, rule,
regulation, order, judgment or decree (including, without limitation, U.S.
federal and state securities laws and regulations) applicable to the Company or
any of its subsidiaries, or by which any property or asset of the Company or any
of its subsidiaries, is bound or affected. Neither the Company nor any of its
subsidiaries is in violation of its Certificate of Incorporation, by-laws or
other organizational documents, and neither the Company nor any of its
subsidiaries is in default (and no event has occurred which, with notice or
lapse of time or both, would put the Company or any of its subsidiaries in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, except for possible defaults or rights as
would not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Company and its subsidiaries are not being conducted, and shall
not be conducted so long as a Purchaser owns any of the Preferred Stock, in
violation of any law, ordinance, rule, regulation, order, judgment or decree of
any governmental entity, court or arbitration tribunal except for possible
violations the sanctions for which either singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. Except as set forth on
SCHEDULE 3.5, the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or the
Registration Rights Agreement or to perform its obligations in accordance with
the terms hereof or thereof. The Company is not in violation of the listing
requirements of Nasdaq and does not reasonably anticipate that the Common Stock
will be delisted by Nasdaq for the foreseeable future.
3.6 REGISTRATION AND SEC DOCUMENTS. The Common Stock is registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and has been so registered since 1993. Except as disclosed in
SCHEDULE 3.6, since December 31, 1993, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act. The Company
has delivered to each Purchaser true and complete copies of the 1997 SEC
Documents (as herein defined), except for exhibits, schedules and incorporated
documents (the Company's Annual Report on Form 10-K for the year ended December
31, 1996, Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997, Current Reports on Form 8-K dated January 3, 1997 (as amended
on February 24, 1997), February 13, 1997, April 3, 1997 (as amended April 18,
1997), and June 25, 1997 (as amended August 29, 1997), Forms S-1 with respect to
$142,750,000 of 5 1/2% Convertible Subordinated Notes Due 2006 and 3,683,871
shares of Common Stock (subject to increase) upon conversion thereof and 307,735
shares of Common Stock, respectively, filed with the SEC on August 28, 1996 (as
amended on December 6, 1996, December 10, 1996 and June 25, 1997) and September
20, 1996 (as amended on December 18, 1996 and June 25, 1997) respectively,
referred to herein as the
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"1997 SEC DOCUMENTS"). As of their respective dates, the 1997 SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to the
1997 SEC Documents, and none of the 1997 SEC Documents, at the time they were
filed with the SEC, 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. Except as set forth on SCHEDULE 3.6 or in a subsequently
filed 1997 SEC Document, none of the statements made in any such 1997 SEC
Documents is, or has been, required to be updated or amended under applicable
law. The financial statements of the Company included in the 1997 SEC Documents
have been prepared in accordance with U.S. generally accepted accounting
principles, consistently applied, and the rules and regulations of the SEC
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they do not include footnotes or are condensed
or summary statements) and fairly present, in all material respects, the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, immaterial year-end audit adjustments). The Filed SEC
Documents contain a complete and accurate list of all material (within the
meaning of S-K Item 601) undischarged written or oral contracts, agreements,
leases or other instruments to which the Company or any subsidiary is a party or
by which the Company or any subsidiary is bound or to which any of the
properties or assets of the Company or any subsidiary is subject (each a
"CONTRACT"). None of the Company, its subsidiaries or, to the best knowledge of
the Company, any of the other parties thereto, is in breach or violation of any
Contract, which breach or violation could reasonably be expected to have a
Material Adverse Effect. No event, occurrence or condition exists which, with
the lapse of time, the giving of notice, or both, or the happening of any
further event or condition, would become a breach or default by the Company or
its subsidiaries under any Contract which breach or default could reasonably be
expected to have a Material Adverse Effect.
3.7 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996 there has been
no material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or prospects
of the Company, except as disclosed in SCHEDULE 3.7 or disclosed in the 1997 SEC
Documents such that the Purchasers could reasonably be expected to understand
the significance of such disclosure.
3.8 ABSENCE OF LITIGATION. Except as disclosed in SCHEDULE 3.8 or
disclosed in the 1997 SEC Documents such that the Purchasers could reasonably be
expected to understand the significance of such disclosure, there is no action,
suit or proceeding before or by any court, public board, governmental agency or
authority, or self-regulatory organization or body (a "Public Authority")
pending or, to the knowledge of the Company or any of its subsidiaries,
threatened, and to the knowledge of the Company there is no inquiry or
investigation before or by any Public Authority pending or threatened, against
or affecting the Company, any of its subsidiaries, or any of their respective
directors or officers in their capacities as such, wherein an unfavorable
decision, ruling or finding could reasonably be expected to have a Material
Adverse Effect. To the Company's knowledge, there are no facts which, if known
by a potential claimant
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or governmental agency or authority, could give rise to a claim or proceeding
which, if asserted or conducted with results unfavorable to the Company or any
of its subsidiaries, could reasonably be expected to have a Material Adverse
Effect.
3.9 DISCLOSURE. No information relating to or concerning the Company
set forth in this Agreement or the 1997 SEC Documents, read together as a whole,
contains an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made herein or therein, in light
of the circumstances under which they were made, not misleading. Except for the
execution and performance of this Agreement, the Company is not in possession of
any material fact (within the meaning of the federal securities laws of the
United States) with respect to the Company or any of its subsidiaries which has
not been publicly disclosed.
3.10 ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF THE SECURITIES.
The Company acknowledges and agrees that Purchasers are not acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement or the transactions contemplated hereby, that this
Agreement and the transaction contemplated hereby, and the relationship between
each Purchaser and the Company, are "arms-length", and that any statement made
by any Purchaser, or any of its representatives or agents, in connection with
this Agreement or the transactions contemplated hereby is not advice or a
recommendation, is merely incidental to each Purchaser's purchase of the
Securities and has not been relied upon in any way by the Company, its officers,
directors or other representatives. The Company further represents to Purchasers
that the Company's decision to enter into this Agreement and the transactions
contemplated hereby has been based solely on an independent evaluation by the
Company and its representatives.
3.11 NO GENERAL SOLICITATION. Neither the Company nor any person acting
on behalf of the Company has conducted any "general solicitation," as described
in Rule 502(c) under Regulation D, with respect to any of the Securities being
offered hereby.
3.12 NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would prevent the parties hereto from
consummating the transactions contemplated hereby pursuant to an exemption from
registration under the Securities Act pursuant to the provisions of Regulation
D. The offer and sale of the Preferred Stock to the Purchasers as contemplated
by this Agreement and the offer and issuance of the Conversion Shares in
connection with the Preferred Stock are exempt from the registration
requirements of the Securities Act, assuming the accuracy of the representations
and warranties herein contained of each Purchaser to the extent relevant for
such determination and assuming the accuracy of GEM's representations in the
Warrant Agreement to the extent relevant for such determination.
3.13 NO BROKERS. The Company has taken no action which would give rise
to any claim by any person for brokerage commissions, finder's fees or similar
payments by Purchaser relating to this Agreement or the transactions
contemplated hereby, except for dealings with (i)
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Global Emerging Markets, Ltd. and GEM Advisors, Inc. (collectively, "GEM/XXXX")
pursuant to the August 11, 1997 letter agreement with the Company (the "GEM
AGREEMENT") and (ii) Lazard Freres & Co. and Xxxxxxxxxxx & Co. Inc. (the fees of
which shall be paid in full by the Company). The Company will indemnify each
Purchaser from and against any fees and expenses sought by GEM/XXXX pursuant to
the GEM Agreement or by Lazard Freres & Co. or Xxxxxxxxxxx & Co. Inc.
3.14 ACKNOWLEDGMENT OF DILUTION. The number of Conversion Shares
issuable upon conversion of the Convertible Securities may increase
substantially in certain circumstances, including the circumstance wherein the
trading price of the Common Stock declines. The Company's executive officers and
directors have studied and fully understand the nature of the securities being
sold hereunder and recognize that they have a potential dilutive effect. The
board of directors of the Company has concluded in its good faith business
judgment that such issuance is in the best interests of the Company. The Company
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Convertible Securities is binding upon it and enforceable regardless of the
dilution that such issuance may have on the ownership interests of other
stockholders.
3.15 INTELLECTUAL PROPERTY. Each of the Company and its subsidiaries
owns or possesses adequate and enforceable rights to use all material patents,
patent applications, trademarks, trademark applications, trade names, service
marks, copyrights, copyright applications, licenses, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other similar rights and proprietary
knowledge (collectively, "INTANGIBLES") used or necessary for the conduct of its
business as now being conducted and as previously described in the 1997 SEC
Documents. There is no material claim pending or to the Company's knowledge
threatened against the Company or any of its subsidiaries to the effect that the
Company or any subsidiary infringes on or is in conflict with any right of any
other person with respect to any Intangibles, and to the Company's knowledge
there is no basis for any such material claim. The Company has properly paid all
required maintenance fees with respect to, and the Company owns all right, title
and interest in and to, U.S. Patent No. 5,177,304 and such patent is, and at all
times has been, duly and validly issued to the Company and in full force and
effect.
3.16 FOREIGN CORRUPT PRACTICES. Except for any of the following that
could not reasonably be expected individually or in the aggregate to have a
Material Adverse Effect: neither the Company, nor any of its subsidiaries, nor
any director, officer, agent, employee or other person acting on behalf of the
Company or any subsidiary has, in the course of his actions for, or on behalf
of, the Company, used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.
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3.17 KEY EMPLOYEES. Each Key Employee (as defined below) is currently
serving the Company in the capacity disclosed in SCHEDULE 3.17. No Key Employee,
to the best of the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each Key Employee does not subject the Company or any of its
subsidiaries to any liability with respect to any of the foregoing matters.
Except as set forth on SCHEDULE 3.17, no Key Employee has, to the best of the
knowledge of the Company, any intention to terminate or limit his employment
with, or services to, the Company, nor is any such Key Employee subject to any
constraints (e.g., litigation) which would cause such employee to be unable to
devote his full time and attention to such employment or services. "Key
Employee" means each of Xxxxxxx Xxxxx, III, Xxxxxxxx X. Xxxxx and Xxxxxxx
Xxxxxx.
3.18 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES. The Company does not
make any other representations or warranties, express or implied, to the
Purchasers in connection with the transaction contemplated hereby and any and
all prior representations and warranties, if any, which may have been made by
the Company to a Purchaser in connection with the transactions contemplated
hereby shall be deemed to have been merged in this Agreement and any such prior
representations and warranties, if any, shall not survive the execution and
delivery of this Agreement.
ARTICLE IV
COVENANTS
4.1 BEST EFFORTS. The parties shall use their best efforts timely to
satisfy each of the conditions described in Articles VI and VII of this
Agreement.
4.2 SECURITIES LAWS. The Company agrees to file a Form D with respect
to the Securities with the SEC as required under Regulation D and to provide a
copy thereof to each Purchaser when filed. The Company agrees to file a Form 8-K
disclosing this Agreement and the transactions contemplated hereby with the SEC
within three business (3) days following the date of Closing. Such 8-K shall
include at least this Agreement, the Certificate of Designations, the
Registration Rights Agreement and the Warrants as exhibits thereto. The Company
shall, on or prior to the date of Closing, take such action as is necessary to
sell the Securities to each Purchaser in accordance with applicable securities
laws of the states of the United States, and shall provide evidence of any such
action so taken to each Purchaser on or prior to the date of the Closing.
Without limiting any of the Company's obligations under this Agreement, the
Registration Rights Agreement or the Certificate of Designation, from and after
the date of Closing, neither the Company nor any person acting on its behalf
shall take any action which would adversely affect any exemptions from
registration under the Securities Act with respect to the offer or sale of the
Preferred Stock to the Purchasers as contemplated by this Agreement or the
Conversion Shares to be issued pursuant to the terms of the Preferred Stock.
4.3 REPORTING STATUS. So long as any Purchaser beneficially owns any
Preferred Stock and for six months thereafter, the Company shall timely file all
reports required to be filed with
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the SEC pursuant to the Exchange Act, and except as permitted under Section 4.8
the Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
4.4 RESTRICTION ON BELOW MARKET ISSUANCE OF SECURITIES. (a) For a
period of one hundred and eighty (180) days following the date of Closing, the
Company shall not issue or agree to issue, any equity securities of the Company
(or any security convertible into or exercisable or exchangeable, directly or
indirectly, for equity securities of the Company) (collectively "Restricted
Securities") if such securities are issued at a price (or in the case of
securities convertible into or exercisable or exchangeable, directly or
indirectly, for Common Stock such securities provide for a conversion, exercise
or exchange price) which may be less than the then current market price for
Common Stock on the date of issuance (in the case of Common Stock) or the date
of conversion, exercise or exchange (in the case of securities convertible into
or exercisable or exchangeable directly or indirectly for Common Stock). The
preceding sentence shall not prohibit the Company from issuing or agreeing to
issue equity securities: (i) to Purchasers pursuant to this Agreement, (ii)
pursuant to any employee stock option, stock purchase or restricted stock plan
of the Company in effect on the date hereof up to the aggregate amounts set
forth on SCHEDULE 3.3 hereto, (iii) pursuant to any existing security, option,
warrant, scrip, call or commitment or right in each case as disclosed on
SCHEDULE 3.3 hereof, (iv) in connection with any bond or other debt financing
for MMT of Tennessee Inc. ("MMTT") for the purpose of reimbursing MMTT or the
Company for costs incurred in constructing the Quantum CEP plant located in Oak
Ridge, Tennessee, provided that such Restricted Securities are limited to the
issuance of warrants to acquire shares of Common Stock with such warrants having
an exercise price at or greater than the average of the Closing Bid Prices (as
defined in the Certificate of Designation) of the Common Stock for the five (5)
trading days immediately preceding the date of issuance of the warrants
(provided that such warrants may be at an exercise price less than such average
if consented to in writing by two-thirds in interest of the then outstanding
shares of Preferred Stock), or (v) pursuant to a strategic joint venture or
partnership entered into by the Company, undertaken at the reasonable discretion
of the Board of Directors of the Company, the primary purpose of which is not to
raise equity capital.
4.5 INFORMATION. The Company agrees to send the following reports to
each Purchaser until such Purchaser transfers, assigns or sells all of its
Securities: (a) within five (5) days after the filing with the SEC, a copy of
its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, any proxy
statements and any Current Reports on Form 8-K; and (b) within one (1) day after
release, copies of all press releases issued by the Company or any of its
subsidiaries. The Company further agrees to promptly provide to any Holder any
information with respect to the Company, its properties, or its business or
Holder's investment as such Holder may reasonably request; provided, however,
that the Company shall not be required to give any Holder any material nonpublic
information. If any information requested by a Holder from the Company contains
material nonpublic information, the Company shall inform the Holder in writing
that the information requested contains material nonpublic information and shall
in no event provide such information to Holder without the express prior written
consent of such Holder after being so informed.
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4.6 RESERVATION OF SHARES. The Company shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares to provide for the full conversion of the outstanding Preferred Stock and
issuance of the Conversion Shares in connection therewith and as otherwise
required by the Certificate of Designation. The Company shall not reduce the
number of shares reserved for issuance upon conversion of the Preferred Stock
without the consent of Purchasers holding a majority of the Preferred Stock then
held by all Purchasers.
4.7 LISTING. For so long as any Purchaser owns any of the Securities,
the Company shall continue the listing and trading of its Common Stock on the
Nasdaq, the Nasdaq Small Cap Market, the New York Stock Exchange (the "NYSE") or
the American Stock Exchange (the "Amex"). In addition, during such period, the
Company shall secure (within 30 days after the Closing but in any event prior to
the earlier of the Filing Date as defined in, and the filing of the Registration
Statement required to be filed pursuant to, the Registration Rights Agreement)
and maintain listing and trading of the Conversion Shares on each national
securities exchange and each automated quotation system upon which shares of
Common Stock are then listed (subject, as appropriate to official notice of
issuance) and comply in all respects with the Company's reporting, filing and
other obligations under the by-laws or rules of the National Association of
Securities Dealers, the Nasdaq, any other such automated quotation system and
any such national securities exchange, as applicable. During the period of time
in which the Cap Amount (as defined in the Certificate of Designation) is in
effect, the Company shall not be required to secure the listing on Nasdaq of a
number of Conversion Shares in excess of such Cap Amount.
4.8 CORPORATE EXISTENCE. So long as any Purchaser beneficially owns
any Preferred Stock, the Company shall maintain its corporate existence, except
in the event of a merger, consolidation or sale of all or substantially all of
the Company's assets, as long as the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith regardless of
whether or not the Company would have had a sufficient number of shares of
Common Stock authorized and available for issuance in order to effect the
conversion of all Preferred Stock outstanding as of the date of such transaction
and (ii) is a publicly traded corporation whose Common Stock is listed for
trading on the Nasdaq, the Nasdaq Small Cap Market, the New York Stock Exchange
or the American Stock Exchange.
4.9 SHARE AUTHORIZATION. The Company covenants and agrees that it
shall (i) solicit by proxy the authorization and approval (the "SHAREHOLDER
APPROVAL") of the Rule 4460(i) Authorization by the stockholders of the Company
not later than 60 days following the date of the Closing, and (ii) use its best
efforts to obtain the Shareholder Approval not later than 120 days following the
date of the Closing, including, without limitation, with respect to the proxies
referred to in Section 7.1(x) hereof.
4.10 HEDGING TRANSACTIONS. The Company understands that some or all of
the Purchasers are so-called "hedge" funds and the Company hereby expressly
agrees that each Purchaser shall not in any way be prohibited or restricted from
any purchases or sales of any
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securities or other instruments of, or related to, the Company or any of its
securities, including, without limitation, puts, call, futures contracts, short
sales and hedging and arbitrage transactions. Each Purchaser acknowledges that
such purchases, sales and other transactions may be subject to various Federal
and state securities laws and agrees to comply with all such applicable
securities laws and any such transactions will not be effected with the
intention of reducing the price of the Common Stock.
ARTICLE V
LEGEND REMOVAL, TRANSFER, AND CERTAIN SALES
5.1 REMOVAL OF LEGEND. The Legend shall be removed and the Company
shall issue a certificate without any legend to the holder of any Security upon
which such Legend is stamped, and a certificate for a security shall be
originally issued without any legend, if, unless otherwise required by
applicable state securities laws, (a) the sale of such Security is registered
under the Securities Act, (b) other than with respect to Rule 144 (which is the
subject matter of clause (c) next below (except to the extent related to changes
in law or rules and regulations or practice with respect thereto after the date
hereof), such holder provides the Company with an opinion of counsel, such
counsel to be reasonably acceptable to the Company and with the form, substance
and scope of such opinion to be reasonably satisfactory to the Company, to the
effect that a public sale or transfer of such Security may be made without
registration under the Securities Act or, (c) such Security can be sold pursuant
to Rule 144 and a registered broker dealer provides to the Company's transfer
agent and counsel copies of a customary broker's 144 letter (or an appropriate
"will sell" letter) and a customary seller's representation letter with respect
to such a sale made (or, as the case may be, to be made) pursuant to Rule 144
(and, in the case of such a "will sell" letter, in a form reasonably
satisfactory to the Company) or (d) such Security can be sold pursuant to Rule
144(k). Each Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the Legend has been removed, or which
were originally issued without the Legend, pursuant to an effective registration
statement and to deliver a prospectus in connection with such sale or in
compliance with an exemption from the registration requirements of the
Securities Act. In the event the Legend is removed from any Security or any
Security is issued without the Legend and thereafter the effectiveness of a
registration statement covering the resale of such Security is suspended or the
Company determines that a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to Purchaser
holding such Security, the Company may require that the Legend be placed on any
such Security that cannot then be sold pursuant to an effective registration
statement or Rule 144(k) or with respect to which the opinion referred to in
clause (b) next above has not been rendered, which Legend shall be removed when
such Security may be sold pursuant to an effective registration statement or
Rule 144(k) or such holder provides the opinion with respect thereto described
in clause (b) next above or the materials referred to in clause (c) above have
been delivered.
5.2 TRANSFER AGENT INSTRUCTIONS. The Company shall instruct its
transfer agent to issue certificates, registered in the name of each Purchaser
or its nominee, for the Conversion Shares in such amounts as specified from time
to time by such Purchaser to the Company upon, and in accordance with, the
conversion of the Preferred Stock. Such certificates shall bear a legend only
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in the form of the Legend, and only to the extent permitted by Section 5.1
above, and the legend referred to in Section 5.3. The Company warrants that no
instruction other than such instructions referred to in this Article V, and no
stop transfer instructions other than stop transfer instructions to give effect
to Section 2.6 hereof in the case of the Conversion Shares prior to registration
of the Conversion Shares under the Securities Act, will be given by the Company
to its transfer agent and that the Securities shall otherwise be freely
transferable on the books and records of the Company. Nothing in this Section
shall affect in any way a Purchaser's obligations and agreement set forth in the
second sentence of Section 2.1 and Section 5.1 hereof to resell the Securities
pursuant to an effective registration statement and to deliver a prospectus in
connection with such sale or in compliance with an exemption from the
registration requirements of applicable securities laws. Without limiting the
foregoing, if (a) a Purchaser provides the Company with an opinion of counsel,
which counsel must be reasonably satisfactory to the Company and which opinion
must be in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from
registration or (b) a Purchaser transfers Securities pursuant to Rule 144, the
Company shall permit the transfer, and, in the case of the Conversion Shares,
promptly instruct its transfer agent to issue one or more certificates in such
name and in such denomination as specified by such Purchaser in order to effect
such a transfer or sale. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Purchaser by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Article V will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Article V, that a
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
5.3 LEGEND REMOVAL FEE. If Purchaser or any Affiliate (as defined
under the Exchange Act) to whom the Preferred Stock is transferred in accordance
with the provisions of paragraph 5.2, within one year after the date of Closing
acquires Common Stock in a conversion based solely on the Variable Conversion
Price (as provided in Exhibit A) and either such shares of Common Stock are
originally issued without the Legend or within such one year period the Legend
is removed therefrom (in each case in accordance with this Article V), then such
Purchaser or Affiliate, as the case may be, shall pay to the Company, within ten
(10) business days following such acquisition of such Common Stock without such
Legend or such removal of such Legend, as the case may be, in consideration of
the issuance without the Legend of such Common Stock or the removal of such
Legend, a fee in cash (or, at the Company's option (to be exercised by written
notice to Purchasers from time to time prior to the twentieth (20th) day of a
calendar month with respect to payments for the next calendar month (or portion
thereof as the Company may specify) in Common Stock) equal to "X" times the
number of Common Shares so issued or de-legended (as the case may be) times the
average of the Closing Bid Prices of the Common Stock for the five trading days
immediately preceding the date of conversion or de-legending (as the case may
be) with respect to such shares of Common Stock, as follows (and only to such
extent):
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DAYS AFTER CLOSING "X"
------------------ ---
121-180 .08
181-240 .06
241-300 .04
301-360 .02
greater than 360 0.00
Subject to the Company's compliance with its obligations to deliver Conversion
Shares in accordance with this Agreement and the Certificate of Designation, any
such fee not paid within ten (10) business days after receipt by the Purchaser
of the applicable shares of Common Stock shall bear interest at a rate per annum
of 18% until such payment is made. In addition, while any such payment is past
due, and provided the Company has provided written notice to such effect to a
Purchaser and such Purchaser does not, in good faith, dispute such default, and
the Company is not then otherwise in default with respect to the delivery of
Conversion Shares in accordance with this Agreement and the Certificate of
Designation, the Company shall not be required to remove a Legend or issue
shares of Common Stock not bearing a Legend on behalf of such Purchaser or
Affiliate until such payment is made in full. Notwithstanding anything to the
contrary contained in this Agreement, until the first anniversary of the Closing
the Preferred Stock may bear a legend referring to (but not summarizing or
reproducing) "the existence of a Legend Removal Fee" under this Agreement. The
obligations in this Section 5.3 shall expire and be of no further force or
effect if the Common Stock becomes listed on the Nasdaq Small Cap Market or in
the event of an Override Election (as defined in the Certificate of
Designations). There shall be only one fee payable under this Section 5.3 with
respect to any particular shares of Common Stock acquired upon conversion of the
Preferred Stock (whether or not new certificates for such shares are
subsequently issued and whether or not any certificates representing directly or
indirectly such shares are subsequently re-legended pursuant to terms hereof).
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
6.1 CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of
the Company hereunder to issue and sell the Convertible Securities to a
Purchaser at the Closing is subject to the satisfaction, as of the date of the
Closing and with respect to such Purchaser, of each of the following conditions
thereto, provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion:
(i) Such Purchaser shall have executed the signature page to
this Agreement and the Registration Rights Agreement and delivered the
same to the Company.
(ii) Such Purchaser shall deliver the applicable Purchase Price
for the Convertible Securities purchased at the Closing.
(iii) The representations and warranties of such Purchaser shall
be true and correct as of the date when made and as of the Closing as
though made at that time, and such Purchaser shall have performed,
satisfied and complied in all material respects with
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the covenants and agreements required by this Agreement to be performed
or complied with by such Purchaser at or prior to the Closing.
(iv) 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
or any self-regulatory organization having authority over the matters
contemplated hereby which restricts or prohibits the consummation of any
of the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE
7.1 The obligation of each Purchaser hereunder to purchase the
Convertible Securities to be purchased by it on the date of the Closing is
subject to the satisfaction of each of the following conditions, provided that
these conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser (with respect to it) at any time in such Purchaser's sole discretion:
(i) The Company shall have executed the signature page to this
Agreement and the Registration Rights Agreement and delivered the same to
Purchaser.
(ii) The Company shall have delivered duly executed certificates
for the Preferred Stock (in such denominations as Purchaser shall
request) being so purchased by Purchaser at the Closing.
(iii) The Common Stock shall be listed on the Nasdaq and trading
in the Common Stock shall not have been suspended by the Nasdaq, the SEC
or other regulatory authority and no delisting or suspension shall be
reasonably likely for the foreseeable future.
(iv) The representations and warranties of the Company shall be
true and correct as of the date when made and as of the Closing as though
made at that time and the Company shall have performed, satisfied and
complied in all material respects with the covenants and agreements
required by this Agreement to be performed or complied with by the
Company at or prior to the Closing. Purchaser shall have received a
certificate, executed on behalf of the Company by the Chief Executive
Officer or Chief Financial Officer of the Company, dated as of the
Closing to the foregoing effect and as to such other matters as may be
reasonably requested by Purchaser.
(v) 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
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
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(vi) Purchaser shall have received the officer's certificate
described in Section 3.3, dated as of the Closing.
(vii) Purchaser shall have received opinions of the Company's
counsel, dated as of the Closing, in the form attached hereto as
EXHIBIT C.
(viii) The Company's transfer agent has agreed to act in
accordance with irrevocable instructions in the form attached hereto as
EXHIBIT D.
(ix) The Company shall have obtained agreements with each of
Messrs. Haney, Preston, Xxxxx, Downs and Xxxxxx restricting dispositions
of Common Stock beneficially owned by such persons and in the form
attached hereto as EXHIBIT E.
(x) The Company shall have received from each director of the
Company and each executive officer of the Company an irrevocable proxy in
the form attached hereto as EXHIBIT F.
(xi) The Certificate of Designation shall have been accepted for
filing with the Secretary of State of the State of Delaware and a copy
thereof certified by the Secretary of State of Delaware shall have been
delivered to Purchaser.
ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS
8.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts
located in the State of Delaware and the state courts located in the County of
New Castle in the State of Delaware in any suit or proceeding based on or
arising under this Agreement or the transactions contemplated hereby and
irrevocably agree that all claims in respect of such suit or proceeding may be
determined in such courts. The Company and each Purchaser irrevocably waives the
defense of an inconvenient forum to the maintenance of such suit or proceeding.
The Company and each Purchaser further agree that service of process upon the
Company and each Purchaser mailed by first class mail shall be deemed in every
respect effective service of process upon the Company and each Purchaser in any
suit or proceeding arising hereunder. Nothing herein shall affect a Purchaser's
or the Company's right to serve process in any other manner permitted by law.
The parties hereto agree that a final non-appealable judgment in any such suit
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
8.2 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, including, without limitation, by facsimile transmission, all of
which counterparts 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. In the event any signature page is delivered
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by facsimile transmission, the party using such means of delivery shall cause
additional original executed signature pages to be delivered to the other
parties.
8.3 HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.4 SEVERABILITY. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
8.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the maters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor any Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and Purchasers holding two-thirds in interest of the then
outstanding Preferred Stock purchased hereunder; provided, however, that no such
amendment shall affect any Purchaser differently than any other Purchaser
without the written consent of such Purchaser so differently affected.
8.6 NOTICE. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or by
facsimile-machine confirmed telecopy, and shall be deemed delivered at the time
and date of receipt (which shall include telephone line facsimile transmission).
The addresses for such communications shall be:
If to the Company:
Molten Metal Technology, Inc.
000-0 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telecopy: (000)000-0000
Attention: Xxxxxxx X. Xxxxx, III
CEO
with a copy to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000)000-0000
Attention: Xxxx X. Xxxxxxxxxxxx, Esq.
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If to CC Investments, LDC:
CC Investments, LDC
Corporate Centre, West Bay Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
with a copy to:
Castle Creek Partners, LLC
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Portfolio Manager
and with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to any other Purchaser, to such address set forth under such Purchaser's name
on the signature page hereto executed by such Purchaser. Each party shall
provide notice to the other parties of any change in address.
8.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, each Purchaser may assign its rights and
obligations hereunder to any of its "affiliates," as that term is defined under
the Exchange Act, without the consent of the Company so long as such affiliate
is an accredited investor. This Section 8.7 shall not limit each Purchaser's
right to transfer the Securities pursuant to the terms of this Agreement
(including, without limitation, to any pledgee), or to assign such Purchaser's
rights hereunder to any such transferee (and all such rights may in fact be so
assigned to any such transferee) (provided such transferee does not acquire the
securities pursuant to a registration under the Securities Act or Rule 144. No
Purchaser will without the prior consent of the Company transfer (other than to
an Affiliate or a pledgee) any shares of Preferred Stock unless the amount
transferred is at least 4 shares (or such lesser number as then owned by such
Purchaser).
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8.8 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.
8.9 SURVIVAL. The representations and warranties of the Company and
the agreements and covenants set forth in Articles III, IV, V and VIII shall
survive the closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of Purchasers. The Company agrees to indemnify and
hold harmless each Purchaser and each of such Purchaser's officers, directors,
employees, partners, agents and affiliates for loss or damage arising as a
result of or related to (a) any material breach by the Company of any of its
representations or covenants set forth herein or (b) any cause of action, suit
or claim brought or made against such indemnitee and arising out of or resulting
from the execution, delivery, performance or enforcement of this Agreement or
any other instrument, document or agreement executed pursuant hereto or
contemplated hereby, any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the Preferred
Stock or the status of any Purchaser, or any holder of Preferred Stock or the
Conversion Shares, as an investor in the Company, except for any such loss or
damage which directly and primarily results from the particular indemnitee's
gross negligence, willful misconduct or intentional breach of any representation
and warranty or covenant thereof contained in this Agreement (it being
understood that to the extent that the foregoing undertaking by the Company in
this clause (b) is unenforceable for any reason with respect to any loss or
damage, the Company shall make the maximum contribution to the payment and
satisfaction of each such loss and damage which is permissible under applicable
law), in each case including advancement of expenses as they are incurred. The
representations and warranties of the Purchasers and the agreements and
covenants set forth in Articles II, IV, V and VIII shall survive the closing
hereunder notwithstanding any investigation conducted by or on behalf of the
Company. Any party seeking indemnification under this Section 8.9 (the
"INDEMNIFIED PARTY") shall promptly notify the other party hereto obligated to
provide indemnification hereunder (the "INDEMNIFYING PARTY") of any action,
suit, proceeding, demand or breach (a "CLAIM") with respect to which the
Indemnified Party claims indemnification hereunder; PROVIDED that, failure of
the Indemnified Party to give such notice shall not relieve any Indemnifying
Party of its obligations under this SECTION 8.9 except to the extent, if at all,
that such Indemnifying Party shall have been prejudiced thereby. If such Claim
relates to any action, suit, proceeding or demand instituted against the
Indemnified Party by a third party (a "THIRD PARTY CLAIM"), upon receipt of such
notice from the Indemnified Party, the Indemnifying Party shall be entitled to
assume the defense of such Third Party Claim, and in the case of such an
assumption the Indemnifying Party shall diligently and in good faith prosecute
the defense of such Third Party Claim and shall, subject to the foregoing, have
the authority to negotiate, compromise and settle such Third Party Claim.
Notwithstanding the foregoing provisions, (i) no Indemnifying Party shall be
entitled to settle any Third Party Claim without the Indemnified Party's prior
written consent (which consent shall not be unreasonably withheld), and (ii) no
Indemnified Party seeking indemnification hereunder with respect to a Third
Party Claim shall be entitled to settle any Third Party Claim without the
Indemnifying Party's prior written consent (which consent shall not be
unreasonably withheld).
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8.10 PUBLIC FILINGS; PUBLICITY. Immediately following execution on this
Agreement, the Company shall issue a press release with respect to the
transactions contemplated hereby. The Company and each Purchaser shall have the
right to approve before issuance any press releases (including the foregoing
press release), SEC or other filings, or any other public statements, with
respect to the transactions contemplated hereby; PROVIDED, HOWEVER, that the
approval of each Purchaser shall not be unreasonably withheld and such Purchaser
agrees that it will review and respond to any proposed disclosure in a timely
manner; and PROVIDED FURTHER that the Company shall be entitled, without the
prior approval of any Purchaser, to make any press release or SEC, NASDAQ, NASD
or exchange filings with respect to such transactions as is required by
applicable law and regulations (although each Purchaser shall (to the extent
time permits) be consulted by the Company in connection with any such press
release prior to its release and shall be provided with a copy thereof).
8.11 FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby. In addition, promptly following the Closing,
the Company shall use its reasonable efforts to legend the shares subject to
proxy in accordance with the provisions of the proxies contemplated by 7.1(x)
and to obtain a proxy, in the form of Exhibit F, from the Travelers Companies.
8.12 REMEDIES. No provision of this Agreement providing for any remedy
to the Company or a Purchaser shall limit any remedy which would otherwise be
available to such Purchaser or the Company at law or in equity. Nothing in this
Agreement shall limit any rights a Purchaser may have with any applicable
federal or state securities laws with respect to the investment contemplated
hereby.
8.13 TERMINATION. In the event that the Closing shall not have occurred
on or before September 10, 1997, unless the parties agree otherwise, this
Agreement shall terminate at the close of business on such date.
8.14 COMPANY'S KNOWLEDGE. Whenever the phrase "to the Company's
knowledge" or "to the knowledge of the Company" or similar qualifiers is used
such phrase shall mean the actual knowledge of any of the following persons:
Xxxxxxx X. Xxxxx, III; Xxxxxxx X. Xxxxxx; Xxxxxxxx X. Xxxxx or Xxxxx X. Xxxxx.
* * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
MOLTEN METAL TECHNOLOGY, INC.
/s/ Xxxxxxxx X. Xxxxx
_____________________________________
Executive Vice President and
Chief Financial Officer
Initial Purchasers:
PURCHASER:
CC Investments, LDC
Corporate Centre, West Bay Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
/s/ Xxxx X. Xxxxxxxxx
By:____________________________
Director
Its:___________________________
With a copy to:
Castle Creek Partners, LLC
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel#: (000) 000-0000
Fax#: (000) 000-0000 Total Gross Purchase Price: US$8,160,000
Attn: Portfolio Manager Net Stated Value: US$8,000,000
PURCHASER:
Xxxxx International
Xxxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx XX00
Tel#: (000) 000-0000
Fax#: (000) 000-0000
/s/ Xxxxxxx X. Xxxx
By:_____________________________
Member of Managing G.P.
Its:____________________________
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With a copy to:
Xxxxx Investments
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel#: (000) 000-0000
Fax#: (000) 000-0000 Total Gross Purchase Price: US$3,060,000
Attn: Xxxxx Xxxxxxxx Net Stated Value: US$3,000,000
PURCHASER:
Xxxxxxx Investments International, Ltd.
International Fund Administration Ltd.
00 Xxx-xx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx XX00
Tel#: (000) 000-0000
Fax#: (000) 000-0000
/s/ Xxxxxxx X. Xxxx
By:______________________________
Member of Investment Manager
Its:_____________________________
With a copy to:
Xxxxx Investments
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel#: (000) 000-0000
Fax#: (000) 000-0000 Total Gross Purchase Price: US$3,060,000
Attn: Xxxxx Xxxxxxxx Net Stated Value: US$3,000,000
PURCHASER:
Xxxxxx Partners
c/o Leeds Management Services
000 Xxxxx Xx., 0xx Xxxxx
Xxxxxxxx, Xxxxxxx XX00
Fax#: (000) 000-0000
Attn: Xxxx Xxxxx
/s/ Xxxx Xxxxx
By:_____________________________
Officer
Its:____________________________
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With a copy to:
Citadel Investment Group LLC
000 Xxxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Tel#: (000) 000-0000
Fax#: (000) 000-0000 Total Gross Purchase Price: US$2,754,000
Attn: Xxxxxxx Xxxxxxxxx Net Stated Value: US$2,700,000
PURCHASER:
Olympus Securities, Ltd.
c/o Leeds Management Services
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxx XX00
Fax#: (000) 000-0000
Attn: Xxxx Xxxxx
/s/ Xxxx Xxxxx
By:_____________________________
Director
Its:____________________________
With a copy to:
Citadel Investment Group LLC
000 Xxxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Tel#: (000) 000-0000
Fax#: (000) 000-0000 Total Gross Purchase Price: US$3,366,000
Attn: Xxxxxxx Xxxxxxxxx Net Stated Value: US$3,300,000
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