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Exhibit 10.17
LASERTECHNICS, INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
December 29, 1997
Amphion Ventures L.P.
c/o Jackson Hole Management Co.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Series G Preferred Stock Purchase Agreement
Dear Sirs:
This letter sets forth the terms and conditions on which
Lasertechnics, Inc., a Delaware corporation (the "Company"), is issuing and
selling to Amphion Ventures L.P., a Delaware limited partnership (the
"Purchaser"), on and as of the date hereof, 700 shares of Series G Preferred
Stock of the Company, par value $.01 per share ("Series G Preferred Stock"),
for an aggregate purchase price equal to SEVEN MILLION DOLLARS ($7,000,000),
payable as provided herein.
1. Purchase of Shares; Purchase Price; Effectiveness;
Delivery. The Purchaser hereby subscribes for and purchases from the Company,
and the Company hereby issues and sells to the Purchaser, 700 shares (the
"Shares") of Series G Preferred Stock. The purchase price for each Share shall
be $10,000, payable in cash or, at the option of the Purchaser, by cancellation
of indebtedness of the Company to the Purchaser in an aggregate amount
(including principal and accrued interest) equal to such purchase price, or any
combination of the foregoing. In addition, the Purchaser shall have the right
to offset a portion of the purchase price for the Shares, aggregating
approximately $709,000, against the Company's obligation to pay previously
accrued and unpaid cash dividends on outstanding shares of Series A, Series B,
and/or Series C Preferred Stock of the Company held the Purchaser on December
31, 1997 (the "Effective Date"), and to pay a portion of such total purchase
price, not to exceed an aggregate of $1,500,000, by delivery of the Purchaser's
unconditional promissory note, payable on demand, in principal amount equal to
the portion of the purchase price so paid. The Purchaser has elected to pay
the purchase price for the Shares in the manner set forth on Schedule I
attached hereto, including the cancellation of indebtedness under one or more
bridge loans heretofore made to the Company by the Purchaser in the aggregate
principal amount set forth on Schedule I, together with accrued unpaid interest
on such bridge loan(s) in the aggregate amount set forth thereon (collectively,
"Canceled Indebtedness"). The purchase and sale of Shares hereunder shall be
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
Page 2 of 8
effective as of the Effective Date (subject to the filing of the Certificate of
Designation of the Series G Preferred Stock in the office of the Secretary of
State of the State of Delaware (the "Series G Certificate of Designation"),
which filing may occur subsequently to the Effective Date without effecting the
rights and obligations of the parties hereto). On and as of the Effective
Date, the Canceled Indebtedness shall automatically be canceled, satisfied and
discharged in full, and the Purchaser shall be the due and valid holder of
record of the Shares. On and as of the Effective Date, the Company shall
execute and deliver to the Purchaser a stock certificate in proper form
representing the Shares, and the Purchaser shall deliver to the Company any and
all promissory notes (including master notes) evidencing the Canceled
Indebtedness, duly endorsed for cancellation.
2. Right to Exchange Shares. If the Company consummates
an equity financing with any third party at any time on or before December 31,
1999, which equity financing raises at least $3,000,000 in cash (a "Qualified
Equity Financing"), the Purchaser will have the non-assignable right,
exercisable by written notice to the Company given at any time within 30 days
after the date of the closing of such equity financing, to exchange the Shares
in whole or in part, for shares ("Exchange Shares") of a new series of
preferred stock of the Company (the "Exchange Preferred"), on the following
basis:
(a) If the securities issued in such Qualified Equity
Financing (the "New Securities") are convertible into Common Stock,
the Exchange Preferred will be convertible into Common Stock at a
conversion price equal to the lesser of (x) the conversion price then
applicable under the Series G Preferred Stock and (y) the conversion
price then applicable under the New Securities.
(b) All other terms of the Exchange Preferred will be
economically equivalent to the terms of the New Securities, determined
as if the New Securities had been issued on the date hereof. The
Exchange Preferred will be on parity with the New Securities for all
purposes, and will vote together with the New Securities for all
purposes, except as otherwise required by law.
(c) If the Purchaser exchanges any Shares pursuant to
this paragraph 2, it shall be entitled to any additional rights and/or
consideration with respect to the Exchange Shares (including, without
limitation, rights of first refusal, warrant coverage or payment of
attorneys' fees) as the purchasers of New Securities shall be entitled
to under the Quality Equity Financing.
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
Page 3 of 8
(d) The number of Exchange Shares issuable to the
Purchaser pursuant to any exchange of Shares hereunder will be the
number of shares of Exchange Preferred that the Purchaser could have
purchased on the date hereof for a purchase price equal to the
aggregate purchase price hereunder of the Shares to be exchanged
therefor, payable in cash (determined on a basis so that the cash
purchase price of the Exchange Shares and the cash purchase price of
the New Securities are economically equivalent).
(e) If the Purchaser exchanges any Shares pursuant to
this paragraph 2, such exchange will not result in an increase in the
conversion price above $.50 per share.
3. Securities Act Legend; Registration Rights. (a) The
Shares (and any Exchange Shares) will not be registered under the Securities
Act of 1933, as amended (the "Securities Act"). Certificates representing the
Shares (and any Exchange Shares) shall bear a restrictive legend substantially
to the effect of the following:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE
SECURITIES LAWS, NOR THE SECURITIES LAWS OF ANY OTHER
JURISDICTION. THEY MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THOSE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM."
(b) The Purchaser shall have the same registration rights
with regard to any shares of Common Stock issuable upon conversion of the
Shares (or, subject to any limitations applicable to the New Securities in the
Qualified Equity Financing, any Exchange Shares) as Xxxxxxxxxx Associates L.P.
("XXXX") was entitled to pursuant to the Stock Purchase Agreement dated as of
January 20, 1994 (the "Prior Agreement"), between the Company and XXXX. The
Company shall have the same expense, indemnification and other obligations to
the Purchaser with respect to such registration rights as the Company owed to
XXXX under the Prior Agreement. The Company and the Purchaser shall enter into
a registration rights agreement in customary form to confirm the registration
rights provided for in this paragraph, as soon as practicable after the date
hereof.
4. Representations and Warranties by the Company. The
Company hereby represents and warrants to the Purchaser as follows:
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
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(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and has the corporate power and authority to execute and deliver this
Agreement, to issue the Shares (and, if applicable, the Exchange
Shares) on the basis described herein and otherwise to perform its
obligations under this Agreement.
(b) The execution and delivery by the Company of this
Agreement, the issuance of the Shares, and the performance by the
Company of its obligations hereunder, have been duly authorized by all
requisite corporate action on the part of the Company (other than (x)
the filing of the Series G Certificate of Designation and (y) any
corporate action that may be required in connection with any issuance
of Exchange Shares) and will not (i) violate any provision of law,
statute, rule or regulation or any order of any court or other agency
of government, (ii) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company, in each case as amended, or
(iii) violate, conflict with or constitute (with due notice or lapse
of time or both) a default under any indenture, mortgage, lease,
license, agreement or other contract or instrument or result in the
creation or imposition of any lien, charge or encumbrance of any
nature upon the properties or assets of the Company or any of its
subsidiaries, in each case if such violation, conflict, default, lien,
charge or encumbrance would have a material adverse effect on the
Company.
(c) This Agreement has been duly executed and delivered
by the Company and constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
except to the extent the enforceability hereof may be limited by
applicable bankruptcy, moratorium or similar laws affecting the rights
of creditors generally.
(d) Based in part upon the representations and warranties
of the Purchaser contained in this Agreement, no registration or
filing with, or consent or approval of, or other action by, any
federal, state or other governmental department, commission, board,
bureau, agency or instrumentality or any third party is or will be
necessary for the execution and delivery of this Agreement by the
Company and the issuance of the Shares hereunder, other than (x) the
filing of the Series G Certificate of Designation and (y) the filing
of a notice of sale on Form D with the Securities and Exchange
Commission in accordance with the rules and regulations thereof under
the Securities Act.
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
Page 5 of 8
(e) Subject only to the filing of the Series G
Certificate of Designation, the Shares are duly authorized, validly
issued, fully paid and non-assessable shares of Series G Preferred
Stock, and are not subject to any pre-emptive rights.
(f) Attached hereto as Exhibit A is a true copy of the
Series G Certificate of Designation. On the Effective Date, the Board
of Directors of the Company approved and adopted resolutions, in the
form of the resolutions set forth in Exhibit A, creating the Series G
Preferred Stock and directing the proper officers of the Company to
file the same with the office of the Secretary of State of the State
of Delaware, in accordance with the applicable provisions of the
Delaware General Corporation Law. The Company hereby covenants and
agrees, for the benefit of the Purchaser, that the Company will cause
the Series G Certificate of Designation to be filed with the office of
the Secretary of State of the State of Delaware, in accordance with
the applicable provisions of the Delaware General Corporation Law,
within 10 days after the date hereof.
5. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company as follows:
(a) The Purchaser is acquiring the Shares (and in the
event of any exchange pursuant to paragraph 2 hereof, will be
acquiring the Exchange Shares) for its own account, for investment and
not with a view to the distribution thereof within the meaning of the
Securities Act.
(b) The Purchaser understands that the Shares have not
been (and the Exchange Shares will not be) registered under the Act,
by reason of their issuance by the Company in transactions exempt from
the registration requirements of the Act, and that the Shares (and any
Exchange Shares) must be held by the Purchaser indefinitely unless a
subsequent disposition thereof is registered under the Act or is
exempt from such registration.
(c) The Purchaser further understands that the exemption
from registration afforded by Rule 144 (the provisions of which are
known to it) promulgated under the Act depends on the satisfaction of
various conditions, and that, if applicable, Rule 144 may afford the
basis for sales only in limited amounts, after compliance with the
holding periods and other provisions thereof.
(d) The Purchaser understands that its investment
hereunder involves substantial risks and represent and warrant that it
has made such independent
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
Page 6 of 8
examinations and investigations of the Company as it has deemed
necessary in making its investment decision, and the Purchaser further
represents and warrants that it has had sufficient access to the
officers, directors, books and records of the Company as it has deemed
necessary to conduct such examination and investigation and make such
investment decision.
(e) The Purchaser is able to bear the economic risk of
the investment contemplated by this Agreement and has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment contemplated by this
Agreement.
6. Miscellaneous. (a) This Agreement constitutes our
entire agreement with respect to the subject matter hereof. This Agreement
may not be modified or amended or any provision hereof waived except by an
instrument in writing signed by the Company and the Purchaser.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The rights of the Purchaser hereunder shall be assignable to any
holder of the Shares, provided that the right of the Purchaser under paragraph
2 above to exchange Shares for Exchange Shares shall not be assignable to any
person, other than an affiliate of the Purchaser, without the prior written
consent of the Company. Except as provided in the immediately preceding
sentence, this Agreement and the rights of the Purchaser hereunder shall not be
assignable and any purported assignment thereof shall be void.
(c) This Agreement may be executed in any number of
counterparts and on separate counterparts, each of which shall be an original
instrument, but all of which together shall constitute a single agreement. One
or more signature pages from any counterpart of this Agreement may be attached
to any other counterpart of this Agreement without in any way changing the
effect thereof. This Agreement shall be effective when executed and delivered
by the Company and the Purchaser.
(d) All notices, requests, demands, consents, waivers, or
other communications made hereunder to any party or holder of Shares shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by nationally-recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to such
party at the address set forth below:
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
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if to the Company, to:
Lasertechnics, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Leaf, Esq.; and
if to the Purchaser, to the Purchaser at its address
first set forth above,
or to such other address as the party to whom such communication is to be given
may have furnished to the other party in writing in accordance herewith. All
such notices, requests, demands, consents, waivers or other communications
shall be deemed to have been delivered (i) in the case of personal delivery, on
the date of delivery, (ii) if sent by overnight courier, on the next business
day following the date sent and (iii) in the case of mailing, on the third
business day following such mailing.
(e) All representations, warranties and agreements
contained herein shall survive the execution and delivery of this Agreement and
the sale of the Shares hereunder.
(f) THIS AGREEMENT, AND ALL RIGHTS, OBLIGATIONS AND
LIABILITIES HEREUNDER, SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN. Any
judicial proceeding brought against the Company to enforce, or otherwise in
connection with, this Agreement may be brought in any court of competent
jurisdiction in the City of New York, and, by execution and delivery of this
Agreement, the Company (i) accepts, generally and unconditionally, the
nonexclusive jurisdiction of such courts and any related appellate court and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement and (ii) irrevocably waives any objection it may
now or hereafter have as to the venue of any such proceeding brought in such a
court or that such a court is an inconvenient forum.
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Lasertechnics, Inc.
Series G Preferred Stock Purchase Agreement
December 29, 1997
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If the foregoing correctly sets forth your understanding of
our agreement, please so indicate by signing and returning to the Company the
enclosed counterpart of this Agreement.
Very truly yours,
LASERTECHNICS, INC.
By: /s/
-------------------------------------
Name:
Title:
The undersigned agrees with and
accepts the foregoing terms and provisions
as of the date first above written.
AMPHION VENTURES L.P.
By Amphion Partners L.L.C., its general partner
By: /s/
---------------------------
A Managing Member
