Exhibit 10.2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of July 22, 2003,
between STARTECH ENVIRONMENTAL CORPORATION, a Colorado corporation (the
"Company") and NORTHSHORE ASSET MANAGEMENT, LLC, a Delaware limited liability
company (the "Purchaser"). Capitalized terms used in this Agreement but not
otherwise defined shall have the meanings assigned to such terms on Schedule 1
of the Stock Purchase and Registration Rights Agreement dated as of July 18,
2003 by and between the Company and the Purchaser (the "Original Purchase
Agreement").
1. Purchase and Sale of Shares.
(a) Subject to the terms and conditions hereof: (i) at the closing
identified in Section 2.2(a) hereof, the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, 1,866,667 shares
(the "Tranche A Shares") of common stock, no par value, of the Company (the
"Common Stock") for a price per share equal to $0.75, or an aggregate purchase
price of $1,400,000.00 (the "Tranche A Purchase Price"); and (ii) at the closing
identified in Section 2.2(b) hereof, the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, 1,333,333 shares
(the "Tranche B Shares") of Common Stock for a price per share equal to $0.75,
or an aggregate purchase price of $1,000,000.00 (the "Tranche B Purchase
Price").
(b) In addition to the foregoing, subject to the terms and
conditions hereof, at the sole and exclusive option of the Purchaser, at the
closing specified in Section 2.2(c) hereof, the Company shall issue and sell to
the Purchaser, and the Purchaser shall purchase from the Company a number of
shares of Common Stock (the "Tranche C Shares" and together with the Tranche A
Shares and Tranche B Shares, the "Shares") equal to a quotient, the numerator of
which shall be an amount up to $1,000,000.00 (the "Tranche C Purchase Price")
and the denominator of which shall be an amount equal to a 25% discount off the
average closing price per share of Common Stock for the thirty (30) consecutive
trading days immediately preceding the day of the the Tranche C Closing (as
defined in Section 2.2(c) hereof). The Purchaser shall provide the Company with
notice, not less than 48 hours prior to the Tranche C Closing, of its decision
whether to elect to purchase the Tranche C Shares at the Tranche C Closing and
the amount of the Tranche C Purchase Price.
(c) Each purchase and sale of Shares pursuant to the terms hereof
will be made in reliance upon the provisions of Section 4(2) of the Securities
Act of 1933, as amended (the "Securities Act"), Regulation D promulgated
thereunder by the United States Securities and Exchange Commission (the "SEC"),
or such other exemptions from the registration requirements of the Securities
Act as may be available with respect to the investment in the Shares to be made
hereunder.
(d) The purchaser will not be entitled to any warrants and there
will be no commissions required to close the transactions set forth herein.
2. Closings and Deliverables.
(a) The closing of the purchase and sale of the Tranche A Shares
shall take place at 12:00 p.m. on Wednesday, July 23, 2003 at the offices of
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, 00000 (the
"Tranche A Closing"). At the Tranche A Closing, or as soon as is reasonably
practicable thereafter, the Company (or its transfer agent) shall deliver to the
Purchaser a stock certificate representing the Tranche A Shares registered in
the name of the Purchaser and such
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other documents and certificates as are required by this Agreement at the
Tranche A Closing. At the Tranche A Closing, the Purchaser shall deliver to the
Company the Tranche A Purchase Price by wire transfer in immediately available
funds to the account designated in Section 2(d) below.
(b) The closing of the purchase and sale of the Tranche B Shares
shall take place at 12:00 p.m. on Friday, July 25, 2003 at the offices of Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, 00000 (the "Tranche B
Closing"). At the Tranche B Closing, or as soon as is reasonably practicable
thereafter, the Company (or its transfer agent) shall deliver to the Purchaser a
stock certificate representing the Tranche B Shares registered in the name of
the Purchaser and such other documents and certificates as are required by this
Agreement at the Tranche B Closing. At the Tranche B Closing, the Purchaser
shall deliver to the Company the Tranche B Purchase Price by wire transfer in
immediately available funds to the account designated in Section 2(d) below.
(c) Unless the Company is otherwise notified by the Purchaser in
accordance with the last sentence of Section 1(a) hereof, the closing of the
purchase and sale of the Tranche C Shares shall take place on or before 12:00
p.m. on Friday, August 15, 2003 at the offices of Xxxxxx Xxxxx Xxxxxxxx &
Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, 00000 (the "Tranche C Closing" and,
together with the Tranche A Closing and the Tranche B Closing, the "Closings").
At the Tranche C Closing, or as soon as is reasonably practicable thereafter,
the Company (or its transfer agent) shall deliver to the Purchaser a stock
certificate representing the Tranche C Shares registered in the name of the
Purchaser and such other documents and certificates as are required by this
Agreement at the Tranche C Closing. At the Tranche C Closing, the Purchaser
shall deliver to the Company the Tranche C Purchase Price by wire transfer in
immediately available funds to the account designated in Section 2(d) below.
(d) At each Closing, the applicable Purchase Price shall be
delivered, by wire transfer in immediately available funds, to the account
designated below:
Wire transfer information for: Startech Environmental Corp.
00 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xx. 00000-0000
Financial Institution: Chase Manhattan Bank
00 Xxx Xxxxxxxxx Xxxx
Xxxxxx, Xx. 00000
Financial Institution Contact: Xx. Xxxxx X. Xxxxxxx
(000) 000-0000
FAX: (000) 000-0000
Accounting Number: 699500710165
ABA/Routing Number: 000000000
(d) The Company, shall use the cash proceeds from the issuance of
the Shares for working capital and general corporate purposes.
3. Representations and Warranties by the Company. As of each Closing, the
Company hereby represents and warrants to the Purchaser that, except as provided
below, each of the representations and warranties made by the Company in Section
3 of the Original Purchase Agreement are and shall be true and correct as of the
date of such Closing:
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(e) Capital Stock; Fully Paid and Non-Assessable.
(i) As of the date and immediately prior to the Tranche A
Closing, the authorized capital stock of the Company consists and will consist,
respectively, of (A) 10,000,000 shares of Preferred Stock, of which 2,645 shares
are issued and outstanding and designated as Series A 8% Cumulative Convertible
Redeemable Preferred Stock (the "Series A Preferred Stock") and (B) 800,000,000
shares of Common Stock of which:
(1) 13,700,689 shares are issued and outstanding;
(2) 3,000,000 shares are authorized for issuance under the
Company's stock option plans, of which 731,089 shares
are reserved for issuance upon the exercise of options
granted and issuable by the Company thereunder;
(3) 298,820 shares are reserved for issuance upon the
conversion of the Series A Preferred Stock; and
(4) 2,206,789 shares are reserved for issuance upon the
exercise of warrants.
(ii) All such outstanding shares of Common Stock and Preferred
Stock and other securities have been duly authorized and validly issued and are
fully paid and nonassessable and were issued in compliance with all applicable
Federal and state securities laws. Except as contemplated by this Agreement or
as set forth in all forms, reports and documents filed with the SEC pursuant to
the Securities Act and Securities Exchange Act of 1934, as amended from January
1, 2002 through the date hereof (collectively, the "SEC Filings"), the Company
has no outstanding subscription, option, warrant, right of first refusal,
preemptive right, call, contract, demand, commitment, convertible security or
other instrument, agreement or arrangement of any character or nature whatever
under which the Company is or may be obligated to issue Common Stock, Preferred
Stock or any other equity security of any kind or which otherwise relates to the
Company's securities.
(iii) The Company represents and warrants that at the Tranche
B Closing and the Tranche C Closing, the authorized capital stock of the Company
shall be substantially similar to the authorized capital stock set forth in
subsection (e) above, except for the issuance of the Shares to the Purchaser as
well as any other issuances of shares of Common Stock by the Company prior to
the date of such closing, which issuances, if any, shall be promptly disclosed
to the Purchaser by the Company.
(y) Resignation of Directors. INTENTIONALLY OMITTED.
4. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that, as of each Closing, each of the
representations and warranties made by the Purchaser in Section 4 of the
Original Purchase Agreement are and shall be true and correct as of the date of
such Closing.
5. Certain Covenants. The Company and the Purchaser hereby covenant and
agree to comply with the provisions set forth in Section 5 of the Original
Purchase Agreement, to the extent applicable to such party.
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6. Registration Rights. The Company and the Purchaser hereby covenant and
agree that the Shares, when purchased at a Closings identified in herein, shall
be included in the definition of "Registrable Securities" in Schedule 1 of the
Original Purchase Agreement and that all rights and obligations of the parties
as set forth in Section 6 of the Original Purchase Agreement shall be applicable
to such Shares as well as the shares of Common Stock purchase pursuant to the
Original Purchase Agreement.
7. Miscellaneous.
(a) Indemnification. In addition, to any indemnification provided
elsewhere in this Agreement or in the Original Purchase Agreement (which
indemnification is not intended to be duplicative of any indemnification already
set forth in the Original Purchase Agreement), the parties hereto agree as
follows:
(i) Company Indemnification.
(1) The Company will indemnify and hold harmless,
to the fullest extent permitted by law, but without duplication, the Purchaser
and each of its Affiliates including any managed or advised accounts and any
investment advisor or agent therefor, and their respective, officers, directors,
employees, partners, representatives, agents, and each Person who controls the
Company and each of its Affiliates within the meaning of the Securities Act)
(each of the foregoing Persons being a "Purchaser Indemnified Person"), from and
against any and all Indemnifiable Costs and Expenses to which such Purchaser
Indemnified Person may become subject under the Securities Act or otherwise
arising out of or based in any manner upon any breach by the Company of any its
representations, warranties or covenants contained in the Agreement, the
Original Purchase Agreement or in any agreement, instrument or document
delivered by the Company hereunder or thereunder.
(2) The Company further agrees promptly upon demand
by each Purchaser Indemnified Person to reimburse each Purchaser Indemnified
Person for any Purchaser Indemnifiable Costs and Expenses as they are incurred
by it; provided that if the Company reimburses a Purchaser Indemnified Person
hereunder for any Indemnifiable Costs and Expenses incurred in connection with a
lawsuit, claim, inquiry or other proceeding or investigation for which
indemnification is sought, such Purchaser Indemnified Person agrees to refund
such reimbursement of Indemnifiable Costs and Expenses to the extent it is
finally judicially determined that the indemnity provided for in this Section
7(a)(i) is not applicable to such Purchaser Indemnified Person in accordance
with the terms hereof or otherwise or the Company is not otherwise obligated to
indemnify such Purchaser Indemnified Person. The indemnity, contribution and
expense reimbursement obligation of the Company under this Section 7(a) shall be
in addition to any liability it may otherwise have.
(3) The obligations of the Company hereunder shall
survive the Closing and any repurchase, conversion, exchange or transfer of the
Preferred Stock and the termination of this Agreement and shall not be
extinguished with respect to any Person because any other Person is not entitled
to indemnity or contribution hereunder.
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(ii) Purchaser Indemnification. The Purchaser agrees and
covenants to agree and covenant to and to hold harmless and indemnify each
Company Indemnified Person, from and against any and all Indemnifiable Costs and
Expenses to which such Company Indemnified Person may become subject under the
Securities Act or otherwise which arises out of or is based in any manner upon
any breach by the Purchaser of any its representations, warranties or covenants
contained in the Agreement, the Original Purchase Agreement or in any agreement,
instrument or document delivered by the Purchaser hereunder or thereunder.
(iii) Conduct of Indemnification Proceedings. The Company and
the Purchaser agree that the provisions set forth in Section 7(a)(iii) of the
Original Purchase Agreement shall be applicable to any indemnification
proceedings arising under this Agreement.
(iv) Contribution. The Company and the Purchaser agree that
the provisions set forth in Section 7(a)(iv) of the Original Purchase Agreement
shall be applicable to this Agreement.
(b) Entire Agreement; Survival of Provisions. The Agreement, the
Original Purchaser Agreement and the SEC Filings referenced herein and therein
constitute the entire agreement of the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings with
respect thereto, whether written or oral. All of the covenants of the parties
made herein shall remain operative and in full force and effect pursuant to
their respective terms regardless of acceptance of the Shares and payment
therefor. The representations and warranties set forth herein shall survive the
execution and delivery of this Agreement, the issuance of the Shares at each
Closing identified herein, in each case until the second anniversary of the date
of such Closing (the "Expiration Date"), and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Purchaser or the Company. Notwithstanding the preceding sentence, any
representation or warranty in respect of which an indemnity may be sought hereof
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if a claim for indemnification shall have been given to the
party against whom such indemnity may be sought prior to the Expiration Date.
The representations, warranties, agreements and covenants made in the Agreement
and the Original Purchase Agreement, to the extend incorporated by reference
herein, shall be deemed to have been relied upon by the parties hereto.
(c) No Waiver; Modifications in Writing. No failure or delay by a
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. Except as otherwise expressly provided
herein with respect to any right of indemnification, the remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise. No waiver of or consent
to any departure by a party from any provision of this Agreement shall be
effective unless signed in writing by the parties entitled to the benefit
thereof. No amendment, modification or termination of any provision of this
Agreement shall be effective unless signed in writing by all parties. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which made or given.
(d) Notices. All notices, demands and other communications provided
for hereunder shall be in writing, shall be given by registered or certified
mail, return receipt requested, on the date sent by telecopy with electronic
confirmation of such transmission, the business day next following deposit with
a courier service for overnight delivery with written confirmation of such
delivery or upon personal delivery, addressed to the parties, as follows:
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If to the Company, to:
Startech Environmental Corporation
00 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Chief Operating Officer
Telecopy: (000) 000-0000
If to the Purchaser, to:
Northshore Asset Management, LLC
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
or to such other address as any party shall designate in writing in compliance
with the provisions of this Section 7(d).
(e) Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
(f) Binding Effect; Assignment. The rights and obligations of the
parties under this Agreement may not be assigned or otherwise transferred to any
other Person, without the prior written consent of the other party hereto;
provided that the Purchaser may assign or otherwise transfer the Shares to any
of its Affiliates without obtaining any such consent, but only if such
Affiliate: (i) agrees to be bound by the terms of this Agreement; (ii) is, at
the time of such transfer, an Accredited Investor; (iii) provides the Company
such written certification as the Company may reasonably require as to the
transferee's status as an Accredited Investor and agreement to be so bound as
the Company may reasonably request; and (iv) such transfer to any such
transferee does not violate federal or state securities laws. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns. This Agreement
shall be binding upon and shall inure to the benefit of the Company, the
Purchaser and their respective permitted successors and assigns.
(g) Governing Law. This Agreement shall be deemed to be a contract
made under and shall be governed by and construed in accordance with the
internal laws of the State of Connecticut without reference to the principles of
conflict of laws.
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(h) Consent to Jurisdiction and Service of Process. Any suit, action
or proceeding arising out of or relating to the Agreement or the transactions
contemplated hereby may be instituted in any Federal court situated in the State
of Connecticut or any state court of the State of Connecticut, and each party
agrees not to assert, by way of motion, as a defense or otherwise, in any such
suit, action or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the Agreement or the subject matter hereof or thereof may not be
enforced in or by such court. Each party further irrevocably submits to the
jurisdiction of such court in any such suit, action or proceeding. Any and all
service of process and any other notice in any such suit, action or proceeding
shall be effective against any party if given personally or by registered or
certified mail, return receipt requested if sent to such party at the address
for such party set forth in Section 7(d) hereof, or by any other means of mail
that requires a signed receipt, postage fully prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.
(i) Further Assurances. Each of the parties hereto shall execute and
deliver such documents, instruments and agreements and take such further actions
as may be reasonably required or desirable to carry out the provisions of the
Agreement and the transactions contemplated hereby, and each of the parties
hereto shall cooperate with each other in connection with the foregoing.
(j) Severability of Provisions. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by law, the parties hereto waive any provision of law that renders any such
provision prohibited or unenforceable in any respect.
(k) Headings. The Article, Section and subsection headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
(l) Costs, Expenses and Taxes.
(i) The Company shall pay any and all stamp, transfer and
other similar Taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement or the original issuance of the Shares
and shall save and hold the Purchaser harmless from and against any and all
liabilities with respect to or resulting from any delay in paying, or omission
to pay, such Taxes.
(ii) Each party shall bear its own fees, costs and expenses in
connection with the execution, delivery and performance of the Agreement.
(m) Waiver of Jury Trial. The parties hereto hereby irrevocably
waive all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement or the transactions contemplated
hereby.
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(n) Publicity. The parties agree that no public release or
announcement concerning the Agreement or the transactions contemplated hereby
shall be made without advance review and approval by each party hereto, except
as otherwise required by applicable law, and which review and approval shall not
be unreasonably withheld or delayed.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
STARTECH ENVIRONMENTAL CORPORATION
By:
-----------------------------
Name:
Title:
NORTHSHORE ASSET MANAGEMENT, LLC
By:
-----------------------------
Name:
Title:
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