EXHIBIT 10.8
XENONICS HOLDINGS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT ("AGREEMENT") is made and
entered into as of April 23, 2004 between Xenonics Holdings, Inc., a Nevada
corporation ("CORPORATION"), and the purchasers listed on the signature page of
this Agreement (each and "INVESTOR" and collectively, the "INVESTORS"). In
consideration of the mutual promises, covenants and conditions hereinafter set
forth, the parties hereby agree as follows:
1. PURCHASE AND SALE OF UNITS. Subject to the terms and conditions of
this Agreement, at the Closing referred to in Section 2 below, the Corporation
agrees to issue and sell to Investors, and Investors hereby agree to purchase
from the Corporation, an aggregate of Fifty Thousand (50,000) Units ("UNITS"),
at a price of $17.00 per Unit, for an aggregate purchase price of $850,000.00.
Each Unit consists of four (4) shares of the Corporation's common stock, $0.001
par value (sometimes referred to herein as "COMMON STOCK") and one Common Stock
purchase warrant (a "WARRANT"), the form of which is attached hereto as Exhibit
B. Each Warrant is exercisable for one share of Common Stock at an exercise
price of eight dollars ($8.00) per share for a period of five years. The number
of Units to be purchased by each Investor is set forth on the signature page of
this Agreement. The obligations of each of the Investors hereunder are several
and not joint, and the sale of the Units to each of the Investors is a separate
transaction; provided, however, that the Corporation shall not be obligated to
consummate the sale of any of the Units unless all of the Units are sold.
2. CLOSING OF PURCHASE AND SALE. The consummation of the purchase and
sale of the Units provided for herein ("CLOSING") will take place at the offices
of the Corporation as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ on April 26, 2004, or at such other date, time and place upon which the
Corporation and the Investors shall agree ("CLOSING DATE"). At the Closing, the
Corporation will deliver to each Investor (i) a stock certificate representing
the number of shares of Common Stock in the Units being purchased by that
Investor, and (ii) a Warrant representing the right of that Investor to purchase
the number of shares of Common Stock equal to the number of Units purchased by
that Investor, against delivery to the Corporation by each Investor of the full
amount of the purchase price of such Units by a check payable to the
Corporation's order or by wire transfer to the Corporation's account.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INVESTOR. As a
material inducement to the Corporation to sell and issue the Units to Investors,
each Investor hereby represents and warrants on its own behalf to the
Corporation, and agrees with the Corporation, as follows:
3.1 Authorization; Enforceability. Such Investor has all requisite
power and authority to enter into this Agreement and to purchase the Units
listed under the Investor's name on the signature page of this Agreement. This
Agreement has been duly executed and delivered by such Investor. This Agreement
is a valid and binding obligation of such Investor, enforceable
against the Investors in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally, and to the
availability of equitable remedies.
3.2 Purchase for Own Account. Such Investor is acquiring the Units
solely for its own account, for investment purposes only and not with a view to,
or for resale in connection with, any distribution or public offering of the
Warrants, the shares of Common Stock contained in such Units, or the shares of
Common Stock underlying each Warrant (the shares contained in the Units, and
shares of Common Stock underlying the Warrants are herein collectively referred
to as the "SHARES") the within the meaning of the Securities Act of 1933, as
amended (the "1933 ACT"). Such Investor has no present intention to sell, offer
to sell, or otherwise dispose of or distribute any of the Warrants or Shares.
Such Investor will hold the entire legal and beneficial interest in and to the
Warrants and Shares and does not presently intend to divide or share such
interest with any other person or entity.
3.3 Restrictions on Transfer. Such Investor understands and has
been advised by the Corporation that neither the Warrants nor the Shares have
not been registered under the 1933 Act or qualified under the California
Corporate Securities Law of 1968, as amended (the "LAW"), in reliance on
exemptions from the registration and/or qualification requirements of such laws,
and that consequently such securities cannot be offered, sold or otherwise
transferred, and must be held indefinitely by the Investor, unless and until
they are registered with the U.S. Securities and Exchange Commission (the "SEC")
under the 1933 Act qualified under the Law, or until exemptions from such
registration and qualification requirements are available.
3.4 Rule 144. Such Investor is familiar with SEC Rule 144
promulgated under the 1933 Act, which permits certain limited sales of
unregistered securities in specified circumstances, and, in any event, requires
that the Shares be held for a minimum of one year (and in some cases longer)
after they have been purchased and paid for (within the meaning of Rule 144)
before they may be resold under Rule 144.
3.5 Legends. Such Investor understands and agrees that (i) all
certificate(s) evidencing the Investor's Shares (and any securities issued in
respect of the Shares upon any stock split, stock dividend, merger,
reorganization or recapitalization), and (ii) the Warrants will be imprinted
with a legend that reads substantially as set forth below, together with any
other legends that, in the opinion of legal counsel to the Corporation, are
required by the 1933 Act or by other federal or state securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
2
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
3.6 Stop Transfer Instructions. Such Investor agrees that, in
order to ensure compliance with and to enforce the restrictions on transfer
referred to in this Agreement the Corporation may refuse to transfer the Shares
or Warrants and may issue appropriate "stop transfer" instructions to its
transfer agent, if any.
3.7 Suitability and Investment Experience. Such Investor is an
"accredited investor" as defined in SEC Rule 501 and has: (a) a pre-existing
personal and/or business relationship with the Corporation, or its officers or
directors, such that Investor is aware of the character, business acumen and
general business and financial circumstances of such persons; and/or (b) such
knowledge and experience in business and financial matters that it is capable of
evaluating the merits and risks of this investment in the Units and is capable
of protecting its own interests in connection with this investment in the Units.
3.8 Access to Data. Such Investor has had an opportunity to
discuss the Corporation's business, management and financial affairs with the
Corporation's management and has received or has had full access to all the
information it considers necessary to make an informed investment decision with
respect to the Units to be purchased. It understands that such discussions, as
well as any written information issued by the Corporation, were intended to
describe certain aspects of the Corporation's business and prospects but were
not a thorough or exhaustive description.
3.9 Brokers or Finders. The Corporation has not and will not
incur, directly or indirectly, as a result of any action taken by the Investor,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or the transactions
contemplated hereby.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE CORPORATION. As a
material inducement to the Investors to purchase the Units, the Corporation
hereby represents and warrants to each Investor, and agrees with each Investor,
as follows:
4.1 Authorization. The Corporation has all requisite power and
authority to enter into this Agreement and to sell and issue the Units,
including the shares of Common Stock and Warrants contained therein. This
Agreement has been duly executed and delivered by the Corporation. This
Agreement is, and the Warrants will be, a valid and binding obligation of the
Corporation, enforceable against the Corporation in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally, and to the availability of equitable remedies.
3
4.2 Organization and Standing. The Corporation is a corporation
duly organized and existing under, and by virtue of, the laws of the State of
Nevada and is in good standing under such laws. The Company has requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as presently conducted.
4.3 Validity of the Shares. The Shares, when issued in compliance
with the provisions of this Agreement or the Warrants, will be validly issued,
fully paid and nonassessable, and will be free of any liens or encumbrances,
other than any liens or encumbrances created by or imposed upon the holders;
provided, however, that the Shares will be subject to restrictions on transfer
under state or federal securities laws. The issuance of the Shares is not
subject to any preemptive rights or rights of first refusal.
5. REGISTRATION OF UNITS. The Corporation hereby agrees to register the
Shares of each Investors in the manner set forth on Exhibit A to this Agreement.
Each Investor hereby agrees to be bound by the terms and conditions set forth on
Exhibit A.
6. MISCELLANEOUS PROVISIONS.
6.1 Modification; Waiver. No modification or waiver of any
provision of this Agreement or consent to departure therefrom shall be effective
unless executed in writing by all of the parties hereto.
6.2 Successors and Assigns. Except as otherwise stated herein, all
covenants and agreements of the parties contained in this Agreement shall be
binding upon and inure to the benefit of their respective successors and
assigns.
6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, excluding that
body of law pertaining to conflict of laws or choice of law.
6.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.5 Entire Agreement. This Agreement, including Exhibit A, and the
Warrants constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede any and all prior agreements or
understandings, whether oral or written, with respect to such subject matter.
[signature follows]
4
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives effective as of the date and year first
above written.
INVESTOR: CORPORATION:
WHITE ROCK CAPITAL PARTNERS, L.P. XENONICS HOLDINGS, INC.
a Nevada corporation
By____________________________________
Units purchased: 40,000 By__________________________________
Purchase Price: $ 680,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
INVESTOR:
TEXROCK, LTD.
By____________________________________
Units purchased: 10,000
Purchase Price: $ 170,000
c/o White Rock Capital Partners, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
5
EXHIBIT A
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Common Stock and
Warrant Purchase Agreement (the "Agreement") to which this Exhibit is attached.
As used in this Exhibit, the following terms shall have the following respective
meanings:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Corporation" means Xenonics Holdings, Inc., a Nevada corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Holder" means (i) each of White Rock Capital Partners, L.P. and Texrock,
Ltd., and (ii) any person holding Registrable Securities to whom the
registration rights under any of the Agreement have been validly transferred.
"Registrable Securities" means the (i) 200,000 shares of the Corporation's
Common Stock sold pursuant to this Agreement, (ii) the 50,000 shares of the
Corporation's Common Stock underlying the Warrants, and any Common Stock of the
Corporation issued or issuable in respect of the foregoing shares of the
Corporation's Common Stock upon any stock split, stock dividend,
recapitalization or similar event; provided, however, that securities shall only
be treated as Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
"register," "registered" and "registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the
Corporation in complying with Section 2.1, including without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Corporation, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration.
"Securities Act" shall mean the federal Securities Act of 1933, as
amended, or any similar federal rule or statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions, or stock transfer taxes and fees applicable to the securities
registered by the Holders.
2. REGISTRATION. The Corporation agrees to use its best efforts to prepare
and file a registration statement with the Commission within 14 days after the
Closing Date, and to thereafter take all steps necessary and proper to effect a
registration of the Registrable Securities (including,
without limitation, appropriate qualification under applicable state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations), in order
to permit or facilitate the sale and distribution by the Holders of all of their
Registrable Securities. The registration statement filed by the Corporation
hereunder shall be a registration statement, at the Corporation's option, on
Form S-1, Form SB-2 or, if available, Form S-3, or any successor to such forms.
If requested by all of the Holders, the Corporation shall, together with all
Holders, enter into an underwriting agreement in customary form with an
investment banking firm or firms selected for such underwriting by all of the
Holders, but subject to the Corporation's reasonable approval.
2.1 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with a registration pursuant to this Section 2 shall be borne by
the Corporation; provided, however, that the Corporation shall have no
obligation to pay or otherwise bear (i) any portion of the fees or disbursements
of counsel for the Holders in connection with the registration of their
Registrable Securities, (ii) any portion of the Selling Expenses, or (iii) any
of such expenses if the payment of such expenses by the Corporation is
prohibited by the laws of a state in which such offering is qualified and only
to the extent so prohibited. Unless otherwise stated, all Selling Expenses
relating to securities registered on behalf of the Holders shall be borne by the
Holders of such securities pro rata on the basis of the number of shares so
registered or proposed to be so registered.
2.2 REGISTRATION PROCEDURES. In the case of each registration
effected by the Corporation pursuant to this Exhibit, the Corporation will keep
each Holder advised in writing as to the initiation of such registration and as
to the completion thereof. The Corporation will:
(a) Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary and cause such
registration statement to become and remain effective until (i) the second
anniversary following the date of the Closing, or (ii) all Registrable
Securities included in the registration statement have been sold, whichever
comes first, except that the Corporation shall be permitted to suspend the use
of the registration statement during certain periods as set forth below in this
Section 2.2; and
(b) Furnish to the Holders participating in such
registration and to any underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities.
Notwithstanding the foregoing, the Corporation shall notify each Holder
whose securities are included in a registration of the happening of any event
which makes any statement made in the registration statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the registration statement or prospectus so that, in the case of the
registration statement, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
prospectus, it will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which
2
they were made, not misleading. In such event, the Corporation may suspend use
of the prospectus on written notice to each participating Holder, in which case
each participating Holder shall not dispose of Registrable Securities covered by
the registration statement or prospectus until copies of a supplemented or
amended prospectus are distributed to the participating Holders or until the
participating Holders are advised in writing by the Corporation that the use of
the applicable prospectus may be resumed (the period of such suspension shall be
a "Blackout Period"). The Corporation shall ensure that the use of the
prospectus may be resumed as soon as practicable. The Corporation shall, upon
the occurrence of any event contemplated by this paragraph, prepare a supplement
or post-effective amendment to the registration statement or a supplement to the
related prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In the event that the Corporation
declares one or more Blackout Periods, the two-year anniversary period set forth
in Section 2.2(a) shall be extended by the number of days that constitute any
such Blackout Periods.
2.3 INDEMNIFICATION.
(a) The Corporation will indemnify each Holder, each of its
officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration has been effected pursuant to this Exhibit, against all expenses,
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or any violation by
the Corporation of the Securities Act, the Exchange Act, state securities laws
or any rule or regulation promulgated under such laws applicable to the
Corporation in connection with any such registration, and the Corporation will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Corporation will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Corporation by or on behalf of such Holder for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration is being
effected, indemnify the Corporation, each of its officers and directors, each
person who controls the Corporation within the meaning of Section 15 of the
Securities Act, each other holder of the Corporation's securities covered by
such registration statement, and each such holder's officers and directors and
each person controlling such holder within the meaning of Section 15 of the
Securities Act, against all claims, losses,
3
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Holder of the Securities Act,
the Exchange Act, state securities laws or any rule or regulation promulgated
under such laws applicable to the Holder, and will reimburse the Corporation,
such other holders, such officers, directors, or control persons for any legal
or any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such claim, loss, damage,
liability or action, but in the case of the Corporation or the other holders or
their officers, directors, or control persons, only to the extent that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with information furnished to the
Corporation in writing by such Holder. Notwithstanding the foregoing, the
liability of each Holder under this Section 2.3(b) shall be limited to an amount
equal to the net proceeds from the offering received by such Holder. A Holder
will not be required to enter into any agreement or undertaking in connection
with any registration under this Section 2 providing for any indemnification or
contribution on the part of such Holder greater than the Holder's obligations
under this Section 2.3(b).
(c) Each party entitled to indemnification under this
Section 2.3 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Exhibit unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
there are separate and different defenses. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
3. TRANSFER OF RIGHTS. The rights granted under Section 2 of this
Exhibit may be assigned to any transferee or assignee in connection with any
transfer or assignment by the Holder of such Holder's Registrable Securities,
provided that: (i) such transfer is otherwise effected in accordance with
applicable securities laws and the terms of this Exhibit; (ii) written notice is
4
promptly given to the Corporation; and (iii) such transferee or assignee agrees
in writing to be bound by the provisions of this Exhibit and by any other
agreement reasonably necessary to ensure compliance with the Federal and state
securities laws.
5
