SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between QUADRAX
CORPORATION, a Delaware corporation, with headquarters located at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 ("Company") and the undersigned
(the "Buyer").
WITNESSETH:
WHEREAS, the Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration
afforded, inter alia, by Rule 506 under 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 "1933
Act"), and/or Section 4(2) of the 1933 Act; and
WHEREAS, the Buyer wishes to purchase, upon the terms and subject to the
conditions of this Agreement, 8% Convertible Debentures (the "Debentures"),
of the Company which will be convertible into shares of Common Stock, $.000009
par value per share (the "Common Stock"), of the Company upon the terms and
subject to the conditions of such Debentures (the Common Stock and the
Debentures sometimes referred to herein as the "Securities"), and subject to
acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to purchase from the Company,
the Debentures of the Company, in the principal amount of $3,500,000 in
Debentures, $1,000,000 principal amount at the First Closing, and the balance
as more specifically set forth in 84(j), and having the terms and conditions
and being in the forms attached hereto as Annex IA, as the initial Debenture
and Annex IB as to the Additional Debentures. The purchase price for each
Debenture shall be 100% of the principal amount of such Debenture (the
"Purchase Price") and shall be payable in United States Dollars.
b. Form of Payment. The Buyer shall pay the Purchase Price for each
Debenture by delivering immediately available good fUnds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint
Escrow Instructions attached hereto as Annex H (the "Joint Escrow
Instructions") as set forth below. Promptly following payment by the Buyer
to the Escrow Agent of the Purchase Price of the Debenture, the Company shall
deliver the Debenture duly executed on behalf of the Company to the Escrow
Agent. By signing this Agreement, the Buyer and the Company, and subject to
acceptance by the Escrow Agent, each agrees to all of the terms and conditions
of, and becomes a party to, the Joint Escrow Instructions,
all of the provisions of which are incorporated herein by this reference as
if set forth in full.
c. Method of Payment. Payment into escrow of the Purchase Price for each
Debenture shall be made by wire transfer of funds to:
Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
For credit to the account of Xxxxxxx & Xxxxxx, Esqs.
Account No. 105-0000000
Not later than l:00 p.m., New York time, on the date which is one (1) New York
Stock Exchange trading day after the Company shall have accepted this
Agreement and returned a signed counterpart of this Agreement to the Escrow
Agent by facsimile, the Buyer shall deposit with the Escrow Agent the Purchase
Price for the initial $1,000,000 Debenture, in currently available
funds. Time is of the essence with respect to such payment on the Closing
Date and each Additional Closing Date (as defined in 4j), and failure by the
Buyer to make such payment, shall allow the Company to cancel this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees with, the
Company as follows:
a. Without limiting Buyer's right to sell the Common Stock pursuant to the
Registration Statement as defined in the Registration Rights Agreement, the
Buyer is purchasing the Debentures and will be acquiring the shares of Common
Stock issuable upon conversion of the Debentures for its own account for
investment only and not with a view towards the public sale or distribution
thereof and not with a view to or for sale in connection with any distribution
thereof;
b. The Buyer is (i) an "accredited investor" as that term is defined in
Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason
of the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its
investment in the Securities;
c. All subsequent offers and sales of the Debentures and the shares of
Common Stock issuable upon conversion of, or issued as interest on, the
Debentures (the "Shares" or "Common Stock" and, together with the Debentures,
the "Securities") by the Buyer shall be made pursuant to registration of the
Shares under the 1933 Act or pursuant to an exemption from registration;
d. The Buyer understands that the Debentures are being offered and sold,
and the Shares are being offered, to it in reliance on specific exemptions
from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy
of, and the Buyer's compliance with, the representations, warranties,
agreements, acknowledgements and understandings of the Buyer set forth herein
in order to determine the availability of such exemptions and the eligibility
of the Buyer to acquire the Debentures and to receive an offer of the Shares,
and Buyer shall indemnify and hold harmless the Company from and against any
liability incurred by the Company proximately caused by any
breach thereof by Buyer;
e. The Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Debentures and the offer of
the Shares which have been requested by the Buyer, including Annex V hereto.
The Buyer and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received complete and satisfactory answers
to any such inquiries. Without limiting the generality of the foregoing, the
Buyer has also had the opportunity to obtain and to review the Company's (1)
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, (2) Quarterly Report on Form 1O-QSB for the fiscal
quarter ended March 31, 1997, (3) Proxy Statement for Annual Meeting of
Stockholders held May 19, 1997, and (4) Form 8-K dated May 31, 1997 and May
7, 1997, as amended (the "Company's SEC Documents").
f. The Buyer understands that its investment in the Securities involves
a high degree of risk;
g. The Buyer understands that no United States federal or state agency or
any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities;
h. This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Buyer and is a valid and binding agreement of the
Buyer enforceable in accordance with its terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights generally.
i. Neither Buyer, nor any affiliate of Buyer, has any present intention
of entering into, any put option, short position, or other similar position
with respect to the Debentures or the Shares.
j. Notwithstanding the provisions hereof or of the Debentures, in no
event shall the holder be entitled to convert any Debenture to the extent
after such conversion, the sum of (1) the number of shares of Common Stock
beneficially owned by the Buyer and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of
the unconverted portion of the Debenture), and (2) the number of shares of
Common Stock issuable upon the conversion of the Debenture with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Buyer and its affiliates of more than 4.9% of the
outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13 D-G thereunder, except as otherwise provided in
clause (1) of such proviso.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a. Concerning the Shares. There are no preemptive rights of any stockholder
of the Company, as such, to acquire the Common Shares.
b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. The Company has registered its Common Stock pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the Common Stock is listed and traded on the
NASDAQ/Small Cap. The Company has received no notice, either oral or written,
with respect to the continued eligibility of the Common Stock for such
listing.
c. Authorized Shares. The Company has sufficient authorized and unissued
Shares as may be reasonably necessary to effect the conversion of the
Debentures. The Shares have been duly authorized and, when issued upon
conversion of, or as interest on, the Debentures, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder.
d. Securities Purchase Agreement; Registration Rights Agreement and Stock.
This Agreement and the Registration Rights Agreement, the form of which is
attached hereto as Annex N (the "Registration Rights Agreement"), and the
transactions contemplated thereby, have been duly and validly authorized by
the Company, this Agreement has been duly executed and delivered by the
Company and this Agreement is, and the Registration Rights
Agreement, when executed and delivered by the Company, will be, valid and
binding agreements of the Company enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws
affecting the enforcement of creditors' rights generally; and the Debenture
will be duly and validly authorized and, when executed and delivered on behalf
of the Company in accordance with this Agreement, will be a valid and binding
obligation of the Company in accordance with its terms,
subject to general principles of equity and to bankruptcy, insolvency,
moratorium, or other similar laws affecting the enforcement of creditors'
rights generally.
e. Non-contravention. The execution and delivery of this Agreement and
the Registration Rights Agreement by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Debentures do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under
(i) the articles of incorporation or by-laws of the Company, (ii) any
indenture, mortgage, deed of trust, or other material agreement or instrument
to which the Company is a party or by which it or any of its properties or
assets are bound, including any listing agreement for the Common Stock except
as herein set forth, (iii) any existing applicable law, rule, or regulation
or any applicable decree, judgment, or (iv) order of any court, United States
federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, except such conflict, breach or default which
would not have a material adverse effect on the transactions contemplated
herein.
f. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the Stockholders of the Company is required to be
obtained by the Company for the issuance and sale of the Securities to the
Buyer as contemplated by this Agreement, except such authorizations, approvals
and consents that have been obtained.
g. SEC Filings. None of the SEC Filings with the Securities and Exchange
Commission since January 1, 1996 contained, at the time they were filed, any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements made therein
in light of the circumstances under which they were made, not misleading.
Except as set forth on Annex V hereto, the Company has since January 1, 1996
timely filed all requisite forms, reports and exhibits thereto with the
Securities and Exchange Commission.
h. Absence of Certain Changes. Since January 1, 1997, there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, or results of operations of the
Company, except as disclosed in Annex V or in the documents referred to in
Section 2(e) hereof.
i. Full Disclosure. There is no fact known to the Company (other than
general economic conditions known to the public generally) or as disclosed in
the documents referred to in Section 2(e), that has not been disclosed in
writing to the Buyer that (i) could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise) or in the earnings,
business affairs, properties or assets of the Company or (ii) could reasonably
be expected to materially and adversely affect the ability of the Company to
perform its obligations pursuant to this Agreement.
j. Absence of Litigation. Except as set forth in Annex V hereto, and in
the documents referred to in Section 2(e), which the Buyer has reviewed, there
is no action, suit, proceeding, inquiry or investigation before or by any
court, public board or body pending or, to the knowledge of the Company or any
of its subsidiaries, threatened against or affecting the Company or any of its
subsidiaries, wherein an unfavorable decision, ruling or finding would have
a material adverse effect on the properties, business, condition (financial
or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by this
Agreement or any of the documents contemplated hereby or which would adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of such other
documents.
k. Absence of Events of Default. Except as set forth in Annex V hereto and
Section 3(e), no Event of Default, as defined in the respective agreement to
which the Company is a party, and no event which with the giving of notice or
the passage of time or both would become an Event of Default (as so defined),
has occurred and is continuing, which would have a
material adverse effect on the Company's financial condition or results of
operations.
l. No Default. The Company is not in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property
is bound, and neither the execution, nor the delivery by the
Company, nor the performance by the Company of its obligations under this
Agreement or the Debentures, other than the conversion provision thereof, will
conflict with or result in the breach or violation of any of the terms or
provisions of, or constitute a default or result in the creation or imposition
of any lien or charge on any assets or properties of the Company under, any
material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or by
which it is bound or any statute or the Certificate of Incorporation or
By-Laws of the Company, or any decree, judgment, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company
or its properties, or the Company's listing agreement for its Common Stock.
m. Prior Issues. During the twelve (12) months preceding the date hereof, the
Company has not issued any securities except as set forth in the documents
listed in Section 2e. The presently outstanding unconverted principal amount
of each such issuance of July 25, 1997 is $941,200. No person holds any
unfulfilled registration rights.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1) the Debentures
have not been and are not being registered under the provisions of the 1933
Act and, except as provided in the Registration Rights Agreement, the Shares
have not been and are not being registered under the 1933 Act, and may not be
transferred unless (A) subsequently registered
thereunder or (B) the Buyer shall have delivered to the Company an opinion of
counsel, reasonably satisfactory in form, scope and substance to the Company
and its transfer agent, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act 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 under circumstances in which the seller, or the
person through whom the sale is made, may be deemed to be an underwriter, as
that term is used in the 1933 Act, may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other person is under any
obligation to register the Securities (other than pursuant to the Registration
Rights Agreement) under the 1933 Act or to comply with the terms and
conditions of any exemption thereunder.
b. Restrictive Legend. The Buyer acknowledges and agrees that the
Debentures, and, until such time as the Common Stock has been registered under
the 1933 Act as contemplated by the Registration Rights Agreement and sold in
accordance with such Registration Statement, the shares of Common Stock issued
to the Holder upon conversion of the Debentures shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the Debenture and such shares of Common Stock):
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED.
c. Registration Rights Agreement. The parties hereto agree to enter into
the Registration Rights Agreement, in substantially the form attached hereto
as Annex IV, on or before the Initial Closing Date.
d. Filings. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Debentures to the Buyer under any
United States laws and regulations, or by any domestic securities exchange or
trading market, and to provide a copy thereof to the Buyer promptly after such
filing.
e. Reporting Status. So long as the Buyer beneficially owns any of the
Debentures, the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even
if the 1934 Act or the rules and regulations thereunder would permit such
termination.
f. Use of Proceeds. The Company will use the proceeds from the sale
of the Debentures (excluding amounts paid by the Company for legal fees and
finder's fees in connection with the sale of the Debentures) for internal
working capital purposes , and shall not, directly or indirectly, use such
proceeds for any loan to or investment in any other corporation, partnership
enterprise or other person, except for wholly owned subsidiaries or for the
purpose of making acquisitions of businesses.
g. Certain Agreements. The Company covenants and agrees that it will not,
without the prior written consent of the Buyer, (i) enter into any subsequent
or further offer or sale of common stock or securities convertible into common
stock with any third party until the expiration of one hundred twenty (120)
days from the Additional Closing Date of the final tranche of Additional
Debentures. However, clauses 4(g)(i) will not apply to (x) the issuance of
securities (other than for cash) in connection with a merger, consolidation,
sale of assets, disposition of a business, product or license by the Company,
strategic alliance, bank loan or agreement, or the exercise of outstanding
options, or OI) the exchange of the capital stock for assets, stock or other
joint venture interests.
h. Available Shares. The Company shall have at all times authorized and
reserved for issuance, free from preemptive rights, shares of Common Stock
sufficient to yield the number of Common Stock issuable at conversion as may
be required to satisfy the conversion rights of the Buyer pursuant to the
terms and conditions of the Debentures.
i. Warrants. The Company agrees to issue to Buyer at the Closing,
transferable divisible warrants (the "Warrants") for 700,000 shares of Common
Stock. Such Warrants shall bear an exercise price per share of Common Stock
as follows: 125% of the Market Price, as defined in the Debenture, on the
Closing Date, and shall be exercisable immediately upon issuance, and for a
period of three (3) years thereafter, in the form annexed hereto as Exhibit
VI, together with piggy-back registration rights, and demand registration
rights.
j. The Buyer irrevocably agrees to purchase up to an additional
$2,500,000 of Debentures (the "Additional Debentures") in a series of
tranches, commencing thirty (30) days after the effective date of the
registration statement contemplated by the Registration Rights Agreement
attached hereto as Annex IV (the "Effective Date"), upon the same terms and
conditions and substantially in the form as those applicable to the initial
Debentures issued pursuant to the Agreement except as set forth in 4(j)(d) and
the maturity date of such Additional Debenture shall be two years from the
Additional Closing Date on which such Additional Debenture was issued (each
an "Additional Closing Date"). Buyer's obligation to purchase the
Additional Debentures, on each Additional Closing Date (which shall occur not
less than ten (10) business days apart), shall be contingent upon the
satisfaction of the following conditions:
(a) The Company shall give the Buyer ten (10) days prior written notice;
(b) The Debentures issued in each tranche shall be not less than $50,000
nor in excess of $200,000 principal amount;
(c) On each Additional Closing Date:
(i) The Registration Statement required to be filed under the
Registration Rights Agreement, is effective;
(ii) The representations and warranties contained in Section 3
shall be true and correct in all material respects;
(iii)The average daily trading volume for the previous three months must
exceed 150,000 shares;
(iv) The average daily share price of the common stock for the ten trading
days prior thereto, must exceed $.25 per share;
(v) The number of shares issuable upon conversion of the
Debentures, together with the Shares of Common Stock issued prior thereto
pursuant to this Agreement, will not exceed 20% of the outstanding Common
Shares of the Company.
(d) The conversion price for shares to be issued upon conversion of the
Additional Debentures shall be the lesser of (a) 84% of the Market Price on
the Additional Closing Date, or (b) 100% of the Market Price on the date of
the issuance of the original Debenture and the coupon rate of interest on all
such additional Debentures shall be 4% rather than 8%.
(e) In the event that the Company does not exercise its option to require
the Buyer to purchase at least $1,250,000 of Debentures, the Company will, not
later than fifteen (15) months after the date hereof, issue to the Buyer an
additional 300,000 Warrants upon the terms and conditions of 1[4i hereof. In
any event, the Company's obligations under the Registration Rights Agreement,
shall be to register the necessary common stock underlying $3,500,000 in
Debentures, and the shares underlying 1,000,000 Warrants to purchase common
stock.
5. TRANSFER AGENT INSTRUCTIONS.
a. Promptly following the delivery by the Buyer of the Purchase Price for
each Debenture in accordance with Section l(c) hereof, the Company will
irrevocably instruct its transfer agent to issue Common Stock from time to
time upon conversion of the Debenture in such amounts as specified from time
to time by the Company to the transfer agent, bearing the restrictive legend
specified in Section 4(b) of this Agreement prior to registration of the
Shares under the 1933 Act, registered in the name of the Buyer or its nominee
and in such denominations to be specified by the Buyer in connection with each
conversion of the Debenture. The Company warrants that no instruction other
than such instructions referred to in this Section 5 and stop transfer
instructions to give effect to Section 4(a) hereof prior to registration and
sale of the Shares under the 1933 Act will be given by the Company to the
transfer agent and that the Shares shall
otherwise be freely transferable on the books and records of the Company as
and to the extent provided in this Agreement, the Registration Rights
Agreement, and applicable law. Nothing in this Section shall affect in any way
the Buyer's obligations and agreement to comply with all applicable securities
laws upon resale of the Securities. If the Buyer provides the Company with an
opinion of counsel reasonably satisfactory to the Company and its transfer
agent that registration of a resale by the Buyer of any of the Securities in
accordance with clause (1)(B) of Section 4(a) of this Agreement is not
required under the 1933 Act, the Company shall (except as
provided in clause (2) of Section 4(a) of this Agreement) permit the transfer
of the Securities and, in the case of the Shares, promptly instruct the
Company's transfer agent to issue one or more certificates for Common Stock
without legend in such name and in such denominations as specified by the
Buyer.
b. The Company will permit the Buyer to exercise its right to convert the
Debenture by telecopying an executed and completed Notice of Conversion, in
the form attached to the Form of Debenture attached hereto as Annex I, to the
Company and delivering within three business days thereafter, the original
Notice of Conversion and the Debenture representing the Shares to the Company
by express courier to the Transfer Agent. Each date on which a Notice of
Conversion is telecopied to and received by the Company in accordance with the
provisions hereof shall be deemed a Conversion Date. The Company will
transmit the certificates
representing the Shares of Common Stock issuable upon conversion of any
Debenture (together with a replacement Debenture representing the any
principal amount not so converted) to the Buyer via express courier, by
electronic transfer or otherwise, within three business days after receipt
by the transfer agent of the original Notice of Conversion and the Debenture
representing the Shares to be converted (the "Delivery Date").
d. The Company understands that a delay in the issuance of the Shares of
Common Stock beyond the Delivery Date could result in economic loss to the
Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments to the Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond five (5) business days from
Delivery Date:
Late Payment For Each
$10,000 of Debenture
No. Business Days Late Principal Amount Being Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
> 10 $1,000 + $200 for
each Business
Day Late beyond 10
days
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Nothing herein shall limit Buyer's right to
pursue actual damages for the Company's failure to issue and deliver Common
Stock to the Buyer. Furthermore, in addition to
any other remedies which may be available to the Buyer, in the event that the
Company fails for any reason to effect delivery of such shares of Common Stock
within five business days after the Delivery Date, the Buyer will be entitled
to revoke the relevant Notice of Conversion by delivering a notice to such
effect to the Company whereupon the Company and the Buyer shall each be
restored to their respective positions immediately prior to delivery of such
Notice of Conversion.
6. DELIVERY INSTRUCTIONS.
Each Debenture shall be delivered by the Company to the Escrow
Agent pursuant to Section l(b) hereof, or a delivery against payment basis at
each closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the initial $1,000,000 Debenture
(the "Closing Date" ) shall occur no later than 12:00 Noon, New York time on
the second NYSE trading day after the fulfillment or waiver of all Closing
conditions pursuant to Sections 8 and 9, or such other mutually agreed to
time. The Closing shall occur on such date at the offices of the
Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the funds representing the Purchase
Price for the Debenture, and the Debenture only upon satisfaction of the
conditions set forth in Section 8 hereof. The Additional Debentures shall be
issued and sold on the Additional Closing Dates in accordance with this
section and the Joint Escrow Instructions.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell the Debentures on
the Closing Date and Additional Closing Dates to the Buyer pursuant to this
Agreement is conditioned upon:
a. The receipt and acceptance by the Buyer of this Agreement as evidenced
by execution of this Agreement by the buyer for at least One Million
($1,000,000.00) Dollars in Debenture (or such lesser amount as the Company,
in its sole discretion, shall determine);
b. Delivery by the Buyer to the Escrow Agent of good funds as payment in
full of an amount equal to the Purchase Price for the Debenture in accordance
with Section l(c) hereof;
c. The accuracy on the Closing Date and each Additional Closing Date of
the representations and warranties of the Buyer contained in this Agreement
as if made on the Closing Date and the performance by the Buyer on or before
the Closing Date and each Additional Closing Date of all covenants and
agreements of the Buyer required to be performed on or before the Closing Date
and each Additional Closing Date;
d. There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent
or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to purchase the Debentures
on the Closing Date and each Additional Closing Date is conditioned upon:
a. Acceptance by the Company of this Agreement for the sale of
Debentures, as indicated by execution of this Agreement;
b. Delivery by the Company to the Escrow Agent of the appropriate
Debenture in accordance with this Agreement;
c. The accuracy in all material respects on the Closing Date and each
Additional Closing Date of the representations and warranties of the Company
contained in this Agreement as if made on the Closing Date and such Additional
Closing Date and the performance by the Company on or before the Closing Date
and each Additional Closing Date of all covenants and agreements of the
Company required to be performed on or before the Closing Date and such
Additional Closing Date, and as to Additional Debentures, the conditions set
forth in Section 4j ; and
d. On the Closing Date and each Additional Closing Date, the Buyer having
received an opinion of counsel for the Company, dated the Closing Date and
each Additional Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer, to the effect set forth in Annex III attached
hereto, and on the first Closing Date only, the Registration Rights Agreement
annexed hereto as Annex IV and the 700,000 share Warrants.
10. GOVERNING LAW; COST OF COLLECTION; MISCELLANEOUS.
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all
parties hereto. This Agreement may be signed in one or more counterparts, each
of which shall be deemed an original. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. 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. This Agreement may be amended only
by an instrument in writing signed by the party to be charged with
enforcement. This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof. Any costs
(including attorneys fees and disbursements) incurred by Buyer with respect
to any default by the Company under this Agreement, the Registration Rights
Agreement, or the Debenture, shall be the obligation of the Company.
11. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon, (a) by personal delivery or fax, or (ii) one business day after
deposit with a nationally recognized overnight delivery service such as
Federal Express, with postage and fees prepaid, addressed to each of the other
parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by ten days advance written notice to each
of the other parties hereto.
COMPANY:
QUADRAX CORPORATION
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Telecopier No. (000) 000-0000
with a copy to:
Xxxxxx Xxxxx, Esq.
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
PURCHASER:
At the address set forth on the signature page of this Agreement.
ESCROW AGENT:
Xxxxxxx & Prager, Esqs.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Company's representations and warranties shall survive the execution and
delivery hereof of this Agreement and the delivery of the Debenture.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer
or one of its officers thereunto duly authorized as of the date set forth
below.
AGGREGATE INITIAL PURCHASE PRICE OF SUCH DEBENTURE: $ 1,000,000
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the foregoing statements
are true and correct and chat it has caused this Securities Purchase Agreement
to be duly executed on its behalf this 4th day of August 1997.
Telecopier No.
(Signature of Authorized Person)
Print Name and Title
SOVEREIGN PARTNERS. L.P.
By Southridge Capital Management, LLC
By:/s/Xxxxxxx Xxxxx
Jurisdiction of Incorporation
or Organization
Delaware
This Agreement has been accepted as of the date set forth below.
QUADRAX CO
by: /S/ Xxxxx Xxxxxxx
Title: CEO
Date: 8/4/97
Jurisdiction of Incorporation
or Organization
Delaware
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AGREEMENT
BETWEEN
QUADRAX CORPORATION AND SOVEREIGN PARTNERS, L.P.
This Amendment No. 1 dated August 22, 1997 to Securities
Purchase Agreement dated as of August 4, 1997 is entered into
between Quadrax Corporation (the "Company") and Sovereign
Partners, L.P. ("Buyer") with respect to the following facts. All
terms used herein which are not defined herein shall have the
meanings set forth in the Securities Purchase Agreement.
1. The Company and the Buyer are the parties to the Securities
Purchase Agreement.
2. The Buyer has agreed to purchase and the Company has agreed to
sell a further $500,000 principal amount Initial Debenture as of
the date hereof, notwithstanding that the Company has not yet
filed its registration statement on Form S-3.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Company will issue and sell to Buyer, and Buyer will
purchase from the Company, a $500,000 principal amount Initial
Debenture, in the form attached to the Securities Purchase
Agreement as Annex I, for a price of $500,000.
2. The Buyer's commitment to purchase Additional Debentures
pursuant to Section 4(j) of the Securities Purchase Agreement
shall be reduced from $2,500,000 to $2,000,000.
3. The Warrant issued to Buyer on August 4, 1997 shall be
initially exercisable at a price of $0.50 per share, rather than
at $0.59 per share.
4. All other terms and conditions of the Securities Purchase
Agreement are hereby ratified and confirmed, except as expressly
modified herein.
In witness whereof, the parties have executed this Amendment
No. 1 as of the date set forth above, being duly authorized to do
so.
QUADRAX CORPORATION SOVEREIGN PARTNERS, L.P.
By:__________________ By: Southridge Capital Management LLC,
its general partner
Xxxxx X. Xxxxxxx,
C.E.O.
By: _____________________________
Xxxxxxx Xxxxx, President
AMENDMENT NO. 2 TO
SECURITIES PURCHASE AGREEMENT
BETWEEN
QUADRAX CORPORATION AND SOVEREIGN PARTNERS, L.P.
This Amendment No. 2 dated October 8th, 1997 to Securities Purchase Agreement
dated as of August 4, 1997, as amended on August 22, 1997, is entered into
between Quadrax Corporation (the "Company") and Dominion Capital Fund, as
assignee of Sovereign Partners, L.P.("Buyer") with respect to the following
facts. All terms used herein which are not defined herein shall have the
meanings set forth in the Securities Purchase Agreement.
1. The Company and the Buyer are the parties to the Securities Purchase
Agreement.
2. The Buyer has agreed to purchase and the Company has agreed to sell a further
$750,000 principal amount Initial Debenture as of the date hereof,
notwithstanding that the Company's registration statement on Form S-3 (File No.
333-34905) has not yet been declared effective.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Company will issue and sell to Buyer, and Buyer will purchase from the
Company, a $750,000 principal amount Initial Debenture, in the form attached to
the Securities Purchase Agreement as Annex I, for a price of $750,000.
2. The Buyer's commitment to purchase Additional Debentures pursuant to Section
4(j) of the Securities Purchase Agreement shall be reduced from $2,000,000 to
$1,250,000.
3. The Conversion Rate for all of the Initial Debentures including those sold to
Sovereign Partners, L.P., (which shall have an aggregate principal amount of
$2,250,000 upon closing of the sale refereed to in Section 1 hereof) shall be
Seventy-Five Percent (75%) of the Market Price on the Conversion Date, and the
Conversion Rate for all of the Additional Debentures shall be the lesser of (a)
75% of the Market Price on the Additional Closing Date of (b) 100% of the Market
Price on the date of the issuance of the first Initial Debenture.
4. All other terms and conditions of the Securities Purchase Agreement are
hereby ratified and confirmed, except as expressly modified herein.
In witness whereof, the parties have executed this Amendment No. 2 as of the
date set forth above, being duly authorized to do so.
QUADRAX CORPORATION DOMINION CAPITAL FUND
By:__________________ By: _________________________
Xxxxx X. Xxxxxxx, CEO Xxxx Xxxxxxxxx, Agent
