Exhibit 4.7
PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (the "Agreement") is effective as of this
9th day of December, 2003 between Epixtar Corp., its subsidiaries and Note
Investors by and among Epixtar Corp., a Florida corporation, with offices at
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx 00000 (the "Company") and the
purchasers executing this Agreement as set forth on the signature page
(collectively, the "Purchasers").
RECITALS
WHEREAS, simultaneously with the execution of this Agreement the
Purchasers executing this Agreement now or on any subsequent date desire to
purchase 7% Secured Convertible Notes of the Company (the "Notes") and five-year
Warrants (the "Warrants") to purchase common stock of the Company (the "Common
Stock") at an exercise price of $5.00 along with such registration rights as set
forth in the Registration Rights Agreement (the "Registration Rights
Agreement");
WHEREAS, the Notes shall have the terms set forth in the form attached
as Exhibit "A" hereto, the Warrants shall be in the form attached hereto as
Exhibit "B" and the Registration Rights Agreement shall be in the form attached
hereto as Exhibit "C";
WHEREAS, in conjunction with the Notes, the Company has executed a
Security Agreement (the "Security Agreement") securing the payment of the Notes,
in the form of the attached Exhibit "D"; and
WHEREAS, the Notes and the Warrants shall be sold in "Units" consisting
of a Note in the minimum amount of $100,000 and one Warrant to purchase 12,500
shares of Common Stock with up to 15 units offered (hereinafter, the Notes,
Warrants, and any shares of Common Stock issued upon conversion of the Notes or
exercise of the Warrants shall be referred to, collectively, as the
"Securities").
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties, to this Agreement desiring to be legally bound hereby
agree as follows:
AGREEMENT
1. Purchase and Sale of Notes; Issuance of Warrant. Simultaneously with
the receipt of payment of the purchase price by check or by wire transfer to the
Company's bank account and (i) this Agreement (ii) the Security Agreement and
(iii) the Registration Rights Agreement executed by each of the Purchasers, the
Company shall deliver to each Purchaser the Notes and Warrants to be purchased
by such Purchaser. The date on which such exchange takes place shall be referred
to hereinafter as the "Closing Date."
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2. Representations and Warranties of the Company. Except as set forth
in the attached Schedule of Exceptions, ("Schedule") or in the Securities
Filings as hereafter defined, the Company hereby represents and warrants to each
Purchaser as follows:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated validly existing and in good standing under the
laws of Florida and has all requisite corporate authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted. The Company is duly qualified or licensed as a foreign corporation
and is in good standing in all jurisdictions where the nature of its business or
property makes such qualification or licensing necessary and where the failure
to do so would have a material adverse effect on its condition (financial or
otherwise), business, properties, assets, liabilities (including contingent
liabilities), results of operations or current prospects of the Company and its
subsidiaries, taken as a whole (hereinafter a "Material Adverse Effect").
(b) Corporate Power. The Company will have at the Closing Date
all requisite legal and corporate power to execute and deliver this Agreement,
the Notes, the Warrant, the Registration Rights Agreement and the Security
Agreement (the Warrant, the Registration Rights Agreement and the Security
Agreement are hereinafter collectively referred to as the "Related Agreements")
and to consummate any other transactions contemplated by the terms of this
Agreement and the Related Agreements, including the delivery of certificates for
the Notes and to carry out and perform its obligations under the terms of this
Agreement and the Related Agreements.
(c) Authorization, Enforcement. (i) The execution and delivery
of the Agreement, the Notes, and Related Agreements by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required, and (ii) the Agreement, the Notes and Related Agreements have been
duly executed and delivered by the Company, and at the Closing shall constitute
valid and binding obligations of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies or by other
equitable principles of general application.
(d) Capitalization
(i) Capital Stock. The authorized capital stock of
the Company consists of (1) 50,000,000 shares of Common Stock of which
10,668,067 shares will be issued and outstanding immediately prior to the
Closing Date and (2) 10,000,000 shares of Preferred Stock to be issued in series
of which 250,000 shares has been designated as Series A and of which 23,510
shall be issued and outstanding prior to the Closing Date other than the shares
to be issued pursuant to conversion of the Notes or exercise of the Warrants.
The outstanding shares of capital stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable, and were issued in
compliance with all applicable federal and state securities laws.
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(ii) Reserved Capital Stock. The Company has reserved
a sufficient number of shares of Common Stock for issuance upon conversion of
the Notes and exercise of the Warrants. The Company has presently reserved (1)
4,000,000 shares of its Common Stock for issuance to employees, consultants or
directors under its Stock Option Plan, and (2) our 5,000,000 shares of Common
Stock for issuance pursuant to outstanding warrants.
(iii) Obligations With Respect to Capital Stock.
Except as set forth in this Agreement, the Schedule or Securities Filings (as
defined in Section 2(k) hereinafter) no options, warrants, subscriptions or
purchase rights of any nature to acquire from the Company shares of capital
stock or other securities are authorized, issued or outstanding, nor is the
Company obligated under its charter documents or under any agreement by which
the Company is bound to issue shares of its capital stock or other securities,
except as contemplated by this Agreement. There are no restrictions on the
transfer of shares of capital stock of the Company other than those imposed by
relevant federal and state securities laws and as otherwise contemplated by this
Agreement. To the Company's best knowledge except as provided for in the
Articles of Amendment, there are no agreements, understandings, trusts or other
collaborative arrangements or understandings concerning the voting of the
capital stock of the Company.
(e) Solvency. The Company is solvent.
(f) No Conflicts. The execution, delivery and performance of
this Agreement the Notes, and the Related Agreements by the Company and the
consummation by the Company of the transactions contemplated herein do not and
will not (i) violate any provision of the Company's Articles of Incorporation or
Bylaws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company is a party, (iii)
create or impose a lien, charge or encumbrance on any property of the Company
under any agreement or any commitment to which the Company is a party or by
which the Company is bound or by which any of its respective properties or
assets are bound, or (iv) result in a violation of any federal, state, local or
other foreign statute, rule, regulation, order, judgment or decree (including
any federal or state securities laws and regulations) applicable to the Company
or any of its subsidiaries or by which any property or asset of the Company or
any of its subsidiaries are bound or affected, except, in all cases, for such
conflicts, defaults, termination, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
(g) Financial Statements. The financial statements of the
Company comply as to form in all material respects with applicable accounting
requirements under GAAP or other applicable rules and regulations with respect
thereto. Such financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present in all
material respects the financial position of the Company and its subsidiaries as
of the dates thereof and the results of operations and cash flows for the
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periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). For purposes hereof, the term "GAAP" shall mean the
United States Generally Accepted Accounting Principles as those conventions,
rules and procedures are determined by the Financial Accounting Standard Board
and its predecessor or successor agencies.
(h) No Undisclosed Liabilities. The Company has no
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) that would be
required to be disclosed on a balance sheet of the Company or any subsidiary
(including the notes thereto) in conformity with GAAP which are not disclosed in
the Schedule of Exceptions, other than those incurred in the ordinary course of
the Company's business since June 30, 2003 and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the Company.
(i) Compliance with Law. The Company has all franchises,
permits, licenses, consents and other governmental or regulatory authorizations
and approvals necessary for the conduct of its business as now being conducted
by it unless the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(k) SEC Reports. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934 as amended (the "Exchange Act") during the 12 months preceding the
date of this Agreement and such documents and the Company's registration
statement under the Securities Act of 1933 as amended, (the "Securities Act") on
form SB-2 (collectively, the "Securities Filings") complied as to form in all
material respects with the SEC's requirements as of their respective filing
dates, and the information contained therein as of the date thereof did not
contain any 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 in
light of the circumstances under which they were made not misleading.
(l) Books and Records. The records and documents of the
Company accurately reflect in all material respects the information relating to
the business of the Company, the location and collection of its assets, and the
nature of all transactions giving rise to the obligations or accounts receivable
of the Company.
(m) Securities Laws. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Securities hereunder. Neither the Company nor
anyone acting on its behalf, directly or indirectly, has or will sell, offer to
sell or solicit offers to buy the Securities or similar securities to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person (other than the
Purchasers), so as to bring the issuance and sale of the Securities under the
registration provisions of the Securities Act and applicable state securities
laws. Neither the Company nor any of its affiliates, nor any person acting on
its or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of the Securities.
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(n) Changes. Since June 30, 2003 (the "Statement Date"), there
has not been: any change in the assets, liabilities, financial condition or
operating results of he Company from that reflected in the Financial Statements,
except changes in the ordinary course of business that have not been, in the
aggregate, materially adverse.
(o) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the Company's knowledge, threatened against, the
Company or its properties (not, to the Company's knowledge against any of the
officers or directors of the Company) before any court, arbitrator or
governmental agency which, in the case of actions, suits, proceedings or
investigations pending or threatened against officers or directors of the
Company, either in any case or in the aggregate, might result in any material
adverse change in the business or financial condition of the Company or any of
its properties or assets, or in any material impairment of the right or ability
of the Company to carry on its business as now conducted or as proposed to be
conducted, or in any material liability on the part of the Company, and none
which questions the validity of the Agreements, the right of the Company to
enter into the Agreements or consummate the transactions contemplated hereby or
thereby, or any action taken or to be taken in connection herewith, nor is the
Company aware that there is a reasonable basis for any of the foregoing.
(p) Brokers or Finders; Other Offers. Except for fees payable
to a finder. As hereinafter set forth, the Company has not incurred, and will
not incur, directly or indirectly, as a result of any action taken by the
Company, any liability for brokerage or finder's fees or agent's commissions or
any similar charges in connection with this Agreement and the Related
Agreements.
(q) Disclosure. The Company has fully provided each Purchaser
with all the information which such Purchaser has requested for deciding whether
to acquire the Securities and all information which the Company believes is
reasonably necessary to enable such Purchaser to make such decision. No
representation or warranty of the Company contained in this Agreement, the Notes
and the Related Agreements and the exhibits and schedules attached hereto and
thereto, any certificate furnished or to be furnished to Purchasers at the
Closing or other written information furnished to the Purchasers or their
counsel in connection with the transactions contemplated by this Agreement and
the Related Agreements contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made. There is no fact known to the Company that has not been disclosed
herein or in the Related Agreements, or in any other agreement, document or
written statement furnished by the Company to the Purchasers in connection with
the transactions contemplated hereby and thereby which is specific to the
Company, as opposed to the industry in which the Company operates, and which
materially adversely affects or is reasonably likely to materially and adversely
affect the business, properties, assets or financial condition of the Company
(t) Customers and Suppliers. No customer or supplier that was
significant to the Company during the period covered by the Financial Statements
or that has been significant to the Company thereafter, has terminated,
materially reduced or, to the Company's knowledge, threatened to terminate or
materially reduce its purchases from or provision of products or services to the
Company, as the case may be.
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3. Representations and Warranties of Purchasers.
(a) Investment Intent. Each of the Purchasers represents,
individually, that he/she/it has acquired the Notes and Warrants, and will
acquire the shares of Common Stock issuable upon the conversion of the Notes or
the exercise of the Warrants (hereinafter, the "Shares") for investment and not
with a view to, or for sale in connection with, any distribution thereof nor
with any present intention to sell the Shares. The undersigned will not offer or
transfer the Shares except pursuant to an effective registration statement
pursuant to the Securities Act of 1933 (the "Securities Act") or an exemption
from such requirements as set forth in an opinion of counsel. The certificates
for the Shares shall contain a legend to such effect and be subject to a stop
transfer order. No other person has a direct or indirect beneficial interest in
the Shares. Except as set forth herein, the Company has no obligation to
register the Shares under the Securities Act, or to assist the undersigned in
complying with an exemption from registration under the Securities Act.
(b) Experience. Each of the Purchasers represents and warrants
that he/she/it has such knowledge and experience in financial and business
matters that he/she/it is and will be capable of evaluating the risks and merits
of an investment in the Shares to be purchased hereby and that each is able to
bear the economic risks, including total loss, of investing in the Shares.
(c) No Review. Each of the Purchasers understands that no
federal or foreign agency has passed upon the Shares or made any findings or
determination as to the fairness of this investment.
(d) Approvals Required. No approval, authorization, consent,
order or other action of, or filing with, any person, firm or corporation or any
court, administrative agency or other governmental authority is required in
connection with the execution and delivery of this Agreement by the each of the
Purchasers or the consummation of the transactions described herein, except as
disclosed herein and, except to the extent that each of them or the Company is
required to file reports in accordance with relevant regulations under Federal
securities laws.
(e) Accuracy of Information. All information furnished in the
Note Purchase Agreement completed by the undersigned is true and correct in all
respects.
(f) Acknowledgement of Risks. Each of the Purchasers
acknowledges the existence of the risks set forth in the Securities Filings
including a risk that the Company may not be able to operate at a profit.
(g) Accredited Investor. Each of the Purchasers further
represents that he/she/it is an Accredited Investor within the meaning of
Regulation D because the Purchasers is one of the types of persons listed below
as indicated by such person's check of the appropriate category. (Please check
the appropriate paragraph[s]).
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(1) Any bank as defined in section 3(a)(2) of the Act, or any savings
----- and loan association or other institution as defined in section
3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934; any insurance company as defined in
section 2(13) of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in section 2(a)(48) of that Act; any Small Business Investment
Company licensed by the U.S. Small Business Administration under
section 301(c) or (d) of the Small Business Investment Act of 1958; any
plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in section
3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
if a self-directed plan, with investment decisions made solely by
persons that are accredited Investors;
(2) Any private business development company as defined in section
----- 202(a)(22) of the Investment Advisers Act of 1940;
X (3) Any organization described in section 501(c)(3) of the Internal
----- Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer
----- of the securities being offered or sold, or any director, executive
officer, or general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth
----- with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(6) Any natural person who had an individual income in excess of
----- $200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
(7) Any trust, with total assets in excess of $5,000,000, not formed
----- for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Section
230.506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
----- investors or whose net worth is at least $5 million.
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(h) Representations and Warranties. The foregoing
representations and warranties are true as of the Closing Date. If such
representation and warranties shall not be true in any respect prior to such
date, each of the Purchasers will give prompt written notice of such fact to the
Company.
(i) Further Acknowledgments. Each of the Purchasers further
acknowledges that he/she/it has carefully reviewed the Securities Filings. Each
of them has had the opportunity to ask questions and receive answers from
representatives of the Company. The Company has made available to the Purchasers
all documents requested and has provided answers to all of their questions
relating to an investment in the Company. In evaluating their decisions to
purchase the Notes and Warrants subscribed for, each of the Purchasers has
relied solely upon information contained in the Schedule or the Securities
Filings and independent investigations made by them.
4. Miscellaneous.
(a) Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(b) Governing Law; Jurisdiction. This Agreement and all acts
and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the
internal laws of the State of Florida, without giving effect to principles of
conflicts of law thereof. In addition, the parties hereto agree that (i) any
legal suit, action or proceeding arising out of or relating to this Agreement
shall be instituted exclusively in the courts of the State of Florida for and in
Miami, Florida, (ii) waive any objection which the parties may have now or
hereafter based upon forum non conveniens or to the venue of any such suit,
action or proceeding, and (iii) irrevocably consent to the jurisdiction of the
federal and state courts for and in Miami, Florida in any such suit, action or
proceeding. FURTHER, THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
TO ENFORCE THIS AGREEMENT AND IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR
CROSS CLAIM ASSERTED IN ANY SUCH ACTION.
(c) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(d) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
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(e) Survival. The warranties, representations, agreements and
covenants of the Company contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing.
(f) Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or five days after being deposited in the U.S. mail as certified or
registered mail with postage prepaid with receipt. Such notice shall be
addressed to the Purchasers at such party's address as set forth on the
signature page and such notice if addressed to the Company shall be sent to the
address above (with a copy to Xxxxxxx X. XxXxxxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxx Xxxxxx, 00000) or as subsequently modified by written
notice.
(g) Amendments and Waivers. Any term of this Agreement may be
amended or waived only with the written consent of the Company and Purchasers
accounting for 67% in dollar amount of the purchases made in this offering. Any
amendment or waiver affected in accordance with this Section 5(g) shall be
binding upon the Purchasers, each future holder of the Securities, and the
Company.
(h) Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then such provision
shall be excluded from this Agreement, and the balance of the Agreement shall be
enforceable in accordance with its terms.
(i) Entire Agreement. This Agreement, and the documents
referred to herein, constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements existing between the parties hereto are expressly canceled.
(j) Expenses. The Company and each Purchaser shall pay their
respective costs and expenses incurred with respect to the negotiation,
execution, delivery and performance of this Agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Note Purchase
Agreement as of the date first written above.
THE COMPANY:
Epixtar Corp.
By:
------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman and CEO
Generation Capital Associates
By:
---------------------------------
Xxxx X. Xxxxxx, CFO
Date:
-------------------------------
The Xxxx Organization Corp.
By:
---------------------------------
Xxxxx X. Xxxx, President
Date
--------------------------------
---------------------------------------
Xxxxxx Commander
PURCHASERS
Signature Name and Address Amount Warrants to be
of Purchaser and tax
identification number Received
--------------------- --------
Generation Capital Associates $400,000 50,000
0000 Xxxxxxxxx Xxxxx -------- -----------------------
Xxxxxxx, XX 00000
Tel: 000 000-0000
Fax 000 000-0000
The Xxxx Organization Corp. $50,000 6,250
0000 Xxxxxxxxx Xxxxx ------- -----------------------
Xxxxxxx, XX 00000
Tel: 000 000-0000
Fax: 000 000-0000
Xxxxxx Commander $50,000 6,250
Box 635 ------- -----------------------
County Xxxxx 00
Xxx Xxxxxxx, X.X. 00000
$
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$
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EXHIBIT A
Form of Note
EXHIBIT B
Form of Warrant
EXHIBIT C
Form of
REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
Form of
SECURITY AGREEMENT
