EXHIBIT 10.7
CONFIDENTIAL
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is entered as of
the date set forth on the signature page of this Agreement by and between
ClearLogic Inc., (the "Company") having its principal address 00 X. Xxxxxx Xxx,
Xxxxxxxxxxx XX 00000 and the investor whose name appears at the end of this
Agreement ("Purchaser").
RECITALS
The Company wishes to obtain additional financing and desires to
provide such financing through the sale of certain promissory notes being
privately offered hereby. Purchaser is willing to provide the financing by
purchasing the promissory notes.
NOW, THEREFORE, in consideration of the premises hereof and the
agreements set forth herein below, the parties hereto hereby agree as follows:
1. Sale and Purchase of Promissory Notes.
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Subject to the terms and conditions herein, on the Closing Date, as
defined in Section 4 hereof, the Company agrees to issue and sell, and the
Purchaser agrees to purchase, that amount of promissory notes (the Note or
"Notes") as are indicated on the last page of this Agreement. The notes will be
sold in minimum amounts of $25,000 (the "Purchase Price"). However, the Company
may in its sole discretion offer Notes at a lower minimum purchase amount.
For each dollar amount advanced to the Company, the Purchaser will
receive a warrant (the Warrant or Warrants) to purchase Common Stock.
2. Terms of Notes and Warrants.
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The Notes shall be for a term of eighteen months. Interest on the Notes
shall be eight (8%) per cent per year. Interest and principle shall be payable
at maturity. The Notes will be convertible at the Purchaser's option into
whatever securities the Company issues in an offering of $500,000 or more.
The Warrants provide that the holder may exercise them at anytime for a
four-year period. The exercise price is $1.00 per share. The Warrants will
contain standard piggy-back registration rights.
3. Notes Offered In A Private Placement Transaction.
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The Notes are to be offered to a number of sophisticated and accredited
investors as part of a private offering transaction (the "Private Offering").
The Company is offering a total of $200,000 in Notes.
The Notes are being offered on a "best efforts" basis with no minimum
amount to be sold.
4. Binding Effect of Securities Purchase Agreement: The Closing.
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The Notes are being offered and sold pursuant to this Securities
Purchase Agreement. This Agreement shall be executed by the Purchaser and
accompanied by wire transfer or bank check in federal funds (U.S.) or personal
check payable to "ClearLogic, Inc.
This Securities Purchase Agreement shall not be binding on the Company
unless and until the Company has accepted the offer represented by an executed
signature page at the end hereof. The Company may accept or reject this
Securities Purchase Agreement in the Company's sole discretion if the Purchaser
does not meet the suitability standards established herein or for any other
reason. In the event the Company rejects this Agreement, the Purchaser's funds
will be promptly returned without deduction of any costs and without interest.
5. Delivery by the Company.
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The Company shall deliver the Notes and the Warrants to the Purchaser
at the Closing as defined below:
Subject to the conditions set forth below, this offering will close no
later June 15, 1999 however, the Company has the sole right to extend the
closing date for thirty (30) additional days (the "Closing").
6. Representations and Warranties of the Purchaser.
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The Purchaser represents and warrants to the Company as follows:
Access to Information. Purchaser has had access to all material and
relevant information concerning the Company, its management, financial
condition, capitalization, properties and prospects necessary to enable
Purchaser to make an informed investment decision with respect to an investment
in the Notes. Purchaser has been provided with the Company's Business Plan dated
April 1999. Purchaser acknowledges that it has had the opportunity to ask
questions of and receive answers from, and to obtain additional information from
the Company or its representatives concerning the terms and conditions of the
acquisition of the Notes and the present and proposed business and financial
condition of the Company and has had all such questions answered to its
satisfaction and has been supplied all information requested.
Financial Matters and Sophistication. Purchaser has such knowledge and
experience in business and financial matters, such that it is capable of
evaluating the merits and risks of purchasing the Notes. Purchaser represents
that it is (i) an "accredited investor" as defined in Rule 501(a) of Regulation
D promulgated under the Securities and Exchange Act of 1933, as amended (the
"1933 Act") and if the Purchaser is an individual, by virtue of having a net
worth in excess of $ 1,000,000 or an individual income in excess of $200,000 in
1997 and 1998; or joint income with his or her spouse in excess of $300,000 in
1997 and 1998; and reasonably expects an income in excess of, or no less than
that, in 1999; and, (ii) that it is capable of assuming the risk of investing in
the Notes.
Investment Intent. (1) Purchaser is acquiring the Notes for its own
account and not on behalf of any other person; (ii) Purchaser is acquiring the
Notes for investment purpose only and not with a view to distribution or with
the intent to divide its participation with others by reselling or otherwise
distributing the Notes; and (iii) Purchaser will not sell the Notes without
registration under the 1933 Act and any applicable state securities laws, or
unless the Company receives an opinion of counsel reasonably acceptable to it
(as to both counsel and the opinion) to the effect that such registration is not
necessary.
7. Understanding of Investment Risks.
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Purchaser understands that the Notes represent a highly speculative
investment, involving a high degree of risk. An investment in the Notes should
not be made by a Purchaser who cannot afford the loss of their entire Purchase
Price, The Purchaser acknowledges that the securities offered hereby have not
been approved or disapproved by the Securities and Exchange Commission, or any
state securities commissions, nor has the Commission, passed upon the adequacy
or accuracy of this Securities Purchase Agreement or any exhibit hereof. Prior
to making an investment in the Notes, the Purchaser should fully consider, among
other things, the following:
Use of Proceeds. The amount that will be raised in this offering is
$200,000. The proceeds to be realized upon the sale of the Notes will be used
for working capital purposes, including the payment of accounts payable. At
least fifty (50%) percent of the proceeds will be used for marketing purposes.
Funds realized from the sale of Notes will not be set aside or reserved, but
rather will be deployed immediately.
Lack of Operating Profits; Dependence upon increase sales. To date, the
Company has not generated positive cash flow or earned operating profits and
expects to continue to incur losses for the immediate future. The Company's
success depends to a large extent upon its ability to commercially sell its
products and services. To the extent that the Company does not generate positive
cash flow from sales and continues to incur losses in the future, there can be
no assurance that the Company can continue to operate as a going concern.
Need for Additional Funding. The funds to be raised in this offering
are only expected to provide the Company with operating capital for a 3 to 4
month period. It is the Company's intention to seek additional funding of
approximately two million dollars.
8. Understanding of Nature of Securities.
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Purchaser understands that the Notes, Warrants and the Common Stock
underlying the Warrants (collectively the Securities) have not been registered
under the 1933 Act or any state securities laws and are
being issued and sold in reliance upon certain of the exemptions contained in
the 1933 Act and under applicable state securities laws.
The Securities are "restricted securities" as that term is defined in
Rule 144 promulgated under the 1933 Act.
The Securities cannot be sold or transferred without registration under
the 1933 Act and applicable state securities laws, or unless the Company
receives an opinion of counsel reasonably acceptable to it (as to both counsel
and the opinion) that such registration is not necessary.
There is no public market for the Securities.
The Securities and any certificates issued in replacement therefor
shall bear the following legends, in addition to any other legend required by
law or otherwise:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities represented by this certificate have been taken by the
registered owner for investment, and without a view to resale or
distribution thereof, and may not be transferred or disposed of
without an opinion of counsel satisfactory to the issuer that such
transfer or disposition does not violate the Securities Act of 1933,
as amended, or the rules and regulations thereunder."
Only the Company can register the Securities under the 1933 Act and
applicable state securities laws.
The Company may, from time to time, make stop transfer notations in its
transfer records to ensure compliance with the 1933 Act.
9. Warranties and Representations of the Company.
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The Company represents and warrants to Purchaser as follows:
Organization and Standing of the Company. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the State of New Jersey, with adequate power and authority to conduct the
business in which it is now engaged and has the corporate power and authority to
enter into this Agreement, and is in good standing in such other states or
jurisdictions as is necessary to enable it to carry on its business;
Corporate Power and Authority. The execution and delivery of this
Agreement and the transaction contemplated hereby has been duly authorized by
the Company's Board of Directors. No other corporate act or proceeding on the
part of the Company is necessary to authorize this Agreement or the consummation
of the transaction contemplated hereby. When duly executed and delivered by the
parties hereto, this Agreement will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its
terms; and
Securities. All Securities have been duly authorized and, upon issuance
and sale pursuant to the terms of this Agreement, will have been validly issued
fully paid and nonassessable and will be free and clear of all liens, claims and
encumbrances.
10. Notices.
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All notices, requests, consents or other communications required or
permitted hereunder shall be in writing and shall be hand delivered or mailed
first class postage prepaid, registered or certified mail, to the following
addresses:
If to the Company:
ClearLogic, Inc.
00 X. Xxxxxx Xxx
Xxxxxxxxxxx, XX 00000
Attention: President
In the case of Purchaser:
To the address set forth at the end of this Agreement or to such other
addresses as may be specified in accordance herewith from time to
time. Such notices and other communications shall for all purposes of
this Agreement be treated as being effective upon being delivered
personally or overnight courier or, if sent by mail, five days after
the same has been deposited in a regularly maintained receptacle for
the deposit of United States mail, addressed as set forth above, and
postage prepaid.
11. Survival of Representations and Warranties.
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Representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the sale and purchase or exchange
of the Note in payment therefor.
12. Parties in Interest.
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All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto, provided that this Agreement and the
interests herein may not be assigned by either party without the express written
consent of the other party.
13. Reference to Currency.
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All references within this Agreement to dollars, funds or any other
financial measures shall be interpreted to mean U.S. dollars.
14. Governing Law.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
15. Sections and Other Headings.
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The section and other headings contained in this Agreement are for the
convenience of reference only, and do not constitute part of this Agreement or
otherwise affect any of the provisions hereof.
16. Counterpart Signatures.
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This Agreement may be signed in counterpart and all counterparts
together shall become effective only when the counterpart (s) have been executed
and delivered by and on behalf of the Company and the Purchaser.
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
caused this Agreement to be signed by their duly authorized representatives.
Purchaser
By: __________________________________
Name (Please Print)
Dated: ______________ ______________________________________
Name (Signature)
Residence of Purchaser:
______________________________________
______________________________________
Social Security No.___________________
$____________________
Dollar amount
of Notes purchased.
Attest: Agreed and Accepted
by ClearLogic, Inc.
______________________ By: __________________________________
Secretary (An Authorized Executive Officer)
