EXHIBIT 4.1
FORM OF
INFINITY, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into this ___ day of January, 2004, by and among Infinity, Inc., a Colorado
corporation (the "Company"), and ______________________________________________
(the "Investor").
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 AUTHORIZATION. The Company has authorized the issuance, pursuant
to the terms and conditions of this Agreement, of __________ shares of the
Company's common stock, $.001 par value (the "Purchased Shares").
1.2 AGREEMENT TO PURCHASE AND SELL. The Company agrees to sell to the
Investor on the Closing Date (as defined below), and the Investor agrees to
purchase from the Company on the Closing Date, the Purchased Shares at a price
of $4.00 per share.
2. CLOSING.
2.1 THE CLOSING. The coordination of the purchase and sale of the
Purchased Shares (the "Closing") will take place at the offices of Xxxxx Xxxxxx
& Xxxxxx LLP, 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx, 00000, at
9:00 a.m., Mountain Time, on January ___, 2004, or at such other time and place
as the Company and Investor mutually agree upon (the "Closing Date"). On the
Closing Date, the Investor will purchase the Purchased Shares against delivery
by the Company to the Investor, or its designee, of a certificate representing
such Purchased Shares registered in the name of the Investor. Upon confirmation
of receipt by the Investor of the certificate, the full purchase price for such
Purchased Shares shall be paid on the Closing Date by wire transfer of funds to
the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Colorado, and has all requisite corporate power and authority to
conduct its business as currently conducted and to execute, deliver and perform
all of its obligations under this Agreement and to consummate the transactions
contemplated hereby. The Company is qualified to do business as a foreign
corporation in each jurisdiction where failure to be so qualified would,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, assets or liabilities of the Company, taken as a
whole (the "Business") (such effect referred to as a "Material Adverse Effect").
For purposes of this Agreement, "Material Adverse Effect" shall not include any
effect attributable to changes in the trading prices for the Company's Common
Stock (as defined below) or changes in economic conditions affecting the U.S.
economy generally.
3.2 CAPITALIZATION. Immediately before the Closing Date, the
capitalization of the Company will consist of the following:
(a) PREFERRED STOCK. A total of 5,000,000 undesignated shares of
Preferred Stock, no par value per share, none of which are issued and
outstanding.
(b) COMMON STOCK. A total of 300,000,000 authorized shares of
common stock, of which approximately 8,185,546 shares of common stock ("Common
Stock") were outstanding as of December 15, 2003.
(c) OPTIONS, WARRANTS, RESERVED SHARES. Except for: (i) 1,051,400
shares of Common Stock issuable upon the exercise of options granted pursuant to
the 1992, 1999, 2000, 2001, 2002 and 2003 Stock Option Plans; (ii) 2,110,150
shares of Common Stock issuable upon the exercise of outstanding options (other
than options issued under the Stock Option Plans) and warrants; and (iii)
1,811,351 shares of Common Stock issuable upon the conversion of 7% and 8%
subordinated convertible notes, there are no outstanding options, warrants,
rights or agreements for the purchase or acquisition from the Company of any
shares of its capital stock or any securities convertible into or ultimately
exchangeable or exercisable for any shares of the Company's capital stock. All
of such outstanding shares of capital stock have been duly authorized and
validly issued and are fully paid and nonassessable and all of such options,
warrants and other rights to acquire Common Stock have been duly authorized by
the Company.
3.3 DUE AUTHORIZATION; NO VIOLATION. All corporate action on the part
of the Company necessary for the authorization, execution and delivery of, and
the performance of all obligations of the Company under, this Agreement and the
transactions contemplated hereby, and the authorization, issuance, reservation
for issuance and delivery of all of the Purchased Shares being sold under this
Agreement, has been taken or will be taken prior to the Closing. No further
consent or authorization of the Company or the Board of Directors or its
stockholders is required and this Agreement constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of law governing the availability of equitable remedies.
Neither the execution, delivery or performance by the Company of this Agreement
nor the consummation by the Company of the transactions contemplated hereby will
(i) conflict with or result in a breach of any provision of the Articles of
Incorporation of the Company, as amended to date (the "Charter") or the
Company's Bylaws, (ii) conflict with, result in a violation or breach of, or
cause a default (or give rise to any right of termination, cancellation or
acceleration), or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company, under any of the terms, conditions or provisions of any agreement,
instrument or obligation to which the Company is a party, which default would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (iii) violate any law, statute, rule or regulation or
judgment, order, writ, injunction or decree of any governmental authority, in
each case under this clause (iii) applicable to the Company or any of its
properties or assets and which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. The business and
operations of the Company have been
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conducted in accordance with all applicable laws, rules and regulations of all
governmental authorities, except for such violations which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
3.4 VALID ISSUANCE OF STOCK. The Purchased Shares, when issued, sold
and delivered in accordance with the terms of this Agreement for the
consideration provided for herein, will be duly authorized and validly issued,
fully paid and nonassessable and free and clear of all pledges, taxes, claims,
liens, encumbrances and restrictions (other than those arising under federal or
state securities laws as a result of the private placement of the Purchased
Shares to the Investor) and are not subject to preemptive or other similar
rights of any stockholder of the Company.
3.5 COMPLIANCE WITH SECURITIES LAWS. Subject to the accuracy of the
representations made by the Investor in Section 4 hereof, the Purchased Shares
(assuming no change in applicable law and no unlawful distribution of Purchased
Shares by the Investor or other parties) will be issued to the Investor in
compliance with applicable exemptions from (i) the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "Securities
Act") and (ii) the registration and qualification requirements of all applicable
securities laws of the states of the United States.
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority or
self regulatory agency on the part of the Company is required in connection with
the valid execution and delivery of this Agreement, the offer, sale and issuance
of the Purchased Shares, or the consummation of the transactions contemplated by
this Agreement, except for qualifications or filings under the Securities Act
and the applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Securities Act,
and all other applicable securities laws as may be required in connection with
the transactions contemplated by this Agreement.
3.7 ABSENCE OF CHANGES. After the respective dates as of which
information is given in the Company's Proxy Statement for the annual meeting of
stockholders held on June 5, 2003, the Company's Annual Report on Form 10-KSB
for the year ended December 31, 2002, the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31, 2003, June 30, 2003 and September 30,
2003, and the Company's Reports on Form 8-K filed on December 12, 2003, November
14, 2003, August 15, 2003, and May 21, 2003 (such documents, referred to
collectively as the "Disclosure Documents"), there has not been any Material
Adverse Effect on the Business or any other event which could reasonably be
expected to adversely affect the validity or enforceability of, or the authority
or the ability of the Company to perform its obligations under, this Agreement.
3.8 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending (or, to the Company's knowledge,
currently threatened) against or otherwise affecting the Company which (i) is
reasonably likely to prevent the consummation of the transactions contemplated
hereby or (ii) if adversely resolved against the Company would reasonably be
expected to have a Material Adverse Effect.
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3.9 COMMISSION FILINGS. The Company has filed in a timely manner all
reports and other information required to be filed ("Filings") with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") during the preceding twelve calendar months. On their respective
dates of filing, to the Company's knowledge the Filings complied in all material
respects with the requirements of the Exchange Act, and the published rules and
regulations of the Commission promulgated thereunder. To the Company's
knowledge, on their respective dates of filing, the Filings did not include any
untrue statement of a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading, and all consolidated financial statements contained in the
Filings fairly present, in all material respects, the financial position of the
Company on the dates of such statements and the results of operations for the
periods covered thereby in accordance with U.S. generally accepted accounting
principles consistently applied throughout the periods involved and comparable
prior periods, except as otherwise indicated in the notes to such consolidated
financial statements, subject in the case of unaudited consolidated financial
statements, to normal year-end audit adjustments.
3.10 TAX MATTERS. The Company has filed all federal, state and local
income and franchise and other tax returns required to be filed and have paid
all taxes due, and no tax deficiency has been determined adversely to the
Company which, individually or in the aggregate, has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely to the
Company would, individually or in the aggregate, reasonably be expected to have)
a Material Adverse Effect.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company as follows:
4.1 AUTHORIZATION. All action (corporate or otherwise) on the part of
the Investor and its investment adviser necessary for the authorization,
execution and delivery of, and the performance of all obligations of the
Investor under this Agreement has been taken and this Agreement constitutes a
valid and legally binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except as enforceability may be limited
by (i) applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditors'
rights generally, and (ii) the effect of rules of law governing the availability
of equitable remedies.
4.2 PURCHASE FOR OWN ACCOUNT. The Purchased Shares to be purchased by
the Investor hereunder will be acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the Securities Act, and the Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act. The Investor also
represents that such Investor has not been formed for the specific purpose of
acquiring Purchased Shares.
4.3 DISCLOSURE OF INFORMATION. The Investor has received and/or had
full access to a copy of the Disclosure Documents and has received or has had
full access to all the
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information it considers necessary or appropriate to make an informed investment
decision with respect to the Purchased Shares to be purchased by the Investor
under this Agreement. The Investor further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Purchased Shares and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify any
information furnished to the Investor or to which the Investor had access. In
connection with its decision to purchase the Purchased Shares, the Investor has
relied solely on the Disclosure Documents, the representations, warranties and
agreements of the Company set forth in this Agreement, as well as any
investigation of the Company completed by the Investor or its advisors; and the
Investor has not relied on any oral statement made by the Company.
4.4 INVESTMENT EXPERIENCE. The Investor understands that the purchase
of the Purchased Shares involves substantial risk. The Investor has experience
as an investor in securities of companies in the development stage and
acknowledges that it can bear the economic risk of its investment in the
Purchased Shares and has such knowledge and experience in financial or business
matters that the Investor is capable of evaluating the merits and risks of this
investment in the Purchased Shares and protecting its own interests in
connection with this investment.
4.5 ACCREDITED INVESTOR STATUs. The Investor is an "accredited
investor" within the meaning of Rule 501(a)(3) of Regulation D promulgated under
the Securities Act.
4.6 RESTRICTED SECURITIES. The Investor understands that the Purchased
Shares are characterized as "restricted securities" under the Securities Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the Securities Act and the Rules and
Regulations such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In this connection, the
Investor represents that it is familiar with Rule 144 of the Commission and
understands the resale limitations imposed thereby.
4.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Purchased Shares unless and until:
(a) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(b) (i) the Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition, and (ii) the Investor
shall have furnished the Company, at the expense of the Investor or its
transferee, with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such securities under the
Securities Act.
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Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
routine transfer of any Purchased Shares in compliance with Rule 144 or Rule
144A (except that an opinion of counsel may be required for other than routine
Rule 144 transactions), or (ii) for any transfer of Purchased Shares by an
Investor that is a partnership, limited liability company ("LLC") or a
corporation to a partner of such partnership, member of such LLC or stockholder
of such corporation on a basis proportionate to their ownership interests in
such partnership, LLC or corporation; provided, that in each of the foregoing
cases the transferee agrees in writing to be subject to the terms of this
Agreement to the same extent as if the transferee were an original Investor
hereunder.
4.8 LEGENDS. It is understood that the certificates evidencing the
Purchased Shares will bear the legends set forth below:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. 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 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 REASONABLY 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.
(b) THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF, AND MAY HAVE CERTAIN REGISTRATION RIGHTS PURSUANT TO, THE
PROVISIONS OF A PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, WHICH MAY
RESTRICT THE TRANSFER OF SUCH SHARES IN CERTAIN CIRCUMSTANCES. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY'S PRINCIPAL OFFICE.
5. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING.
5.1 CLOSING. The obligations of the Investor under Section 2 of this
Agreement to purchase the Purchased Shares on the Closing Date are subject to
the fulfillment or waiver, on or before the Closing Date, of each of the
following conditions:
5.1.1 SECURITIES EXEMPTIONS. The offer and sale of the Purchased
Shares to the Investor pursuant to this Agreement shall be exempt from the
registration requirements under the Securities Act and applicable state
securities laws, and the rules thereunder.
5.1.2 AGREEMENT. The Company shall have executed and delivered to
the Investor this Agreement.
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5.1.3 NO STATUTE OR RULE CHALLENGING TRANSACTION. No statute, rule,
regulation, executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
5.1.4 REGISTRATION RIGHTS AGREEMENT. The Company shall have executed
and delivered that certain Registration Rights Agreement dated the date hereof.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.
6.1 CLOSING. The obligations of the Company under this Agreement to
sell the Purchased Shares to the Investor on the Closing Date are subject to the
fulfillment or waiver, on or before the Closing Date, of the following
conditions:
6.1.1 PAYMENT OF PURCHASE PRICE. The Investor shall have
delivered to the Company the purchase price for the Purchased Shares in
accordance with the provisions of Section 2, subject to the Company's delivery
of certificates for such shares.
6.1.2 AGREEMENT. The Investor shall have executed and delivered
to the Company this Agreement.
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. The representations, warranties and
covenants of the Company and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing for a period of twelve months.
7.2 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.
7.3 GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF COLORADO. THE COMPANY AND INVESTORS HEREBY IRREVOCABLY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF DENVER, COLORADO FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY
THE COMPANY OR THE INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE
COMPANY OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.
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7.4 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.
7.5 HEADINGS. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits, and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
7.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, by
telecopier or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified in the
case of the Company, at 000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxx 00000, Attention:
President, with a copy to Xxxxxxx Xxxxxxxx, Xxxxx Xxxxxx & Xxxxxx LLP, 0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or in the case of
Investor, at ___________________________________________, or at such other
address as any party may designate by giving ten (10) days advance written
notice to the other party. Notices shall be deemed delivered upon delivery if
personally delivered, one business day after transmission with confirmation of
receipt if sent by telecopier, or three (3) days after deposit in the mails if
mailed.
7.7 NO FINDER'S FEES. Each party represents that it neither is nor
will be obligated for any finder's or broker's fee or commission in connection
with this transaction; the Investor agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finder's or broker's fee (and any asserted liability) for which the Investor or
any of its officers, partners, employees, or representatives is responsible; and
the Company agrees to indemnify and to hold harmless the Investor from any
liability for any commission or compensation in the nature of a finder's or
broker's fee (and any asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.8 COSTS, EXPENSES. Each party's costs in connection with the
preparation, execution, delivery and performance of this Agreement (including
without limitation legal fees) shall be borne by that party.
7.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investor.
7.10 SEVERABILITY. If one or more provisions of this Agreement are
held to be invalid, illegal or unenforceable under applicable law, such
provision(s) shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.
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7.11 ENTIRE AGREEMENT. This Agreement, together with any exhibits and
schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties with respect to the subject matter hereof.
7.12 FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Investor or the Company, the Company and the Investor
shall execute and deliver such instruments, documents or other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
7.13 8-K FILING. Following the Closing, the Company shall file a
Current Report on Form 8-K with the SEC describing the terms of the transactions
contemplated by this Agreement and attaching this Agreement as an exhibit to
such filing (the "8-K Filing" including all attachments). Until the time of the
8-K Filing, the Investor will treat this offering and this Agreement as
confidential and none of its provisions or terms shall be disclosed to anyone
who is not an officer or director of an Investor's organization or an Investor's
professional advisor.
7.14 PUBLIC ANNOUNCEMENTS. The parties agree that the initial press
release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties. The Investor
and the Company shall consult with each other before issuing, and give each
other the opportunity to review and comment upon, any subsequent press release
primarily relating to the transactions contemplated by this Agreement, and shall
not issue any such press release prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or national securities
quotation system.
IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Agreement as of the date first above written.
Infinity, Inc., _____________________________
a Colorado corporation
By: ________________________________ By: ________________________________
Name: __________________________ Name: __________________________
Title: _________________________ Title: _________________________
