Exhibit 10.14
NOTE AND WARRANT PURCHASE AGREEMENT
This Note and Warrant Purchase Agreement (this "AGREEMENT") is made and
entered into as of June 3, 2004 by and among Solution Technology International,
Inc., a Delaware corporation (the "COMPANY") and Xxxxxxx Xxxx (the "LENDER").
WHEREAS, the Company is currently in need of funds to help finance its
operations; and
WHEREAS, the Lender is willing to advance funds to the Company in
exchange for the issuance to him of (i) promissory notes evidencing the
Company's obligation to repay the Lender's loan of the advanced funds, and (ii)
warrants to purchase shares of the Company's common stock, all as provided in
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereby agree as follows:
1. PURCHASE AND SALE OF NOTES AND WARRANTS.
1.1 NOTES. The Company agrees to sell to Lender, and Lender
agrees to purchase from the Company (i) on the Closing Date, a promissory note
in the principal amount of $25,000 and (ii) at such time as the Company executes
an agreement with Cornell Capital Partners, LP ("CORNELL CAPITAL") pursuant to
which Cornell Capital will grant the Company an equity line of credit, a
promissory note in the principal amount of $25,000 (each individually a "NOTE"
and collectively the "NOTES"). Each such Note shall (i) be dated the date of
issuance, (ii) bear interest from such date at the rate of eight percent (8%)
per annum, (iii) mature upon the earlier to occur of (x) one year from the date
of issuance or (y) the date the Company receives its first advance under an
equity line of credit agreement between the Company and Cornell Capital, with
all principal and accrued but unpaid interest due on maturity and (iv) be
substantially in the form of Exhibit A hereto.
1.2 WARRANTS. The Company agrees to issue and sell to the
Lender, warrants to purchase a number of shares of common stock equal to one
hundred thousand (100,000) shares of common stock (subject to adjustment as set
forth in the Warrant) for each $25,000 Note issued hereunder (each individually
a "WARRANT" and collectively, the "WARRANTS"), each Warrant substantially in the
form of Exhibit B hereto. The Warrants shall be fully paid and issued
immediately upon the issuance of each such Note and the satisfaction with
respect to the Lender of the conditions set forth in Section 5.
2. CLOSING. Subject to the terms and conditions hereof and on the basis
of the representations and warranties set forth herein, the purchase and sale of
the Notes and Warrants will take place at the offices of Xxxxxx Xxxxxx LLP, 0000
Xxxxxxxxxxx Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, XX 00000, at 10:00 a.m. Eastern
Standard Time, on June 3, 2004, or at such other time and place as the Company
and the Lender mutually agree upon (which time and place are referred to in this
Agreement as the "CLOSING"). Delivery of each Note and Warrant will be made
against payment of $25,000 by wire transfer of immediately available funds.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Lender that, except as set forth in the Schedule
of Exceptions (the "SCHEDULE OF EXCEPTIONS") attached to this Agreement as
Exhibit C (which Schedule of Exceptions shall be deemed to be representations
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and warranties to the Lender by the Company under this Section 3), the
statements in the following paragraphs of this Section 3 are all true and
complete immediately prior to the Closing:
3.1 ORGANIZATION, GOOD STANDING, CORPORATE POWER AND
QUALIFICATION. The Company has been duly incorporated and organized, and is
validly existing in good standing, under the laws of the State of Delaware. The
Company has the requisite corporate power and authority to enter into and
perform this Agreement and the Related Agreements, to own and operate its
properties and assets and to carry on its business as currently conducted and as
presently proposed to be conducted. The Company is duly qualified to do business
as a foreign corporation in good standing in all jurisdictions in which it is
required to be qualified to do intrastate business as the Company's business is
currently conducted and as presently proposed to be conducted by the Company,
except for jurisdictions in which failure to so qualify could not reasonably be
expected to have a material adverse effect on the business and operations of the
Company taken as a whole.
3.2 CAPITALIZATION. The capitalization of the Company
immediately prior to the Closing, consists of the following:
(a) Common Stock. A total of 20,000,000 authorized
shares of Common Stock, $0.001 par value per share (the "COMMON STOCK"), of
which 1,952,985 shares will be issued and outstanding.
(b) Options, Warrants, Reserved Shares. Except for
(i) the conversion privileges of the Warrants, (ii) the shares of Common Stock
reserved for issuance under the Company's 2002 Stock Incentive Plan (the "PLAN")
under which options to purchase 1,500,000 shares are outstanding, and (iii)
warrants to purchase 1,110,245 shares of Common Stock, there are no outstanding
options, warrants, rights (including conversion or preemptive 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. Apart from the
exceptions noted herein or in the Schedule of Exceptions, and except for rights
of first refusal held by the Company to purchase shares of its stock issued
under the Plan, no shares of the Company's outstanding capital stock, or stock
issuable upon exercise or exchange of any outstanding options, warrants or
rights, or other stock issuable by the Company, are subject to any preemptive
rights, rights of first refusal or other rights to purchase such stock (whether
in favor of the Company or any other person), pursuant to any agreement or
commitment of the Company.
(c) The outstanding shares of the capital stock of
the Company (i) are duly authorized and validly issued, fully paid and
nonassessable, and have been approved by all requisite stockholder action; (ii)
were issued in compliance with all applicable state and federal laws concerning
the issuance of securities; and (iii) issued or issuable upon exercise of an
option granted pursuant to the Plan, are subject to a right of first refusal in
favor of the Company upon transfer.
3.3 SUBSIDIARIES. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.
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3.4 DUE AUTHORIZATION. All corporate action on the part of the
Company's directors and stockholders necessary for the authorization, execution,
delivery of, and the performance of all obligations of the Company under, this
Agreement, the Notes and the Warrants has been taken or will be taken prior to
Closing, and this Agreement constitutes, and the Notes and Warrants when
executed and delivered, will constitute, valid and legally binding obligations
of the Company, enforceable in accordance with their respective terms, except as
may be limited by (i) applicable bankruptcy, insolvency, reorganization or
others 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.
3.5 VALID ISSUANCE OF STOCK.
(a) The securities issuable upon conversion of the
Warrants, when issued, sold and delivered in accordance with the terms of this
Agreement, the Notes and the Warrants for the consideration provided for herein
and therein, will be duly and validly issued, fully paid and nonassessable.
(b) Based in part on the representations made by the
Lender in Section 4 hereof, the offer and sale of the Notes and the Warrants
solely to the Lender in accordance with this Agreement are exempt from the
registration and prospectus delivery requirements of the U.S. Securities Act of
1933, as amended (the "1933 ACT") and the securities registration and
qualification requirements of the currently effective provisions of the
securities laws of the States in which the Lender is resident based upon his
address set forth herein.
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or foreign governmental authority is
required on the part of the Company in order to enable the Company to execute,
deliver and perform its obligations under this Agreement, the Notes and the
Warrants except for such qualifications or filings under applicable securities
laws as may be required in connection with the issuance of the Warrant. All such
qualifications and filings will, in the case of filings, be made within the time
prescribed by applicable law.
3.7 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation (the "ACTION") pending (or, to the Company's and
subsidiaries' knowledge, currently threatened) against the Company or any of its
subsidiaries, its or any of its subsidiaries' activities or its or any of its
subsidiaries' properties before any court or governmental agency. The Company
and its subsidiaries are not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company or any of its subsidiaries currently pending or which the Company or any
of its subsidiaries intends to initiate.
3.8 INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT. Each
employee and contractor of the Company who is engaged in product development has
entered into and executed a Proprietary Information, Invention and
Non-Competition Agreement or an employment or consulting agreement containing
substantially similar terms. To the Company's knowledge, none of its employees
or contractors is subject to any agreement with a previous employer that would
materially and adversely affect the carrying on of the Company's business as now
conducted or the Company's full title and ownership of its Proprietary Assets
(as defined in Section 3.9 below.
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3.9 STATUS OF PROPRIETARY ASSETS.
(a) Status. The Company and its subsidiaries have
full title and ownership of, or is duly licensed under or otherwise authorized
to use, all patents, patent applications, trademarks, service marks, trade
secrets, trade names, and copyrights and other proprietary rights and processes
(all of the foregoing collectively hereinafter referred to as the "PROPRIETARY
ASSETS"), necessary to enable it to carry on its business as now conducted and
presently proposed to be conducted, and to the best of our knowledge without any
conflict with or infringement upon the rights of others. There are no
outstanding options, licenses or agreements of any kind relating to the
foregoing Proprietary Assets, nor is the Company or any of its subsidiaries
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
of any other person or entity other than such licenses or agreements arising
from the purchase of "off the shelf" or standard products.
(b) Licenses; Other Agreements. The Company and its
subsidiaries have not granted, any options, licenses or agreements of any kind
relating to any Proprietary Asset of the Company or any of its subsidiaries, nor
is the Company or its subsidiaries bound by or a party to any option, license or
agreement of any kind with respect to any of its Proprietary Assets. The Company
and its subsidiaries are not obligated to pay any royalties or other payments to
third parties with respect to the marketing, sale, distribution, manufacture,
license or use of any Proprietary Asset or any other property or rights.
(c) Neither the Company nor any of its subsidiaries
have received any communications alleging that the Company or any of its
subsidiaries have violated or, by conducting its business as presently proposed,
would violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity, nor is the Company or any of its subsidiaries aware of any basis
therefor.
3.10 COMPLIANCE WITH LAW AND DOCUMENTS. The Company is not in
violation or default of any provisions of its Third Amended and Restated
Certificate of Incorporation ("RESTATED CERTIFICATE") or Bylaws, both as amended
to-date, and to the Company's knowledge, the Company and its subsidiaries are in
compliance with all applicable statutes, laws, regulations and executive orders
of the United States of America and all states, foreign countries or other
governmental bodies and agencies having jurisdiction over the Company's business
or properties where such violation would have a material and adverse impact on
the Company's and its subsidiaries business taken as a whole. Neither the
Company nor any of its subsidiaries have received any notice of any violation of
any such statute, law, regulation or order which has not been remedied prior to
the date hereof. The execution, delivery and performance of this Agreement, the
Notes and the Warrants and the consummation of the transactions contemplated
hereby or thereby will not result in any such violation or default, or be in
conflict with or result in a violation or breach of, with or without the passage
of time or the giving of notice or both, the Company's Restated Certificate or
Bylaws, any judgment, order or decree of any court or arbitrator to which the
Company is a party or is subject, any agreement or contract of the Company, or,
to the Company's knowledge, a violation of any statute, law, regulation or
order, or an event which results in the creation of any lien, charge or
encumbrance upon any asset of the Company.
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3.11 REGISTRATION RIGHTS. The Company is not under any
obligation to register under the 1933 Act any of its currently outstanding
securities or any securities issuable upon exercise or conversion of its
currently outstanding securities nor is the Company obligated to register or
qualify any such securities under any state securities or blue sky laws.
3.12 TITLE TO PROPERTY AND ASSETS. The Company and its
subsidiaries each own their properties and assets free and clear of all
mortgages, deeds of trust, liens, encumbrances and security interests except for
statutory liens for the payment of current taxes that are not yet delinquent and
liens, encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company
or any of its subsidiaries. With respect to the property and assets it or any of
its subsidiaries leases, the Company and its subsidiaries are in material
compliance with such lease.
3.13 FINANCIAL STATEMENTS. Attached to this Agreement as
Exhibit E-1 is the Company's consolidated audited balance sheet, and statement
of operations and cash flows of the Company and its subsidiaries for the period
ended December 31, 2003 and attached to this Agreement as Exhibit E-2 is the
Company's consolidated unaudited balance sheet and statement of operations of
the Company and its subsidiaries dated March 31, 2004 (the "BALANCE SHEET DATE")
(all such financial statements being collectively referred to herein as the
"FINANCIAL STATEMENTS"). Such Financial Statements (i) are in accordance with
the books and records of the Company, (ii) are true, correct and complete and
present fairly the financial condition of the Company at the date or dates
therein indicated and the results of operations for the period or periods
therein specified, and (iii) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except, as to the
unaudited Financial Statements, for the omission of notes thereto and normal
year-end audit adjustments.
3.14 CERTAIN ACTIONS. Since the Balance Sheet Date, the
Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock;
(ii) incurred any indebtedness for money borrowed; (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses; (iv)
sold, exchanged or otherwise disposed of or encumbered any material asset or
rights other than the sale of inventory in the ordinary course of its business;
or (v) entered into any material transactions with any of its officers,
directors, stockholders or employees or any entity controlled by such
individuals.
3.15 ACTIVITIES SINCE BALANCE SHEET DATE. Since the Balance
Sheet Date, there has not been:
(a) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the assets, properties,
financial condition, operating results, prospects or business of the Company (as
presently conducted and as presently proposed to be conducted); or
(b) any material change or amendment to a material
contract or arrangement by which the Company or any of its assets or properties
is bound or subject, except for changes or amendments which are expressly
provided for or disclosed in this Agreement.
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3.16 ERISA PLANS. The Company does not have any Employee
Pension Benefit Plan as defined in Section 3 of the Employee Retirement Income
Security Act of 1974, as amended.
3.17 INSURANCE. The Company has in full force and effect fire,
casualty and liability insurance policies, in such amounts (subject to
reasonable deductibles) as are carried by similar companies.
3.18 TAX RETURNS AND PAYMENTS. The Company has timely filed
all tax returns and reports required by law. All tax returns and reports of the
Company are true and correct in all material respects. The Company has paid all
taxes and other assessments due, except those, if any, currently being contested
by it in good faith which are listed in the Schedule of Exceptions.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF LENDER. The
Lender hereby represents and warrants to, and agrees with, the Company, that:
4.1 AUTHORIZATION. This Agreement constitutes Lender's valid
and legally binding obligation, enforceable in accordance with its terms except
as 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. Lender represents that Lender has full power
and authority to enter into this Agreement.
4.2 PURCHASE FOR OWN ACCOUNT. The Warrants, the securities
issuable upon conversion of the Warrants (collectively, the "SECURITIES") will
be acquired for investment for such Lender'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 1933 Act, and such Lender has no present intention of
selling, granting any participation in, or otherwise distributing the same.
4.3 DISCLOSURE OF INFORMATION. Such Lender has received or has
had full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Securities. Such Lender
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the Securities 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 such Lender or to which such
Lender had access. The foregoing, however, does not in any way limit or modify
the representations and warranties made by the Company in Section 5.
4.4 INVESTMENT EXPERIENCE. Such Lender understands that the
purchase of the Securities involves substantial risk. Such Lender (i) has
experience as an investor in securities of companies in the development stage
and acknowledges that such Lender is able to fend for himself, can bear the
economic risk of such Lender's investment in the Securities and has such
knowledge and experience in financial or business matters that such Lender is
capable of evaluating the merits and risks of this investment in the Securities
and protecting its own interests in connection with this investment and/or (ii)
has a preexisting personal or business relationship with the Company and certain
of its officers, directors or controlling persons of a nature and duration that
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enables such Lender to be aware of the character, business acumen and financial
circumstances of such persons. The Lender represents that he resides in the
state identified herein.
4.5 ACCREDITED LENDER STATUS. The Lender is an "accredited
investor" within the meaning of Regulation D promulgated under the 0000 Xxx.
4.6 RESTRICTED SECURITIES. Such Lender understands that the
Securities are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. In this connection, such
Lender represents that such Lender is familiar with Rule 144 of the U.S.
Securities and Exchange Commission (the "SEC"), as presently in effect, and
understands the resale limitations imposed thereby and by the 1933 Act. Such
Lender understands that the Company is under no obligation to register any of
the securities sold hereunder. Such Lender understands that no public market now
exists for any of the Securities and that it is uncertain whether a public
market will ever exist for the Securities.
4.7 NO SOLICITATION. At no time was the Lender presented with
or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general or advertising or solicitation in connection
with the offer, sale and purchase of the Securities.
4.8 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Lender further agrees not to
make any disposition of all or any portion of the Securities unless and until:
(a) there is then in effect a registration statement
under the 1933 Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b) such Lender 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, at the expense
of such Lender 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 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii)
for any transfer of any Securities by a Lender that is the estate of any such
stockholder, or (iii) for the transfer by gift, will or intestate succession by
any Lender to his or her spouse or lineal descendants or ancestors or any trust
for any of the foregoing; provided that in each of the foregoing cases the
transferee agrees in writing to be subject to the terms of this Section 4 to the
same extent as if the transferee were an original Lender hereunder.
4.9 LEGENDS.
(a) It is understood that the certificates evidencing
the Securities will bear the legends set forth below:
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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 other jurisdictions. 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. Lender
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 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.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
180 DAY MARKET STAND-OFF RESTRICTION AS SET FORTH IN A CERTAIN
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE
SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE
DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE
ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF
THESE SHARES.
(b) Any legend required by any state securities laws.
The first legend set forth in (a) above shall be removed by the Company
from any certificate evidencing Securities upon delivery to the Company of an
opinion by counsel, reasonably satisfactory to the Company, that a registration
statement under the 1933 Act is at that time in effect with respect to the
legended security or that such security can be freely transferred in a public
sale without such a registration statement being in effect and that such
transfer will not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Securities.
4.10 TAX LIABILITY. Lender has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Lender relies
solely on such advisors and not on any statements or representations of the
Company, the Company's counsel, or any of the Company's agents. It understands
that it (and not the Company) shall be responsible for its own tax liability
that may arise as a result of this investment or the transactions contemplated
by this Agreement.
5. CONDITIONS TO LENDER'S OBLIGATION AT CLOSING. The obligations of the
Lender under Section 2 of this Agreement are subject to the fulfillment or
waiver, on or before the Closing, of each of the following conditions, the
waiver of which shall not be effective against Lender if Lender does not consent
to such waiver, which consent may be given by written, oral or telephone
communication to the Company, its counsel or to counsel of Lender:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of the Company and its subsidiaries contained in
Section 3 shall be true and complete on and as of the Closing with the same
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effect as though such representations and warranties had been made on and as of
the date of the Closing.
5.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
5.3 SECURITIES EXEMPTIONS. The offer and sale of the
Securities to the Lender pursuant to this Agreement and the securities issuable
upon exercise of each Warrant shall be exempt from the registration requirements
of the 1933 Act, the qualification requirements of applicable state securities
laws.
5.4 BOARD OF DIRECTORS. The Company shall nominate Lender to
serve as a director of the Company.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to Lender under this Agreement are subject to the fulfillment or
waiver on or before the Closing of each of the following conditions by Lender:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Lender contained in Section 4 shall be true and complete on the
date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. Lender shall have delivered to
the Company the purchase price specified in Section 2 for such Lender in
accordance with the provisions of Section 2.
6.3 SECURITIES EXEMPTIONS. The offer and sale of the
Securities to the Lender pursuant to this Agreement and the securities issuable
upon exercise of each Warrant shall be exempt from the registration requirements
of the 1933 Act and the registration and/or qualification requirements of all
applicable state securities laws.
7. GENERAL PROVISIONS.
7.1 SURVIVAL OF WARRANTIES. The representations, warranties
and covenants of the Company and the Lender contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Lender, their counsel or the
Company, as the case may be.
7.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided in
this Agreement, this Agreement, and the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective
successors, assigns, heirs, executors, administrators and legal representatives.
7.3 GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to that body of laws pertaining to conflict of laws.
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7.4 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
7.5 TITLES AND HEADINGS. The titles, captions and headings of
this Agreement are included for ease of reference only and will be disregarded
in interpreting or construing this Agreement. Unless otherwise specifically
stated, all references herein to "sections" and "exhibits" will mean "sections"
and "exhibits" to this Agreement.
7.6 NOTICES. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) at the time of transmission by
facsimile, addressed to the other party at its facsimile number specified herein
(or hereafter modified by subsequent notice to the parties hereto), with
confirmation of receipt made by both telephone and printed confirmation sheet
verifying successful transmission of the facsimile; (iii) one (1) business day
after deposit with an express overnight courier for United States deliveries, or
two (2) business days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iv) five (5)
business days after deposit in the United States mail by certified mail (return
receipt requested) for United States deliveries.
All notices for delivery outside the United States will be
sent by facsimile or by express courier. Notices by facsimile shall be machine
verified as received. All notices not delivered personally or by facsimile will
be sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the address or facsimile number as follows, or at such
other address or facsimile number as such other party may designate by one of
the indicated means of notice herein to the other parties hereto as follows:
(a) if to Lender, at:
(b) if to the Company, marked "Attention: President",
at 0000 Xxxxxxxxx Xxxxx, Xxxxx 0, Xxxxxxxxx, XX 00000.
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. Lender agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' or broker's fee (and any asserted liability) for which
the Lender or any of its officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless Lender 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 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 Lender. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each holder of any Securities at the time outstanding, each future holder
of such securities, and the Company; provided, however, that no condition set
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forth in Section 5 may be waived with respect to any Lender who does not consent
thereto. No delay or failure to require performance of any provision of this
Agreement shall constitute a waiver of that provision as to that or any other
instance. No waiver granted under this Agreement as to any one provision herein
shall constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.
7.9 SEVERABILITY. If any provision of this Agreement is
determined by any court or arbitrator of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, such provision will be enforced to the
maximum extent possible given the intent of the parties hereto. If such clause
or provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such
invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Agreement. Notwithstanding the
forgoing, if the value of this Agreement based upon the substantial benefit of
the bargain for any party is materially impaired, which determination as made by
the presiding court or arbitrator of competent jurisdiction shall be binding,
then both parties agree to substitute such provision(s) through good faith
negotiations.
7.10 ENTIRE AGREEMENT. This Agreement, together with all
exhibits and schedules hereto, the Notes and the Warrants entered into pursuant
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.
7.11 FURTHER ASSURANCES. The parties agree to execute such
further documents and instruments and to take such further actions as may be
reasonably necessary to carry out the purposes and intent of this Agreement.
7.12 FACSIMILE SIGNATURES. This Agreement may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been delivered
to the other party.
7.13 COSTS AND ATTORNEYS' FEES. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or petitions
therefrom.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Note and
Warrant Purchase Agreement as of the date first written above.
THE COMPANY:
SOLUTION TECHNOLOGY INTERNATIONAL, INC.
By:
----------------------------
Xxx Xxxxxx
Its: President
LENDER:
By:
----------------------------
Xxxxxxx Xxxx
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