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Exhibit 10.6
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Securities Purchase Agreement"), is
made as of May 19, 2000, by and between Eagletech Communications, Inc., a
corporation organized under the laws of the State of Nevada, with headquarters
located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, XX 00000 (the "Company")
and the Buyers listed on Schedule 1 and the execution page hereof (the
"Buyers").
RECITALS
A. The Company and the Buyers are executing and delivering this
Securities Purchase Agreement in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D ("Regulation D") as
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act");
B. The Buyers desire to purchase from the Company, and the Company
desires to sell to the Buyers, for the amounts and upon the terms and conditions
stated in this Securities Purchase Agreement, certain shares of the Company's
Class A Convertible Preferred Stock (the "Preferred Stock") as described below,
and certain warrants of the Company as described below.
(i) At a Closing or a series of Closings (a "Closing"), the
Company will sell to the Buyers up to $8,000,000 in aggregate
face value of shares of the Company's Preferred Stock, which
are convertible in accordance with their terms into shares of
the Company's common stock, $.001 par value per share (the
"Shares" of "Common Stock"), at a conversion price per Share
as specified in the Preferred Stock. The rights, preferences
and privileges of the Preferred Stock shall be defined in the
Company's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), which shall be substantially
in the form attached as Exhibit A.
(ii) At each Closing, as additional consideration for Buyers'
purchase of the Preferred Stock, the Company will issue to the
Buyers Common Stock purchase warrants (each a "Warrant" and
collectively the "Warrants") exercisable for the number of
Shares determined under the terms of next sentence at an
exercise price per Share equal to the Purchase Price (defined
below) per share of Preferred Stock (subject to adjustment)
(the "Warrant Exercise Price"), which Warrants must be
exercised within three (3) years after the date of issuance.
At the first closing, the Buyers shall receive one and
two/tenths (1.2) Warrant shares for each share of Preferred
Stock purchased, based on the Purchase Price; at any Closing
that occurs at any time after May 11th but before or on June
8th, the Buyers shall receive one and one/tenth (1.1) Warrant
shares for each share of Preferred Stock purchased, based on
the Purchase Price; at any Closing that occurs from June 9
through July 7, 2000, the Buyers shall receive one (1) Warrant
share for each share of Preferred Stock purchased, based on
the Purchase Price. The Warrants shall be substantially in the
form attached as Exhibit B.
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(iii) At each Closing, the Company and the Buyers will enter into a
registration rights agreement (the "Registration Rights
Agreement") substantially in the form attached as Exhibit C,
which gives the Buyers certain rights to require registration
of the Common Stock underlying the Preferred Stock and the
Warrants.
The Common Stock into which the Preferred Stock is convertible are also
be referred to in this Agreement as the "Conversion Shares." The Common Stock
issued upon exercise of the Warrants shall be referred to as the "Warrant
Shares." The Company will issue certain shares of Common Stock to the Buyers in
payment of dividends on the Preferred Stock (the "Dividend Shares"). The
Preferred Stock, the Conversion Shares, the Warrants, the Warrant Shares and the
Dividend Shares (if any) are collectively referred to herein as the
"Securities."
NOW, THEREFORE, in consideration of their respective promises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, and intending to be legally bound, the Company and
the Buyers hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES.
a. Purchase. The Buyers hereby agree to purchase from the Company, and
the Company agrees to sell to the Buyers, an aggregate of 321,389 shares of
Preferred Stock and Warrants to purchase 385,667 Shares of Common Stock at the
Closing. The purchase price for the Preferred Stock and Warrants is $6.70 per
share of Preferred Stock (the "Purchase Price"). The Purchase Price is the
lesser of : 80% of the average closing price for the three trading days prior to
the initial closing or any subsequent closing, but no less than $6.00 or more
than $8.00 per share of Preferred Stock. The $6.00 floor price is waivable by
the Company. If the Purchase Price for any subsequent Closing as determined by
the foregoing formula is less than the Purchase Price determined at any earlier
Closing, Buyers who purchased at such earlier Closings will be issued additional
Shares of Preferred Stock and additional Warrants so that the Securities owned
will be equal to the Securities that such Buyer's investment would have
purchased under the lower Purchase Price.
b. The Closing. The date of the Closing shall be May 16, 2000 (the
"Closing Date"). The Buyers shall deliver the full Purchase Price to the Company
for the purchase of the Securities on the Closing Date. The Company shall
deliver the Preferred Stock and the Warrants, each duly authorized, issued and
executed on behalf of the Company by its duly authorized officers, to the Buyers
on the Closing Date.
c. Form of Payment. The Buyers shall pay the Purchase Price for the
Securities by wire transfer of immediately available funds in United States
Dollars, to be deposited into the Company's account, against delivery of all of
the duly executed Preferred Stock and Warrants being purchased by the Buyers.
2. BUYERS' REPRESENTATIONS AND WARRANTIES.
Each Buyer separately understands, agrees with, and represents and
warrants to the Company with respect to its purchase hereunder, that:
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a. Investment Purposes; Compliance with 1933 Act. The Buyer is
purchasing the Securities for its own account for investment only and not with a
view towards, or in connection with, the public sale or distribution thereof,
except pursuant to sales registered under or exempt from the 0000 Xxx. The Buyer
is not purchasing the Securities for covering short sale positions in the Common
Stock established on or before the Closing Date. The Buyer agrees to offer, sell
or otherwise transfer the Securities only (i) in accordance with the terms of
this Securities Purchase Agreement, the Preferred Stock and the Warrants, as
applicable, and (ii) pursuant to registration under the 1933 Act or to an
exemption from registration under the 1933 Act and any other applicable
securities laws. The Buyer does not by its representations contained in this
Section 2(a) agree to hold the Securities for any minimum or other specific term
and reserve the right to dispose of the Securities at any time pursuant to a
registration statement or in accordance with an exemption from registration
under the 1933 Act, in all cases in accordance with applicable state and federal
securities laws. The Buyer understands that it shall be a condition to the
issuance of the Conversion Shares and the Dividend Shares (if any) that the
Conversion Shares and the Dividend Shares (if any) be and are subject to the
representations set forth in this Section 2(a).
b. Accredited Investor Status. The Buyer is an "accredited investors"
as that term is defined in Rule 501(a) of Regulation D. The Buyer has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment made through this Securities
Purchase Agreement. The Buyer is aware that it may be required to bear the
economic risk of the investment in the Securities for an indefinite period of
time, and is able to bear such risk for an indefinite period.
c. Reliance on Exemptions. The Buyer understands the Company is
offering and selling the Securities to Buyer in reliance on specific exemptions
from the registration requirements of the applicable federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties,
acknowledgments, understandings, agreements and covenants of the Buyer set forth
in this Agreement in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.
d. Information. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Securities that have
been requested by the Buyer. In particular, the Buyer has received and reviewed
a copy of the Company's Form 10-SB Registration Statement filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the
section entitled "Risk Factors". The Buyer and its advisors, if any, have been
afforded the opportunity to ask all such questions of the Company as they have
deemed advisable in their discretion. The Buyer understands that its investment
in the Securities involves a high degree of risk. The Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its investment in the Securities.
e. No Government Review. The Buyer understands that no federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or
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endorsed the Securities or the fairness or suitability of an investment in the
Securities, nor have such authorities passed upon or endorsed the merits of the
offering of the Securities.
f. Transfer or Resale. The Buyer understands that: (i) the Securities
have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless either (a) the Securities are subsequently registered pursuant to the
Registration Rights Agreement or (b) the Buyer shall have delivered to the
Company an opinion by counsel satisfactory to the Company, in form, scope and
substance satisfactory to the Company, to the effect that the Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration; (ii) any sale of Securities made in
reliance on Rule 144 (as hereafter defined) may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
Securities under circumstances in which the seller (or the person though whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case, other than pursuant to
this Securities Purchase Agreement or the Registration Rights Agreement).
g. Legend. The Buyer understands that the Preferred Stock, the
Warrants, and until such time as the Conversion Shares, the Warrant Shares and
the Dividend Shares (if any) (collectively, the "Registerable Securities"), have
been registered under the 1933 Act as contemplated by the Registration Rights
Agreement or otherwise may be sold by the Buyer pursuant to Rule 144 (as
amended, or any applicable rule which operates to replace said Rule) promulgated
under the 1933 Act ("Rule 144"), the certificates representing the Securities
will bear a restrictive legend (the "Legend") in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE LAWS.
The Company shall remove the Legend and the Company will issue
certificates without the Legend to the holder of any Securities upon which the
Legend is stamped, in accordance with the 1933 Act and Rule 144.
h. Authorization; Enforcement. This Securities Purchase Agreement and
the Registration Rights Agreement have been duly and validly authorized,
executed and delivered by the Buyer and each is and both are collectively valid
and binding agreements of the Buyer enforceable
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in accordance with their terms, subject as to enforceability to general
principles of equity and to bankruptcy, insolvency, moratorium, and other
similar laws affecting the enforcement of creditors' rights generally.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyers that:
a. Organization and Qualification. The Company and its subsidiaries (if
any) are corporations duly organized and existing in good standing under the
laws of the respective jurisdictions in which they are incorporated, except as
would not have a Material Adverse Effect (as defined below), and have the
requisite corporate power to own their properties and to carry on their business
as now being conducted. Each of the Company and its subsidiaries (if any) is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary and where the failure so to qualify would have a
Material Adverse Effect. "Material Adverse Effect" means any material adverse
effect on the operations, properties or financial condition of the Company and
its subsidiaries taken as a whole. Price quotations for the Common Stock are
posted by market makers on the OTC Bulletin Board. The Company has received no
notice, either written or oral, with respect to the continued eligibility of the
Common Stock for listing price quotations, the Company has maintained all
requirements for the continuation of price quotation listing, and the Company
does not reasonably anticipate that the Common Stock will be delisted from the
OTC Bulletin Board for the foreseeable future. Seller shall use its best efforts
to continue to have price quotations for the Common Stock eligible for listing
on the OTC Bulletin Board or a national securities market or exchange.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform this Securities Purchase
Agreement and the Registration Rights Agreement, to issue and sell the
Securities in accordance with the terms of this Agreement, and to perform its
obligations under this Agreement, the Certificate of Incorporation, the Warrants
and the Preferred Stock, (ii) the execution, delivery and performance of this
Securities Purchase Agreement, the Preferred Stock, the Warrants and the
Registration Rights Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by the
Company's Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or its shareholders is required, (iii) this
Securities Purchase Agreement, the Registration Rights Agreement, and, on the
date of the Closing, the Preferred Stock and Warrants sold at the Closing, have
been duly and validly authorized, executed and delivered by the Company, and
(iv) this Securities Purchase Agreement, the Preferred Stock (when issued), the
Warrants (when issued), and the Registration Rights Agreement constitute the
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting, generally, the
enforcement of creditors' rights and remedies or by other equitable principles
of general application. The Company has examined this Securities Purchase
Agreement and is satisfied in its sole discretion that this Securities Purchase
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Agreement and the accompanying Exhibits and Schedules, if any, comply with
Regulation D and are effective to accomplish the purposes set forth herein.
c. Capitalization. As of April 1, 2000, the authorized capital stock of
the Company consists of (i) 100,000,000 Shares of Common Stock of which
9,950,240 shares were issued and outstanding. All of such outstanding Shares
have been validly issued and are fully paid and nonassessable. No Shares of
Common Stock are subject to preemptive rights or any other similar rights or any
liens or encumbrances. Except as disclosed in Schedule 3(c) (attached if
applicable), as of the effective date of this Securities Purchase Agreement, (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its subsidiaries, (ii) there are no outstanding debt securities, and
(iii) there are no agreements or arrangements under which the Company or any of
its subsidiaries is obligated to register the sale of any of its or their
securities under the 1933 Act (except as provided herein and in the Registration
Rights Agreement). The Company has furnished to the Buyers, and the Buyers
acknowledge receipt of same by their signatures hereafter, true and correct
copies of the Company's Certificate of Incorporation and the Company's Bylaws,
as in effect on the date hereof (the "Bylaws").
d. Issuance of Securities. The Securities are all duly authorized and
reserved for issuance, and in all cases upon issuance shall be validly issued,
fully paid and non-assessable, free from all taxes, liens and charges with
respect to the issue thereof, and will not be subject to preemptive rights or
other similar rights of shareholders of the Company.
e. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances which would prevent the parties hereto from
consummating the transactions contemplated hereby pursuant to an exemption from
registration under the 1933 Act and specifically in accordance with the
provisions of Regulation D. The transactions contemplated hereby are exempt from
the registration requirements of the 1933 Act, assuming the accuracy of the
representations and warranties contained herein of the Buyers.
f. No Conflicts. The execution, delivery and performance of this
Securities Purchase Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not (i) result in a violation of
the Certificate of Incorporation or Bylaws or (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, indenture or instrument to which
the Company or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
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 is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). Except
as set forth in Schedule 3(g) (attached if applicable), neither the Company nor
any of its subsidiaries is in violation of its Certificate
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of Incorporation or other organizational documents, and neither the Company nor
any of its/subsidiaries is in default (and no event has occurred which, with
notice or lapse of time or both, would put the Company or any of its
subsidiaries in default) under, nor has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, except for possible defaults
or rights as would not, in the aggregate or individually, have a Material
Adverse Effect. The business of the Company and its subsidiaries is not being
conducted, and shall not be conducted so long as the Buyers owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity, except for possible violations which neither singly or in the aggregate
would have a Material Adverse Effect. Except as specifically contemplated by
this Securities Purchase Agreement and as required under the 1933 Act and any
applicable state securities laws (any of which exceptions are set forth in
Schedule 3(g)), the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Securities Purchase Agreement, the Preferred Stock, the Certificate
of Incorporation, the Warrants or the Registration Rights Agreement in
accordance with the terms hereof and thereof, or to perform its obligations with
respect to the Preferred Stock exactly as described in the Preferred Stock (once
issued), and with respect to the Warrants exactly as described in the Warrants
(once issued).
g. Financial Statements. The Company has made available to the Buyers
as requested by the Buyers (or the Buyers have otherwise obtained) true and
complete copies of the Company's audited financial statements through December
31, 1999. As of their respective dates, the financial statements of the Company
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, 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 exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers (including the
information referred to in Section 2(d) of this Securities Purchase Agreement)
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading. Except as set
forth in the financial statements of the Company, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the date of such financial statements
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, in each case of clause
(i) and (ii) next above which, individually or in the aggregate, are not
material to the financial condition, business, operations, properties, operating
results or prospects of the Company. Except as disclosed in Schedule 3(g), the
said financial statements contain a complete and accurate list of all material
undischarged written and oral contracts, agreements, leases or other instruments
to which the Company or any
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subsidiary is a party or by which the Company or any subsidiary is subject (each
a "Contract"). None of the Company, its subsidiaries or, to the best of the
Company's knowledge, any of the other parties thereto, is in breach or violation
of any Contract, which breach or violation would have a Material Adverse Effect.
No event, occurrence or condition exists which, with the lapse of time, the
giving of notice, or both, or the happening of any further event or condition,
would become a default by the Company or its subsidiaries thereunder which would
have a Material Adverse Effect.
h. Absence of Certain Changes. Except as disclosed in Schedule 3(h)
(attached if applicable), since at least December 31, 1999, there has been no
material adverse change and no material adverse development in the business,
properties, operation, financial condition, results of operations or prospects
of the Company. The Company has not taken any steps, and does not currently have
any reasonable expectation of taking any steps, to seek protection pursuant to
any bankruptcy law nor does the Company have any knowledge that its creditors
intend to initiate involuntary bankruptcy proceedings. At least until Buyers no
longer hold any of the Securities, the Company shall maintain its corporate
existence in good standing and shall pay all taxes when due except for taxes it
reasonably disputes.
i. Absence of Litigation. Except as set forth in Schedule 3(i)
(attached if applicable), there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, wherein
an unfavorable decision, ruling or finding would have a Material Adverse Effect
or which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, this
Securities Purchase Agreement or any of the documents contemplated herein.
j. Environmental Matters. To its best knowledge, the Company does not
own, lease, or otherwise control any property affected by toxic waste, radon gas
or other hazardous conditions or constructed in part with the use of asbestos
which requires removal or encapsulation. It is not aware of, nor has it received
written notice from any governmental or regulatory body of, any past, present or
future conditions, activities, practices or incidents which may interfere with
or prevent compliance or continued compliance with hazardous substance or other
environmental laws or any regulation, order, decree, judgment or injunction,
issued, entered, promulgated or approved thereunder or which may give rise to
any common law or legal liability or otherwise form the basis of any claim,
action, suit, proceeding, hearing or investigation based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical or industrial,
toxic or hazardous substance or waste. There is no civil, criminal or
administrative claim, action, suit, proceeding, hearing or investigation pending
or, to its knowledge, threatened against it relating in any way to such
hazardous substance laws or any regulation, order, decree, judgment or
injunction issued, entered, promulgated or approved thereunder.
k. Employee Benefits. Except as disclosed in Schedule 3(k) (attached if
applicable):
(i) The Company does not maintain any funded deferred
compensation plans (including profit sharing, pension, retirement savings or
stock bonus plans), unfunded deferred
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compensation arrangements or employee benefit plans as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
("Employee Plans"). It has not incurred or reasonably expects to incur any
liability to the Pension Benefit Guaranty Corporation. It does not (x) provide
health, medical, death or survivor benefits to any former employee or
beneficiary thereof or (y) maintain any form of current (exclusive of base
salary and base wages) or deferred compensation, bonus, stock option, stock
appreciation right, benefit, severance pay, retirement, employee stock
ownership, incentive, group or individual health insurance, welfare or similar
plan or arrangement for the benefit of any single or class of directors,
officers or employees, whether active or retired (collectively, "Benefit
Arrangements").
(ii) To its best knowledge, with respect to all Employee Plans
and Benefit Arrangements, it is in substantial compliance with the requirements
prescribed by any and all statutes, governmental or court orders or rules or
regulations currently in effect, including but not limited to ERISA and the
Code, applicable to such Employee Plans or Benefit Arrangements. To its best
knowledge, no condition exists that could constitute grounds for the termination
of any Employee Plan under Section 4042 of ERISA; no "prohibited transaction",
as defined in Section 406 of ERISA and Section 4975 of the Code, has occurred
with respect to any Employee Plan, or any other employee benefit plan maintained
by it, could subject any person to liability under Title I of ERISA or to the
imposition of any tax under Section 4975 of the Code; to its best knowledge, no
Employee Plan subject to Part III of Subtitle B of Title I of ERISA or Section
412 of the Code, or both, has incurred any "accumulated funding deficiency," as
defined in Section 412 of the Code, whether or not waived; it has not failed to
make any contribution or pay any amount due and owing as required by the terms
of any Employee Plan or Benefit Arrangement. To its best knowledge, it has not
incurred or expects to incur, directly or indirectly, any liability under Title
IV of ERISA arising in connection with the termination of, or a complete or
partial withdrawal from, any plan covered or previously covered by Title IV of
ERISA which could constitute a liability of Eagletech.
l. Property and Assets. It has good and marketable title to all of its
real and personal property, if any, reflected in the financial statements at
December 31, 1999 or acquired subsequent thereto, free and clear of all
Encumbrances, except for (a) such items shown in such financial statements or in
the notes thereto, (b) liens for current real estate taxes not yet delinquent,
(c) customary easements, restrictions of record and title exceptions that are
not material to the value or use of such property, (d) property sold or
transferred in the ordinary course of business since the date of such financial
statements, or (e) as otherwise noted in Schedule 3(l) (attached if applicable).
It enjoys peaceful and undisturbed possession under all material leases for the
use of real property under which they are the lessee; all of such leases are
valid and binding and in full force and effect, and it is not in default in any
material respect under any such lease. No default will arise under any material
real property, material personal property lease or material intellectual
property license by reason of the consummation of the Transaction without the
lessor's or licensor's consent except as set forth in Schedule 3(l) (attached if
applicable). There has been no material physical loss, damage, or destruction,
whether or not covered by insurance, affecting any of its real properties or
material personal property since December 31, 1999. All fixed assets material to
its business and currently used by it are, in all material respects, in good
operating condition and repair.
m. Tax Matters.
(i) It has duly and properly filed all federal, state, local
and other tax returns and
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reports required to be filed by it and has made timely payments of all taxes due
and payable, whether disputed or not; all such tax returns are true and complete
in all material respects; the current status of audits of such returns or
reports by the Internal Revenue Service and other applicable tax authorities is
as set forth in Schedule 3(m) (attached if applicable); and, except as set forth
in Schedule 3(m) (attached if applicable), it has no agreement for the extension
of time for the assessment or payment of any taxes payable. Except as set forth
in Schedule 3(m) (attached if applicable), neither the Internal Revenue Service
nor any other taxing authority is now asserting or, to its best knowledge,
threatening to assert any deficiency or claim for additional taxes (or interest
thereon or penalties in connection therewith), nor is it aware of any basis for
any such assertion or claim. It has complied in all material respects with
applicable Internal Revenue Service backup withholding requirements. It has
complied with all applicable state law tax collection and reporting
requirements.
(ii) It has made adequate provision for any unpaid federal,
state, local or foreign taxes due or to become due from it for all periods
through and including December 31, 1999 and is reflected in its including
December 31, 1999 financial statements referred to above and has been or will be
made with respect to periods ending after including December 31, 1999.
(iii) As of each Closing date, the Company will not be a party
to, will not be bound by, and will have no obligation under, any tax sharing
agreement or contract.
(iv) (a). The Company is not currently the beneficiary of any
extension of time within which to file any tax return; (b) to the Company's
knowledge, no claim has ever been made by an authority in a jurisdiction where
the Company does not file tax returns that it is or may be subject to taxation
by that jurisdiction; and (c) the Company will not incur tax liability as a
result of the transactions contemplated by this Agreement.
(v) The Company has withheld and paid all taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party.
(vi) The company has not waived any statute of limitations in
respect of taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
(vii) The Company has no liability for the taxes of any person
other than the Company (a) under Tres. Reg Section 1.1502-6 (or any similar
provision of state, local or foreign law), (b) as a transferee or successor, (c)
by contract, or (d) otherwise.
n. Absence of Changes.
(i) Since December 31, 1999, there has been no material
adverse change affecting it. There is no occurrence, event or development of any
nature existing or, to its best knowledge, threatened which may reasonably be
expected to have a material adverse effect upon it.
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(ii) Except as set forth in Schedule 3(n) (attached if
applicable), since December 31, 1999, it has owned and operated its assets,
properties and businesses in the ordinary course and consistent with past
practice.
o. Foreign Corrupt Practices. Neither the Company nor any of its
subsidiaries, nor any officer, director or other person acting on behalf of the
Company or any subsidiary has, in the course of his actions for or on behalf of
the Company, used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity, made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.
p. Brokers; No General Solicitation. The Company has taken no action
that would give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments relating to this Securities Purchase Agreement
and the transactions contemplated hereby, except that the Company and the Buyers
both acknowledge that no broker or finder was involved with respect to the
transactions contemplated hereby other than LBC Capital Group, Inc. and Paradigm
Group, and other than Trinity Technology Management Incorporated as a
representative of the Investors, any fees or expenses of which shall be paid in
full at each Closing by the Company as agreed between the Company and such
party. Neither the Company nor any person participating on the Company's behalf
in the transactions contemplated hereby nor any person acting for the Company,
or any such distributor, has conducted any "general solicitation," as described
in Rule 502(c) under Regulation D, with respect to the Securities being offered
hereby.
q. Acknowledgment of Dilution. The number of Conversion Shares issuable
upon conversion of the Preferred Stock may increase substantially in certain
circumstances, including the circumstance wherein the trading price of the
Common Stock declines. The Company's executive officers and directors have
studied and fully understand the nature of the Securities being sold hereunder
and recognize they have a potential dilutive effect. The Board of Directors of
the Company has concluded in its good faith business judgment that such issuance
is in the best interests of the Company. The Company acknowledges that its
obligation to issue Conversion Shares upon conversion of the Preferred Stock is
binding upon it and enforceable regardless of the dilution that such issuance
may have on the ownership interests of other shareholders.
r. Eligibility to File Registration Statement. The Company is currently
eligible to file a registration statement with the SEC on either Form S-1 or
Form SB-2 under the 1933 Act.
s. Intellectual Property. Schedule 3(s) lists all patents, patent
applications, trade names, trademarks, trademark registrations and applications,
domestic or foreign (collectively, "Intellectual Property") owned, possessed,
used or held (under license or otherwise) by the Company, in each case free and
clear of all liens and encumbrances. The Company has not granted any license,
made any assignment, or entered into any agreement with respect to, or otherwise
consented in writing to the use by any other person of, any Intellectual
Property right listed on Schedule 3(s), nor does the Company pay any royalties
of other consideration for the right to use any Intellectual Property of
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others. There are no inquiries, investigations, claims or litigation challenging
or threatening to challenge the Company's right, title and interest in and to
its Intellectual Property or its continued use and right to preclude others from
using any of such Intellectual Property. There are no inquiries, investigations,
claims or litigation alleging, nor any judgments holding, that the Company's
activities constitute an infringement of any Intellectual Property right of a
third party.
4. COVENANTS.
a. Best Efforts. Each party shall use its best efforts to satisfy each
of the conditions to be satisfied by it on a timely basis as provided in
Sections 6 and 7 of this Securities Purchase Agreement.
b. Securities Laws. The Company agrees to timely file a Form D (or
equivalent form required by applicable state law) with respect to the Securities
if and as required under Regulation D and applicable state securities laws and
to provide a copy thereof to the Buyers promptly after such filing. The Company
shall, on or before the Closing Date, take such action as is necessary to sell
the Securities being sold to the Buyers on each such date under applicable
securities laws of the United States, and shall if specifically so requested
provide evidence of any such action so taken to the Buyers on or prior to the
Closing Date.
c. Reporting Status; Covenant to Remain a "Reporting Issuer". As of the
date of this Securities Purchase Agreement, the Company is subject to the
reporting requirements (the "Reporting Requirements") of Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"). Thereafter,
and for so long as the Buyers beneficially owns any of the Securities, the
Company shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination.
d. Use of Proceeds. The Company will use the proceeds from the sale of
the Securities for marketing, equipment purchases and general corporate
purposes.
e. Reservation of Shares. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
Shares of Common Stock to provide for the issuance of all of the Conversion
Shares, the Warrant Shares and the Dividend Shares (if any). Prior to complete
conversion of the Preferred Stock and exercise of the Warrants, the Company
shall not reduce the number of shares of Common Stock reserved for issuance
hereunder without the written consent of the Buyers except for a reduction
proportionate to a reverse stock split effected for a business purpose other
than affecting the requirements of this Section, which reverse stock split
affects all shares of Common Stock equally.
f. Listing. At the time the SEC declares the Company's registration
statement on Form SB-2 effective, the Company shall promptly secure the listing
upon notice of issuance of the Registerable Securities underlying the Preferred
Stock and the Warrants then purchased by the Buyers upon each national
securities exchange or automated quotation system, if any, upon which Shares of
Common Stock are then listed and shall maintain, so long as any other Shares of
Common Stock shall
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be so listed, such listing until all Registerable Securities have been issued.
The Company shall at all times comply in all respects with the Company's
reporting, filing and other obligations under the rules of the OTC Bulletin
Board (or such national securities exchange or market on which the Common Stock
may then be listed, as applicable).
g. Prospectus Delivery Requirement. The Buyers understand that the 1933
Act requires delivery of a prospectus relating to the Common Stock in connection
with any sale thereof pursuant to a registration statement under the 1933 Act
covering any resale by the Buyers of the Common Stock being sold, and the Buyers
shall comply with any applicable prospectus delivery requirements of the 1933
Act in connection with any such sale.
h. Intentional Acts or Omissions. No party shall intentionally perform
any act which if performed, or omit to perform any act which if omitted to be
performed, would prevent or excuse the performance of this Securities Purchase
Agreement or any of the transactions contemplated hereby.
i. Short Sales. As a material inducement for the Company to enter into
this Securities Purchase Agreement, the Buyers represents that it has not as of
the date hereof, and covenants on behalf of itself and its affiliates that
neither Buyers nor any affiliate of Buyers will at any time in which the Buyers
or any affiliate of the Buyers beneficially owns any of the Securities, engage
in any short sales of, or hedging or arbitrage transactions with respect to, the
Common Stock, or sell "put" options or similar instruments with respect to the
Common Stock, except as set forth in the Stockholders' Agreement of even date.
j. Board Representation and Related Matters. The Company agrees that
Trinity will have the right to designate one (1) member to the Company's Board
of Directors to represent the Buyers. In addition, Trinity's representative,
Xxxx Xxxxxxx, shall be appointed to the Company's Advisory Board and shall be
appointed as an observer to the Company's Board of Directors. As an observer, he
shall be entitled to receive a copy of any information distributed to the
Directors.
k. Inspection of Records. The Company will permit the Buyers or their
representative at all reasonable times, and as often as Buyers or their
representative may reasonably request, to examine and copy all books and records
and other papers relating to the organization or business of the Company.
l. Budget. The Company agrees to provide Trinity with a copy of its
annual budget and updates, at least quarterly, showing actual versus budget
amounts for all major budget items.
m. Expenses. The Company agrees to pay at the Closing to or at the
direction of the Buyers the Buyers' actual expenses of this transaction, up to
the sum of $25,000.
5. LEGEND AND TRANSFER INSTRUCTIONS.
a. Transfer Agent Instructions. The Company shall instruct its transfer
agent to issue certificates, registered in the name of the Buyers or their
nominees, for the Conversion Shares, the
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Warrant Shares and the Dividend Shares (if any) in accordance with the terms of
the applicable Preferred Stock and Warrants and in such amounts as specified
from time to time by the Buyers to the Company, upon conversion of the Preferred
Stock or exercise of the Warrants (as applicable). All such certificates shall
bear the restrictive legend specified in Section 2(g) of this Securities
Purchase Agreement only to the extent required by applicable law and as
specified in this Securities Purchase Agreement and the Exhibits and Addenda
hereto. The Company warrants that no instruction other than such instructions
referred to in this Section 5, and stop transfer instructions to give effect to
Section 2(f) hereof in the case of the Conversion Shares, the Warrant Shares and
the Dividend Shares (if any) prior to the registration of same under the 1933
Act, will be given by the Company to its transfer agent and that the Conversion
Shares, the Warrant Shares and the Dividend Shares (if any) shall otherwise be
freely transferable on the books and records of the Company as and to the extent
permitted by applicable law and provided by this Securities Purchase Agreement,
the Warrants and the Registration Rights Agreement. Nothing in this Section
shall affect in any way the Buyers' obligations and agreement to comply with all
applicable securities laws upon resale of the Conversion Shares, the Warrant
Shares and/or the Dividend Shares (if any). If the Buyers (x) provide the
Company with an opinion of counsel satisfactory to Company that registration by
the Buyers of the Preferred Stock, the Warrants, the Warrant Shares, the
Conversion Shares and/or the Dividend Shares (if any) is not required under the
1933 Act, or (y) transfer Securities to affiliates which are accredited
investors (in accordance with the provisions of this Securities Purchase
Agreement) or in compliance with Rule 144, then in either instance the Company
shall permit the said transfers, and if applicable promptly (and in all events
within five (5) trading days after receipt of all documents necessary to process
such issuance or transfer) instruct its transfer agent to issue certificates in
such names and in such denominations as specified by the Buyers.
b. Removal of Legends. The Legend shall be removed and the Company
shall issue a certificate without such Legend to the holder of any Security upon
which it is stamped, and a certificate for a security shall be originally issued
without the Legend, if, unless otherwise required by state securities laws, (x)
the sale of such Security is registered under the 1933 Act, or (y) such holder
provides the Company with an opinion by counsel satisfactory to the Company,
that is in form, substance and scope satisfactory to the Company, to the effect
that a public sale or transfer of such Security may be made without registration
under the 1933 Act or (z) such holder provides the Company with assurances and
documents satisfactory to the Company and its counsel, that such Security can be
sold pursuant to Rule 144. Once the Company's transfer agent transmits all
supporting documents to the Company's counsel, the Company has three business
days to deliver an unlegended certificate to the Buyer. The Buyers agree that
their sales of all Securities shall be made only pursuant to an effective
registration statement (and to deliver prospectuses in connection with such
sales) or in compliance with an exemption from the registration requirements of
the 1933 Act. In the event the Legend is removed from any Security or any
Security is issued without the Legend and thereafter the effectiveness of a
registration statement covering the sales of such Security is suspended or the
Company determines that a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to the holder of
such Security, the Company shall be entitled to require that the Legend be
placed upon any such Security which cannot then be sold pursuant to an effective
registration statement or Rule 144 or with respect to which the opinion referred
to in clause (y) next above has not been rendered, which Legend shall be removed
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when such Security may be sold pursuant to an effective registration statement
or Rule 144 (or such holder provides the opinion with respect thereto described
in clause (y) above).
c. Conversion of Preferred Stock. The Buyers shall have the right to
convert the Preferred Stock sold hereunder by delivering via facsimile executed
and completed Notices of Conversion (as defined in the Preferred Stock) to the
Company and delivering within two (2) business days thereafter the original
Notice of Conversion and the original Preferred Stock being converted by express
courier to the Company. If a Buyer is converting less than the Buyer's entire
holdings of the Preferred Stock, the Company will promptly issue a replacement
certificate for the balance of the Preferred Stock not then being converted.
Each date on which a Notice of Conversion is telecopied to the Company in
accordance with the provisions hereof shall be deemed a "Conversion Date." The
Company will transmit the certificates representing the Shares of Common Stock
issuable upon conversion of any Preferred Stock (along with a replacement
certificate for Preferred Stock representing the shares of Preferred Stock not
so converted, if applicable) to the Buyer via express courier, within five (5)
business days after the relevant Conversion Date. Time is of the essence with
respect to the requirements of the immediately preceding sentence.
d. Injunctive Relief for Breach. The Company acknowledges that a breach
of its obligations under Sections 5(a), 5(b) and 5(c) above will cause
irreparable harm to the Buyers by violating the intent and purpose of the
transactions contemplated hereby. Accordingly the Company agrees that the remedy
at law for a breach of its obligations under such Sections would be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the
provisions of such Sections, the Buyers shall be entitled, in addition to all
other remedies at law or in equity, to an injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to sell Preferred Stock at the
Closing is subject to the satisfaction, on or before the Closing Date, of each
of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion:
a. The parties shall have executed this Securities Purchase Agreement
and the Registration Rights Agreement, and the parties shall have delivered the
respective documents or signature pages thereof (via facsimile or otherwise as
permitted in this Agreement) to the other party.
b. The Buyers shall have delivered to the Company the Purchase Price
for the Preferred Stock and Warrants purchased at the Closing, by wire transfer
of immediately available funds via the wiring instructions provided by the
Company.
c. The representations and warranties of the Buyers shall be true and
correct in all material respects as of the date made and as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date), and the Buyers shall have performed, satisfied and
complied in all material respects with the covenants, agreements and
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conditions required by this Securities Purchase Agreement to be performed,
satisfied or complied with by the Buyers at or prior to the date of the Closing.
d. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of any of the transactions contemplated
herein.
7. CONDITIONS TO THE BUYERS' OBLIGATION TO PURCHASE.
The obligation of the Buyers to purchase Preferred Stock and Warrants
is subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, provided that these conditions are for the sole benefit of
the Buyers and may be waived by the Buyers at any time in their sole discretion:
a. The parties shall have executed this Securities Purchase Agreement
and the Registration Rights Agreement and shall have delivered the respective
documents or signature pages thereof (via facsimile or otherwise) to the other
parties.
b. The representations and warranties of the Company shall be true and
correct in all material respects as of the date made and as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Securities Purchase Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. The Buyers may
require a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other
matters as may be reasonably requested by the Buyers.
c. As of the Closing Date, the Company will have filed an amendment to
the Company's Certificate of Incorporation in the form attached as Exhibit 7(c).
d. On each Closing Date, the Company's Treasurer or Chief Financial
Officer will certify to the Buyers that there have been no material adverse
changes in the Company's financial condition as disclosed in the Company's most
recent financial statements.
e. The Buyers must have completed their due diligence investigation of
the Company.
f. The Company shall have received all necessary consents needed to
complete the sale of the Securities.
g. At the Closing, the Company will deliver a "blue sky" memorandum
from its counsel regarding the sale of the Securities to Buyers.
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h. At the Closing, the Company shall have issued and have duly executed
by the authorized officers of the Company, and delivered to the Buyers, the
Preferred Stock and Warrants being sold at the Closing.
i. The Common Stock shall be authorized for quotation on the OTC
Bulletin Board (or a national securities exchange or market) and trading in the
Common Stock on such market shall not have been suspended by the SEC or other
relevant regulatory agency.
j. The Company shall not have received, as of the Closing Date, from
the National Association of Securities Dealers, any written or oral
communication as to its actual or potential ineligibility for continued listing
of the Common Stock on the OTC Bulletin Board (or a national securities exchange
or market).
k. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self regulatory
organization having authority over the matters contemplated hereby which
restricts or prohibits the consummation of any of the transactions contemplated
herein.
l. The Buyers shall have received the opinion of Company counsel, dated
as of the Closing Date, substantially in the form attached hereto as Exhibit D.
8. INDEMNIFICATION
a. The Company agrees to indemnify in respect of, and hold
Buyers and Trinity harmless against, any and all damages, claims, deficiencies,
losses, and expenses (including, without limitation, legal and investigatory and
other fees in attempting to avoid the same or defending against the same)
(collectively "Damages") resulting from any misrepresentation, breach of
warranty, or non-fulfillment or failure to perform any covenant or agreement on
the part of the Company made as a part of or contained in this Agreement or in
any certificate executed and delivered pursuant to this Agreement or in the
Registration Rights Agreement, the Warrant or any related agreement in
connection with the transactions contemplated hereby,
b. Buyers agree to indemnify in respect of, and hold the
Company harmless against, any and all Damages resulting from any
misrepresentation, breach of warranty, or non-fulfillment or failure to perform
any covenant or agreement on the part of Buyers made as a part of or contained
in this Agreement or in any certificate executed and delivered pursuant to this
Agreement or in the Registration Rights Agreement, the Warrant or any related
agreement in connection with the transactions contemplated hereby.
c. The party claiming indemnification hereunder is hereinafter
referred to as the "Indemnified Party" and the party against whom such claims
are asserted hereunder is hereinafter referred to as the "Indemnifying Party."
d. Limitation of Liability. No party shall be liable to the
other parties to this Agreement except to the extent that the aggregate amount
of Damages for which they would otherwise (but for this provision) be liable
under this Section, net of any insurance payments, exceeds
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in the aggregate the sum of $5,000.00.
e. Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this Section are independent of and in addition to
such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any party, including without
limitation the right to seek specific performance, rescission or restitution,
none of which rights or remedies shall be affected or diminished hereby.
9. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Securities Purchase Agreement shall be governed
by and interpreted in accordance with the laws of the State of Florida without
regard to the principles of conflict of laws. In the event of any litigation
regarding the interpretation or application of this Securities Purchase
Agreement, the parties irrevocably consent to jurisdiction in any of the state
or federal courts located in the State of Florida and waive their rights to
object to venue in any such court, regardless of the convenience or
inconvenience thereof to any party. Service of process in any civil action
relating to or arising out of this Securities Purchase Agreement (including also
all Exhibits or Addenda hereto) or the transaction(s) contemplated herein may be
accomplished in any manner provided by law. The parties hereto agree that a
final, non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
b. Counterparts. This Securities Purchase Agreement may be executed in
two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and signature pages from such counterparts have been delivered to the
other party. In the event any signature page is delivered by facsimile
transmission (which the parties agree is an acceptable form of delivery), the
party using such means of delivery shall cause three (3) additional originally
executed signature pages to be physically delivered to the other party within
two (2) business days of the execution and delivery hereof.
c. Headings; Gender, Etc. The headings of this Securities Purchase
Agreement are for convenience of reference and shall not form a part of, or
affect the interpretation of this Securities Purchase Agreement. As used herein,
the masculine shall refer to the feminine and neuter, the feminine to the
masculine and neuter, and the neuter to the masculine and feminine, as the
context may require. As used herein, unless the context clearly requires
otherwise, the words "herein," "hereunder" and "hereby" shall refer to this
entire Securities Purchase Agreement and not only to the Section or paragraph in
which such word appears. If any date specified herein falls upon a Saturday,
Sunday or public or legal holidays, the date shall be construed to mean the next
business day following such Saturday, Sunday or public or legal holiday. For
purposes of this Securities Purchase Agreement, a "business day" is any day
other than a Saturday, Sunday or public or legal holiday.
d. Severability. If any provision of this Securities Purchase Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Securities Purchase Agreement in that jurisdiction or the
validity or enforceability of any provision of this Securities Purchase
Agreement in any other jurisdiction.
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e. Entire Agreement; Amendments. This Securities Purchase Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyers
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Securities Purchase Agreement may be waived or
amended other than by an instrument in writing signed by the party to be charged
with enforcement.
f. Notices. Any notices required or permitted to be given under the
terms of this Securities Purchase Agreement shall be sent by U. S. Mail or
delivered personally or by courier or via facsimile (if via facsimile, to be
followed within three (3) business days by an original of the notice document
via U.S. Mail or courier) and shall be effective five (5) days after being
placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier or by
facsimile, in each case properly addressed to the party to receive the same. The
addresses for such communications shall be:
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To the Company: Xx. Xxxxxx X. Xxxxx, Xx., President
Eagletech Communications, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
TEL.: 000-000-0000
If to the Buyers, at the address on the signature page of this Securities
Purchase Agreement. Each party shall provide written notice to the other party
of any change in address.
g. Successors and Assigns. This Securities Purchase Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. Neither the Company nor the Buyers shall assign this
Securities Purchase Agreement or any rights or obligations hereunder without the
prior written consent of the other (which consent shall not be unreasonably
withheld), and in any event any assignee of the Buyers shall be an accredited
investor (as defined in Regulation D), in the written opinion of counsel who is
reasonably satisfactory to Seller and in form, substance and scope reasonably
satisfactory to the Seller. Notwithstanding the foregoing, if applicable, any of
the entities constituting the Buyers (if greater than one (1) entity) may assign
its rights hereunder to any of its "affiliates," as that term is defined under
the 1934 Act, without the consent of the Company; provided, however, that any
such assignment shall not release such assigning entity from its obligations
hereunder unless such obligations are assumed by such affiliate and the Company
has prior to such assignment and assumption consented in writing to the same;
and no such assignment shall be made unless it is made in accordance with any
applicable securities laws of any applicable jurisdiction. Any request for an
assignment made hereunder by the Buyers shall be accompanied by a legal opinion
in form, substance and scope reasonably satisfactory to the Company, that such
assignment is proper under applicable law.
h. No Third Party Beneficiaries. This Securities Purchase Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
i. Survival. Unless this Securities Purchase Agreement is terminated
under Section 8(1), the representations and warranties of the Company and the
Buyers contained in Sections 2 and 3 and the Agreements and covenants set forth
in Sections 4, 5 and 8 shall survive the Closing for so long as any of the
Buyers shall hold any Preferred Stock, Common Stock or Warrants.
j. Publicity. The Company and the Buyers shall have the right to review
before issuance by the other, any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without prior consultation with or approval of
the Buyers, to make any press release or other public disclosure with respect to
such transactions as is required by applicable law and regulations. The Company
shall use its best efforts to keep the names of the Buyers confidential;
provided however, that the Company will file all documents necessary under the
Rules and Regulations of the Securities and Exchange Commission.
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k. Further Assurance. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Securities Purchase Agreement and the
consummation of the transactions contemplated hereby.
l. Termination. In the event that the initial Closing shall not have
occurred on or before twenty (20) business days after the date hereof, this
Securities Purchase Agreement may terminate at the close of business on such
date at the election of the parties. Neither party may unilaterally terminate
this Securities Purchase Agreement after the Closing for any reason other than a
material breach of this Securities Purchase Agreement by the non-terminating
party, other than as specified in Section 4(l) above. Such termination shall not
be the sole remedy for a breach of this Securities Purchase Agreement by the
non-terminating party, and each party shall retain all of its rights hereunder
at law or in equity. Notwithstanding anything herein to the contrary, a party
whose breach of a covenant or representation and warranty or failure to satisfy
a condition prevented the Closing shall not be entitled to terminate this
Securities Purchase Agreement.
m. Remedies. No provision of this Securities Purchase Agreement
providing for any specific remedy to a party shall be construed to limit such
party to the specific remedy described, and any other remedy that would
otherwise be available to such party at law or in equity shall be so available.
Nothing in this Securities Purchase Agreement shall limit any rights a party may
have with any applicable federal or state securities laws with respect to the
transactions contemplated hereby.
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
EAGLETECH COMMUNICATIONS, INC.
By: _______________________________________
Xxxxxx X. Xxxxx, Xx., President
___________________________________________
Buyer
Buyer's Information Name: _____________________________________
Address: __________________________________
__________________________________
Telephone: ________________________________
Tax I.D. No.: _____________________________
Subscription Amount: ______________________
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List of Schedules and Exhibits
Exhibit A Form of Amendment to Certificate of Incorporation
Exhibit B Form of Warrant to Purchase Common Stock
Exhibit C Registration Rights Agreement
Exhibit D Opinion of Counsel for Eagletech Communications, Inc.
Schedule 1 List of Buyers and Amount Invested
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