EXHIBIT 4.1
Generation Capital Associates
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Tel 404/000-0000 Fax 404/000-0000
Integrated Business Systems and Services, Inc.
0000 Xxxx Xxxx, Xxx X
Xxxxxxxx, X.X. 29201
Tel 803/000-0000 Fax 803/000-0000
Securities Purchase Agreement
1. Amount of Financing $250,000 (Purchase Amount).
2. Purchaser(s) Generation Capital Associates (GCA) and other
accredited investors (collectively Purchaser(s)), and
their transferees and assigns (Holder(s)).
3. Securities - Units 312,500 Units (Units) each unit consisting of 4
shares of Integrated Business Systems, Inc. (IBSS)
Convertible Preferred Stock (IBSS Preferred Stock)
and 3 warrants (IBSS Warrants). One share of IBSS
Preferred Stock is convertible into one share of IBSS
common stock. One IBSS Warrant is exercisable into
one share of IBSS Common Stock. The per unit purchase
price (Unit Purchase Price) shall be $0.80
Preferred Stock The IBSS Preferred Stock shall have a liquidation
value of $0.20 per share, an initial annual 8 %
dividend, payable quarterly, shall be non-voting,
shall be non-redeemable, and shall contain customary
anti-dilution provisions, which shall not apply to
the conversion and/or exercise of any convertible
instruments, options or warrants outstanding on the
Execution Date, or securities issued pursuant to any
stock option plans in effect as of the Closing Date.
The IBSS Preferred Stock shall be convertible into
IBSS common stock (IBSS Conversion Shares). If the
IBSS Conversion Shares have not been registered for
resale with a current prospectus available on or
before 90 days from the Closing Date (as defined in
Section 10 (c)) the dividend shall be increased to
twenty-five per cent (25%) per year effective on such
date until such registration is effective with a
current prospectus available, at which time the
dividend rate shall be reduced to 2 % per year.
Warrants The strike price of the IBSS Warrants shall be $.40
per share. The IBSS Warrants shall be exercisable for
five years commencing from the Closing Date (as
defined in Section 10(c)) and shall contain customary
anti-dilution provisions, which shall not apply to
the conversion and/or exercise of any convertible
instruments, options or warrants outstanding on the
Execution Date, or securities issued pursuant to any
stock option plans in effect as of the Closing Date.
The IBSS Warrants shall be exercisable for cash;
provided however, commencing one year from the
Execution Date, the IBSS Warrants shall be "cashless
exercise," at the option of the Holder(s), unless the
underlying shares (IBSS Warrants Shares) may be sold
without restriction pursuant to an effective
registration statement with current prospectus
available.
4. Document IBSS shall pay to GCA a document preparation fee of
$1,000.00 in the form of
Preparation Fee 62,500 IBSS Warrants (IBSS Document Preparation
Warrants). The IBSS common stock issuable upon
exercise of the IBSS Document Preparation Warrants is
the IBSS Document Preparation Warrants Shares.
5. Limitations No Purchaser(s) or Holder(s) of IBSS Preferred Stock,
IBSS Warrants, or IBSS Document Preparation Warrants
shall be permitted to convert IBSS Preferred Stock
into IBSS common stock and/or to exercise any IBSS
Warrants or IBSS Document Preparation Warrants to the
extent that, after giving effect to such conversion
and/or exercise, any such Purchasers(s) or Holder(s)
would be the beneficial owner of more than 5% of the
then outstanding IBSS common stock. This limitation
shall not be deemed to prevent any Purchaser(s) or
Holder(s) from acquiring an aggregate of more than 5%
of IBSS common stock resulting from such conversion
or exercise, so long as such Purchaser(s) or
Holder(s) does not own more than 5% at any given
time.
6. Registration IBSS shall file a registration statement (GCA
Registration Statement) for the resale of all of the
securities issued pursuant to this Agreement within
thirty (30) days following the Closing Date; and it
shall use its best efforts to cause the GCA
Registration Statement to become effective as soon
thereafter as possible. If the GCA Registration
Statement is not filed within thirty (30) days of the
Closing Date (as defined in Section 10(c)) and/or is
not effective within one hundred twenty (120) days
following the Closing Date with a current prospectus
available, the exercise price of the IBSS Warrants
and the IBSS Document Preparation Warrants shall be
reduced by $0.05 for the first month or part thereof
of such late filing and/or late effectiveness and
$0.03 for each month or part thereof thereafter, but
shall not be less than $0.05 per share; furthermore,
IBSS shall issue additional shares of its common
stock (Additional Shares) equal to 2% of each
Holder(s)' number of shares of IBSS Preferred Stock
for each such month or part thereof. These Additional
Shares shall be registered in the GCA Registration
Statement.
7. Escrow Xxxxx X. Xxxxxxxx, General Counsel of GCA, shall act
as Escrow Agent for the Purchase Amount, the IBSS
Preferred Stock, the IBSS Conversion Shares, the IBSS
Warrants, the IBSS Document Preparation Warrants, the
IBSS Warrants Shares, the IBSS Document Preparation
Warrants Shares, and the Additional Shares. The
address of the Escrow Agent is 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (Tel
404/000-0000, Fax 404/000-0000).
8. Accuracy of IBSS IBSS represents and warrants that its filings
SEC Filings with the SEC in the last two years are true and
complete and do not omit any material information
or fail to include any information which is necessary
to make the information set forth therein not
misleading.
9. Execution Date. This Agreement shall not be valid unless GCA and
Escrow Agent have received a facsimile copy of the
Agreement signed by IBSS by November 21, 2003 and
have each in turn signed the Agreement within two
business days of such receipt. The date on which the
last signature is affixed shall be the "Execution
Date."
10. Closing Schedule (a) Within five business days following the Execution
Date, Purchaser(s) shall deposit the Purchase Amount
in good funds with Escrow Agent.
(b) Within five business days following the Execution
Date, IBSS shall deposit the
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following items with Escrow Agent (IBSS Escrow
Deposit Items):
(i) certificates for 1,250,000 shares of
IBSS Preferred Stock, as a deposit for delivery to
Purchaser(s) and/or Holder(s) of the IBSS Preferred
Stock (Escrow Preferred Shares), registered in the
name of Purchaser(s).
(ii) 937,500 executed IBSS Warrants,
registered in the name of Purchaser(s); 62,500
executed IBSS Document Preparation Warrants,
registered in the name of GCA.
(iii) certificate(s) for 1,250,000 shares of
IBSS common stock as a deposit for delivery of the
IBSS Conversion Shares (Escrow Conversion Shares) to
Holder(s) upon conversion of the IBSS Preferred
Stock, registered in the name of Escrow Agent.
(iv) certificate(s) for 1,000,000 shares of
IBSS common stock as a deposit for delivery of the
937,500 IBSS Warrants Shares to Holder(s) upon
exercise of the IBSS Warrants; and for delivery of
the 62,500 IBSS Document Preparation Warrants Shares
to GCA upon exercise of the Document Preparation
Warrants. The IBSS Warrants Shares and the IBSS
Document Preparation Warrants Shares (Escrow Warrants
Shares) shall be registered in the name of Escrow
Agent.
(v) certificates for 525,000 shares of IBSS
common stock as a deposit for delivery to Holder(s)
of any Additional Shares which shall be registered in
the name of Escrow Agent.
(c) Within two business days of the receipt of the
Purchase Amount from Purchaser(s) and the IBSS Escrow
Deposit Items from IBSS, Escrow Agent shall deliver:
the Purchase Amount to IBSS; the IBSS Preferred
Shares and the IBSS Warrants to Purchaser(s); the
IBSS Document Preparation Warrants to GCA. The date
upon which the Escrow Agent wires the Purchase Amount
to IBSS is the Closing Date.
(d) Upon conversion of any IBSS Preferred Shares, the
Escrow Agent shall deliver the appropriate number of
Escrow Conversion Shares to the converting person,
and shall deliver the certificates for the cancelled
IBSS Preferred Shares to IBSS.
(e) Upon exercise of any IBSS Warrants and/or any
IBSS Document Preparation Warrants, the Escrow Agent
shall deliver the appropriate number of Escrow
Warrant Shares to the exercising person. Within five
business days following the expiration of the IBSS
Warrants, the IBSS Document Preparation Warrants and
the IBSS Placement Agent Warrants, Escrow Agent shall
return to IBSS any excess Escrow Warrants Shares.
(f) As soon as reasonably practicable after the
earlier of (i) twenty-four (24) months from the
Closing Date, or (ii) the effective date of the GCA
Registration Statement, the Escrow Agent shall return
to IBSS any remaining Additional Shares.
(g) On the Closing Date the Purchaser(s) shall be
deemed to be the owner(s) of the IBSS Preferred
Shares and the IBSS Warrants, and GCA shall be deemed
the owner of the IBSS Document Preparation Warrants.
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11. Binding Agreement and (a) The parties shall be legally bound by the
Choice of Law above terms and shall execute such further documents
as may be required to implement the provisions of
this Agreement. Facsimile signatures shall be deemed
to be original signatures. This Agreement may be
signed in two or more counterparts.
(b) This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of
the state of Georgia and applicable Federal laws
without regard to conflicts of laws, rules or
principles. IBSS consents to the personal
jurisdiction of any state or federal court located in
Xxxxxx County, Georgia for any litigation arising out
of or in connection with this Agreement.
Integrated Business Systems, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx Date: December 24, 2003
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Xxxxxx X. Xxxxxxxxxx, CEO
Generation Capital Associates
By: /s/ Xxxx X. Xxxxxx Date: December 24, 2003
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Xxxx X. Xxxxxx, CFO
Escrow Agent
/s/ Xxxxx X. Xxxxxxxx Date: December 24, 2003
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Xxxxx X. Xxxxxxxx
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