EXHIBIT 10.9
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT ("Agreement") dated as of July 11, 2005,
between Xxxxxx Xxxx & Company, Inc., a Nevada corporation (the "Company"), and
iCurie, Inc., a Nevada corporation (the "Purchaser").
WITNESSETH:
WHEREAS, on December 2, 2004, the Company sold and issued to certain
purchasers (the "Bridge Noteholders") promissory notes in the aggregate
principal amount of Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars
($2,500,000 USD) (the "Bridge Promissory Notes");
WHEREAS, on December 2, 2004, iCurie Lab Holdings, Ltd., a corporation
organized under the laws of the United Kingdom ("iCurie UK"), issued to the
Company a promissory note in the amount of Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx Dollars ($1,500,000 USD) (the "iCurie UK Note");
WHEREAS, on July 11, 2005, the Purchaser acquired all of the outstanding
shares in iCurie UK, and the Bridge Noteholders assigned the Bridge Promissory
Notes to the Purchaser in exchange for Series A Preferred Stock issued by the
Purchaser;
WHEREAS, this Agreement provides that the Company shall cancel the iCurie
UK Note; and the Purchaser shall reduce the Company's indebtedness under the
Bridge Promissory Notes to One Million United States Dollars ($1,000,000 USD) on
the terms and conditions set forth herein;
WHEREAS, the Purchaser has agreed to loan the Company an additional Five
Hundred Thousand United States Dollars ($500,000 USD), making the Company's
aggregate indebtedness to the Company Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxxx Dollars ($1,500,000 USD) which shall be evidenced by a debenture executed
by the Company in favor of the Purchaser (the "Debenture"), which Debenture will
be secured by the Company's proceeds from the Revenue Share Agreement, dated May
18, 2005, between the Company and iCurie UK (the "Revenue Sharing Agreement");
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
CANCELLATION AND ISSUANCE OF NOTES
Section 1.1 Cancellation of iCurie UK Note. The Company hereby
acknowledges that the iCurie UK Note is cancelled and any indebtedness owed by
iCurie UK under the iCurie UK Note is hereby null and void.
Section 1.2 Cancellation of Bridge Notes. The Purchaser hereby
acknowledges that the Bridge Notes are cancelled and any indebtedness, security
interest or warrants owed by the Company under the Bridge Notes are hereby null
and void.
Section 1.3 Issuance of the Note. Upon the following terms and conditions,
the Company shall issue the Debenture to the Purchaser. The indebtedness due
under the Debenture shall be One Million Five Hundred Thousand Dollars
($1,500,000 USD) (the "Indebtedness"), which will be secured by the Company's
proceeds from the Revenue Share Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Purchaser as of
the date hereof:
(a) Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and existing in good standing under
the laws of the State of Nevada and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The company has
one (1) subsidiary, CyberQuest Partners, Inc., a Florida corporation
("Subsidiaries"). Except where specifically indicated to the contrary, all
references in this Agreement to subsidiaries shall be deemed to refer to all
direct subsidiaries of the Company. The Company 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 or property owned by it makes such
qualification necessary other than those in which the failure so to qualify
would not have a Material Adverse Effect. "Material Adverse Effect" means (i)
any adverse effect on the business, operations, properties, prospects or
financial condition of the Company and its subsidiaries, if any, and which is
(either alone or together with all other adverse effects) material to the
Company and its Subsidiaries, if any, taken as a whole, and (ii) any material
adverse effect on the transactions contemplated under the Transaction Documents
or the enforceability thereof.
(b) Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement, the
Debenture, and the Security Agreement (collectively, the "Transaction
Documents") and to issue the Debenture in accordance with the terms hereof, (ii)
the execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including the issuance of the Debenture, have been duly authorized by all
necessary corporate action, and no further consent or authorization of the
Company, or the Company's Board of Directors (or any committee or subcommittee
thereof) or stockholders is required, (iii) the Transaction Documents have been
duly executed and delivered by the Company, and (iv) the applicable Transaction
Documents constitute valid and binding obligations of the Company enforceable
against the Company, except (A) 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
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principles of general application, and (B) to the extent the indemnification
provisions contained in this Agreement may be limited by applicable federal or
state securities laws.
(c) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby and issuance of the Debenture will
not (i) result in a violation of the Articles of Incorporation, any certificate
of designations, preferences and rights of any outstanding series of preferred
stock of the Company or the By-laws of the Company; (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 (iii)
to the Company's knowledge result in a violation of any law, rule, regulation,
order, judgment or decree by which any property or asset of the Company or any
of its Subsidiaries is bound or affected, except in the case of clause (ii),
such conflicts that would not have a Material Adverse Effect.
Section 2.2 Representations and Warranties of the Purchaser. The Purchaser
hereby makes the following representations and warranties to the Company as of
the date hereof:
(a) Accredited Investor Status; Sophisticated Purchaser. The
Purchaser is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D under the 1933 Act. The Purchaser has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the purchase of the Debenture. The Purchaser is not registered as a
broker or dealer under Section 15(a) of the 1934 Act, affiliated with any broker
or dealer registered under Section 15(a) of the 1934 Act, or a member of the
National Association of Securities Dealers, Inc.
(b) Information. The Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company which have been requested and materials relating to the offer and
sale of the Debenture which have been requested by the Purchaser or its
advisors. The Purchaser and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. The Purchaser understands that its
purchase of the Debenture involves a high degree of risk. The Purchaser has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Debenture.
(c) No Governmental Review. The Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Debenture or the
fairness or suitability of the investment in the Debenture nor have such
authorities passed upon or endorsed the merits thereof.
(d) Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of the Purchaser and is a
valid and binding agreement of the Purchaser enforceable against the Purchaser
in accordance with its terms, subject as to enforceability to general principles
of equity and to applicable bankruptcy,
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insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies. The Purchaser has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and
each other agreement entered into by the parties hereto in connection with the
transactions contemplated by this Agreement.
(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Purchaser and the consummation by the Purchaser of
the transactions contemplated hereby and thereby will not (i) result in a
violation of the Articles of Incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock of the
Purchaser or the By-laws of the Purchaser; (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 Purchaser is a party, or (iii) to the Purchaser's knowledge result in a
violation of any law, rule, regulation, order, judgment or decree by which any
property or asset of the Purchaser is bound or affected, except in the case of
clause (ii), such conflicts that would not have a material adverse effect on the
Purchaser.
(f) Investment Representation. The Purchaser is purchasing the
Debenture for its own account and not with a view to distribution in violation
of any securities laws. The Purchaser has been advised and understands that the
Debenture has not been registered under the 1933 Act or under the "blue sky"
laws of any jurisdiction and may be resold only if registered pursuant to the
provisions of the 1933 Act or if an exemption from registration is available,
except under circumstances where neither such registration nor such an exemption
is required by law. The Purchaser has been advised and understands that the
Company, in issuing the Debenture, is relying upon, among other things, the
representations and warranties of the Purchaser contained in this Section 2.2 in
concluding that such issuance is a "private offering" and is exempt from the
registration provisions of the 1933 Act.
(g) Rule 144. The Purchaser understands that there is no public
trading market for the Debenture, that none is expected to develop, and that the
Debenture must be held indefinitely unless and until such Debenture is
registered under the 1933 Act or an exemption from registration is available.
The Purchaser has been advised or is aware of the provisions of Rule 144
promulgated under the 1933 Act.
(h) Reliance by the Company. The Purchaser understands that the
Debenture is being offered and sold in reliance on a transactional exemption
from the registration requirements of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the applicability of such exemptions and the
suitability of the Purchaser to acquire the Debenture.
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ARTICLE III
DELIVERIES AT CLOSING
Section 3.1 Conditions Precedent to the Obligation of the Company to Sell.
The obligation hereunder of the Company to issue the Debenture and the other
Transaction Documents to the Purchaser is subject to the satisfaction, on the
date hereof, of each of the applicable conditions set forth below. These
conditions are for the Company's sole benefit and may be waived by the Company
by the execution of this Agreement.
(a) Delivery of Bridge Notes. The Purchaser shall deliver all of the
original Bridge Notes to the Company.
(b) Termination of Security Agreement. The Security Agreement
between the Bridge Noteholders and the Company shall be terminated.
(c) Wire. The Purchaser shall have wired $500,000 to the Company's
bank account in accordance with the wire instructions provided by the Company.
Section 3.2 Conditions Precedent to the Obligation of the Purchaser to
Purchase. The obligation hereunder of the Purchaser to acquire and pay for the
Debenture is subject to the satisfaction, on the date hereof, of each of the
applicable conditions set forth below. These conditions are for the Purchaser's
benefit and may be waived by the Purchaser by the execution of this Agreement.
(a) Delivery of iCurie UK Note. The Company shall have delivered the
original iCurie UK Note to the Purchaser.
(b) Security Agreement. A security interest in the Company's
proceeds of the Revenue Sharing Agreement shall have been perfected, pursuant to
a security agreement.
(c) Definitive Documents. The execution of definitive documentation
including this Agreement, and the Debenture.
ARTICLE IV
GOVERNING LAW; MISCELLANEOUS
Section 4.1 Governing Law. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEVADA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEVADA. EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.
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Section 4.2 Counterparts. This 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 delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
Section 4.3 Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
Section 4.4 Severability. If any provision of this 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 Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
Section 4.5 Entire Agreement; Amendments; Waivers. This Agreement
supersedes all other prior oral or written agreements between the Purchaser, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein (including the other Transaction Documents) 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 Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Purchaser, and no provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought.
Section 4.6 Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing, must be delivered by (i) courier, mail or hand
delivery or (ii) facsimile, and will be deemed to have been delivered upon
receipt to the following addresses:
If to the Company:
Xxxxxx Xxxx & Company, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to the Secured Party: with a copy to:
iCurie, Inc. DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
c/o iCurie Lab Holdings, Ltd. 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
00 Xxxxxxxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
London Attention: Xxxxxxx X. Xxxxx, Xxx.
Xxxxxx Xxxxxxx XX0 X0XX Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
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Section 4.7 Successors and Assigns. This Agreement may not be assigned
without the prior written consent of the parties. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
Section 4.8 No Third Party Beneficiaries. This 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.
Section 4.9 Survival. The representations, warranties and agreements of
the Company and the Purchaser contained in the Agreement shall survive the
Closing.
Section 4.10 Further Assurances. 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 Agreement and the consummation of the
transactions contemplated hereby.
Section 4.11 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed as of the date and year first above
written.
COMPANY: PURCHASER:
XXXXXX XXXX & COMPANY, INC. ICURIE, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------------------- ----------------------------
Xxxxx X. Xxxxxx Xxxxx Xxxxxxxx
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Its: President Its: Chief Executive Officer
