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EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of March 31,
1998, by and between ENVIRONMENTAL PRODUCTS & TECHNOLOGIES, CORPORATION a
corporation organized under the laws of the State of Delaware (the "COMPANY"),
and each of the purchasers (the "PURCHASERS") set forth on the execution pages
hereof (the "EXECUTION PAGES").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
B. The Company desires to sell, and the Purchasers collectively desire
to purchase, upon the terms and conditions stated in this Agreement, for an
aggregate purchase price equal to Three Million Dollars ($3,000,000) (the
"PURCHASE PRICE"), (i) Three Thousand (3,000) shares of the Company's Series A
Convertible Preferred Stock, par value $.01 per share (the "PREFERRED SHARES"),
convertible into shares of the Company's Common Stock, par value $.01 per share
(the "COMMON STOCK"), and (ii) warrants, in the form attached hereto as Exhibit
B, to acquire One Hundred Fifty Thousand (150,000) shares of Common Stock (the
"WARRANTS"). The rights, preferences and privileges of the Preferred Shares,
including the terms upon which such Preferred Shares are convertible into shares
of Common Stock, are set forth in the form of Certificate of Designations,
Preferences and Rights attached hereto as Exhibit A (the "CERTIFICATE OF
DESIGNATION"). The shares of Common Stock issuable upon conversion of the
Preferred Shares or otherwise pursuant to the Certificate of Designation are
referred to herein as the "CONVERSION SHARES" and the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants are referred to
herein as the "WARRANT SHARES." The Preferred Shares, the Warrants, the
Conversion Shares and the Warrant Shares are collectively referred to herein as
the "SECURITIES" and each of them may individually be referred to herein as a
"SECURITY."
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit C (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
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NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES.
a. Purchase. On the Closing Date (as defined below), subject to the
satisfaction (or waiver) of the conditions set forth in Section 6 and Section 7
below, the Company shall issue and sell to each Purchaser, and each Purchaser
severally agrees to purchase from the Company, such number of Preferred Shares
and Warrants as is set forth on such Purchaser's Execution Page hereto. Each
Purchaser's obligation to purchase Preferred Shares or Warrants hereunder is
distinct and separate from each other Purchaser's obligation to purchase
Preferred Shares or Warrants and no Purchaser shall be required to purchase
hereunder more than the number of Preferred Shares or Warrants set forth on such
Purchaser's Execution Page hereto notwithstanding any failure by any other
Purchaser to purchase Preferred Shares or Warrants hereunder.
b. Form of Payment. On the Closing Date, each Purchaser shall pay the
aggregate Purchase Price for the Preferred Shares and Warrants being purchased
by such Purchaser on the Closing Date by wire transfer to the Company, in
accordance with the Company's written wiring instructions, against delivery of
duly executed certificates representing the Preferred Shares and duly executed
Warrants being purchased by such Purchaser and the Company shall deliver such
duly executed certificates and Warrants against delivery of such aggregate
Purchase Price.
c. Closing Date. The date and time of the issuance and sale of the
Preferred Shares and Warrants to each of the Purchasers pursuant to this
Agreement (the "CLOSING") shall be as soon as practicable after the satisfaction
(or waiver) of the conditions thereto set forth in Section 6 and Section 7
below, or such other time as may be mutually agreed upon by the Company and the
Purchasers (the "CLOSING DATE"). The Closing shall occur at the offices of
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally represents and warrants to the Company as
follows:
a. Investment Purpose. Purchaser is purchasing the Preferred Shares and
the Warrants for Purchaser's own account and not with a present view towards the
public sale or distribution thereof, except pursuant to sales that are exempt
from the registration requirements of the Securities Act and/or sales registered
under the Securities Act. Purchaser understands that Purchaser must bear the
economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities or
blue sky laws or an exemption from such registration is available, and that the
Company has no present intention of registering the resale of any such
Securities other than as contemplated by the Registration Rights Agreement.
Notwithstanding anything in this Section 2(a) to the contrary, by making the
representations herein,
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the Purchaser does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption from the
registration requirements under the Securities Act.
b. Accredited Investor Status. Purchaser is an "ACCREDITED INVESTOR" as
that term is defined in Rule 501(a) of Regulation D.
c. Reliance on Exemptions. Purchaser understands that the Preferred
Shares and the Warrants are being offered and sold to Purchaser in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of
Purchaser to acquire the Preferred Shares and Warrants.
d. Information. Purchaser and its counsel, if any, have been furnished
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Preferred Shares and the
Warrants which have been specifically requested by the Purchaser or its counsel.
Purchaser and its counsel have been afforded the opportunity to ask questions of
the Company and have received what Purchaser believes to be satisfactory answers
to any such inquiries. Neither such inquiries nor any other investigation
conducted by Purchaser or its counsel or any of its representatives shall
modify, amend or affect Purchaser's right to rely on the Company's
representations and warranties contained in Section 3 below. Purchaser
understands that Purchaser's investment in the Securities involves a high degree
of risk.
e. Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
Purchaser further acknowledges and understands that the Company is not currently
obligated to, and does not, file reports or financial statements with the
Securities and Exchange Commission pursuant to Sections 12, 13, 14 or 16 of the
Securities Exchange Act of 1934, as amended.
f. Transfer or Resale. Purchaser understands that (i) except as provided
in the Registration Rights Agreement, the sale or resale of the Securities have
not been and are not being registered under the Securities Act or any state
securities laws, and the Securities may not be transferred unless (a) the resale
of the Securities has been registered thereunder; or (b) Purchaser shall have
delivered to the Company an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (c) the
Securities are sold under Rule 144 promulgated under the Securities Act (or a
successor rule) ("RULE 144"); or (d) the Securities are sold or transferred to
an affiliate of Purchaser who agrees to sell or otherwise transfer the
Securities only in accordance with the provisions of this Section 2(f) and who
is an Accredited Investor; and (ii) neither the Company nor
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any other person is under any obligation to register such Securities under the
Securities Act or any state securities laws (other than pursuant to the
Registration Rights Agreement). Notwithstanding the foregoing or anything else
contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.
g. Legends. Purchaser understands that the Preferred Shares and the
Warrants and, until such time as the Conversion Shares and Warrant Shares have
been registered under the Securities Act (including registration pursuant to
Rule 416 thereunder) as contemplated by the Registration Rights Agreement or
otherwise may be sold by Purchaser under Rule 144, the certificates for the
Conversion Shares and Warrant Shares may bear a restrictive legend in
substantially the following form:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any state of the United States. The securities represented hereby may
not be offered, sold, transferred or assigned in the absence of an
effective registration statement for the securities under applicable
securities laws unless offered, sold, transferred or assigned under an
available exemption from the registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by state securities laws, (a) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder) as contemplated by the Registration Rights
Agreement; (b) such holder provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the Securities Act; or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
under Rule 144. Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, pursuant
to an effective registration statement or under an exemption from the
registration requirements of the Securities Act. In the event the above legend
is removed from any Security and thereafter the effectiveness of a registration
statement covering 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 Purchaser the Company may require that the
above legend be placed on any such Security that cannot then be sold pursuant to
an effective registration statement or under Rule 144 and Purchaser shall
cooperate in the replacement of such legend. Such legend shall thereafter be
removed when such Security may again be sold pursuant to an effective
registration statement or under Rule 144.
h. Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable in accordance with their terms.
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i. Residency. Purchaser is a resident of the jurisdiction set forth
under such Purchaser's name on the Execution Page hereto executed by such
Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted. The Company and each of its subsidiaries 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 (i) the
Securities, (ii) the ability of the Company to perform its obligations hereunder
or under the Certificate of Designation, the Warrants or the Registration Rights
Agreement or (iii) the business, operations, properties, prospects or financial
condition of the Company and its subsidiaries, taken as a whole.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Warrants and the Registration Rights Agreement, to issue and
sell the Preferred Shares and the Warrants in accordance with the terms hereof,
and to issue the Conversion Shares upon conversion of the Preferred Shares in
accordance with the terms of the Certificate of Designation and to issue the
Warrant Shares upon exercise of the Warrants in accordance with the terms of
such Warrants; (ii) the execution, delivery and performance of this Agreement,
the Warrants and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Preferred Shares and
Warrants and the issuance and reservation for issuance of the Conversion Shares
and Warrant Shares) have been duly authorized by the Company's Board of
Directors and no further consent or authorization of the Company, its Board of
Directors, any committee of the Board of Directors, or its stockholders is
required; (iii) this Agreement has been duly executed and delivered by the
Company; and (iv) this Agreement constitutes, and, upon execution and delivery
by the Company of the Warrants and the Registration Rights Agreement, such
agreements will constitute, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms.
c. Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Preferred Shares and Warrants)
exercisable or exchangeable for, or convertible into, any shares of capital
stock and the number of shares to be reserved for issuance upon conversion of
the Preferred Shares and exercise of the Warrants is set forth on Schedule 3(c).
All of such outstanding shares of capital stock have
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been, or upon issuance in accordance with the terms of any such warrants,
options or preferred stock, will be, validly issued, fully paid and
non-assessable. No shares of capital stock of the Company (including the
Preferred Shares, the Conversion Shares and the Warrant Shares) are subject to
preemptive rights or any other similar rights of the stockholders of the Company
or any liens or encumbrances. Except for the Securities and as set forth on
Schedule 3(c), as of the date of this 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 or
exercisable or exchangeable for, 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, and (ii) 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 Securities Act
(except the Registration Rights Agreement). Except as set forth on Schedule
3(c), there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the issuance of the Securities in
accordance with the terms of this Agreement, the Certificate of Designation or
the Warrants. The Company has furnished to the Purchasers true and correct
copies of the Company's Certificate of Incorporation as in effect on the date
hereof ("CERTIFICATE OF INCORPORATION"), the Company's By-laws as in effect on
the date hereof (the "BY-LAWS"), and all other instruments and agreements
governing securities convertible into or exercisable or exchangeable for capital
stock of the Company. The Certificate of Designation, in the form attached
hereto, will be duly filed prior to Closing with the Secretary of State of the
State of [Delaware] and, upon issuance of the Preferred Shares in accordance
with the terms hereof, each Purchaser shall be entitled to the rights set forth
therein.
d. Issuance of Shares. The Preferred Shares are duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances and will not be subject to any preemptive or other similar
rights of stockholders of the Company and will not impose personal liability on
the holders thereof. The Conversion Shares and Warrant Shares are duly
authorized and reserved for issuance, and, upon conversion of the Preferred
Shares and exercise of the Warrants, as applicable, in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances and will not be subject to any
preemptive or other similar rights of stockholders of the Company and will not
impose personal liability upon the holder thereof.
e. No Conflicts. The execution, delivery and performance of this
Agreement, the Warrants and the Registration Rights Agreement by the Company,
the performance by the Company of its obligations under the Certificate of
Designation and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and reservation
for issuance, as applicable, of the Preferred Shares, the Conversion Shares and
the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation or By-laws 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 (including, without
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limitation, the triggering of any anti-dilution provisions), 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 U.S. federal and state
securities laws and regulations and rules or regulations of any self-regulatory
organizations to which either the Company or its securities are subject)
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,
with respect to clause (ii), for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its subsidiaries is in violation of its Certificate of
Incorporation, By-laws 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 actual or possible
violations, defaults or rights as would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its
subsidiaries are not being conducted, and shall not be conducted so long as
Purchaser owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either singly or in the aggregate would not have a Material
Adverse Effect. Except as specifically contemplated by this Agreement and the
Registration Rights Agreement, the Company is not required to obtain any
consent, approval, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self regulatory
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement, the Warrants or the Registration Rights Agreement or to
perform its obligations under the Certificate of Designation, in each case in
accordance with the terms hereof or thereof.
f. Absence of Certain Changes. Since September 30, 1997, there has been
no material adverse change and no material adverse development in the business,
properties, operations, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, except as disclosed in
Schedule 3(f) or in the SEC Documents filed prior to the date hereof.
g. Absence of Litigation. Except as disclosed in the SEC Documents filed
prior to the date hereof or in Schedule 3(g) hereto, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or
affecting the Company, any of its subsidiaries, or any of their respective
directors or officers in their capacities as such, which could reasonably be
expected to have a Material Adverse Effect. There are no facts which, if known
by a potential claimant or governmental authority, could give rise to a claim or
proceeding which, if asserted or conducted with results unfavorable to the
Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect.
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h. Intellectual Property. Each of the Company and its subsidiaries owns
or is licensed to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright applications,
licenses, permits, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other similar rights and proprietary knowledge (collectively, "INTANGIBLES")
necessary for the conduct of its business as now being conducted and as
described, conditioned, qualified or excepted in Schedule 3(h) to this
Agreement. To the best knowledge of the Company, neither the Company nor any
subsidiary of the Company infringes or is in conflict with any right of any
other person with respect to any Intangibles which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect. Neither the Company nor any of its subsidiaries
has received written notice of any pending conflict with or infringement upon
such third party Intangibles, which alleged pending conflict or alleged
infringement, if adversely determined, would result in a Material Adverse
Effect. Except as disclosed in Schedule 3(h) hereto, the termination of the
Company's ownership of, or right to use, any single Intangible would not result
in a Material Adverse Effect on the Company. Except as described in Schedule
3(h) hereto, (a) neither the Company nor any of its subsidiaries has entered
into any consent agreement, indemnification agreement, forbearance to xxx or
settlement agreement with respect to the validity of the Company's or its
subsidiaries' ownership or right to use its Intangibles and, to the best
knowledge of the Company, there is no reasonable basis for any such claim to be
successful, (b) the Intangibles are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing and (c) the Company and its
subsidiaries have complied, in all material respects, with their respective
contractual obligations relating to the protection of the Intangibles used
pursuant to licenses. To the best knowledge of the Company, no person is
infringing on or violating the Intangibles owned or used by the Company or its
subsidiaries.
i. Foreign Corrupt Practices. Neither the Company, nor any of its
subsidiaries, nor any director, officer, agent, employee 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 expenses 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;
or made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
j. Disclosure Materials. The financial statements of the Company dated
September 30, 1997 and any other financial statements delivered by the Company
to the Purchasers (the "Financial Statements" and, together with the Schedules
to this Agreement and other documents and information furnished by or on behalf
of the Company at any time prior to the Closing, the "Disclosure Materials")
comply in all material respects with applicable accounting requirements. Such
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as may be otherwise
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specified in such Financial Statements or the notes thereto, and fairly present
in all material respects the financial position of the Company as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal year-end audit
adjustments. There are not liabilities, contingent or otherwise, of the Company
involving material amounts not disclosed in said Financial Statements. The
Disclosure Materials do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Since September 30, 1997, there has been no
event, occurrence or development that has had or that could have or result in a
Material Adverse Effect.
k. Acknowledgment Regarding Purchasers' Purchase of the Securities. The
Company acknowledges and agrees that none of the Purchasers is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement or the transactions contemplated hereby, the
relationship between the Company and the Purchasers is "arms-length" and any
statement made by any Purchaser or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to such Purchaser's purchase
of Securities and has not been relied upon by the Company, its officers or
directors in any way. The Company further acknowledges that the Company's
decision to enter into this Agreement has been based solely on an independent
evaluation by the Company and its representatives.
l. Form SB-2 Eligibility. The Company is currently eligible to register
the resale of its Common Stock on a registration statement on Form SB-2 under
the Securities Act. There exist no facts or circumstances that would prohibit or
delay the preparation and filing of a registration statement on Form SB-2 with
respect to the Registrable Securities (as defined in the Registration Rights
Agreement).
m. No General Solicitation. Neither the Company nor any distributor
participating on the Company's behalf in the transactions contemplated hereby
(if any) nor any person acting for the Company, or any such distributor, has
conducted any "general solicitation," as such term is defined in Regulation D,
with respect to any of the Securities being offered hereby.
n. 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 that would require registration of the
Securities being offered hereby under the Securities Act or cause this offering
of Securities to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act or any applicable stockholder
approval provisions.
o. No Brokers. Except for fees payable to CDC Consulting, Inc. and
advisory fees payable by the Corporation to Strategic Planning Associates, Inc.,
no fees or commissions will be payable by the Company to any broker, financial
advisor, finder, investment banker, or bank with respect to the transactions
contemplated hereby. The Purchaser shall have no obligation with respect to such
fees or with respect to any claims made by or on behalf of other persons for
fees of a type
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contemplated in this Section 3(p) that may be due in connection with the
transactions contemplated hereby. The Company shall indemnify and hold harmless
the Purchaser, its respective employees, officers, directors, agents and
partners, and their respective Affiliates (as such term is defined under Rule
405 promulgated under the Securities Act), from and against all claims, losses,
damages, costs (including the costs of preparation and reasonable attorney's
fees) and expenses suffered in respect of any such claimed or existing fees.
p. Acknowledgment of Dilution. The number of Conversion Shares issuable
upon conversion of the Preferred Shares may increase substantially in certain
circumstances, including the circumstance wherein the trading price of the
Common Stock declines. The Company's executive officers have studied and fully
understand the nature of the Securities being sold hereunder. The Company
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Preferred Shares in accordance with the terms of the Certificate of
Designation is absolute and unconditional, regardless of the dilution that such
issuance may have on the ownership interests of other stockholders. Taking the
foregoing into account, the Company's Board of Directors has determined in its
good faith business judgment that the issuance of the Preferred Shares hereunder
and the consummation of the other transactions contemplated hereby are in the
best interests of the Company and its stockholders.
q. Title. The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3(q) or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries. Any real property and facilities held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries, except as described in
Schedule 3(q).
r. Tax Status. Except as set forth on Schedule 3(r), the Company and
each of its subsidiaries has made or filed all foreign, federal, state and local
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. Except as set forth on Schedule 3(r), there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has not executed a waiver with respect to any statute of limitations relating to
the assessment or
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collection of any federal, state or local tax. Except as set forth on Schedule
3(r), none of the Company's tax returns is presently being audited by any taxing
authority.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and Section 7 of this
Agreement.
b. Form D: Blue Sky Laws. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the Purchasers
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States or obtain exemption therefrom, and shall provide
evidence of any such action so taken to the Purchasers on or prior to the
Closing Date.
c. Reporting Status. So long as any Purchaser beneficially owns any of
the Securities, the Company shall take all actions necessary to continue to be
eligible to register the resale of its Common Stock on a registration statement
on Form SB-2 under the Securities Act.
d. Use of Proceeds. The Company shall use the proceeds from the sale of
the Securities as set forth in Schedule 4(d).
e. Additional Equity Capital; Right of First Offer. The Company agrees
that during the period beginning on the date hereof and ending on the date which
is 183 days following the Closing Date (the "LOCK-UP PERIOD"), the Company will
not contract with any party to obtain additional financing in which any equity
or equity-linked securities are issued (including any debt financing with an
equity component) ("FUTURE OFFERINGS"). In addition, during the period beginning
on the date hereof and ending 180 days following the expiration of the Lock-Up
Period, the Company will not conduct a future offering unless it shall have
first delivered to each Purchaser, at least ten (10) business days prior to the
closing of such Future Offering, written notice describing the proposed Future
Offering, including the terms and conditions thereof, and providing each
Purchaser and its affiliates an option during the ten (10) business day period
following delivery of such notice to purchase all of the securities being
offered in the Future Offering on the same terms as contemplated by such Future
Offering (the limitation referred to in this Section 4(e) is referred to as the
"CAPITAL RAISING LIMITATION"). The Capital Raising Limitation shall not apply to
any transaction involving issuances of securities as consideration in a merger,
consolidation or acquisition of assets, or in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise
equity capital), or as consideration for the acquisition of a business, product
or license by the Company. The Capital Raising Limitation also shall not apply
to (i) the issuance of securities pursuant to an underwritten public offering,
(ii) the issuance of securities upon exercise or conversion of the Company's
options, warrants or other convertible securities outstanding as of the date
hereof or (iii) the grant of additional options or warrants, or the issuance of
additional securities,
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under any duly authorized Company stock option or restricted stock plan for the
benefit of the Company's employees or directors.
f. Expenses. The Company shall pay to each Purchaser, or at its
direction, at the Closing, reimbursement for the expenses reasonably incurred by
such Purchaser and its affiliates and advisors in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
agreements to be executed in connection herewith, including, without limitation,
the Purchaser's and its affiliates' and advisors' reasonable due diligence and
attorneys' fees and expenses (the "EXPENSES"). In addition, from time to time
thereafter, upon any Purchaser's written request, the Company shall pay to such
Purchaser such additional Expenses, if any, not covered by such payment, in each
case to the extent reasonably incurred by such Purchaser in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
agreements to be executed in connection herewith. Notwithstanding the foregoing,
the Company shall not be obligated to reimburse the Purchasers for more than
$25,000 pursuant to this Section 4(f).
g. Financial Information. The Company agrees to send the following
reports to each Purchaser until such Purchaser transfers, assigns or sells all
of its Securities, provided that the Company is obligated to file such reports
with the SEC: (i) within ten (10) days after the filing with the SEC, a copy of
its Annual Report on Form 10-KSB, its Quarterly Reports on Form 10-QSB, its
proxy statements and any Current Reports on Form 8-K; and (ii) within one (1)
day after release, copies of all press releases issued by the Company or any of
its subsidiaries.
h. 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 full conversion of the outstanding Preferred Shares and
the issuance of the Conversion Shares in connection therewith and the full
exercise of the Warrants and the issuance of the Warrant Shares in connection
therewith subject to and as otherwise required by the Certificate of Designation
and the Warrants. In that regard, a "sufficient number of shares" with respect
to the Preferred Shares shall be deemed to be equal to the number of shares of
Common Stock required to be reserved for issuance by the Company pursuant to
Article V of the Certificate of Designation. The Company shall not reduce the
number of shares reserved for issuance upon conversion of the Preferred Shares
and the full exercise of the Warrants (except as a result of any such conversion
or exercise) without the consent of the Purchaser.
i. Listing. The Company shall promptly secure the listing of the
Conversion Shares and Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so long as
any Purchaser (or any of their affiliates) own any Securities, such listing of
all Conversion Shares from time to time issuable upon conversion of the
Preferred Shares and all Warrant Shares from time to time issuable upon exercise
of the Warrants. The Company will take all action necessary to continue the
listing and trading of its Common Stock on the New York Stock Exchange ("NYSE"),
the American Stock Exchange ("AMEX"), the Nasdaq National Market ("NNM"), the
Nasdaq SmallCap Market ("SMALLCAP") or in the over the counter market on the
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electronic bulletin board (the "Bulletin Board") and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of the NASD and such exchanges, as applicable. The Company shall promptly
provide to each Purchaser copies of any notices it receives regarding the
continued eligibility of the Common Stock for trading on the Bulletin Board or,
if applicable, any securities exchange or automated quotation system on which
securities of the same class or series issued by the Company are then listed or
quoted, if any.
j. Corporate Existence. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
Certificate of Designation, the Warrants and the agreements and instruments
entered into in connection herewith regardless of whether or not the Company
would have had a sufficient number of shares of Common Stock authorized and
available for issuance in order to effect the full conversion of all Preferred
Shares and the exercise in full of all Warrants outstanding as of the date of
such transaction and (ii) is a publicly traded corporation whose common stock is
listed for trading on the NNM, SmallCap, NYSE, AMEX or Bulletin Board.
k. No Integrated Offerings. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of Securities to be integrated with any
other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
l. Legal Compliance. The Company shall conduct its business and the
business of its subsidiaries in compliance with all laws, ordinances or
regulations of governmental entities applicable to such businesses, except where
the failure to do so would not have a Material Adverse Effect.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company shall instruct its transfer agent to issue certificates,
registered in the name of each Purchaser or its nominee, for the Conversion
Shares and the Warrant Shares in such amounts as specified from time to time by
such Purchaser to the Company upon conversion of the Preferred Shares or
exercise of the Warrants, as applicable. To the extent and during the periods
provided in Sections 2(f) and 2(g) of this Agreement, all such certificates
shall bear the restrictive legend specified in Section 2(g) of this Agreement.
b. 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 transfer of the Conversion Shares or the
Warrant Shares, as applicable, prior to registration thereof under the
Securities Act or without an exemption therefrom, will be given by the Company
to its transfer agent and that the Securities shall otherwise be freely
transferable on the books and records
-13-
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of the Company as and to the extent provided in this Agreement, the Certificate
of Designation, the Warrants and the Registration Rights Agreement. Nothing in
this Section shall affect in any way each Purchaser's obligations and agreement
set forth in Section 2(g) hereof to resell the Securities pursuant to an
effective registration statement or under an exemption from the registration
requirements of applicable securities law.
c. If (i) (A) the Conversion Shares and the Warrant Shares, as
applicable, have been registered under the Securities Act as contemplated by the
Registration Rights Agreement, or (B) a Purchaser provides the Company and the
transfer agent with an opinion of counsel, which opinion of counsel shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from registration, or (C) a
Purchaser provides the Company with reasonable assurances that such Securities
may be sold under Rule 144, and (ii) (A) such Purchaser has delivered to the
Company certificates representing the Conversion Shares and/or Warrant Shares,
as applicable, along with a written request for the removal of any restrictive
legend set forth thereon or (B) in the case of the conversion by such Purchaser
of the Preferred Shares or the exercise by the Purchaser of the Warrants, such
Purchaser has complied with the procedures for conversion set forth in Article
IV of the Certificate of Designation and the procedures for exercise set forth
in the Warrants, the Company shall permit the transfer and promptly instruct its
transfer agent to issue the Conversion Shares and/or Warrant Shares, as
applicable, in such name and in such denominations as specified by such
Purchaser. If the Company's transfer agent is participating in the Depository
Trust Company ("DTC") Fast Automated Securities Transfer program, the Company
shall cause its transfer agent to electronically transmit the Conversion Shares
and/or Warrant Shares, as applicable, to such Purchaser or its transferee by
crediting the account of such Purchaser or its transferee with DTC through its
Deposit Withdrawal Agent Commission system ("DTC TRANSFER"). If the
aforementioned conditions to a DTC Transfer are not satisfied, the Company shall
deliver to such Purchaser or its transferee physical certificates representing
the Conversion Shares and/or Warrant Shares, as applicable, which certificates
shall not bear any legend restricting transfer of the Conversion Shares and/or
Warrant Shares represented thereby. Further, a Purchaser may instruct the
Company to deliver to such Purchaser or its transferee unlegended physical
certificates representing the Conversion Shares and/or Warrant Shares, as
applicable, in lieu of delivering such shares by way of DTC Transfer.
d. If the Company fails (a "LEGEND REMOVAL FAILURE") to deliver such
unlegended Conversion Shares and/or Warrant Shares to a Purchaser or its
transferee in accordance with Section 5(c) within five (5) business days after
the conditions to such delivery have been satisfied (the "LEGEND REMOVAL
PERIOD"), then the Company shall pay to such Purchaser an amount equal to:
(.24) x (N/365) x (MP)
where:
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"N" means the number of days after the expiration of the Legend Removal
Period through and including the Legend Removal Cure Date;
"MP" means the product of (x) the Closing Bid Price (as defined in the
Certificate of Designation) of the Common Stock in effect on the date of the
Legend Removal Failure and (y) the number of Conversion Shares and/or Warrant
Shares which are the subject of such Legend Removal Failure; and
"LEGEND REMOVAL CURE DATE" means the date the Company issues freely
tradeable shares of Common Stock in accordance with Section 5(c).
The payments to which a holder shall be entitled pursuant to this
Section 5(d) are referred to herein as "LEGEND REMOVAL PAYMENTS." A Purchaser
may elect to receive accrued Legend Removal Payments in cash or to convert all
or any portion of such accrued Legend Removal Payments, at any time, into Common
Stock at the lowest Conversion Price (as defined in the Certificate of
Designation) in effect during the period beginning on the date of the Legend
Removal Failure through the date of conversion of such Legend Removal Payments.
In the event such Purchaser elects to take such payment in cash, cash payment
will be made by the Company within five (5) days after its receipt of written
notice of such election from the Purchaser. In the event such Purchaser elects
to convert all or any portion of the Legend Removal Payment into Common Stock,
such Purchaser shall provide written notice of such election specifying the
amount of such Legend Removal Payment to be converted and the applicable
Conversion Price at which such amount is to be converted. The Company shall
deliver the shares of Common Stock issuable upon any such conversion to such
Purchaser within five (5) days of its receipt of such written notice from such
Purchaser.
Nothing herein shall limit a Purchaser's right to pursue actual damages
for the Company's failure to deliver unlegended Conversion Shares and Warrant
Shares pursuant to Section 5(c), and such Purchaser shall have the right to
pursue all remedies available at law or in equity (including a decree of
specific performance and/or injunctive relief).
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Preferred
Shares and Warrants to a Purchaser at the Closing is subject to the
satisfaction, on or before the Closing Date, of each of the following conditions
thereto, 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. Each Purchaser shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Company.
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b. Each Purchaser shall have delivered the Purchase Price for the
Preferred Shares and Warrants in accordance with Section 1(b) above.
c. The representations and warranties of each Purchaser shall be true
and correct as of the date when 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, which representations and warranties shall be true and correct as
of such date), and each Purchaser shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by such Purchaser
at or prior to the Closing Date.
d. No litigation, 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 prohibits the consummation of any of the transactions contemplated
by this Agreement.
e. The aggregate number of Preferred Shares and Warrants being purchased
hereunder by all Purchasers hereunder shall be 3,000 and 150,000 respectively.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase the Preferred
Shares and Warrants 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 such Purchaser's sole benefit and may be waived by such
Purchaser at any time in Purchaser's sole discretion:
a. The Company shall have executed this Agreement, the Warrants and the
Registration Rights Agreement, and delivered the same to such Purchaser.
b. The Certificate of Designation shall have been accepted for filing
with the Secretary of State of the State of Delaware and a copy thereof
certified by the Secretary of State of the State of [Delaware] shall have been
delivered to such Purchaser.
c. The Company shall have delivered to such Purchaser duly executed
Warrants and certificates (in such denominations as such Purchaser shall
request) representing the Preferred Shares in accordance with Section 1(b)
above.
d. The Common Stock shall be authorized for quotation on the Bulletin
Board and trading in the Common Stock (or the Bulletin Board generally) shall
not have been suspended by the SEC or the Bulletin Board, nor shall any such
suspension be pending or threatened.
-16-
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e. The representations and warranties of the Company shall be true and
correct as of the date when 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, which representations and warranties shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. The Purchaser shall have received 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 Purchaser.
f. No litigation, statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding 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 questions the validity of, or challenges or
prohibits the consummation of any of the transactions contemplated by this
Agreement.
g. Such Purchaser shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to such Purchaser and in substantially the form of Exhibit D
attached hereto.
h. The Company shall have delivered evidence reasonably satisfactory to
the Purchasers that the Company's transfer agent has agreed to act in accordance
with irrevocable instructions in the form attached hereto as Exhibit E.
i. There shall have been no material adverse changes and no material
adverse developments in the business, properties, operations, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, since the date hereof, and no information, of
which the Purchasers are not currently aware, shall come to the attention of the
Purchasers that is materially adverse to the Company.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in the State of Delaware in any suit or proceeding
based on or arising under this Agreement and irrevocably agrees that all claims
in respect of such suit or proceeding may be determined in such courts. The
Company irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. The Company further agrees that service
of process mailed by first class mail shall be deemed in every respect effective
service of process in any such suit or proceeding. Nothing herein shall affect
the right of the Purchaser to serve process in any other manner permitted by
law. The Company agrees that a
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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 Agreement may be executed in two or more
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. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
to be physically delivered to the other party within five (5) days of the
execution hereof.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. 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 or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein. No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be charged
with enforcement and no provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and the Purchaser.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
If to the Company:
Environmental Products & Technologies Corporation
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxxxx Xxxxx, President
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with a copy simultaneously transmitted by like means to:
Xxxx X. Xxxxxxxxxx, Esquire
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Telecopy: 000-000-0000
If to any Purchaser, to such address set forth under such Purchaser's
name on the Execution Page hereto executed by such Purchaser.
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Except as
provided herein or therein, neither the Company nor any Purchaser shall assign
this Agreement, the Registration Rights Agreement or the Warrants or any rights
or obligations hereunder or thereunder. Notwithstanding the foregoing, any
Purchaser may assign its rights hereunder to any of its "affiliates" (as that
term is defined under the Exchange Act) who are Accredited Investors without the
consent of the Company (provided such assignees agree to be bound by all of the
terms and conditions hereof), or to any other person or entity with the consent
of the Company, which consent shall not be unreasonably withheld. This provision
shall not limit a Purchaser's right to transfer the Securities pursuant to the
terms of the Certificate of Designation, the Warrants and this Agreement or to
assign such Purchaser's rights hereunder and/or thereunder to any such
transferee.
h. 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.
i. Survival. The representations, warranties, agreements and covenants
of the Company set forth in Sections 3, 4, 5 and 8 hereof shall survive the
Closing hereunder notwithstanding any investigation conducted by or on behalf of
any Purchaser. Moreover, none of the representations and warranties made by the
Company herein shall act as a waiver of any rights or remedies the Purchaser may
have under applicable federal or state securities laws. The Company agrees to
indemnify and hold harmless each Purchaser and each of such Purchaser's
officers, directors, employees, partners, members, agents and affiliates for
loss or damage arising as a result of or related to any breach or alleged breach
by the Company of any of its representations or covenants set forth herein,
including advancement of reasonable expenses as they are incurred.
j. Publicity. The Company and the Purchaser shall have the right to
review before issuance any press releases, SEC or NASD filings, or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior review
of the Purchasers, to make any press release or SEC or NASD filings with respect
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to such transactions as is required by applicable law and regulations (although
the Purchasers shall be consulted by the Company in connection with any such
press release and filing prior to its release and shall be provided with a copy
thereof).
k. 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.
l. Termination. In the event that the Closing shall not have occurred on
or before April 3, 1998, unless the parties agree otherwise, this Agreement
shall terminate at the close of business on such date. Notwithstanding any
termination of this Agreement, any party not in breach of this Agreement shall
preserve all rights and remedies it may have against another party hereto for a
breach of this Agreement prior to or relating to the termination hereof.
m. Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement, the Certificate
of Designation, the Warrants and the Registration Rights Agreement. As such, the
language used herein and therein shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.
n. Equitable Relief. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Purchaser by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
hereunder (including, but not limited to, its obligations pursuant to Section 5
hereof) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement (including, but not
limited to, its obligations pursuant to Section 5 hereof), that a Purchaser
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer of the
Securities, without the necessity of showing economic loss and without any bond
or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
By:
-------------------------
Name:
-----------------------
Title:
----------------------
PURCHASER:
JNC OPPORTUNITY FUND LTD.
By:
-----------------------------
Name:
Title:
RESIDENCE: Cayman Islands
ADDRESS: x/x Xxxxxxx Xxxxxxx (Xxxxxx) Ltd.
Xxxxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxx
with copies of all notices to:
Encore Capital Management, L.L.C.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxx
AGGREGATE SUBSCRIPTION AMOUNT
Number of Preferred Shares to be Purchased 2,750
Number of Warrants to be Purchased 137,500
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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
By:
-------------------------
Name:
-----------------------
Title:
----------------------
PURCHASER:
DIVERSIFIED STRATEGIES FUND, L.P.
By:
-----------------------------
Name:
Title:
RESIDENCE: Kentucky
ADDRESS: c/o Encore Capital Management, L.L.C.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Manager
with copies of all notices to:
Encore Capital Management, L.L.C.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Manager
AGGREGATE SUBSCRIPTION AMOUNT
Number of Preferred Shares to be Purchased 250
Number of Warrants to be Purchased 12,500
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