EXHIBIT 99.1
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made this ___
day of _________, 2004, by and between Global Matrechs, Inc. (the "Company"), a
Delaware corporation, and ___ (the "Purchaser").
WHEREAS, the Purchaser wishes to purchase from the Company, and the
Company wishes to sell to the Purchaser, a nonnegotiable 2% secured convertible
promissory note (the "Note"), substantially in the form of Exhibit A attached
hereto, a warrant (the "Warrant") to purchase shares of common stock, par value
$0.0001 per share (the "Common Stock"), of the Company, substantially in the
form of Exhibit B attached hereto (the "Warrant Shares"). The Note shall be
convertible into shares of Common Stock (the "Conversion Shares");
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties agree as follows:
SECTION 1 Sale of Securities.
1.1. Authorization of Sale of the Securities. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale and issuance
to the Purchaser of the Note and Warrant (the "Securities").
1.2. Agreement to Sell and Purchase the Securities. At the Closing
(defined below), the Company will issue and sell to the Purchaser and the
Purchaser will buy from the Company the Securities upon the terms and conditions
hereinafter set forth. Subject to and in reliance upon all of the
representations, warranties, covenants, terms and conditions of this Agreement,
any such closing hereunder shall take place at the offices of Xxxxxxx & Xxxxxx
LLP, 00 Xxxxxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m., local time, on the dates set
forth below, or at such other location, date and time as many be agreed upon
between the Purchaser and the Company.
1.3. Closing. At the closing of the sale and purchase of the Note (the
"Closing"), the Company shall issue and sell, and the Purchaser shall purchase,
the Note, which shall be in principal amount of $_____ (the "Principal Amount")
and the Warrant to purchase . shares of Common Stock, against payment by the
Purchaser of the Principal Amount.
SECTION 2. Grant of Security Interest. The Company hereby grants to the
Purchaser, to secure the payment of the Notes, a security interest in and so
pledges and assigns to the Purchaser a security interest in all of its right,
title and interest to the following:
2.1. presently existing and hereafter arising accounts, contract
rights, and all other forms of obligations owing to the Company arising out of
the sale or lease of goods or the rendition of services by the Company, whether
or not earned by performance, and any and all credit insurance, guaranties, and
other security therefor, as well as all merchandise returned to or reclaimed by
the Company and the Company's Books relating to any of the foregoing
(collectively, "Accounts");
2.2. present and future general intangibles and other personal property
(including choses or things in action, goodwill, patents, trade names,
trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, monies due under any royalty or licensing
agreements, infringement claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims) other than goods and Accounts, and
the Company's Books relating to any of the foregoing (collectively, "General
Intangibles");
2.3. present and future letters of credit, notes, drafts, instruments,
certificated and uncertificated securities, documents, leases, and chattel
paper, and the Company's Books relating to any of the foregoing (collectively,
"Negotiable Collateral");
2.4. present and future inventory in which the Company has any
interest, including goods held for sale or lease or to be furnished under a
contract of service and all of the Company's present and future raw materials,
work in process, finished goods, and packing and shipping materials, wherever
located, and any documents of title representing any of the above, and the
Company's Books relating to any of the foregoing (collectively, "Inventory");
2.5. books and records including: ledgers; records indicating,
summarizing, or evidencing the Company's assets or liabilities, or the
collateral; all information relating to the Company's business operations or
financial condition; and all computer programs, disc or tape files, printouts,
funds or other computer prepared information, and the equipment containing such
information (collectively, "Company's Books");
2.6. substitutions, replacements, additions, accessions, proceeds,
products to or of any of the foregoing, including, but not limited to, proceeds
of insurance covering any of the foregoing, or any portion thereof, and any and
all Accounts, General Intangibles, Negotiables, Collateral, Inventory, money,
deposits, accounts, or other tangible or intangible property resulting from the
sale or other disposition of the accounts, General Intangibles, Negotiable
Collateral, Inventory or any portion thereof or interest therein and the
proceeds thereof.
SECTION 3. Registration Rights.
3.1. Request for Registration. If the Company proposes to register any
of its securities under the Securities Act of 1933, as amended ("Act") (except
for registrations on Forms S-8 or S-4 or their equivalent), it will give written
notice by registered mail, at least twenty (20) days prior to the filing of each
such registration statement, to the Purchaser of its intention to do so. If the
Purchaser notifies the Company within ten (10) days after receipt of any such
notice of its desire to include any of the Warrant Shares or Conversion Shares
(together, the "Underlying Shares"), the Company shall afford the Purchaser the
opportunity to have any such Underlying Shares registered under such
registration statement at the Company's sole cost and expense; provided,
however, that the Purchaser shall not have any registration rights with respect
to that certain registration on Form SB-2 (SEC File No. 333-119028) filed with
the Securities and Exchange Commission on September 16, 2004, or any amendments
thereto. The Company shall use its best efforts to file a registration statement
containing the Warrant Shares and the Conversion Shares with 30 business days
from the date of the Closing.
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3.2. Limitations on Registration.
(a) Termination of Registration Rights. These rights may be exercised
at any time on an unlimited number of occasions after the date hereof until such
time when all Underlying Shares may be sold without volume restrictions pursuant
to Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the Purchaser.
(b) Underwritten Offerings. In connection with any offering involving
an underwriting of shares being issued by the Company, the Company shall not be
required to include any Underlying Shares in such underwriting unless such
Purchaser accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
will not, in the reasonable opinion of the underwriters, jeopardize the success
of the offering by the Company. If the underwriters reasonably believe the total
amount of Underlying Shares which the Purchaser requests to be included in an
underwritten offering pursuant to this Section 3, together with any other shares
of Common Stock for which registration has been requested by holders with
similar rights, exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, the Company
shall only be required to include in the offering so many of the Underlying
Shares and such other shares of Common Stock as the underwriters reasonably
believe will not jeopardize the success of the offering, such shares so included
to be apportioned pro rata among the Purchaser and other holders based on the
number of shares for which registration was initially requested.
SECTION 4. Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated.
SECTION 5. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent via overnight courier, sent by facsimile, or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:
if to the Company, to:
Global Matrechs, Inc.
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Facsimile: (000)000-0000
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 000000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Purchaser, to:
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__________________________
__________________________
__________________________
Attention:
Facsimile:
with a copy to:
Xxxxxxx & Xxxxxx LLP
00 Xxxxxxxx
Xxx Xxxx, XX 00000
SECTION 6. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 7. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York for contracts
to be wholly performed in such state and without giving effect to the principles
thereof regarding the conflict of laws. Each of the parties consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the County of New York or the state courts of the State of New York sitting
in the County of New York in connection with any dispute arising under this
Agreement or any of the other Transaction Agreements and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
FORUM NON CONVENIENS, to the bringing of any such proceeding in such
jurisdictions. Each of the parties hereto expressly waives its right to a trial
by jury with respect to any adjudication arising between the parties pursuant to
this Agreement.
SECTION 8. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes and is in full substitution for any and all prior oral or written
agreements and understandings between them related to such subject matter, and
neither party hereto shall be liable or bound to the other party hereto in any
manner with respect to such subject matter by any representations, indemnities,
covenants or agreements except as specifically set forth herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be executed as of the date first above written by their
duly authorized representatives shown below:
GLOBAL MATRECHS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
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Title: President
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[INSERT NAME OF PURCHASER]
By: ________________________________
Name: ______________________________
Title: _____________________________
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