COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE AGREEMENT, dated as of April 17, 2000 (this
"AGREEMENT"), by and among EUROTECH, LTD., a District of Columbia corporation
(the "COMPANY"), and XXXXXXXX LLC, a Cayman Islands limited liability company
("PURCHASERS").
RECITALS
A. Purchaser desires to purchase, and the Company desires to issue and
sell, shares ("SHARES") of the Company's Common Stock, $ .00025 par value per
share ("COMMON STOCK"), on the terms and conditions set forth below. For
purposes of this Agreement, the Shares shall mean the Initial Shares (as defined
below) and the Repriced Shares (as defined below).
B. The parties hereto intend that the issuance of the Shares as
anticipated by this Agreement shall be accomplished without registration under
the U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), and without
registration or qualification under the securities laws of any state or other
jurisdiction, in reliance on exemptions from the registration requirements of
the Securities Act, including, without limitation, Regulation D under the
Securities Act and Section 4(2) of the Securities Act; PROVIDED, HOWEVER, that
nothing in this Agreement shall act or be construed as a limitation on
Purchaser's right to sell any of the Shares to be acquired pursuant to this
Agreement pursuant to the Registration Statement (the "REGISTRATION STATEMENT")
contemplated by the Registration Rights Agreement (as defined below), or other
provisions of the Registration Rights Agreement or in accordance with applicable
laws.
THEREFORE, in consideration of the mutual promises and covenants set
forth below and for other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge by their signatures below, the
parties hereto hereby agree as follows:
AGREEMENT
1. PURCHASE OF COMMON STOCK. Subject to the terms and conditions of
this Agreement, the Company agrees to issue and sell, and Purchaser agrees to
acquire, two million (2,000,000) fully paid and non-assessable shares (the
"INITIAL SHARES") in exchange for Purchaser's payment to the Company of
aggregate cash consideration of Ten Million Dollars ($10,000,000) and the Other
Consideration as set forth in Schedule 1 hereto. In no event shall theIf
required by the Principal Market on which the Common Stock is listed, the total
number of Shares issued by the Company pursuant to this Agreement shall not
exceed 19.9% of the outstanding shares of Common Stock immediately prior to the
date of the Initial Closing, in the absence of registration approval.
1.1 FORM OF PAYMENT. Purchaser shall pay the Purchase Price
for the Initial Shares by delivering immediately available good funds in United
States Dollars to the escrow agent (the "ESCROW AGENT") identified in the Joint
Escrow Instructions attached hereto as EXHIBIT E (the "JOINT ESCROW
INSTRUCTIONS"). No later than the Closing Date(as defined below), the Company
shall deliver one or more certificates representing the Initial Shares duly
executed on behalf of the Company (collectively, each the "Certificates") to the
Escrow Agent. By signing this Agreement, the Purchaser and the Company, and
subject to acceptance by the Escrow Agent, each agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.
1.2 METHOD OF PAYMENT. Purchasers shall pay into escrow the
Purchase Price for the Initial Shares by wire transfer of funds to:
[bank information here]
Purchaser shall deliver payment of the Purchase Price at or before 1:00 p.m.,
New York time, on or about April 25, 2000. Purchaser shall deposit the Purchase
Price for the Initial Shares with the Escrow Agent in immediately available
funds. For purposes of this Agreement, "BUSINESS DAY" shall mean a day on which
the New York Stock Exchange is open for business.
1.3 ESCROW PROPERTY. The Purchase Price and the Certificates
delivered to the Escrow Agent as contemplated by SECTION 1.1 hereof are referred
to as the "ESCROW PROPERTY."
2. CLOSING.
2.1 INITIAL CLOSING. Upon execution of this Agreement (the
"INITIAL CLOSING"), and on the date set forth above (the "INITIAL CLOSING
DATE"), Purchaser shall pay Ten Million Dollars ($10,000,000) and assign the
Other Consideration. At the Initial Closing the parties hereto shall execute
and deliver the following documents (incorporated herein by this reference,
collectively with this Agreement, the "TRANSACTION DOCUMENTS"): (i) the
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") in the form
attached hereto as EXHIBIT A; (ii) the Escrow Agreement in the form attached
hereto as EXHIBIT B; and the Company shall deliver to Purchaser the Warrant (the
"WARRANT") in the form attached hereto as EXHIBIT C. On the Closing Date (as
defined below), the Escrow Agent shall deliver (i) the Purchase Price to the
Company and (ii) the Certificates to the Purchaser.
2.2 REPRICED SHARES. Definitions:
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(a) As used herein, "CLOSING BID PRICE" shall mean
the closing bid price of the Common Stock as reported, at the option of
Purchaser, by Bloomberg, LP or the National Association of Securities Dealers
("NASD").
(b) "AGREED DATE" shall mean April 25 , 2001, or such
earlier date as is mutually agreed to by the parties, provided that a
Registration Statement for all of the Initial Shares is then effective.
(c) "AGREED AMOUNT" shall mean (i) $9.375 if the
Agreed Date is on or after April 1,2001, (ii) $8.81 if the Agreed Date is on or
after January 1, 2001, and (iii) $8.25 if the Agreed Date is on or after October
1, 2000.
(d) "REPRICING PERIOD" shall mean each of the First
Repricing Period, the Second Repricing Period, and the Third Repricing Period,
each as defined below.
(e) "REPRICED SHARES" shall mean the First Repriced
Shares, the Second Repriced Shares, and the Third Repriced Shares, each as
defined below.
2.3 FIRST REPRICING PERIOD B. (a) The "First Repricing Period"
shall commence on the Agreed Date, and end twenty (20) Business Days after such
date. If the average Closing Bid Price for the twenty (20) Business Days during
the First Repricing Period (the "FIRST REPRICING PRICE"), is not equal to or
greater than the Agreed Amount, then one-third (1/3) of the Initial Shares shall
be repriced (the "FIRST REPRICED SHARES"). The Company shall issue to Purchaser
the number of additional Shares as determined according to the following
formula:
(Agreed Amount - First Repricing Price) x (# of the First
Repriced Shares)/First Repricing Price.
2.4 SECOND REPRICING PERIOD - TRANCHE B. (a) The "Second
Repricing Period" shall commence on the day immediately following the First
Repricing Period and end twenty (20) Business Days thereafter. If the average
Closing Bid Price for the twenty (20) Business Days during the Second Repricing
Period (the "SECOND REPRICING PRICE"), is not equal to or greater than the
Agreed Amount, then one-third (1/3) of the Initial Shares shall be repriced (the
"SECOND REPRICED SHARES"). The Company shall issue to Purchaser the number of
additional Shares as determined according to the following formula:
(Agreed Amount - Second Repricing Price) x (# of the Second
Repriced Shares)/ Second Repricing Price.
2.7 THIRD REPRICING PERIOD - TRANCHE B. (a) The "Third
Repricing Period" shall commence on the day immediately following the Second
Repricing Period and end twenty (20) Business Days thereafter. If the average
Closing Bid Price for the twenty (20) Business Days during the Third Repricing
Period (the "THIRD REPRICING PRICE"), is not equal to or greater than the
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Agreed Amount, then one-third (1/3) of the Initial Shares shall be repriced
(the "THIRD REPRICED SHARES"). The Company shall issue to Purchaser the number
of additional Shares as determined according to the following formula:
(Agreed Amount - Third Repricing Price) x (# of the Third
Repriced Shares)/ Third Repricing Price.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. To induce the Company's
acceptance of this Agreement, PurchaserPurchaser hereby certifies, represents
and warrants to the Company and its agents and attorneys as follows, which
representations and warranties are solely for the benefit of the Company and may
be waived in whole or in part at any time prior to the Initial Closing by the
Company:
3.1 INTENT. Purchaser will be acquiring the Shares for its own
account, and Purchaser has no present arrangement (whether or not legally
binding) to sell any of the Shares to or through any person or entity; PROVIDED,
HOWEVER, Purchaser does not agree to hold any of the Shares except as provided
for herein, for any minimum or other specific term and reserves the right to
dispose of the Shares at any time in accordance with U.S. federal and state
securities laws applicable to such disposition and any restrictions imposed on
such transfer by the Transaction Documents. Purchaser understands that the
Shares must be held indefinitely unless the Shares are subsequently registered
under the Securities Act or an exemption from registration is available.
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act.
3.2 SOPHISTICATED INVESTOR. Purchaser is a "sophisticated
investor" (as described in Rule 506(b)(2)(ii) of Regulation D) and an
"accredited investor" (as defined in Rule 501(a) of Regulation D), and Purchaser
has such knowledge and experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Company.
3.3 ABILITY OF PURCHASER TO BEAR RISK OF INVESTMENT. Purchaser
acknowledges that the Shares are speculative investments and involve a high
degree of risk and Purchaser is able to bear the economic risk of an investment
in the Shares, and, at the present time, is able to afford a complete loss of
such investment.
3.4 AUTHORITY. Each of the Transaction Documents (except for
the Warrant) has been duly authorized and validly executed and delivered by
Purchaser and (assuming due authorization and valid execution by the Company) is
a legal, valid and binding agreement of Purchaser enforceable against Purchaser
in accordance with its terms, subject to general principles of equity and to
bankruptcy, insolvency or similar laws relating to, or affecting generally the
enforcement of creditors' rights and remedies or by other equitable principles
of general application. The person or persons executing the Transaction
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Documents (except for the Warrant) have all requisite authority to do so on
behalf of Purchaser.
3.5 BROKERS, FINDERS. Except with respect to Spinneret
Financial Systems, Inc., Purchaser has taken no action which would give rise to
any claim by any person for brokerage commission, finder's fees or similar
payments by the Company relating to this Agreement or the transactions
contemplated hereby. The Company 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 contemplated in this section that may be due in connection with
the transactions contemplated hereby. Purchaser shall indemnify and hold
harmless the Company, its employees, officers, directors, agents and partners,
and their respective affiliates, from and against all claims, losses, damages,
costs (including the costs of preparation and attorneys' fees) and expenses
suffered in respect of any such claimed or existing fees, as and when incurred.
3.6 ORGANIZATION; AUTHORITY. Purchaser is an entity organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and to carry out its
obligations thereunder. The acquisition of the Shares and the payment of the
Purchase Price therefor by such Purchaser have been duly authorized by all
necessary action on the part of Purchaser.
3.7 ABSENCE OF CONFLICTS. The execution and delivery of each
of the Transaction Documents (except for the Warrant), and the consummation of
the transactions contemplated by this Agreement and such other documents and
instruments, and compliance with the requirements thereof, will not violate any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on Purchaser, or the provision of any indenture, instrument or agreement
to which Purchaser is a party or is subject, or by which Purchaser or any of its
assets is bound, or conflict with or constitute a material default thereunder,
or require the approval of any third-party pursuant to any material contract,
agreement, instrument, relationship or legal obligation to which Purchaser is
subject or to which any of its assets, operations or management may be subject.
3.8 DISCLOSURE; ACCESS TO INFORMATION. Purchaser has received
copies of or has had access to all documents, records, books and other
information pertaining to Purchaser's investment in the Company and the Shares
that have been requested by Purchaser. Purchaser or its representative has been
afforded the opportunity to ask questions of the Company and its management.
Purchaser further acknowledges that it understands that the Company is subject
to the periodic reporting requirements of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), and Purchaser has reviewed or received copies
of any such reports that it has requested.
3.9 MANNER OF SALE. At no time was Purchaser presented with or
solicited by or through any leaflet, public promotional meeting, television
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advertisement or any other form of general solicitation or advertising with
respect to the Shares.
3.10 OFFSHORE TRANSACTION.
(i) Purchaser is not a U.S. person as that term
is defined under Regulation S.
(ii) Purchaser is outside the United States as of
the date of the execution and delivery of
this agreement.
(iii) Purchaser is purchasing the Common Stock for
its own account and not on behalf of any
U.S. person, and has not pre-arranged any
sale with purchaser in the United States.
(iv) Purchaser represents and warrants and hereby
agrees that all offers and sales of the
Securities prior to the expiration of a
period commencing on the date of the
transaction and ending after the
Distribution Compliance Period shall only be
made in compliance with the safe harbor
contained in Regulation S, pursuant to
registration of securities under the
Securities Act of 1933 or pursuant to an
exemption from registration, and all offers
and sales after the expiration of the
Distribution Compliance Period shall be made
only pursuant to such registration or to
such exemption from registration.
(v) Purchaser understands that in the view of
the SEC the statutory basis for the
exemption claimed for this transaction would
not be present if the offering of
Securities, although in technical compliance
with Regulation S, is part of a plan or
scheme to evade the registration provisions
of the 1933 Act. Purchaser is acquiring the
Securities for investment purposes and has
no present intention to sell the Shares in
the United States or to a U.S. Person or for
the account or benefit of a U.S. Person
either now or after the expiration of the
Distribution Compliance Period.
(vi) Purchaser is not an underwriter of, or
dealer in, the Securities, and Purchaser is
not participating, pursuant to a contractual
agreement, in the distribution of Share.
3.11 ACCURACY OF REPRESENTATIONS AND INFORMATION. All
representations made by Purchaser in the Transaction Documents, and all
information provided by Purchaser to the Company concerning Purchaser are
correct and complete in all material respects as of the date hereof.
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3.12 Notwithstanding any other provision hereof, of the
Warrant or of any of the other Transaction Agreements, in no event (except (i)
as specifically provided in this Agreement as an exception to this provision, or
(ii) while there is outstanding a tender offer for any or all of the shares of
the Company's Common Stock) shall the Purchaser be entitled to exercise
Repricing Rights or shall the Company have the obligation to deliver Repricing
Shares to the extent that, after such delivery, the sum of (1) the number of
shares of Common Stock beneficially owned by the Purchaser and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership Repricing Shares not yet issued or unexercised portion of
any warrant, including the Warrant, issued by the Company and owned by Purchaser
and its affiliates), and (2) the number of shares of Common Stock issuable upon
the exercise of Repricing Rights or exercise of such warrants with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Purchaser and its affiliates of more than 9.99% of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Purchaser upon such exercise). For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 ACT"), except as otherwise provided in clause (1) of such sentence.
The Purchaser, further agrees that if the Purchaser transfers or assigns any of
the Shares to a party who or which would not be considered such an affiliate,
such assignment shall be made subject to the transferee's or assignee's specific
agreement to be bound by the provisions of this Paragraph 3.12 as if such
transferee or assignee were the original Purchaser hereof.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser as follows, which representations and
warranties are solely for the benefit of Purchaser and may be waived in whole or
in part by Purchaser at any time prior to the Initial Closing:
4.1 COMPANY STATUS. The Company has registered the Common
Stock pursuant to Section 12(g) of the Exchange Act, is in full compliance with
all material reporting requirements of the Exchange Act, and the Company has
maintained all requirements for the continued trading of the Common Stock, and
the Common Stock currently trades on the Over- the-Counter Bulletin Board.
4.2 CURRENT PUBLIC INFORMATION. The Company has furnished or
made available to Purchaser true and correct copies of all registration
statements, reports and documents filed with the SEC by or with respect to the
Company since December 31, 1998 and prior to the date of this Agreement,
pursuant to the Securities Act or the Exchange Act (collectively, the "SEC
DOCUMENTS"). The SEC Documents are the only filings made by or with respect to
the Company since December 31, 1998 pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act or pursuant to the Securities Act. The Company has
filed all reports, schedules, forms, statements and other documents required to
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be filed under Sections 13(a), 14 and 15(d) of the Exchange Act since December
31, 1998 and prior to the date of this Agreement.
4.3 NO GENERAL SOLICITATION. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Shares.
4.4 VALID ISSUANCE OF COMMON STOCK. The authorized capital
stock of the Company consists of 50,000,000 shares of Common Stock, $.00025 par
value per share, of which ___________ shares are issued and outstanding as of
the date hereof; and 1,000,000 shares of preferred stock, $.001 par value per
share, of which none have been designated or issued. All of the outstanding
shares of Common Stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable. Except as set forth above or as
disclosed in SEC Documents, 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, any shares of capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to redeem or issue additional shares of capital stock of the
Company or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company, (ii) there are no
outstanding debt securities and (iii) there are no agreements or arrangements
under which the Company is obligated to register the sale of any of their
securities under the Securities Act. Except as disclosed in SCHEDULE 4.4, there
are no securities or instruments containing any anti- dilution, right of first
refusal, preemptive rights or similar provisions that will be triggered by the
issuance of the Shares as described in this Agreement. Upon issuance of the
Shares, such securities will be duly and validly issued, fully paid and
non-assessable.
4.5 ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly incorporated and existing in good standing under the laws of
the District of Columbia, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company does
not have any subsidiaries. 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 any
effect on the business, operations, properties, prospects, or financial
condition of the entity or entities with respect to which such term is used and
which is material and adverse to such entity or to other entities controlling or
controlled by such entity, and/or any condition or situation which would
prohibit or otherwise interfere with the ability of the entity or entities with
respect to which said term is used to enter into and perform its obligations
under the Transaction Documents.
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4.6 AUTHORIZATION: ENFORCEMENT. (i) The Company has the
requisite corporate power and authority to enter into and perform under the
Transaction Documents and to issue the Shares and the Warrant in accordance with
the terms of the Transaction Documents, (ii) the execution, issuance and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated by the Transaction Documents have been duly
authorized by all necessary corporate action, and no further consent or
authorization of the Company or its board of directors or shareholders is
required, (iii) the Transaction Documents have been duly executed and delivered
by the Company, and (iv) the Transaction Documents (assuming due authorization
and valid and legal execution by Purchaser) constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principles
of general application.
4.7 [Intentionally Omitted]
4.8 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, including, without limitation, the
issuance of the Shares, do not and will not (i) result in a violation of the
Company's Articles of Incorporation or Bylaws, (ii) conflict with, or result in
a breach of or forfeiture of any rights (or result in an event which with notice
or lapse of time or both would become a breach of or forfeiture of any rights)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company is a party or (iii) result in a violation of any federal or state law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). To the best of its knowledge, the business of the Company is
not being conducted in violation of any law, ordinance or regulation of any
governmental entity, except for possible violations which either singly or in
the aggregate do not and will not have a Material Adverse Effect. The Company is
not required under federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or issue and sell the Shares and the
Warrant in accordance with the terms of this Agreement (other than any SEC, NASD
or state securities filings which may be required to be made by the Company
subsequent to any Closing, and any registration statement which may be filed in
furtherance of this Agreement); PROVIDED that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of Purchaser herein.
The Company is not in violation of any material term of or in material default
under its Articles of Incorporation, of any outstanding series of preferred
stock or Bylaws or their organizational charter or Bylaws, respectively, or any
9
material contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree of order or any statute, rule or regulation applicable to the
Company, which has not been duly waived as of the date of this Agreement.
4.9 SEC DOCUMENTS. The Company has not provided to Purchaser
any information which according to applicable law, rule or regulation, should
have been disclosed publicly prior to the date hereof by the Company but which
has not been so disclosed. As of their respective dates, the SEC Documents
complied, and all similar documents filed with the SEC prior to the Closing Date
will comply, in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and rules and regulations of the
SEC promulgated thereunder and other federal, state and local laws, rules and
regulations applicable to such SEC Documents, and none of the SEC Documents
contained, nor will any similar document filed with the SEC prior to the Closing
Date contain, any untrue statement of a material fact or omitted 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. The financial statements of the Company included in the SEC
Documents, as of the dates thereof, complied, and all similar documents filed
with the SEC prior to the Closing Date will comply, as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC and other applicable rules and regulations with respect
thereto. Such financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary statements
as permitted by Form 10-Q of the SEC) and fairly present in all material
respects the financial position of the Company as of 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).
4.10 NO UNDISCLOSED LIABILITIES. The Company has no
liabilities or obligations of a financial nature (whether accrued, absolute,
contingent or otherwise), which are material, individually or in the aggregate,
and are not disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company's business consistent with past practice since
December 31, 1999, and which, individually or in the aggregate, do not or would
not have a Material Adverse Effect on the Company.
4.11 LITIGATION AND OTHER PROCEEDINGS. Except as may be set
forth in the SEC Documents, there are no lawsuits or proceedings pending or, to
the best knowledge of the Company, threatened, against the Company, nor has the
Company received any written or oral notice of any such action, suit, proceeding
or investigation, which might have a Material Adverse Effect on the Company or
which likely would have a Material Adverse Effect on the transactions
contemplated by this Agreement. Except as set forth in the SEC Documents, no
judgment, order, writ, injunction or decree or award has been issued by or, to
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the best knowledge of the Company, requested of any court, arbitrator or
governmental agency which likely would have a Material Adverse Effect on the
transactions contemplated by this Agreement.
4.12 OTHER DOCUMENTS OR MATERIALS. With respect to any
document or other materials received by Purchaser from the Company or its
representatives other than the Transaction Documents and the SEC Documents, (i)
the Company has no reason to believe any of such documents and materials or any
projections contained therein, as of the date of such other documents or
materials, contained errors or misstatements or do not adequately describe the
status of the development of the Company's technologies or its business as of
such date, and (ii) such documents, materials and projections were prepared by
the Company and its management in good faith.
4.13 NATURE OF COMPANY. The Company is not an open-ended
investment company or a unit investment trust, registered or required to be
registered, or a closed end investment company required to be registered, but
not registered, under the Investment Company Act of 1940.
4.14 BROKERS, FINDERS. Except for the payment of consulting
fees in the amount of $500,000 to Spinneret Financial Systems, Inc., payment of
which is the sole responsibility of the Company, the Company has taken no action
which would give rise to any claim by any person for brokerage commission,
finder's fees or similar payments by Purchaser relating to this Agreement or the
transactions contemplated hereby. 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 contemplated in this SECTION 4.14 that may be due in
connection with the transactions contemplated hereby. The Company shall
indemnify and hold harmless each of Purchaser and its employees, officers,
directors, agents, partners and affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any such claimed or existing fees, as and when
incurred.
4.15 ABSENCE OF CERTAIN CHANGES. Except as set forth in the
SEC Documents, since December 31, 1999, no Material Adverse Effect has been
suffered by, and no material adverse development has occurred in the business,
properties, operations, financial condition or results of operations of the
Company. The Company has not taken any steps, and does not currently expect to
take any steps, to seek protection pursuant to any bankruptcy law, nor does the
Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.
4.16 INTELLECTUAL PROPERTY RIGHTS. To its knowledge without
conducting any special investigation and except as set forth on SCHEDULE 4.16,
the Company owns or possesses adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct its businesses as
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now conducted. None of the Company's trademarks, trade names, service marks,
service xxxx registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, government authorizations, trade secrets or
other intellectual property rights has expired or terminated, or is expected to
expire or terminate in the near future. Except as set forth on SCHEDULE 4.16,
the Company does not have any knowledge of any infringement by the Company of
trademarks, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service xxxx registrations, trade
secrets or other similar rights of others, or of any such development of similar
or identical trade secrets or technical information by others and, there is no
claim, action or proceeding being made or brought against, or to the best
knowledge of the Company, being threatened against, the Company regarding
trademark, trade name, patent, patent rights, invention, copyright, license,
service name, service xxxx, service xxxx registration, trade secret or other
infringement; and the Company is unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company has taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties.
4.17 INTERNAL ACCOUNTING CONTROLS. The Company is not aware
that its system of internal accounting controls is not sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
4.18 TAX STATUS. Except as set forth in SCHEDULE 4.18, the
Company has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject 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, 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. 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.
12
4.19 CERTAIN TRANSACTIONS. Except as set forth in the SEC
Documents and except for arm's length transactions pursuant to which the Company
makes payments in the ordinary course of business upon terms no less favorable
than the Company could obtain from third parties and other than the grant of
stock options, none of the officers, directors or employees of the Company (or
any spouse or relative of any such person) is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
4.20 DILUTION. The number of shares of Common Stock issuable
as Repriced Shares may increase substantially in certain circumstances,
including, but not necessarily limited to, the circumstance wherein the trading
price of the Common Stock declines during the period between the Effective Date
and the end of the Final Repricing Period. The Company's executive officers and
directors have studied and fully understand the nature of the transactions
contemplated by this Agreement and recognize that they have a potential dilutive
effect. The board of directors of the Company has concluded, in its good faith
business judgment, that such issuance is in the best interests of the Company.
The Company specifically acknowledges that its obligation to issue the Repriced
Shares is binding upon the Company and enforceable regardless of the dilution
such issuance may have on the ownership interests of other shareholders of the
Company.
4.21 MARKET QUOTES. The Company's Common Stock is presently
quoted on the Over-the-Counter Bulletin Board under the symbol "EURO". Except as
set forth on SCHEDULE 4.21, the Company is not in receipt of any written notice
from any stock exchange, market or trading facility on which the Common Stock is
or has been listed or traded (or on which it is or has been quoted) to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such stock exchange, market or trading facility or that the
Common Stock will be delisted from such stock exchange, market or trading
facility.
4.22 a. OFFSHORE TRANSACTION. Company has not offered these
securities to any person in the United States or to any U.S. person as that term
is defined in Regulation S.
b. In regard to this transaction, Company has not
conducted any "directed selling efforts" as that term is defined in Rule 902 of
Regulation S nor has Company conducted any general solicitation relating to the
offer and sale of the within securities to persons resident within the United
States or elsewhere.
4.23 NO INTEGRATED OFFERING. Neither the Company nor any of
its affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since June 1, 1999, made any offer or sales of any
13
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under
Section 4(2) of the Securities Act in connection with the offer and sale of the
Shares as contemplated hereby.
5. USE AND DISPOSITION OF PROCEEDS. The Company will use the proceeds
from the sale of the Initial Shares (excluding amounts paid by the Company for
legal fees, finder's fees and escrow agent fees in connection with the sale of
the Initial Shares) for general capital purposes and acquisitions, but shall
not, directly or indirectly, use such proceeds for investment in any other
affiliate or to repay debt to affiliates.
6. COMPANY RELIANCE ON PURCHASER'S REPRESENTATIONS. Purchaser
understands that the Company is relying on the truth and accuracy of the
representations and warranties made herein by Purchaser in offering the Shares
for sale and in relying upon applicable exemptions available under the Act and
applicable state securities laws.
7. RESTRICTED SHARES. Purchaser understands and acknowledges that the
Shares have not been, and will not as of the time issued, be registered under
the Securities Act and that they will be issued in reliance upon exemptions from
the registration requirements of the Securities Act, and thus cannot be resold
unless they are included in an effective registration statement filed under the
Securities Act or unless an exemption from registration is available for such
resale. With regard to the restrictions on resales of the Shares for which a
Registration Statement is not effective, Purchaser is aware: (a) that the
Company will issue stop transfer orders to its stock transfer agent in the event
of attempts to improperly transfer any such Shares, and (b) that a restrictive
legend will be placed on certificates representing the Shares, which legend will
read substantially as follows:
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR
OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS
NOT REQUIRED.
The legend set forth above shall be promptly removed, and the Company shall
issue a certificate without such legend to the holder of any such Unlegended
Shares (as defined below) upon which such legend is stamped, if, unless
otherwise required by state securities laws, (i) such Shares are registered for
resale under the Securities Act, (ii) in connection with a sale transaction,
such holder provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a public sale, assignment or transfer of
such Shares may be made without registration under the Securities Act, or (iii)
such holder provides the Company with reasonable assurances that such Shares can
14
be sold pursuant to Rule 144 promulgated under the Securities Act without any
restriction as to the number of securities acquired as of a particular date that
can then be immediately sold. Notwithstanding the removal of the legend set
forth above in the event the Shares are registered for resale on an effective
registration statement, the Company reserves the right to affix a legend on
certificates representing such Shares that any selling shareholder must comply
with the prospectus delivery requirements of the Securities Act in connection
with any resale. The Company shall bear the cost of the removal of any legend as
anticipated by this SECTION 7.
8. OTHER COVENANTS OF THE COMPANY.
8.1 FURNISHING OF INFORMATION. As long as Purchaser owns
Shares, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. If at any time prior to the date on which Purchaser may resell
all of its Shares without volume restrictions pursuant to Rule 144(k)
promulgated under the Securities Act (as determined by counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company's transfer agent for the benefit of and enforceable by Purchaser)
the Company is not required to file reports pursuant to such sections, it will
prepare and furnish to Purchaser and make publicly available in accordance with
Rule 144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial statements
in form and substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act in the time period that such filings would have been required to
have been made under the Exchange Act. The Company further covenants that it
will take such further action as Purchaser may reasonably request, all to the
extent required from time to time to enable Purchaser to sell its Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act.
8.2 LISTING OF SHARES. The Company shall, if required by any
applicable listing agreement, (a) not later than the Effective Date, prepare and
file with any national securities exchange, market or trading facility on which
the Common Stock is then listed an additional shares listing application
covering the Shares, (b) take all steps necessary to cause such shares to be
approved for listing on any other national securities exchange, market or
trading facility on which the Common Stock is then listed as soon as possible
thereafter and (c) provide to Purchaser evidence of such listing, and the
Company shall maintain the listing of its Common Stock on such exchange or
market.
8.3 FIRST RIGHT. The Company shall not, directly or
indirectly, without the prior written consent of Purchaser, offer, sell, grant
any option to purchase, or otherwise dispose of (or announce any offer, sale,
grant or any option to purchase or other disposition) any of its Common Stock or
15
securities convertible into Common Stock at a price that is less than the market
price of the Common Stock at the time of issuance of such security or investment
(a "SUBSEQUENT FINANCING") for a period of three hundred sixty (360) days after
the Effective Date, except (i) the granting of options or warrants to employees,
officers, directors and consultants, and the issuance of shares upon exercise of
options granted, under any stock option plan heretofore or hereinafter duly
adopted by the Company, (ii) shares issued upon exercise of any currently
outstanding warrants or options and upon conversion of any currently outstanding
convertible debenture, in each case disclosed pursuant to SECTION 4.4, (iii)
securities issued in connection with the capitalization or creation of a joint
venture with a strategic partner, (iv) shares issued to pay part or all of the
purchase price for the acquisition by the Company of a person (which, for
purposes of this clause (iv), shall not include an individual or group of
individuals), and (v) shares issued in a bona fide public offering by the
Company of its securities, unless (A) the Company delivers to Purchaser a
written notice (the "SUBSEQUENT FINANCING NOTICE") of its intention to effect
such Subsequent Financing, which Subsequent Financing Notice shall describe in
reasonable detail the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder, the person with whom such Subsequent
Financing shall be effected, and attached to which shall be a term sheet or
similar document relating thereto and (B) Purchaser shall not have notified the
Company by 5:00 p.m. (New York time) on the fifthtenth (5th10th) Business Day
after its receipt of the Subsequent Financing Notice of its willingness to
provide, subject to completion of mutually acceptable documentation, financing
to the Company on substantially the terms set forth in the Subsequent Financing
Notice. If Purchaser shall fail to notify the Company of its intention to enter
into such negotiations within such time period, then the Company may effect the
Subsequent Financing substantially upon the terms and to the persons (or
affiliates of such persons) set forth in the Subsequent Financing Notice;
PROVIDED THAT the Company shall provide Purchaser with a second Subsequent
Financing Notice, and Purchaser shall again have the right of first refusal set
forth above in this SECTION 8.3, if the Subsequent Financing subject to the
initial Subsequent Financing Notice shall not have been consummated for any
reason on the terms set forth in such Subsequent Financing Notice within thirty
(30) Business Days after the date of the initial Subsequent Financing Notice
with the person (or an affiliate of such person) identified in the Subsequent
Financing Notice. The rights granted to Purchaser in this SECTION 8.3 are not
subject to any prior right of first refusal given to any other person except as
disclosed on SCHEDULE 4.4.
8.4 CERTAIN AGREEMENTS. (a) The Company covenants and agrees
that it will not, without the prior written consent of Purchaser, enter into any
subsequent or further offer or sale of Common Stock or securities convertible
into Common Stock with any third party until the date which is one hundred
eighty (180) days after the Effective Date, unless all of the Initial Shares and
Additional Shares held by the Purchaser have been redeemed by the Company
pursuant to SECTION 8.5 within ten (10) calendar days of the closing of such
subsequent offer or sale.
(b) The provisions of SECTION 8.4(a) will not apply to:
16
(w) Common Stock sold pursuant to Rule 144, provided the holder thereof is
required to hold such Common Stock for at least two years from the date of
issuance; (x) a secondary public offering of shares of Common Stock at market;
or (y) the issuance of securities (other than for cash) in connection with a
merger, consolidation, sale of assets, disposition or the exchange of the
capital stock for assets, stock or other joint venture interests; and provided
further, that such securities would not be included in the Registration
Statement relating to the Initial Shares and a registration statement in respect
of such stock shall not be filed prior to sixty (60) days after the Effective
Date.
8.5 LIMITATION ON ISSUANCE OF COMMON STOCK. The Company shall
not issue an aggregate number of (i) Shares under this Agreement and (ii) shares
of Common Stock pursuant to any warrant theretofore issued by the Company to the
Purchaser, that exceeds 19.9% of the shares of Common Stock issued and
outstanding on the date of the Initial Closing (the "SHARE LIMITATION"). If,
pursuant to this Agreement and any such warrant, the Company otherwise would be
required to issue a number of shares of Common Stock that exceeds the Share
Limitation, then Purchaser shall have the right to require the Company to redeem
each Repriced Share for the Redemption Amount (as defined below).
(i) the Company will take all steps reasonably necessary
to be in a position to issue Shares upon exercise of such warrants without
violating the Cap Regulations and (ii) if, despite taking such steps, the
Company still cannot issue such Shares without violating the Cap Regulations,
the holder of Initial Shares and such warrants shall have the option,
excercisable in such holders' sole and absolute discretion, to elect either of
the following remedies:
(x) require the Company to issue Repricing Shares at a
price equal to the average of the closing bid price per share of Common Stock
for the last five (5) consecutive trading days during a Repricing Period
(subject to certain equitable adjustments for certain events occurring during
such period); or
(y) require the Company to redeem each Repriced Share for
the Agreed Amount.
8.6 AVAILABLE SHARES. The Company shall have at all times
authorized and reserved for issuance, free from preemptive rights, shares of
Common Stock sufficient to yield the number of shares of Common Stock issuable
as may be required to issue the Repriced Shares.
8.7 WARRANT. The Company agrees to issue to Purchaser at the
Closing a Warrant for 500,000 shares of Common Stock. The Warrant shall (i) bear
an exercise price per share of Common Stock of $10.00, and (ii) be exercisable
immediately upon issuance, and for a period of four (4) years thereafter, with
registration rights under the Registration Rights Agreement.
17
8.8 REIMBURSEMENT. If (i) Purchaser, other than by reason of
its gross negligence or willful misconduct, becomes involved in any capacity in
any action, proceeding or investigation brought by any shareholder of the
Company, in connection with or as a result of the consummation of the
transactions contemplated by the Transaction Documents, or if Purchaser is
impleaded in any such action, proceeding or investigation by any person, or (ii)
Purchaser, other than by reason of its gross negligence or willful misconduct or
by reason of its trading of the Common Stock in a manner that is illegal under
the federal securities laws, becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC against or involving the Company
or in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if Purchaser is impleaded in any
such action, proceeding or investigation by any person, then in any such case,
the Company will reimburse Purchaser for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which Purchaser is a named party, the Company will pay to
Purchaser the charges, as reasonably determined by Purchaser, for the time of
any officers or employees of Purchaser devoted to appearing and preparing to
appear as witnesses, assisting in preparation for hearings, trials or pretrial
matters, or otherwise with respect to inquiries, hearing, trials, and other
proceedings relating to the subject matter of this Agreement. The reimbursement
obligations of the Company under this Section 8.8 shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliates of Purchaser that are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and controlling persons (if any), as the case may be, of Purchaser and any such
affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, Purchaser and any
such affiliate and any such person.
9. TRANSFER AGENT INSTRUCTIONS.
9.1 IRREVOCABLE INSTRUCTIONS. The Company will irrevocably
instruct its transfer agent to issue Repriced Shares from time to time in such
amounts as shall be specified from time to time by the Company to the transfer
agent, bearing the restrictive legend specified in SECTION 7 of this Agreement
prior to registration of the Shares under the Securities Act, registered in the
name of Purchaser or its nominee and in such denominations to be specified by
Purchaser in connection with each Closing. The Company warrants that no
instruction other than such instructions referred to in this SECTION 9 and stop
transfer instructions to give effect to SECTION 7 hereof prior to registration
and sale of the Shares under the Securities Act will be given by the Company to
the transfer agent and that the securities shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Registration Rights Agreement, and applicable
law. Nothing in this SECTION 9 shall affect in any way Purchaser's obligations
and agreement to comply with all applicable securities laws upon resale of the
Shares.
18
9.2 [Intentionally Omitted]
9.3 TRANSMISSION OF CERTIFICATES. The Company will transmit
the certificates representing the unlegended securities ("UNLEGENDED SHARES") to
be issued to Purchaser via express courier, by electronic transfer or otherwise,
within three (3) Business Days after receipt by the Company of the certificate
representing the legended Common Stock, and a representation by Purchaser that
such shares have been sold in accordance with the provisions of the Securities
Act (the "DELIVERY DATE").
9.4 DELAY. The Company understands that a delay in the
issuance of the Unlegended Shares beyond the Delivery Date could result in
economic loss to Purchaser. On and after the Effective Date as compensation to
Purchaser for such loss, the Company agrees to pay late payments to Purchaser
for late issuance of Unlegended Shares in accordance with the following schedule
(where "NO. OF DAYS LATE" is defined as the number of days beyond five (5)
Business Days from Delivery Date):
Late Payment For Each
No. of Days Late $10,000 of Common Stock
---------------- -----------------------
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 +$200 for each Business
Day Late beyond 10 days
The Company shall pay any payments incurred under this SECTION 9.4 in
immediately available funds upon demand. Nothing herein shall limit Purchaser's
right to pursue actual damages for the Company's failure to issue and deliver
the Unlegended Shares to Purchaser, except to the extent that such late payments
shall constitute payment for and offset any such actual damages alleged by
Purchaser, and any Buy In Adjustment Amount (as defined below).
9.5 COVER. If the Company fails for any reason to deliver the
Unlegended Shares after such Delivery Date and the holder of the Initial Shares
(a "HOLDER") purchases, in an open market transaction or otherwise, shares of
Common Stock (the "COVERING SHARES") in order to make delivery in satisfaction
of a sale of Common Stock by such Holder (the "SOLD SHARES"), which delivery
19
such Holder anticipated to make using the Unlegended Shares (a "BUY-IN"), then
the Company shall pay to such Holder, in addition to all other amounts
contemplated in other provisions of the Transaction Documents, and not in lieu
thereof, the Buy-In Adjustment Amount (as defined below). The "BUY-IN ADJUSTMENT
AMOUNT" is the amount equal to the excess, if any, of (x) such Holder's total
purchase price (including brokerage commissions, if any) for the Covering Shares
over (y) the net proceeds (after brokerage commissions, if any) received by such
Holder from the sale of the Sold Shares. The Company shall pay the Buy-In
Adjustment Amount to such Holder in immediately available funds immediately upon
demand by such Holder. By way of illustration and not in limitation of the
foregoing, if such Holder purchases Covering Shares having a total purchase
price (including brokerage commissions) of $11,000 to cover a Buy-In with
respect to shares of Common Stock that it sold for net proceeds of $10,000, the
Buy-In Adjustment Amount that the Company will be required to pay to such Holder
will be $1,000.
9.6 ELECTRONIC TRANSFER. In lieu of delivering physical
certificates representing the Unlegended Shares issuable upon conversion,
provided the Company's transfer agent is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer program, upon request of
Purchaser and its compliance with the provisions contained in this paragraph, so
long as the certificates therefor do not bear a legend and Purchaser thereof is
not obligated to return such certificate for the placement of a legend thereon,
the Company shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock to Purchaser by crediting the account
of Purchaser's Prime Broker with DTC through its Deposit Withdrawal Agent
Commission system.
9.7 The Company will authorize its transfer agent to give
information relating to the Company directly to the Purchaser or the Purchaser's
representatives upon the request of the Purchaser or any such representative, to
the extent such information relates to (i) the status of shares of Common Stock
issued or claimed to be issued to the Purchaser, or (ii) the number of
outstanding shares of Common Stock of all stockholders as of a current or other
specified date. The Company will provide the Purchaser with a copy of the
authorization so given to the transfer agent.
9.8 Subject to the completeness and accuracy of the Buyer's
representations and warranties herein, and following the expiration of any
applicable Distribution Compliance Period (as those terms are defined in
Regulation S), the Company, shall, at its expense, take all necessary action
(including the issuance of an opinion of counsel) to assure that the Company's
transfer agent shall issue stock certificates without restrictive legend or stop
orders in the name of Purchaser (or its nominee (being a non-U.S. Person) or
such non-U.S. Persons as may be designated by Buyer). Nothing in this Section,
however, shall affect in any way Buyer's or such nominee's obligations and
agreement to comply with all applicable securities laws upon resale of the
Common Stock or the Repriced Shares.
20
10. CLOSING DATE.
10.1 The closing of the issuance and sale of the Initial
Shares shall occur on the later of the date set forth in SECTION 1.2 or the
first Business Day after the fulfillment or waiver of all closing conditions
pursuant to SECTIONS 11 AND 12 hereof (the "CLOSING DATE").
10.2 Notwithstanding anything to the contrary contained
herein, the Escrow Agent will be authorized to release the Escrow Property only
upon satisfaction of the conditions set forth in SECTIONS 11 AND 12 hereof.
11. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
Purchaser understands that the Company's obligation to sell
the Initial Shares on the Closing Date to Purchaser pursuant to this Agreement
is conditioned upon:
11.1 The receipt and acceptance by Purchaser of this Agreement
as evidenced by Purchaser's execution and delivery of this Agreement.
11.2 Delivery by Purchaser to the Escrow Agent of good funds
as payment in full of an amount equal to the Purchase Price for the Initial
Shares in accordance with SECTION 1.2 hereof;
11.3 The accuracy on the Closing Date of the representations
and warranties of Purchaser contained in this Agreement as if made on the
Closing Date, and the performance by Purchaser on or before the Closing Date of
all covenants and agreements of Purchaser required to be performed on or before
the Closing Date;
11.4 There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
12. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE.
The Company understands that Purchaser's obligation to
purchase the Initial Shares on the Closing Date is conditioned upon:
12.1 Acceptance by the Company of this Agreement for the sale
of the Initial Shares, as indicated by the Company's execution and delivery of
this Agreement;
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12.2 Delivery by the Company to the Escrow Agent of the
Certificate in accordance with this Agreement;
12.3 The accuracy in all material respects on the Closing Date
of the representations and warranties of the Company contained in this Agreement
as if made on the Closing Date and the performance by the Company on or before
the Closing Date of all covenants and agreements of the Company required to be
performed on or before the Closing Date; and
12.4 On the Closing Date, Purchaser having received an opinion
of counsel for the Company, dated the Closing Date, in form, scope and substance
reasonably satisfactory to Purchaser, to the effect set forth hereto, the
Registration Rights Agreement, the Warrant, if applicable.
12.5 No statute, rule, regulation, executive order, decree,
ruling or injunction shall be enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits or
adversely effects any of the transactions contemplated by the Transaction
Documents, and no proceeding or investigation shall have been commenced or
threatened which may have the effect of prohibiting or adversely effecting any
of the transactions contemplated by the Transaction Documents.
12.6 From and after the date hereof to and including the
Closing Date, the trading of the Common Stock shall not have been suspended by
the SEC, or the NASD and trading in securities generally on the New York Stock
Exchange or NASDAQ shall not have been suspended or limited, nor shall minimum
prices have been established for securities traded on NASDAQ, nor shall there be
any outbreak or escalation of hostilities involving the United States or any
material adverse change in any financial market that in either case in the
reasonable judgment of Purchaser makes it impracticable or inadvisable to
purchase the Initial Shares, as the case may be.
13. GENERAL PROVISIONS.
13.1 ASSIGNMENT. Neither this Agreement nor any rights of
Purchaser hereunder may be assigned by either party to any other person without
the prior written consent of the Company.
13.2 ATTORNEYS' FEES. In the event any dispute arises under
this Agreement or the documents or instruments executed and delivered in
connection with this Agreement, and the parties hereto resort to litigation to
resolve such dispute, the prevailing party in any such litigation, in addition
to all other remedies at law or in equity, shall be entitled to an award of
costs and fees from the other party, which costs and fees shall include, without
limitation, reasonable attorneys' fees and legal costs.
22
13.3 CHOICE OF LAW; VENUE. This Agreement will be construed
and enforced in accordance with and governed by the laws of the State of
Delaware and the federal law of the United States without reference to
principles of conflicts of law. The parties agree that, in the event of any
dispute arising out this Agreement or the transactions contemplated thereby,
venue for such dispute shall be in the state or federal courts located in
Wilmington, and that each party hereto waives any objection to such venue based
on FORUM NON CONVENIENS.
13.4 COSTS AND EXPENSES. Company shall be responsible for and
shall pay the costs and expenses, including without limitation attorneys' fees
and accountants' fees and expenses of Purchaser, in connection with the conduct
of the due diligence inquiry, negotiation, execution and delivery of this
Agreement and the instruments, documents and agreements executed in connection
with this Agreement.
13.5 COUNTERPARTS/FACSIMILE SIGNATURES. This Agreement may be
executed in one or more counterparts, each of which when so signed shall be
deemed to be an original, and such counterparts together shall constitute one
and the same instrument. In lieu of the original, a facsimile transmission or
copy of the original shall be as effective and enforceable as the original.
13.6 ENTIRE AGREEMENT: AMENDMENT. This Agreement, together
with the exhibits to this Agreement and the other instruments and documents
delivered in connection with this Agreement constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth in this Agreement or therein. Except as expressly
provided in this Agreement, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
13.7 HEADINGS. The headings of the sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
13.8 NOTICES. All notices or other communications provided for
under this Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by overnight courier service, as follows:
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If to the Company:
-----------------
EUROTECH, LTD.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxx X. Xxxxx
---------
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to: (not deemed to be notice)
--------------
XXXXXXX XXXX XXXXX XXXXX & XXXXX PC
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxx X. Xxxxxxx, Esq.
---------
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Purchaser:
---------------
Xxxxxxxx, LLC
Xxxxxxxxx Xxxxxx
Xxxx Xxx Xxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Fax No.: (000) 000-0000
With a copy to: (not to be deemed notice)
--------------
Xxxxxxx & Prager, LLP
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
---------
Tel No.: 000-000-0000
Fax No: 000-000-0000
All notices and communications shall be effective as follows: when mailed, upon
three (3) Business Days after deposit in the mail (postage prepaid); when
telecopied, upon confirmed transmission of the telecopied notice; when hand
delivered, upon delivery; and when sent by overnight courier, the next Business
Day after deposit of the notice with the overnight courier.
24
13.9 PUBLICITY. The Company and Purchaser shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and no party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be required
if such disclosure is required by law, in which such case the disclosing party
shall provide the other parties with prior notice of such public statement.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of Purchaser without the prior written consent of such Purchaser, except to the
extent required by law. Purchaser acknowledges that this Agreement and all or
part of the Transaction Documents may be deemed to be "material contracts" as
that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company
may therefore be required to file such documents as exhibits to reports or
registration statements filed under the Securities Act or the Exchange Act.
Purchaser further agrees that the status of such documents and materials as
material contracts shall be determined solely by the Company, in consultation
with its counsel.
13.10 SEVERABILITY. Should any one or more of the provisions
of this Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the provision
or provisions determined to be illegal or unenforceable and shall not be
affected thereby.
13.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
Company's representations and warranties herein shall survive the execution and
delivery of this Agreement for one (1) year, and shall inure to the benefit of
Purchaser and its successors and assigns.
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IN WITNESS WHEREOF, the parties named below have caused this Agreement
to be executed, as of the date first above written.
PURCHASER:
----------
XXXXXXXX LLC
By:
-----------------------------------------
Its:
-----------------------------------------
THE COMPANY:
-----------
EUROTECH, LTD.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------------------------
Its:
-----------------------------------------
26
